A.C. NO. 10525, September 01, 2015 filed before the Court of Appeals9), Atty.

filed before the Court of Appeals9), Atty. Natu-El indicated the following
details:
INTESTATE ESTATE OF JOSE UY, HEREIN REPRESENTED BY ITS ADMINISTRATOR
WILSON UY, Complainant, v. ATTY. PACIFICO M. MAGHARI MARIANO L. NATU-EL
III, Respondent. Counsel for Private-Respondent
Rm. 14, J.S. Building
RESOLUTION Lacson-Galo Sts., Bacolod City
IBP O.R. No. 731938 11/24/08
LEONEN, J.: PTR NO. 0223568 1/5/09
ROLL NO. 20865
This resolves a Complaint1 for disbarment directly filed before this court MCLENO. 001597010 (Emphasis supplied)
by complainant Wilson Uy, the designated administrator of the estate of
Jose Uy. This Complaint charges respondent Atty. Pacifico M. Maghari, III There appears to have been conflicts between Wilson Uy and the other
(Maghari) with engaging in deceitful conduct and violating the Lawyer's heirs of Jose Uy.11 In the course of the proceedings, Wilson Uy prayed
Oath. Specifically, Maghari is charged with the use of information that is that a subpoena ad testificandum be issued to Magdalena Uy as she
false and/or appropriated from other lawyers in signing certain was alleged to have been the treasurer of several businesses owned by
pleadings.2 Jose Uy.12 In its Order13dated April 20, 2010, the Regional Trial Court
granted Wilson Uy's Motion that a Subpoena ad Testificandum be issued
On February 18, 1997, Lilia Hofileña (Hofileña) filed a Petition before the to Magdalena Uy.
Bacolod City Regional Trial Court praying that she be designated
administratrix of the estate of her common-law partner, the deceased Thereafter, Magdalena Uy, through Maghari, her counsel, filed a Motion
Jose Uy. This was docketed as Spec. Proc. No. 97-241.3 to Quash Subpoena ad Testificandum with Alternative Motion to Cite
the Appearance of Johnny K.H. Uy.14 In signing this Motion, Maghari
Hofileña was initially designated administratrix.4 However, a Motion for indicated the following details:
Reconsideration of the Order designating Hofileña as administratix was
filed by Wilson Uy, one of Jose Uy's children, on behalf of Jose Uy's PACIFICO M. MAGHARI, III
spouse and other children.5 In its Order6 dated June 9, 1998, the Counsel for Magdalena Uy
Regional Trial Court designated Wilson Uy as administrator of Jose Uy's 590 Ylac St., Villamonte
estate. Bacolod City
IBP O.R. No. 731938 11/24/08 B.C.
Subsequently, Hofileña's claims in the settlement of Jose Uy's estate were PTR NO. 0223568 1/5/09 B.C.
granted.7 Hence, she filed a Motion for Execution8 dated September 14, ROLL NO. 20865
2007. MCLECompl. 0015970 1/14/0915 (Emphasis supplied)

In Spec. Proc No. 97-241 and in other proceedings arising from the
On November 9, 2010, Wilson Uy filed his Opposition to Magdalena Uy's
conflicting claims to Jose Uy's estate, Hofileña was represented by her
Motion to Quash.16
counsel, Atty. Mariano L. Natu-El (Atty. Natu-el). In a pleading filed in the
course of these proceedings (i.e., in the Comment dated May 27, 2009
Magdalena Uy, through Maghari, filed her Reply17 to Wilson Uy's
1
Opposition. This Reply was dated December 8, 2010. In signing this Reply, ROLL NO. 44869
Maghari indicated the following details: MCLE Compl. III-0000762 1/14/0924 (Emphasis supplied)

PACIFICO M. MAGHARI, III

Counsel for Magdalena Uy At this point, Wilson Uy's counsel noticed that based on the details
590 Ylac St., Villamonte indicated in the March 8, 2012 Motion, Maghari appeared to have only
Bacolod City recently passed the bar examinations. This prompted Wilson Uy to check
IBP O.R. No. 766304 11/27/09 B.C. the records of Spec. Proc No. 97-241. Upon doing so, he learned that
PTR NO. 3793872 1/4/10 B.C. since 2010, Maghari had been changing the professional details
ROLL NO. 20865 indicated in the pleadings he has signed and has been copying the
MCLE Compl. 0015970 1/14/0918 (Emphasis supplied) professional details of Atty. Natu-El.25cralawred

Wilson Uy then filed a Motion26 to declare Magdalena Uy in indirect

The Regional Trial Court subsequently denied Magdalena Uy's Motion to contempt (as by then she had still not complied with the Subpoena ad
Quash.19 Thereafter, Maghari filed for Magdalena Uy a Motion for Testificandum) and to require Maghari to explain why he had been
Reconsideration20 dated July 15, 2011. In signing this Motion, Maghari usurping the professional details of another lawyer.
indicated the following details:
In its Order27 dated February 16, 2012, the Regional Trial Court declined
PACIFICO M. MAGHARI, III from citing Magdalena Uy in contempt as no verified petition asking that
Counsel for Magdalena Uy she be so cited had been filed.28
590 Ylac St., Villamonte
Bacolod City On July 31, 2014, Wilson Uy filed before this court the present Complaint
IBP O.R. No. 815530 1/4/11 B.C. for disbarment.29 Pointing to Maghari's act of repeatedly a changing
PTR NO. 4190929 1/4/11 B.C. and using another lawyer's professional details, Wilson Uy asserts that
ROLL NO. 20865 Maghari violated the Lawyer's Oath and acted in a deceitful manner.
MCLE Compl. IH-0000762 1/14/0921(Emphasis supplied)
In the Resolution30 dated November 12, 2014, this court directed
Maghari to file his Comment on Wilson Uy's Complaint.
As the Motion for Reconsideration was denied,22 Maghari filed for
Magdalena Uy a Motion to Recall Subpoena ad Testificandum 23 dated
This court, through the Office of the Bar Confidant, received Maghari's
March 8, 2012. In signing this Motion, Maghari indicated the following
Comment31 on March 2, 2015.
details:

PACIFICO M. MAGHARI, III For resolution are the issues of whether respondent Atty. Pacifico M.
Counsel for Magdalena Uy Maghari, III engaged in unethical conduct and of what proper penalty
590 Ylac St., Villamonte may be meted on him.
Bacolod City
I
IBP O.R. No. 848630 12/27/11 B.C.
PTR NO. 4631737 1/2/12 B.C.
Respondent does not deny the existence of the errant entries indicated
2
by complainant. However, he insists that he did not incur disciplinary
liability. He claims that these entries were mere overlooked errors:
For true indeed that after the draft of a particular motion
or pleading had been printed and ready for signature, all
what [sic] he did after cursorily going over it was to affix
his signature thereon, specifically, atop his printed name,
without giving any special or particular attention to
details as the "IBP, PTR, and MCLE Numbers", considering
that these are matters of record and are easily verifiable,
thus he gains nothing by "the usurpation of professional
details of another lawyer" and has no sinister motive or
ill-purpose in so doing[.]32
He attempts to diminish the significance of the dubious entries and
instead ascribes ill motive to complainant. He faults complainant for
"nitpicking"33 and calls him a "sore loser"34 and a "disgruntled
litigant"35 who is merely "making a mountain out of a molehill" 36 and is
predisposed to "fault-finding."
He adds that "for the satisfaction of complainant," 37 he has provided
what are supposedly his correct professional details:
2009
IBP OR No. 765868 - Dec. 22, 2008 - Bacolod City
PTR No. 3408746 - Jan. 5, 2009 -Bacolod City
MCLE Compl. II-0012507 - Jan. 14, 2009 and
III-0000762-Jan. 14, 2009
2010
IBP OR No. 766304 - Dec. 9, 2009 - Bacolod City
PTR No. 3793872 - Jan. 4, 2010 -Bacolod City
MCLE Compl. II-0012507 - Jan. 14, 2009 and
III-0000762 - Jan. 14, 2009
2011
IBP OR No. 815530 -Jan. 4, 2011 -Bacolod City
PTRNo. 4190929 - Jan. 4, 2011 - Bacolod City
MCLE Compl. III-0000762 - Jan. 14, 2009
2012
IBP OR No. 848630-Dec. 27, 2011 - Bacolod City
PTR No. 4631737 - Jan. 2, 2012 -Bacolod City
MCLE Compl. III-0000762 - Jan. 14,
200938ChanRoblesVirtualawlibrary
II
Respondent's avowals, protestations, and ad hominem attacks on
complainant fail to impress.
The duplicitous entries speak for themselves. The errors are manifest and
respondent admits their existence. This court would perhaps be well
counseled to absolve respondent of liability or let him get away with a
proverbial slap on the wrist if all that was involved were a typographical
error, or otherwise, an error or a handful of errors made in an isolated
instance or a few isolated instances. So too, if the error pertained to only
' one of the several pieces of information that lawyers are required to
indicate when signing pleadings.
None of these can be said of this case. Respondent did not merely
commit errors in good faith. The truth is far from it. First, respondent
violated clear legal requirements, and indicated patently false
information. Second, the way he did so demonstrates that he did so
knowingly. Third, he did so repeatedly. Before our eyes is a pattern of
deceit. Fourth, the information he used was shown to have been
appropriated from another lawyer. Not only was he deceitful; he was
also larcenous. Fifth, his act not only of usurping another lawyer's details
but also of his repeatedly changing information from one pleading to
another demonstrates the intent to mock and ridicule courts and legal
processes. Respondent toyed with the standards of legal practice.
3
 III
Rule 138, Section 27 of the Rules of Court provides for deceit as a ground
for disbarment. The Lawyer's Oath entails commitment to, among others,
The requirement of a counsel's signature in pleadings, the significance of
obeying laws and legal orders, doing no falsehood, conducting one's
this requirement, and the consequences of non-compliance are spelled
self as a lawyer to the best of one's capacity, and acting with fidelity to
out in Rule 7, Section 3 of the Rules of Court:
both court and client:

Section 3. Signature and address. — Every pleading must

I, do solemnly swear that I will maintain allegiance to the
be signed by the party or counsel representing him,
Republic of the Philippines, I will support the Constitution
stating in either case his address which should not be a
and obey the laws as well as the legal orders of the duly
post office box.
constituted authorities therein; I will do no falsehood, nor
consent to the doing of any in court; I will not wittingly or
The signature of counsel constitutes a certificate by him
willingly promote or sue any groundless, false or unlawful
that he has read the pleading; that to the best of his
suit, or give aid nor consent to the same; I will delay no
knowledge, information, and belief there is good ground
man for money or malice, and will conduct myself as a
to support it; and that it is not interposed for delay.
lawyer according to the best of my knowledge and
discretion, with all good fidelity as well to the courts as to
An unsigned pleading produces no legal
my clients; and I impose upon myself these voluntary
effect. However, the court may, in its discretion, allow
obligations without any mental reservation or purpose of
such deficiency to be remedied if it shall appear that the
evasion. So help me God.
same was due to mere inadvertence and not intended
for delay. Counsel who deliberately files an unsigned
No amount of feigned ignorance and ad hominem attacks on pleading, or signs a pleading in violation of this Rule,
complainant can negate the gravity of respondent's actions. His insolent or alleges scandalous or indecent matter therein, or fails
and mocking violation of statutory and regulatory requirements is a promptly report to the court a change of his
violation of his duties to society and to courts. His swiping of another address, shall be subject to appropriate disciplinary
lawyer's information is a violation of his duties to the legal profession. The action. (Emphasis supplied)
unnecessary risks that he foiled on his client as a possible result of
deficiently signed pleadings violate his duties to his client. Thus,
A counsel's signature on a pleading is neither an empty formality nor
respondent did not only act in a deceitful manner and violate the
even a mere means for identification. Through his or her signature, a
solemn oath he took to be admitted into the legal profession; he also
party's counsel makes a positive declaration. In certifying through his or
violated every single chapter of the Code of Professional Responsibility.
her signature that he or she has read the pleading, that there is ground
to support it, and that it is not interposed for delay, a lawyer asserts his or
It is as clear as the entries themselves that respondent acted in a
her competence, credibility, and ethics. Signing a pleading is such a
manner that is woefully unworthy of an officer of the court. He was not
solemn component of legal practice that this court has taken occasion
even a good citizen. As respondent has fallen short of the ethical
to decry the delegation of this task to non-lawyers as a violation of the
standards apropos to members of the legal profession, we find it proper
Code of Professional Responsibility:
to suspend respondent from the practice of law for two (2) years.

4
 The signature of counsel constitutes an assurance by him
that he has read the pleading; that, to the best of his
knowledge, information and belief, there is a good
ground to support it; and that it is not interposed for delay.
Under the Rules of Court, it is counsel alone, by affixing his
signature, who can certify to these matters.
The preparation and signing of a pleading constitute
legal work involving practice of law which is reserved
exclusively for the members of the legal profession.
Counsel may delegate the signing of a pleading to
another lawyer but cannot do so in favor of one who is
not. The Code of Professional Responsibility
provides:chanRoblesvirtualLawlibrary
Rule 9.01 — A lawyer shall not delegate to
any unqualified person the performance
of any task which by law may only be
performed by a member of the Bar in
good
standing.ChanRoblesVirtualawlibrary
Moreover, a signature by agents of a lawyer amounts to
signing by unqualified persons, something the law
strongly proscribes.39 (Citations omitted)
A counsel's signature is such an integral part of a pleading that failure to
comply with this requirement reduces a pleading to a mere scrap of
paper totally bereft of legal effect. Thus, faithful compliance with this
requirement is not only a matter of satisfying a duty to a court but is as
much a matter of fidelity to one's client. A deficiency in this respect can
be fatal to a client's cause.
Apart from the signature itself, additional information is required to be
indicated as part of a counsel's signature:
Per Rule 7, Section 3 of the Rules of Court, a counsel's address must
(1)
be stated;
In Bar Matter No. 1132,40 this court required all lawyers to indicate
(2)
their Roll of Attorneys number;
In Bar Matter No. 287,41 this court required the inclusion of the
"number and date of their official receipt indicating payment of their
(3) annual membership dues to the Integrated Bar of the Philippines for
the current year"; in lieu of this, a lawyer may indicate his or her
lifetime membership number;
In accordance with Section 139 of the Local Government Code,42 a
(4)
lawyer must indicate his professional tax receipt number;
Bar Matter No. 192243 required the inclusion of a counsel's
(5) Mandatory Continuing Legal Education Certificate of Compliance
or Certificate of Exemption; and
This court's Resolution in A.M. No. 07-6-5-SC44 required the inclusion of
(6)
a counsel's contact details.
As with the signature itself, these requirements are not vain formalities.
The inclusion of a counsel's Roll of Attorneys number, professional tax
receipt number, and Integrated Bar of the Philippines (IBP) receipt (or
lifetime membership) number is intended to preserve and protect the
integrity of legal practice. They seek to ensure that only those who have
satisfied the requisites for legal practice are able to engage in it. With
the Roll of Attorneys number, parties can readily verify if a person
purporting to be a lawyer has, in fact, been admitted to the Philippine
bar.45 With the professional tax receipt number, they can verify if the
same person is qualified to engage in a profession in the place where he
or she principally discharges his or her functions. With the IBP receipt
number, they can ascertain if the same person remains in good
standing as a lawyer. These pieces of information, in the words
of Galicto v. Aquino III, "protect the public from bogus lawyers."46 Paying
professional taxes (and the receipt that proves this payment) is likewise
compliance with a revenue mechanism that has been statutorily
devolved to local government units.
The inclusion of information regarding compliance with (or exemption
from) Mandatory Continuing Legal Education (MCLE) seeks to ensure
5
that legal practice is reserved only for those who have complied with mockery of them reveals a dire, wretched, and utter lack of respect for
the recognized mechanism for "keep[ing] abreast with law and the profession that one brandishes.
jurisprudence, maintaining] the ethics of the profession[,] and
enhancing] the standards of the practice of law."47 IV

Lastly, the inclusion of a counsel's address and contact details is

We underscore several facts. These demonstrate that respondent acted
designed to facilitate the dispensation of justice. These pieces of
in manifest bad faith, thereby exhibiting a pattern of insubordination,
information aid in the service of court processes, enhance compliance
dishonesty, deceit, and intent to make a mockery of courts and legal
with the requisites of due process, and facilitate better representation of
processes.
a client's cause. In Juane v. Garcia,48this court took occasion to
expound on the significance of putting on record a counsel's address:
In signing the Motion to Quash Subpoena ad Testificandum with
Altenative Motion to Cite the Appearance of Johnny K.H. Uy,
The time has come, we believe, for this Court to remind the members of
respondent appropriated four of the five details (i.e., IBP official receipt
the Bar that it is their inescapable duty to make of record their correct
number, professional tax receipt number, Roll of Attorneys number, and
address in all cases in which they are counsel for a suitor. For, instances
MCLE compliance number) that Atty. Natu-el indicated in the Comment
there have been in the past when, because of failure to inform the court
dated May 27, 2009, which the latter signed and filed before the Court
of the change of address, litigations were delayed. And this, not to
of Appeals. Atty. Natu-el's details are reproduced as follows:
speak of inconvenience caused the other parties and the court. Worse
still, litigants have lost their cases in court because of such negligence
MARIANO L. NATU-EL
on the part of their counsel. It is painful enough for a litigant to surfer a
Counsel for Private-Respondent
setback in a legal battle. It is doubly painful if defeat is occasioned by
Rm. 14, J.S. Building
his attorney's failure to receive notice because the latter has changed
Lacson-Galo Sts., Bacolod City
the place of his law office without giving the proper notice therefor. It is
IBP O.R. No. 731938 11/24/08
only when some such situation comes about that the negligent lawyer
PTR NO. 0223568 1/5/09
comes to realize the grave responsibility that he has incurred both to his
ROLL NO. 20865
client and to the cause of justice. It is then that the lawyer is reminded
MCLENO. 001597050 [Emphasis
that in his oath of office he solemnly declared that he "will conduct"
supplied]ChanRoblesVirtualawlibrary
himself "as a lawyer according to the best of his knowledge and
discretion." Too late. Experience indeed is a good teacher. To a lawyer,
though, it could prove very expensive.49 The details that respondent indicated are reproduced as follows:

These requirements are not mere frivolities. They are not mere markings PACIFICO M. MAGHARI, III
on a piece of paper. To willfully disregard them is, thus, to willfully Counsel for Magdalena Uy
disregard mechanisms put in place to facilitate integrity, competence, 590 Ylac St., Villamonte
and credibility in legal practice; it is to betray apathy for the ideals of the Bacolod City
legal profession and demonstrates how one is wanting of the standards IBPO.R. No. 731938 11/24/08 B.C.
for admission to and continuing inclusion in the bar. Worse, to not only PTR NO. 0223568 1/5/09 B.C.
willfully disregard them but to feign compliance only, in truth, to make a ROLL NO. 20865
MCLE Compl. 00159701/14/0951 (Emphasis supplied)
6
 590 Ylac St., Villamonte
In signing the Reply dated December 8, 2010, respondent used what Bacolod City
was supposedly his correct IBP official receipt number and professional IBP O.R. No. 848630 12/27/11 B.C.
tax receipt number: PTR NO. 4631737 1/2/12 B. C.
ROLL NO. 44869
PACIFICO M. MAGHARI, III MCLE Compl. 111-0000762 1/14/09 (Emphasis supplied)
Counsel for Magdalena Uy
590 Ylac St., Villamonte
Bacolod City Respondent acted deliberately. It is impossible that the erroneous details
IBP O.R. No. 766304 11/27/09 B.C. he indicated on his pleadings are products of mere inadvertence.
PTR NO. 3793872 1/4/10 B.C.
ROLL NO. 20865 To begin with, details were copied from a pleading submitted
MCLE Compl. 00159701/14/0952 (Emphasis supplied) by another lawyer. These details somehow found their way into
respondent's own pleadings. Certainly, these details could not have
written themselves, let alone transfer themselves from a pleading
The same pleading, however, still bore Atty. Natu-el's Roll of Attorneys prepared by one lawyer to those prepared by another. Someone must
number and MCLE compliance number, which respondent previously have actually performed the act of copying and transferring; that is,
appropriated for himself. someone must have intended to copy and transfer them. Moreover, the
person responsible for this could have only been respondent or
In signing the Motion for Reconsideration dated July 15, 2011, someone acting under his instructions; the pleadings on which they
respondent used what was supposedly his correct IBP official receipt were transferred are, after all, respondent's pleadings.
number and professional tax receipt number. However, he still used Atty.
Natu-el's Roll of Attorneys number: Second, these details were not merely copied, they were modified.
"B.C." was added to the IBP official receipt and professional tax receipt
PACIFICO M. MAGHARI, III numbers copied from Atty. Natu-el. The facts of modification and
Counsel for Magdalena Uy addition show active human intervention to make something more out
590 Ylac St., Villamonte of markings that could otherwise have simply been reproduced.
Bacolod City
IBP O.R. No. 815530 1/4/11 B.C. Third, in subsequent pleadings, some details copied from Atty. Natu-el
PTR NO. 4190929 1/4/11 B.C. were discarded while some were retained. The December 8, 2010 Reply
ROLL NO. 20865 still bore Atty. Natu-el's Roll of Attorneys number and MCLE compliance
MCLE Compl. III-0000762 1/14/09 53(Emphasis supplied) number, but no longer his IBP official receipt number and professional
tax receipt number. The July 15, 2011 Motion for Reconsideration only
bore Atty. Natu-el's MCLE compliance number. This gradual act of
It was only in signing the Motion to Recall Subpoena ad
segregating information—discarding some while retaining others, and
Testificandum54 dated March 8, 2012, that all the professional details
retaining less over time—reveals that the author of these markings must
that respondent indicated are supposedly his own:
have engaged in a willful exercise that filtered those that were to be
PACIFICO M. MAGHARI, III discarded from those that were to be retained.
Counsel for Magdalena Uy
7
Respondent is rightly considered the author of these acts. Any claim that
the error was committed by a secretary is inconsequential. As this court
has stated in Gutierrez v. Zulueta:55
The explanation given by the respondent lawyer to the
effect that the failure is attributable to the negligence of
his secretary is devoid of merit. A responsible lawyer is
expected to supervise the work in his office with respect
to all the pleadings to be filed in court and he should not
delegate this responsibility, lock, stock and barrel, to his
office secretary. If it were otherwise, irresponsible
members of the legal profession can avoid appropriate
disciplinary action by simply disavowing liability and
attributing the problem to the fault or negligence of the
office secretary. Such situation will not be countenanced
by this Court.56
V
In the first place, it is doubtful that respondent has complied with the
requirements of paying his dues to the Integrated Bar of the Philippines,
paying his annual professional tax, and completing the necessary units
for Mandatory Continuing Legal Education in the periods concerned. To
put it plainly, there would be no need for him to use incorrect
information if he had complied with all pertinent regulations.
In his Comment, respondent provided what are supposedly his correct
professional details. We emphasize, however, that he failed to attach to
his Comment copies of the pertinent official receipts, certifications, and
other supporting documents. All that he relies on is a self-serving recital
of numbers and dates. None but respondent, himself, was in a better
position to produce the documents that could prove his claims. His
failure to do so is, at the very least, suspicious. It can very well mean that
they do not exist, or that he willfully desisted from producing them. The
latter would be more damaging to respondent, as it calls into operation
the basic presumption "[t]hat evidence willfully suppressed would be
adverse if produced."57
Even assuming that the details provided by respondent in his Comment
are correct, it still remains that he (1) used a false IBP official receipt
number, professional tax receipt number, Roll of Attorneys number, and
MCLE compliance number a total of seven (7) times; and (2) used
another lawyer's details seven (7) times.
In failing to accurately state his professional details, respondent already
committed punishable violations. An isolated inaccuracy, regardless of
the concerned lawyer's lack of bad faith, already merits a penalty of
relative severity. In Bumactao v. Fano,58 respondent Atty. Restito F. Fano
was suspended from the practice of law for the singular violation of
indicating wrong MCLE compliance details:
Here, it is established that respondent Atty. Restito F. Fano
falsely indicated "MCLE Compliance No. III-0018308". . . . .
The admitted falsity notwithstanding, respondent
endeavors to douse his culpability by shifting the blame
to the MCLE providers - PLM and IBP Quezon City
Chapter — and insisting that he acted in good faith. He
likewise attributes the indication of "MCLE Compliance
No. III-0018308" to his secretary / liaison, an "honest
mistake . . . because of the pressure of his many duties."
We are not impressed.
Bar Matter No. 1922, dated June 3, 2008, requires
"practicing members of the bar to indicate in all
pleadings filed before the courts or quasi-judicial bodies,
the number and date of issue of their MCLE Certificate of
Compliance or Certificate of Exemption, as may be
applicable. . . ." It further provides that "[f]ailure to
disclose the required information would cause the
dismissal of the case and the expunction of the pleadings
from the records."
At the very least, respondent was negligent in failing to
monitor his own MCLE compliance. This is a sort of
negligence that is hardly excusable. As a member of the
legal profession, respondent ought to have known that
8
 non-compliance would have resulted in the rendering
inutile of any pleading he may file before any tribunal.
The grave consequence of non-compliance
notwithstanding, respondent (by his own account)
admits to having complacently relied on the statements
of MCLE providers. His negligence, therefore risked harm
not only upon himself - he being now burdened with the
present complaint as a direct consequence - but worse,
upon his clients, the reliefs they seek through their
pleadings being possibly rendered inoperative.59
This court has never shied away from disciplining lawyers who have
willfully engaged in acts of deceit and falsehood.
In Flores v. Chua,60 respondent Atty. Enrique S. Chua was disbarred on
this court's finding of "a habit, attitude, and mindset not only to abuse
one's legal knowledge or training, but also to deliberately defy or ignore
known virtues and values which the legal profession demands from its
members."61 Atty. Enrique S. Chua was found to have notarized a
document that he knew to have been falsified so as to make it appear
that a person had personally appeared before him; this was part of a
bigger design to defraud another.
isolated or manifold, these inaccuracies alone already warrant
disciplinary sanctions. However, as shall be discussed, respondent also
acted with dishonest, deceitful, and even larcenous intent.
Respondent is not only accountable for inaccuracies. This case is far
from being a matter of clerical errors. He willfully used false information.
In so doing, he misled courts, litigants—his own client included—
professional colleagues, and all others who may have relied on the
records and documents on which these false details appear.
Respondent's act of filing pleadings that he fully knew to contain false
information is a mockery of courts, chief of which is this court,
considering that this court is the author of all but one of the regulations
that respondent violated. It is this court that requires respondent to
indicate his Roll of Attorneys number, IBP official receipt number, and
MCLE compliance number.
Having also violated a requirement spelled out in the Local Government
Code, respondent similarly made a mockery of an act of the legislature.
Respondent's profligacy does not stop here. He also appropriated for
himself another lawyer's professional details in seven (7) separate
instances.

In Nunga v. Viray,62 respondent Atty. Venancio Viray was suspended

In seven distinct instances, respondent is accountable for three
from the practice of law for three (3) years after having been found to
constituent acts of larceny, taking, use, and profiting.
have notarized a document despite the lapse of his commission as a
notary public.
Seven times, respondent took for himself professional details that
belonged to another. In these seven instances, he used the same
In Benguet Electric Cooperative v. Flores,63 respondent Atty. Ernesto B.
swiped details in his own pleadings. So too, in these seven instances he
Flores was suspended from the practice of law for two (2) years after
personally benefited. In these instances, respondent succeeded in
being found to have falsely stated that he did not pursue an appeal so
making it appear that he filed valid pleadings and avoided the fatal
as to absolve himself of the charge of forum shopping when, in fact, he
consequences of a deficiently signed pleading. He was able to pursue
had perfected an appeal.
reliefs in court and carry on litigation that could have been terminated
as soon as his deficient pleadings were recognized.
Here, respondent violated Bar Matter No. 287, Section 139(e) of the
Local Government Code, Bar Matter No. 1132, and Bar Matter No. 1922,
All these instances of falsity, dishonesty, and professional larceny are
a total of seven (7) times. The sheer multiplicity of instances belies any
similarly acts of deceit. In using false information taken from another,
claim that we are only dealing with isolated errors. Regardless whether
respondent misled courts, parties, and colleagues into believing that he
9
was faithfully, truthfully, and decently discharging his functions.
Respondent's acts reek of malicious intent to deceive courts. He was not
only insubordinate and disobedient of regulations; he was also dishonest,
deceitful and duplicitous. Worse, he was mocking and contemptuous.
VI
The totality of respondent's actions demonstrates a degree of gravity
that warrants suspension from the practice of law for an extended
period.
This case involves anything but trivial non-compliance. It is much graver.
The confluence of: (1) respondent's many violations; (2) the sheer
multiplicity of rules violated; (3) the frequency—nay, pattern—of falsity
and deceit; and (4) his manifest intent to bring courts, legal processes,
and professional standards to disrepute brings to light a degree of
depravity that proves respondent worthy of being sanctioned. Having
flagrantly disobeyed, deceived, and ridiculed courts, respondent rightly
stands to be at the receiving end of disciplinary action.
owes candor, fairness and good faith to the court" Rule 10.01 requires
lawyers to "not do any falsehood . . . or allow the court to be misled by
any artifice." Rule 10.03 imposes upon lawyers the duty of faithfully
"observ[ing] the rules of procedure [and] not misusing] them to defeat
the ends of justice." Canon 11 exhorts lawyers to "observe and maintain
the respect due to the courts."
Respondent did not merely violate a statute and the many issuances of
this court as regards the information that members of the bar must
indicate when they sign pleadings. He did so in a manner that betrays
intent to make a mockery of courts, legal processes, and professional
standards. By his actions, respondent ridiculed and toyed with the
requirements imposed by statute and by this court. He trampled upon
professional standards established not only by this court, in its capacity
as overseer of the legal profession, but by the Republic itself, through a
duly enacted statute. In so doing, he violated his duty to society and to
the courts.
Canon 8 of the Code of Professional Responsibility requires a lawyer to
"conduct himself with courtesy, fairness and candor toward his
professional colleagues."

Respondent's circumstances are well within the grounds for disciplining

In appropriating information pertaining to his opposing counsel,
lawyers as specified by Rule 138, Section 27 of the Rules of Court. His
respondent did not only fail to observe common courtesy. He
deception is well demonstrated. He ran afoul of every single word, save
encroached upon matters that, ultimately, are personal to another. This
perhaps his name, in the Lawyer's Oath. Then again, it was his own
encroachment is, therefore, not only an act of trickery; it is also act of
signature, his own name, that respondent Pacifico M. Maghari, III had
larceny. In so doing, he violated his duty to the legal profession.
disgraced.
Canon 17 of the Code of Professional Responsibility imposes upon a
Respondent's acts also demonstrate a violation of every single chapter
lawyer "fidelity to the cause of his client," while Canon 18 requires a
of the Code of Professional Responsibility.
lawyer to "serve his client with competence and diligence."

Canon 1 of the Code of Professional Responsibility pronounces a

In using false information in his pleadings, respondent unnecessarily put
lawyer's foremost duty "to uphold the constitution, obey the laws of the
his own client at risk. Deficiencies in how pleadings are signed can be
land V and promote respect for law and legal processes" Rule 1.01 of
fatal to a party's cause as unsigned pleadings produce no legal effect.
the same Code requires lawyers to "not engage in unlawful, dishonest,
In so doing, respondent violated his duty to his clients.
immoral or deceitful conduct."
It is tempting to think that the only thing respondent did was to deviate
Per Canon 10 of the Code of Professional Responsibility, "[a] lawyer
from required formalities. Respondent was, himself, quite dismissive,
10
stating that he did nothing more than "cursorily [go] over . . . without
giving any ... attention to details . . . that. . . are matters of record and
are easily verifiable."64 It is equally tempting to think it would be
excessive of this court to engage in an overly rigid, pedantic emphasis
on formalistic niceties.

However, we have demonstrated that what can otherwise be dismissed

as empty formalities are, in fact, necessary solemnities. They are not
ends in themselves but crucial means to enhance the integrity,
competence and credibility of the legal profession. They are vital to the
dispensation of justice. The significance of these solemnities, along with
the legal profession's "high standard of legal proficiency, . . . morality,
honesty, integrity[,] and fair dealing[,]" 65 put in contrast with how
respondent has fallen dismally and disturbingly short of the high
standards that his profession demands, demonstrates the propriety of
momentarily suspending respondent from engaging in legal practice.

It is unsettling that respondent engaged in the mockery and ridicule that

he did of the very same badges—his place in the Roll of Attorneys, his
membership in the Integrated Bar, his recognition as a practicing
professional, his continuing training and competence—that are
emblematic of his being a lawyer. Seeing as how he manifested such
contempt for these badges, we find that there is every reason for
preventing him, at least temporarily, from engaging in the profession
these badges signify.

WHEREFORE, respondent Atty. Pacifico M. Maghari, III, having clearly

violated his Lawyer's Oath and the Canons of the Code of Professional
Responsibility through his unlawful, dishonest, and deceitful conduct,
is SUSPENDED from the practice of law for two (2) years, effective upon
receipt of a copy of this Resolution.

Let copies of this Resolution be served on the Office of the Bar Confidant,
the Integrated Bar of the Philippines, and all courts in the country for
their information and guidance. Let a copy of this Resolution be
attached to respondent Atty. Pacifico M. Maghari, III's personal record
as attorney.

SO ORDERED.chanroblesvirtuallawlibrary
11
 ROBERN DEVELOPMENT CORPORATION, petitioner,
vs. JUDGE JESUS V. QUITAIN, Regional Trial
Court of Davao City, Br. 15; and NATIONAL
POWER CORPORATION, respondents.

DECISION
PANGANIBAN, J.:

Expropriation proceedings are governed by revised Rule 67 of the

1997 Rules of Civil Procedure which took effect on July 1,
1997. Previous doctrines inconsistent with this Rule are deemed
reversed or modified. Specifically, (1) an answer, not a motion to
dismiss, is the responsive pleading to a complaint in eminent domain; (2)
the trial court may issue a writ of possession once the plaintiff deposits
an amount equivalent to the assessed value of the property, pursuant to
Section 2 of said Rule, without need of a hearing to determine the
provisional sum to be deposited; and (3) a final order of expropriation
may not be issued prior to a full hearing and resolution of the objections
and defenses of the property owner.

The Case

Before us is a Petition under Rule 45, challenging the Decision of

the Court of Appeals[1] promulgated February 27, 1998 and its
Resolution promulgated July 23, 1998 in CA-GR SP-46002, which (1)
dismissed the action for certiorari and preliminary injunction filed by
Robern Development Corporation ("Robern" for brevity); and (2)
effectively affirmed the Orders (dated August 13, 1997; September 11,
1997; and November 5, 1997) and the Writ of Possession (dated
September 19, 1997), all issued by the Regional Trial Court of Davao
[G.R. No. 135042. September 23, 1999]
City in Civil Case No. 25356-97.

12
 The assailed Decision disposed as follows:[2]
IN VIEW OF ALL THE FOREGOING, the instant petition is
ordered DISMISSED. Costs against the petitioner.
In its assailed Resolution, the Court of Appeals denied
reconsideration in this manner:[3]
There being no compelling reason to modify, reverse or
reconsider the Decision rendered in the case dated February 27,
1998[;] the Motion for Reconsideration posted by petitioner on
March 23, 1998 is DENIED, it appearing further that the
arguments raised therein were already considered and passed
upon in the aforesaid Decision.
The Facts
The following facts are undisputed.
1. Robern is the registered owner of a parcel of land with an area of
about 17,746.50 square meters, which the National Power Corporation
("NPC" for brevity) is seeking to expropriate. The property forms part
of a proposed low-cost housing project in Inawayan, Binugao, Toril,
Davao City.
2. On June 6, 1997, NPC filed a Complaint for Eminent Domain
against Robern.[4] Instead of filing an answer, petitioner countered with
a Motion to Dismiss,[5] alleging (a) that the Complaint suffered a
jurisdictional defect for not showing that the action bore the approval of
the NPC board of directors; (b) that Nemesio S. Caete, who signed the
verification and certification in the Complaint, was not the president, the
general manager or an officer specifically authorized under the NPC
charter (RA 6395); (c) that the choice of property to be expropriated
was improper, as it had already been intended for use in a low-cost
housing project, a public purpose within the contemplation of law; and
the choice was also arbitrary, as there were similar properties available
within the area.
3. Before this Motion could be resolved, NPC filed a Motion for the
Issuance of Writ of Possession based on Presidential Decree No. 42. On
July 9, 1997, NPC deposited P6,121.20 at the Philippine National Bank,
Davao Branch, as evidenced by PNB Savings Account No.
385-560728-9.[6]
4. In its Order of August 13, 1997, the trial court denied the
petitioner's Motion to Dismiss in this wise:
This refers to the motion to dismiss. The issues raised are
matters that should be dealt with during the trial proper. Suffice
it to say that [NPC] has the privilege as a utility to use the
power of eminent domain.
The motion is denied for lack of merit. The pre-trial conference
shall be on August 27, 1997 at 2:30 P.M.[7]
5. On September 2, 1997, petitioner filed a Motion for
Reconsideration, pointing out that (a) the issues raised in the Motion to
Dismiss could be resolved without trial, as they could be readily
appreciated on the face of the Complaint itself vis--vis the applicable
provisions of law on the matter; and (b) the grounds relied upon for
dismissing the Complaint did not require evidence aliunde.
6. On September 11, 1997, the trial court denied the Motion, as
follows:
The xxx motion [of the petitioner] for reconsideration is denied
for lack of merit. Finding the xxx motion [of NPC] to be
meritorious[,] let a writ of possession issue.[8]
13
 7. On September 22, 1997, petitioner filed a Motion for
Reconsideration of the Order of September 11, 1997, arguing among
others that Section 15-A of RA 6395 was virtually amended when Caete
was allowed to verify and sign the certificate of non-forum shopping in
regard to the Complaint for expropriation filed by NPC.
8. Without awaiting the outcome of the Motion for Reconsideration,
NPC filed a Motion to Implement the Writ of Possession.
9. On September 19, 1997, in spite of petitioners opposition, the
trial court issued a Writ of Possession as follows:
WHEREAS, the applicant National Power Corporation in the
above-titled case has presented to this Court a petition praying
for the issuance of a Writ of Possession of the affected property
of the xxx Robern Development Corporation, described
hereinbelow, as follows:
TCT No. Total Area in Area Affected in
Square Meter Square Meter
T-251558
(T-141754) 11,469.00 3,393.00
T-251559
(T-141755) 10,000.00 2,124.00
T-251556
(T-14152) 30,000.00 3,402.00
T-251555 45,000.00 8,827.50
TOTAL - - 97,371.00 17,746.50 Total
affected area
WHEREAS, on September 11, 1997 the court issued an Order
granting the issuance of a Writ of Possession in favor of the xxx
National Power Corporation for the immediate possession and
control of the parcels of land owned by the [petitioner] as
aforestated for the construction of the Mantanao-New-Loon 138
KV Transmission Line Project to be undertaken by the
petitioner affecting 17,746.50 sq.m. of the 97,371.00 sq. meters
as shown above.
NOW THEREFORE, you are hereby commanded to place
[NPC] in possession and control of the affected property
consisting 17,746.50 [s]quare [m]eters of the total area of
97,371.00 square meters described above and to eject therefrom
all adverse occupants, Robern Development Corporation and
[all other] persons xxx claiming under it.[9]
10. On November 5, 1997, before counsel for the petitioner
received any order from the trial court directing the implementation of
the Writ of Possession, NPC occupied the disputed property.
11. In a Petition for Certiorari before the Court of Appeals (CA),
Robern assailed the Writ on the following grounds: (a) patent on the
face of the complaint were its jurisdictional defect, prematurity and
noncompliance with RA 6395; and (b) the issuance of the Writ of
Possession was irregular, arbitrary and unconstitutional, as the trial
court had yet to fix the appropriate value for purposes of taking or
entering upon the property to be expropriated.
Ruling of the Court of Appeals
The Court of Appeals upheld the trial court on the following
grounds.
14
 First, the verification and certification of the Complaint by I WHETHER OR NOT THE QUESTIONED ORDER OF
someone other than the president or the general manager of NPC was THE RESPONDENT JUDGE DATED SEPTEMBER 11,
not a fatal jurisdictional defect. It was enough to allege that the 1997 DIRECTING THE ISSUANCE OF A WRIT OF
expropriating body had the right of eminent domain. The issues of
POSSESSION IS UNCONSTITUTIONAL, HIGHLY
whether the expropriation was properly authorized by the board of
directors and whether Caetes verification and certification of the
IRREGULAR, ARBITRARY, AND DESPOTIC.
Complaint was likewise authorized were evidentiary and could be ruled
upon only after the reception of evidence. II WHETHER OR NOT THE COMPLAINT FILED IN
THE INSTANT CASE IS DISMISSIBLE ON ITS FACE
Second, whether the disputed property could still be expropriated
FOR LACK OF JURISDICTION, BEING FLAWED
even if it had already been intended to be used in a low-cost housing
project and whether the choice of that lot was arbitrary and erroneous,
WITH PREMATURITY, AND VIOLATIVE OF RA 6395.
given the availability of similar properties in the area, were factual
issues that would entail presentation of evidence by both parties. III WHETHER OR NOT THE COURT OF APPEALS
MADE A FINDING NOT BORNE OUT BY THE
Third, the allegation in the Complaint that NPC sought to acquire COMPLAINT, THUS IT EXCEEDED ITS
an easement of right-of-way through the disputed property did not
JURISDICTION AMOUNTING TO LACK OF
preclude its expropriation. Section 3-A of the NPC charter allowed the
power company to acquire an easement of right-of-way or even the land JURISDICTION.
itself if the servitude would injure the land.
IV WHETHER OR NOT THE CHOICE OF THE
Fourth, the issuance of the Writ of Possession was proper in view PROPERTY TO BE EXPROPRIATED IS ARBITRARY.
of NPCs compliance with Section 2, Rule 67 of the 1997 Rules of Civil
Procedure, by depositing with the Philippine National Bank an amount Simply stated, the petition raises the following issues:
equivalent to the assessed value of the disputed property.
1. Were there valid grounds to dismiss the Complaint?
Fifth, certiorari was not the proper remedy, as the Order sustaining
the right to expropriate the property was not final and could still be 2. Was the Writ of Possession validly issued, considering that the
trial court had not conducted any hearing on the amount to be deposited?
appealed by the aggrieved party. The availability of appeal ruled
out certiorari.
Hence, this Petition.[10] This Courts Ruling

The Issues The Court of Appeals was correct in its rulings, but in the interest
of substantial justice, the petitioner should be given an opportunity to
file its answer.
In their Memorandum,[11] petitioner raises the following issues:[12]
15
 First Issue:
Grounds for Dismissal
Jurisdiction
Petitioner contends that the trial court did not acquire jurisdiction
over the case because, first, Atty. Caete who signed the verification and
certification of non-forum shopping was neither the president nor the
general manager of NPC; and second, under Section 15-A of RA 6395,
only the NPC chief legal counsel, under the supervision of the Office of
the Solicitor General is authorized to handle legal matters affecting the
government power corporation. On the other hand, NPC argues that
Caete, as its regional legal counsel in Mindanao, is authorized to
prepare the Complaint on its behalf.
We find the disputed verification and certification to be sufficient
in form. Verification is intended to assure that the allegations therein
have been prepared in good faith or are true and correct, not mere
speculations.[13] Generally, lack of verification is merely a formal defect
that is neither jurisdictional nor fatal. Its absence does not divest the
trial court of jurisdiction.[14] The trial court may order the correction of
the pleading or act on the unverified pleading, if the attending
circumstances are such that strict compliance with the rule may be
dispensed with in order to serve the ends of justice.
The certificate of non-forum shopping directs the plaintiff or
principal party to attest under oath that (1) no action or claim involving
the same issues have been filed or commenced in any court, tribunal or
quasi-judicial agency and that, to the best of the plaintiff's knowledge,
no such other action or claim is pending; (2) if there is such other
pending action or claim, a complete statement of its present status shall
be made; and (3) if it should be learned that the same or a similar action
or claim has been filed or is pending, the plaintiff shall report this fact to
the court where the complaint or initiatory pleading was filed.[15] This
rule is rooted in the principle that a party-litigant shall not be allowed to
pursue simultaneous remedies in different forums, as this practice is
detrimental to orderly judicial procedure.[16]Administrative Circular No.
04-94, which came before the 1997 Rules of Court, is deemed
mandatory but not jurisdictional, as jurisdiction over the subject or
nature of the action is conferred by law.[17]
In this case, the questioned verification stated that Atty. Caete was
the acting regional legal counsel of NPC at the Mindanao Regional
Center in Iligan City. He was not merely a retained lawyer, but an NPC
in-house counsel and officer, whose basic function was to prepare legal
pleadings and to represent NPC-Mindanao in legal cases. As regional
legal counsel for the Mindanao area, he was the officer who was in the
best position to verify the truthfulness and the correctness of the
allegations in the Complaint for expropriation in Davao City. As
internal legal counsel, he was also in the best position to know and to
certify if an action for expropriation had already been filed and pending
with the courts.
Besides, Atty. Caete was not the only signatory to the Complaint;
he was joined by Comie P. Doromal, OIC-assistant general counsel; and
Catherine J. Pablo -- both of the NPC Litigation & Land and Land
Rights Department. They all signed on behalf of the solicitor general in
accordance with the NPC charter.[18] Their signatures prove that the NPC
general counsel and the solicitor general approved the filing of the
Complaint for expropriation. Clearly then, the CA did not err in holding
that the Complaint was not dismissible on its face, simply because the
person who had signed the verification and certification of non-forum
shopping was not the president or the general manager of NPC.
Legal Standing and Condition Precedent
16
 Next, petitioner asserts that NPC had no legal standing to file the
expropriation case, because the Complaint did not allege that its board
of directors had authorized its filing. It added that under Section 6, RA
6395, only the board was vested with the corporate power to sue and be
sued.
The National Power Corporation explains that, like other corporate
officers and employees whose functions are defined by the board, Atty.
Caete is authorized to file the expropriation case. Even if he is not the
general counsel, he has residual authority to prepare, verify and certify
the Complaint for expropriation.
We rule for the private respondent. Rule 67, Section 1 of the Rules
of Court, provides:
SECTION 1. The complaint.The right of eminent domain shall
be exercised by the filing of a verified complaint which 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, so
far as practicable, the separate interest of each defendant. xxxx.
The foregoing Rule does not require that the Complaint be
expressly approved by the board of directors of a corporation. In any
event, such authorization is a factual issue that can be threshed out
during the trial. As held by the appellate court, the issue of whether or
not the expropriation proceedings [were] authorized by the Board of
Directors or that those who signed the complaint [were] authorized
representatives are evidentiary in character determinable only in [the]
trial proper.
Prematurity of the Complaint
The same ruling applies to the argument alleging prematurity of the
Complaint. Petitioner's insistence that NPC must secure the approval of
the provincial board and the municipal council is unfounded.Section 3(j),
RA 6395, merely requires that the Complaint be filed in the same
manner as an expropriation case of the national, the provincial or the
municipal government. At bottom, all that is needed is compliance with
Rule 67 of the Rules of Court and the prevailing jurisprudence on
expropriation.
Defenses and Objections
Petitioner avers that the Complaint should be dismissed, because
the subject property was already committed to be used in a low-cost
housing project. Besides, there were other available properties in the
area. Finally, the Complaint allegedly sought only an easement of a
right-of-way, not essentially an expropriation.
We disagree. Petitioner's argument in this case is premised on the
old rule. Before the 1997 amendment, Section 3 of Rule 67 allowed a
defendant in lieu of an answer, [to] present in a single motion to dismiss
or for other appropriate relief, all of his objections and defenses to the
right of the plaintiff to take his property xxx. A motion to dismiss was
not governed by Rule 15 which covered ordinary motions.Such motion
was the required responsive pleading that took the place of an answer
and put in issue the plaintiff's right to expropriate the defendant's
property.[19] Any relevant and material fact could be raised as a defense
in a condemnation proceeding, such as that which tended to show that
(1) the exercise of the power to condemn was unauthorized, or (2) there
was cause for not taking defendants property for the purpose alleged in
the petition, or (3) the purpose for the taking was not public in
character.[20]
This old rule found basis in the constitutional provisions on the
exercise of the power of eminent domain, which were deemed to be for
17
the protection of the individual property owner against the aggressions
of the government.[21] Under the old rule, the hearing of the motion and
the presentation of evidence followed.
However, Rule 67 of the 1997 Rules of Civil Procedure no longer
requires such extraordinary motion to dismiss. Instead, it provides:
SEC. 3. Defenses and objections. x x x x
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. x x
x x.
In his book on remedial law, Justice Florenz D. Regalado writes
that the old Rule was a bit confusing as the previous holdings under that
former provision also allowed the filing of another motion to dismiss, as
that is understood in Rule 16, to raise additionally the preliminary
objections authorized by that Rule. Further, an answer, which is now
required, gives more leeway. First, even if it still applies the omnibus
motion rule, it allows amendments to be made within ten days from its
filing.[22] Second, the failure to file an answer does not produce all the
disastrous consequences of default in ordinary civil actions, because the
defendant may still present evidence as to just compensation.[23]
When petitioner filed its Motion to Dismiss, the 1997 Rules of
Civil Procedure had already taken effect. Statutes regulating procedure
in the courts are applicable to actions pending and undetermined at the
time those statutes were passed.[24] New court rules apply to proceedings
that take place after the date of their effectivity.[25] On April 8, 1997, the
Court en banc issued a Resolution in Bar Matter No. 803, declaring that
the revisions in the Rules of Court were to become effective on July 1,
1997.
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.[26]
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.[27] 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.[28]
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.
Order of Condemnation
18
 The Court will now tackle the validity of the trial court's assailed
Order of August 13, 1997, which Respondent Court affirmed in this
wise:
xxxx The denial of Roberns Motion to Dismiss [is
tantamount] to a confirmation or a determination of the
authority of NPC to exercise the power of eminent domain
and the propriety of its exercise in the context of the facts
involved in the case. Under Section 4 of the present Rule 67,
1997 Rules, supra, an order sustaining the right to
expropriate the property is a final one and may be appealed
by any aggrieved party (Municipality of Bian v. Garcia, 180
SCRA 576 [1989]). xxxx.[29]
We clarify. Founded on common necessity and interest, eminent
domain is the inherent right of the state (and of those entities to which
the power has been lawfully delegated) to condemn private property to
public use upon payment of just compensation. It may appear to be
harsh and encompassing, but judicial review limits the exercise of
eminent domain to the following areas of concern: (1) the adequacy of
the compensation, (2) the necessity of the taking, and (3) the public-use
character of the purpose of the taking.[30]
If there are objections and defenses that require the presentation of
evidence and the hearing of arguments, the trial court should not
immediately issue an order of expropriation. This is clearly implied in
Section 4 of Rule 67, which mandates that [i]f 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 x x x.
The Court of Appeals ruled that there were issues that required
presentation of evidence during the trial proper; namely, whether the
expropriation proceeding was authorized by the NPC board of directors,
whether the property to be expropriated was already devoted to public
use, and whether the choice of the property was arbitrary and erroneous
in view of the other properties available in the area.The necessity of the
taking and the public character of the purpose of the expropriation were
still in issue and pending resolution by the trial court. To these we add
the issue of whether the taking of the disputed property would require
only an easement of right-of-way or would perpetually deprive Robern
of its proprietary rights. Therefore, the trial court should not have issued
the assailed Order of Expropriation which foreclosed any further
objection to the NPCs right to expropriate and to the public purpose of
the expropriation, leaving the matter of just compensation as the only
remaining substantial issue.
The nullity of the Order was glaring. While the trial court correctly
denied the Motion to Dismiss, as the issues raised by the petitioner
should be dealt with during the trial proper, it nonetheless ruled that
NPC had the privilege as a [public] utility to use the power of eminent
domain.
Second Issue
Requisites of a Writ of Possession
Petitioner objects to the issuance of the Writ of Possession for
being highly irregular, arbitrary and despotic, because the Motion to
Dismiss was yet to be resolved. It stresses that there was no hearing on
the correct amount of just compensation for the taking of the disputed
property, as required in Panes v. Visayas State College of
Agriculture.[31] We cannot uphold this contention.
19
 There is no prohibition against a procedure whereby immediate
possession of the land involved in expropriation proceedings may be
taken, provided always that due provision is made to secure the prompt
adjudication and payment of just compensation to the
owners.[32] However, the requirements for authorizing immediate entry
in expropriation proceedings have changed.
To start with, in Manila Railroad Company v. Paredes,[33] the Court
held that the railway corporation had the right to enter and possess the
land involved in condemnation proceedings under Section 1, Act No.
1592,[34] immediately upon the filing of a deposit fixed by order of the
court.
The Rules of Court of 1964[35] sanctioned this procedure as follows:
SEC. 2. Entry of plaintiff upon depositing value with National
or Provincial Treasurer.-- Upon the filing of the complaint or at
any time thereafter the plaintiff shall have the right to take or
enter upon the possession of the real or personal property
involved if he deposits with the National or Provincial Treasurer
its value, as provisionally and promptly ascertained and fixed by
the court having jurisdiction of the proceedings, to be held by
such treasurer subject to the orders and final dispositon of the
court. xxxx. (Underscoring ours.)
Subsequently, former President Ferdinand E. Marcos signed into
law Presidential Decree No. 42 and its companion decrees, which
removed the court's discretion in determining the amount of the
provisional value of the land to be expropriated and fixed the
provisional deposit at its assessed value for taxation purposes. Hearing
was not required; only notice to the owner of the property sought to be
condemned.
On the issue of immediate possession, PD 42 (Authorizing The
Plaintiff In Eminent Domain Proceedings To Take Possession Of The
Property Involved Upon Depositing The Assessed Value, For Purposes
of Taxation) provided:
WHEREAS, the existing procedure for the exercise of the right
of eminent domain is not expeditious enough to enable the
plaintiff to take or enter upon the possession of the real property
involved as soon as possible, when needed for public purposes;
xxxxxxxxx
xxx [T]hat, upon filing in the proper court of the complaint in
eminent domain proceedings or at anytime thereafter, and after
due notice to the defendant, plaintiff shall have the right to take
or enter upon the possession of the real property involved if he
deposits with the Philippine National Bank, xxx an amount
equivalent to the assessed value of the property for purposes of
taxation, to be held by said bank subject to the orders and final
disposition of the court.
The provisions of Rule 67 of the Rules of Court and of any
other existing law contrary to or inconsistent herewith are
hereby repealed.
Paragraph 3 of PD No. 1224 (Defining The Policy On The
Expropriation Of Private Property For Socialized Housing Upon
Payment Of Just Compensation) also authorized immediate takeover of
the property in this manner:
3. Upon the filing of the petition for expropriation and the
deposit of the amount of just compensation as provided for
herein, the Government, or its authorized agency or entity, shall
immediately have possession, control and disposition of the real
20
property and the improvements thereon even pending resolution
of the issues that may be raised whether before the Court of
First Instance or the higher courts.
Where the taking was for socialized housing, Section 3, PD 1259
(Amending Paragraphs 1, 2, And 3 Of PD No. 1224 Further Defining
The Policy On The Expropriation Of Private Property For Socialized
Housing Upon Payment Of Just Compensation), amending the
above-quoted paragraph, provided:
Upon the filing of the petition for expropriation and the deposit
of the amount of the just compensation provided for in Section
2 hereof, the Government, or its authorized agency or entity,
shall immediately have possession, control and disposition of
the real property and the improvements thereon even pending
resolution of the issues that may be raised whether before the
Court of First Instance, Court of Agrarian Relations or the
higher courts.
Similarly, Section 1, PD No. 1313 (Further Amending Paragraph 3
Of Presidential Decree No. 1224 As Amended By Presidential Decree
No. 1259, Defining The Policy On The Expropriation Of Private
Property For Socialized Housing Upon Payment Of Just Compensation),
amending paragraph 3 of PD 1224, decreed:
Upon the filing of the petition for expropriation and the deposit
in the Philippine National Bank at its main office or any of its
branches of the amount equivalent to ten percent (10%) of the
just compensation provided for in Section 2 of Presidential
Decree No. 1259, the government, or its authorized agency or
entity, shall immediately have possession, control and
disposition of the real property and the improvements thereon
with the power of demolition, if necessary, even pending
resolution of the issues that may be raised whether before the
Court of First Instance, Court of Agrarian Relations, or the
higher Courts.
In this connection, we also quote Section 7 of PD No. 1517
(Proclaiming Urban Land Reform In The Philippines And Providing
For The Implementing Machinery Thereof), which reads:
xxxxxxxxx
Upon the filing of the petition for expropriation and the deposit
in the Philippine National Bank at its main office or any of its
branches of the amount equivalent to ten per cent (10%) of the
declared assessment value in 1975, the Government, or its
authorized agency or entity shall immediately have possession,
control and disposition of the real property and the
improvements thereon with the power of demolition, if
necessary, even pending resolution of the issues that may be
raised whether before the Court of First Instance, Court of
Agrarian Relations, or the higher Courts.
Finally, PD 1533 (Establishing A Uniform Basis For Determining
Just Compensation And The Amount Of Deposit For Immediate
Possession Of The Property Involved In Eminent Domain
Proceedings)mandated the deposit of only ten percent (10%) of the
assessed value of the private property being sought to be expropriated,
after fixing the just compensation for it at a value not exceeding that
declared by the owner or determined by the assessor, whichever is
lower. Section 2 thereof reads:
SEC. 2. Upon the filing of the petition for expropriation and the
deposit in the Philippine National Bank at its main office or any
21
of its branches of an amount equivalent to ten per cent (10%) of
the amount of compensation provided in Section 1 hereof, the
government or its authorized instrumentality agency or entity
shall be entitled to immediate possession, control and
disposition of the real property and the improvements thereon,
including the power of demolition if necessary, notwithstanding
the pendency of the issues before the courts.
Accordingly, in San Diego v. Valdellon,[36] Municipality of Daet v.
Court of Appeals,[37] and Haguisan v. Emilia,[38] the Court reversed itself
and ruled that Section 2, Rule 67 of the 1964 Rules, was repealed by
Presidential Decree No. 42. The judicial duty of ascertaining and fixing
the provisional value of the property was done away with, because the
hearing on the matter had not been expeditious enough to enable the
plaintiff to take possession of the property involved as soon as possible,
when needed for public purpose.[39]
In Daet, the Court clarified that the provisional value of the land
did not necessarily represent the true and correct one but only
tentatively served as the basis for immediate occupancy by the
condemnor.The just compensation for the property continued to be
based on its current and fair market value, not on its assessed value
which constituted only a percentage of its current fair market value.
However, these rulings were abandoned in Export Processing Zone
Authority v. Dulay,[40] because [t]he method of ascertaining just
compensation under the aforecited decrees constitute[d] impermissible
encroachment on judicial prerogatives. It tend[ed] to render this Court
inutile in a matter which under the Constitution [was] reserved to it for
final determination. The Court added:
We return to older and more sound precedents. This Court has
the duty to formulate guiding and controlling constitutional
principles, precepts, doctrines, or rules. (See Salonga v. Cruz
Pano, supra).
The determination of just compensation in eminent domain
cases is a judicial function. The executive department or the
legislature may make the initial determinations but when a party
claims a violation of the guarantee in the Bill of Rights that
private property may not be taken for public use without just
compensation, no statute, decree, or executive order can
mandate that its own determination shall prevail over the courts
findings. Much less can the courts be precluded from looking
into the just-ness of the decreed compensation.
In Province of Camarines Sur v. Court of Appeals,[41] the Court
reaffirmed the unconstitutionality of the presidential decrees that fixed
the just compensation in an expropriation case at the value given to the
condemned property either by the owners or by the assessor, whichever
was lower.
More precisely, Panes v. Visayas State College of
Agriculture[42] ruled that the judicial determination of just compensation
included the determination of the provisional deposit. In that case, the
Court invalidated the Writ of Possession because of lack of hearing on
the provisional deposit, as required under then Section 2 of Rule 67,
pre-1997 Rules. In the light of the declared unconstitutionality of PD
Nos. 76, 1533 and 42, insofar as they sanctioned executive
determination of just compensation, any right to immediate possession
of the property must be firmly grounded on valid compliance with
Section 2 of Rule 67, pre-1997 Rules; that is, the value of the
subject property, as provisionally and promptly ascertained and fixed by
the court that has jurisdiction over the proceedings, must be deposited
with the national or the provincial treasurer.[43]
22
 However, the 1997 Rules of Civil Procedure revised Section 2 of
Rule 67 and clearly reverted to the San Diego,
Daet and Haguisan rulings. Section 2 now reads:
SEC. 2. Entry of plaintiff upon depositing value with authorized
government depositary.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. xxxx
xxxxxxxxx
After such deposit is made the court shall order the sheriff or
other proper officer to forthwith place the plaintiff in possession
of the property involved and promptly submit a report thereof to
the court with service of copies to the parties. [Underscoring
ours.]
In the present case, although the Complaint for expropriation was
filed on June 6, 1997, the Motion for the Issuance of the Writ of
Possession was filed on July 28, 1997; thus, the issuance of the Writ is
covered by the 1997 Rules. As earlier stated, procedural rules are given
immediate effect and are applicable to actions pending and
undetermined at the time they are passed; new court rules apply to
proceedings that take place after the date of their
effectivity.[44] Therefore, Section 2, Rule 67 of the 1997 Rules of Civil
Procedure, is the prevailing and governing law in this case.[45]
With the revision of the Rules, the trial court's issuance of the Writ
of Possession becomes ministerial, once the provisional compensation
mentioned in the 1997 Rule is deposited. Thus, in the instant case the
trial court did not commit grave abuse of discretion when it granted the
NPCs Motion for the issuance of the Writ, despite the absence of
hearing on the amount of the provisional deposit.
The Court nonetheless hastens to add that PD 1533 is not being
revived.
Under Section 2, Rule 67 of the 1997 Rules, the provisional deposit
should be in an amount equivalent to the full assessed value of the
property to be condemned, not merely ten percent of it. Therefore, the
provisional deposit of NPC is insufficient. Since it seeks to expropriate
portions, not the whole, of four parcels of land owned by Robern, the
provisional deposit should be computed on the basis of the Tax
Declarations of the property:[46]
TCT No. Total Area Area Affected Assessed Provisional
in Sq. M. in Sq. M. Value Deposit
T-251558
(T-141754) 11,469.00 3,393.00 P4,250.00 P1,257.32
T-251559
(T-141755) 10,000.00 2,124.00 8,960.00 1,903.10
T-251556
(T-14152) 30,000.00 3,402.00 18,910.00 2,144.39
T-251555 45,000.00 8,827.50 18,450.00 3,619.28
TOTAL 97,371.00 17,746.50 P8,924.09
Hence, the amount of the provisional deposit should be increased,
in order to conform to the requirement that it should be equivalent to the
assessed value of the property. In the interest of justice, NPC should in
23
the meantime pay Robern reasonable rental, to be fixed by the trial court IMELDA B. DAMASCO, petitioner, vs. NATIONAL
in its final decision, for the use and occupation of the disputed property LABOR RELATIONS COMMISSION, MANILA
from the date of entry until the deposit of the full assessed value of the
GLASS SUPPLY and BONIFACIO K.
property, as mandated by Rule 67.
SIA, respondents.
WHEREFORE, the assailed Decision and Resolution of the Court
of Appeals in CA-GR SP-46002 are AFFIRMED with the
following MODIFICATIONS: (1) petitioner is granted a period of ten
days from the finality of this Decision within which to file its answer, in [G.R. No. 116101. December 4, 2000]
accordance with Rule 67 of the 1997 Rules of Court; (2) NPC shall
deposit, also within ten days from the finality if this Decision, the full
amount required under the aforecited Rule; and (3) the trial court shall, BONIFACIO K. SIA and MANILA GLASS
in its final decision, fix the rental for the use and the occupation of the
SUPPLY, petitioners, vs. NATIONAL LABOR
disputed property, from the date of NPCs entry until its deposit of the
full amount required under the 1997 Rules. No costs. RELATIONS COMMISSION, LABOR ARBITER
DOMINADOR B. SALUDARES, DEPUTY
SO ORDERED.
SHERIFF ANTONIO T. DATU and IMELDA B.
DAMASCO, respondents.

DECISION
QUISUMBING, J.:

These two petitions for certiorari seek to annul the decision

[G.R. No. 115755. December 4, 2000]
promulgated by public respondent National Labor Relations
Commission (NLRC) on March 21, 1994 in NLRC CA No.
L-001159, and its resolution dated May 11, 1994, which denied
petitioners respective motions for reconsideration.
Ms. Imelda Damasco is the petitioner in G.R. No. 115755 and
private respondent in G.R. No. 116101. She was a regular sales
clerk in Manila Glass Supply in Olongapo City.
Manila Glass Supply is private respondent in G.R. No. 115755
and petitioner in G.R. No. 116101. It is a sole proprietorship
engaged in the sale of glass with main store in Olongapo City and
24
branch in Metro Manila. Bonifacio K. Sia is private respondent in
G.R. No. 115755 and petitioner in G.R. No. 116101. He is the
owner of Manila Glass Supply.
The factual background of this case as summarized by the
labor arbiter is as follows:
That she [Damasco] was employed by respondents
[Manila Glass Supply and Bonifacio K. Sia] as Sales Clerk
on January 30, 1992, receiving lately a daily wage of
P140.00; that as sales clerk, she was ordered to do almost
all the works related to the glass business of respondents
including the cutting, sales and delivery of glass as well as
balancing, accounting and checking of capital and profits
every end of the month; that she was made to work from
8:30 in the morning up to 9:30 in the evening continuously
from Monday to Sunday without having been paid
overtime pay, rest day pay and holiday pay; that during the
period of her employment, she was not paid any 13th
month pay as well as five (5) days service incentive leave
pay; that on August 28, 1992 at around 7:00 oclock in the
evening, while she was working, respondent Bonifacio Sia
called her up and told her to finish all her works that night,
but she told respondent that she would not be able to finish
them all because it was already late; that she then left
respondents room but respondent called her again and
asked her why she could not finish what she was told to do,
to which complainant [Damasco] answered that it was
already late and there were still a lot of things to do; that
respondent asked her what she was doing since he
(respondent) left for Manila, to which complainant told him
that she was attending to the sales, to the field and to
other things relative to the business of respondent, to
which respondent got mad at her; that respondent asked
complainant why she was not teaching her two (2) other
co-workers on what to do, and she answered she would
not do it anymore because if the other co-workers should
commit mistakes in accounting, she was the first one to be
lambasted by respondent and even required to share in
paying the shortages; that when respondent heard this, he
picked up and swiped an ashtray in front of complainant
and it broke, after which, he threw some notebooks at
complainant who began to tremble in fear and her whole
body shook; respondent ordered her to go out of the room,
lambasted her again and told her that he
(respondent)does not want to see her face anymore (ayaw
ko nang makita ang pagmumukha mo rito); that after
respondent had left, complainant again trembled and she
could not prevent herself from crying, her co-workers
applied alcohol on her because her body was cold, given
water to drink and after about an hour, complainant
decided not to finish her work anymore because she felt
weak; that one of his co-workers, Alma, brought her home
and since then, she did not report for work anymore
because she developed a phobia of respondent
Disputing the claim of complainant, respondents maintain
as follows: That sometime in the late part of August 1992,
complainant was instructed by respondent to report for
work in their store in Metro Manila as there is a necessity
for her detail thereat for reasons that the employees there
are new and do not have the experience and know-how in
running the store specifically with regards (sic) to the sale
25
of glass; that complainant manifested her objection to such
detail for reasons that her husband is working in Olongapo
City and she does not want to work in Manila; that
thereafter, complainant did not report for work in the
respondents store in Olongapo City, so respondent sent
some of his employees to the house of complainant but
were told that she is sick and cannot report for work; that
sometime in the first week of January 1993, respondent
received a copy of the instant complaint filed by
complainant; that immediately, respondent thru counsel
sent a letter to complainant directing her to report for work
on January 13, 1993 at its store in Olongapo City; that
complainant ignored the letter despite receipt thereof,
hence, on January 15, 1993, respondent again sent
complainant another letter directing her to report for work
on January 22, 1993 but just the same, complainant failed
and refused to report for work; that it is not true as claimed
by complainant that respondent shouted at her and swiped
an ashtray from the table and threw at her some
notebooks. [1]
On December 7, 1992, Damasco filed before the NLRC
Regional Arbitration Branch in San Fernando, Pampanga, a
complaint against Bonifacio Sia and Manila Glass Supply (jointly
referred hereafter as Sia for easy reference). In the one-page
complaint form of the NLRC, Damasco indicated that she is suing
her employer for illegal dismissal and non-payment of overtime
pay.[2] However, in her complaint affidavit and position paper filed
later before the labor arbiter, Damasco additionally charged her
employer with non-payment of 13th month pay, service incentive
leave pay, holiday pay and night shift differential. [3]
On September 2, 1993, the labor arbiter rendered judgment in
favor of Ms. Damasco. The labor official declared that Sia has not
shown any just or authorized cause in terminating the services of
Damasco, except for wild, generalized and self-serving
statements that Damasco committed serious misconduct or willful
disobedience of the lawful orders in connection with her work. The
labor arbiter also ruled that Damasco is entitled to 13th month pay,
service incentive leave pay, holiday pay, overtime pay, and
disposed of the case, thus:
WHEREFORE, premises considered, judgment is hereby
entered in favor of the complainant and against
respondents, ordering the latter, as follows:
1.To pay the total sum of P112,570.32 representing
unpaid 13th month pay, holiday pay, overtime and
premiums pay, five (5) days service incentive leave pay,
backwages and separation pay of complainant;
2.To pay attorneys fees in the sum of P11,257.00 which is
ten (10%) percent of the award; and
3.All other claims or issues, for want of substantial
evidence, are hereby DISMISSED.
SO DECIDED. [4]
On appeal, the NLRC upheld the labor arbiters finding that
Damasco was illegally dismissed but modified the labor officials
judgment, thus:
26
PREMISES CONSIDERED, the Decision of September 2, and/or Manila Glass Supply maintained in said bank, sufficient to
1993, is hereby MODIFIED. Respondents are directed to cover the monetary award in favor of Damasco.[6]
pay complainant the following: In her petition, Damasco alleged that the NLRC committed
grave abuse of discretion:
I. Backwages .. P43,680.00
IN DELETING THE AWARD FOR OVERTIME PAY AND
II. Separation Pay 36,400.00 REDUCING THE ATTORNEYS FEES IN FAVOR OF
PETITIONER. [7]

III. 13th month pay . 10,920.00

In his memorandum, Sia raised the following issues for
IV. Service Incentive Leave Pay 2,100.00 resolution, thus:
A
V. Holiday Pay .. 4,200.00
WHETHER OR NOT PUBLIC RESPONDENT LABOR
VI. Attorneys fees .. 1,722.00
ARBITER SALUDARES DEPRIVED PETITIONERS
OF THEIR RIGHT TO DUE PROCESS AND THUS
--------------
COMMITTED GRAVE ABUSE OF DISRCRETION,
T O T A L ----- P99,022.00 AMOUNTING TO LACK OR EXCESS OF
JURISDICTION
SO ORDERED. [5]

Both parties filed motions for reconsideration which were

denied. WHETHER OR NOT PUBLIC RESPONDENT NLRC
COMMITTED GRAVE ABUSE OF DISCRETION,
On July 4, 1994, the NLRC issued an entry of judgment
AMOUNTING TO LACK OR EXCESS OF
stating that the aforesaid judgment of the labor tribunal has
JURISDICTION, IN AFFIRMING, ALBEIT WITH
become final and executory.
MODIFICATIONS, THE LABOR ARBITERS
On July 7, 1994, the labor arbiter, upon motion of Damasco, PATENTLY NULL AND VOID DECISION. [8]

issued a writ of execution. In compliance therewith, public

respondent deputy sheriff issued the next day a notice of In our view, the crucial issue for resolution is whether or not
garnishment addressed to Far East Bank and Trust Company, the NLRC committed grave abuse of discretion in affirming the
Olongapo City, against all credits and deposits of Bonifacio Sia

27
decision of the labor arbiter which held that Damasco was illegally
dismissed from her job.
On August 1, 1994, we decided to consolidate the two
petitions inasmuch as they involve the same parties and
intertwined issues. Likewise, we issued a temporary restraining
order, effective immediately and continuing until further orders
from this Court, enjoining the parties concerned from
implementing the subject writ of execution and notice of
garnishment dated July 7 and 8, 1994, which were respectively
issued by the labor arbiter and deputy sheriff of NLRC Regional
Arbitration Branch III, San Fernando, Pampanga.[9]
We note that both petitioners did not comply with the rule on
certification against forum shopping. The certifications in their
respective petitions were executed by their lawyers, which is not
correct.[10] The certification of non-forum shopping must be by the
petitioner or a principal party and not the attorney. This procedural
lapse on the part of petitioners could have warranted the outright
dismissal of their actions.[11]
But, the Court recognizes the need to resolve these two
petitions on their merits as a matter of social justice involving labor
and capital. After all, technicality should not be allowed to stand in
the way of equitably and completely resolving herein the rights
and obligations of these parties.[12] Moreover, we must stress that
technical rules of procedure in labor cases are not to be strictly
applied if the result would be detrimental to the working woman.[13]
Sia contends that he was deprived of his right to due process
as the labor arbiter failed to conduct a hearing for the reception of
evidence. He also claims that the labor arbiters finding that
Damasco was illegally dismissed is not supported by substantial
evidence. On the contrary, Sia insists, Damasco abandoned her
work as she refused to be detailed at her employers store in Metro
Manila.
Sias contentions are bereft of merit. His words cannot hide
the oppressive acts obviously directed to deprive Ms. Damasco of
her employment and erode her dignity as a worker.
It is now axiomatic that the essence of due process in
administrative proceedings is simply an opportunity to explain
ones side or an opportunity to seek reconsideration of the action
or ruling complained of.[14] A formal or trial-type hearing is not at all
times and in all instances essential to due process, the
requirements of which is satisfied where parties are afforded fair
and reasonable opportunity to explain their side of the controversy
at hand.[15]
As noted by the Solicitor General and petitioner Damasco, the
labor arbiter set the case several times for preliminary conference
but the parties failed to reached an amicable settlement.[16] The
labor arbiter then ordered the parties to submit their position
papers. In compliance therewith, the parties submitted position
papers where they set out and argued the factual as well as the
legal bases of their position. Damasco filed her position paper,
computation of money claims and affidavit. For his part, Sia filed
his position paper and affidavit. Damasco, in turn, filed her
affidavit in reply to the affidavit of Sia. After both parties had filed
their replies, the case was deemed submitted for resolution as the
labor arbiter did not find it necessary to conduct a trial-type
hearing. Note that the filing of position papers and supporting
documents fulfills the requirements of due process. [17] Further, it is
within the discretion of the labor arbiter to determine if there is a
need for a hearing.[18] Thus, we cannot subscribe to Sias posturing
that the labor arbiter gravely abused its discretion when he
dispensed with the hearing to receive further evidence.[19]
Moreover, Sia was given additional opportunity to argue his
case on appeal before the NLRC in a memorandum and motion
for reconsideration which pleadings were likewise considered by
that labor agency in the course of resolving the case. Sia cannot
28
thereafter interpose lack of due process since he was given
sufficient time and ample chances to be heard in the present case.
Consequently, the alleged defect in the proceedings in the labor
arbiter, if there be any, should be deemed cured. [20] All told, Sias
due process argument must fail.
On Sias assertion that the labor arbiters finding is not
supported by ample evidence, suffice it to state that judicial review
of labor cases does not go as far as to evaluate the sufficiency of
evidence upon which the labor arbiter and NLRC based their
determinations.[21] Moreover, this Court does not review supposed
errors in the decision of the NLRC which raise factual issues
because findings of agencies exercising quasi-judicial functions
are accorded not only respect but even finality aside from the
consideration that this Court is not a trier of facts.[22] In any case, in
our view, the labor arbiter used every reasonable means to
ascertain the facts by giving the parties ample opportunity to
present evidence. It is worth stressing that in controversies
between a worker and her employer doubts reasonably arising
from evidence or in the interpretation of agreements should be
resolved in the formers favor.[23] Thus, the labor arbiter had
reasonable ground to sustain the version of Ms. Damasco on how
she was unceremoniously dismissed from her job. Furthermore,
Sia did not quite succeed to convince theNLRC to rule
otherwise. Finally, the mere fact that the worker seeks
reinstatement and backpay directly rebuts the employers bare
claim of abandonment by the worker of his employment.
Thus, going now to the specific issue of abandonment, we
find no merit in Sias allegation that Ms. Damasco abandoned her
job. To constitute abandonment, two elements must concur: (1)
the failure to report for work or absence without valid or justifiable
reason, and (2) a clear intention to sever the employer-employee
relationship, with the second element as the more determinative
factor when manifested by some overt acts.[24] Abandoning ones
job means the deliberate, unjustified refusal of the employee to
resume his employment and the burden of proof is on the
employer to show a clear and deliberate intent on the part of the
employee to discontinue employment.
In this case, there are no overt acts established by Sia from
which we can infer the clear intention of Damasco to desist from
employment. Sias letters dated January 7 and 15, 1993, for
Damasco to report for work deserve scant consideration. Note
that those orders were made four months after Damasco was told
not to show herself again in the store, and after Sia had received a
copy of Damascos complaint for illegal dismissal. It is indeed
highly incredible for an employer to require his employee without
an approved leave to report to work only after four months of
absence. If at all, the charge of abandonment is disingenuous to
say the least. Moreover, as noted by the NLRC, it was unlikely
that Damasco had abandoned her job for no reason at all
considering the hardship of the times. In addition, if Damasco had
truly forsaken her job, she would not have bothered to file a
complaint for illegal dismissal against her employer and prayed for
reinstatement. An employee who forthwith took steps to protect
her layoff could not by any logic be said to have abandoned her
work.[25]
As to Sias allegation that Ms. Damasco committed serious
misconduct or willful disobedience of lawful order in connection
with her work, we find no tenable support. Even if Sia directed her
to be assigned at his store in Metro Manila, her act of refusing to
be detailed in Metro Manila could hardly be characterized a willful
or intentional disobedience of her employers order. It was Sias
order that appears to us whimsical if not vindictive. Reassignment
to Metro Manila is prejudicial to Ms. Damasco, as she and her
family are residing in Olongapo City. This would entail separation
from her family and additional expenses on her part for
29
transportation and food. Damascos reassignment order was made.[30] In view of Sias formal admission that Ms. Damasco
unreasonable, considering the attendant circumstances.[26] worked beyond eight hours daily, the latter is entitled to overtime
compensation. No further proof is required. Sia already admitted
In sum, we conclude there is no valid and just cause to
she worked an extra hour daily. Thus, public respondent gravely
terminate the employment of Ms. Damasco. The NLRC did not
erred in deleting the award of overtime pay to Ms. Damasco on
gravely abuse its discretion in upholding the finding of the labor
the pretext that the claim has no factual basis.
arbiter that Ms. Damascos dismissal was not for cause.
Still, even assuming that Damasco received a wage which is
An employee who is unjustly dismissed from work is entitled
higher than the minimum provided by law, it does not follow that
to reinstatement without loss of seniority rights and other
any additional compensation due her can be offset by her pay in
privileges as well as to his full backwages, inclusive of allowances,
excess of the minimum, in the absence of an express agreement
and to other benefits or their monetary equivalent computed from
to that effect. Moreover, such arrangement, if there be any, must
the time his compensation was withheld from him up to the time of
appear in the manner required by law on how overtime
his actual reinstatement.[27]
compensation must be determined. For it is necessary to have a
However, in our view, the circumstances obtaining in this case clear and definite delineation between an employees regular and
do not warrant the reinstatement of Ms. Damasco. Antagonism overtime compensation to thwart violation of the labor standards
caused a severe strain in the relationship between her and her provision of the Labor Code.[31]
employer. A more equitable disposition would be an award of
With regard to the award of attorneys fees the ten percent
separation pay equivalent to one (1) months pay for every year of
(10%) attorneys fees is provided for in Article 111 of the Labor
service with the employer.[28]
Code. Considering the circumstances of this case, said award is
Now, as regards Ms. Damascos contention that public in order.
respondent gravely abused its discretion in deleting the award for
WHEREFORE, in G.R. No. 115755, the petition is
overtime pay for lack of factual basis, we find the same impressed
GRANTED. The judgment of the Labor Arbiter in favor of
with merit. We note that Sia has admitted in his pleadings that
petitioner Imelda B. Damasco dated September 2, 1993 is
Damascos work starts at 8:30 in the morning and ends up at 6:30
REINSTATED in full. In G.R. No. 116101, the petition of Bonifacio
in the evening daily, except holidays and Sundays. However, Sia
K. Sia and Manila Glass Supply is DISSMISSED for lack of merit.
claims that Damascos basic salary of P140.00 a day is more than
Costs against petitioners Bonifacio K. Sia and Manila Glass
enough to cover the one hour excess work which is the
Supply.
compensation they allegedly agreed upon.[29]
SO ORDERED.
Judicial admissions made by parties in the pleadings, or in the
course of the trial or other proceedings in the same case are
conclusive, no further evidence being required to prove the same,
and cannot be contradicted unless previously shown to have been
made through palpable mistake or that no such admission was
30
 senior officers. The motion was, however, denied, with the Court of
Appeals stating that

"In the present case, absent any compelling reason for

petitioners failure to comply, at first instance, with
Revised Supreme Court Circular No. 28-91, the Court
cannot therefore, accept its subsequent compliance."[1]

Aggrieved, petitioner is now before this Court seeking reversal of the

ruling of the Court of Appeals.
[G.R. No. 128550. March 16, 2000]
Revised Circular No. 28-91 provided:
DIGITAL MICROWAVE CORPORATION, petitioner, vs. COURT OF
APPEALS and ASIAN HIGH TECHNOLOGY "To avoid [forum shopping], every petition or complaint
CORPORATION, respondents. filed with the Supreme Court, the Court of Appeals, or
different Divisions thereof, or any other tribunal or
RESOLUTION agency, shall comply with the following requirements,
aside from pertinent provisions of the Rules of Court and
QUISUMBING, J.: existing circulars:

On December 14, 1994, private respondent Asian High Technology xxx

Corp. filed a complaint against petitioner Digital Microwave Corp. for a
sum of money and damages before the Regional Trial Court of Pasig
city. Petitioner moved for the dismissal of the complaint. The trial court
denied the motion, as well as petitioners subsequent motion for
reconsideration.
Petitioner then initiated a special civil action for certiorari before the
Court of Appeals, alleging grave abuse of discretion on the part of the
trial court. However, the Court of Appeals dismissed the petition for
failure to comply with Revised Circular No. 28-91, as amended by
Administrative Circular No. 04-94. Said circular requires the petition filed
before the Court of Appeals to be accompanied by a sworn certification
against forum shopping, signed by petitioner himself. Petitioners
certification was signed by counsel; the petition was, thus, dismissed.
Petitioner moved for a reconsideration of the dismissal and submitted a
sworn certification against forum shopping duly signed by one of its
2. Certification.-The party must certify under oath that he
has not commenced any other action or proceeding
involving the same issues in the Supreme Court, the
Court of Appeals, or different Divisions thereof, or any
other tribunal or agency, and that to the best of his
knowledge, no such action or proceeding is pending in
the Supreme Court, the Court of Appeals, or different
Divisions thereof, or any other tribunal or agency. If there
is any other action pending, he must state the status of
the same. If he should learn that a similar action or
proceeding has been filed or is pending before the
Supreme Court, the Court of Appeals, or different
Divisions thereof, or any other tribunal or agency, he
should notify the court, tribunal or agency within five (5)
days from such notice."[2]

31
The requirement for a sworn certification against forum shopping was
extended by administrative Circular No. 04-94 to complaints, petitions,
applications or other initiatory pleadings filed in all courts or agencies
other than the Supreme Court or the Court of Appeals.
Petitioner contends that in the case of a corporation as petitioner, the
certification against forum shopping may be signed by a natural person
authorized to do so and with knowledge of the required facts. The
authorized person may be anyone authorized by the corporation, not
necessarily an officer thereof. In such a case, petitioner argues, the
counsel of record has the authority to execute the certification on behalf
of the corporation, particularly considering that under the Rules of Court,
counsels authority to represent his client is presumed. No written power
of attorney is required for counsel to appear for his client.
If we follow petitioners line of reasoning, then the requirement in
Revised Circular No. 28-91 that petitioner himself must make the
certification against forum shopping would have been rendered useless.
Why require petitioner himself to certify when his counsel can anyway
execute the certification on his behalf?
The reason the certification against forum shopping is required to be
accomplished by petitioner himself is because only the petitioner
himself has actual knowledge of whether or not he has initiated similar
actions or proceedings in different courts or agencies. Even his counsel
may be unaware of such fact. For sure, his counsel is aware of the
action for which he has been retained. But what of other possible
actions?
We disagree with petitioner that a corporation cannot possibly hope to
comply with the requirement laid down by Revised Circular No. 28-91
because it is a juridical entity and not a natural person. If this were so,
then it would have been impossible for a corporation to do anything at
all. Needless to say, this is the reason why corporations have directors
and officers, to represent it in its transactions with others. The same is
true for the certification against forum shopping. It could easily have
been made by a duly authorized director or officer of the corporation.
That petitioner did not in the first instance comply with the requirement
of revised Circular No. 28-91 by having the certification against forum
shopping signed by one of its officers, as it did after its petition before
the Court of Appeals had been dismissed, is beyond our
comprehension.
In the recent case of Spouses Valentin Ortiz and Camilla Milan Ortiz v.
Court of Appeals, et al., 299 SCRA 708, 711-712 (1998), we ruled that
"Regrettably, we find that substantial compliance will not
suffice in a matter involving strict observance as provided
for in Circular No. 28-91. The attestation contained in the
certification on non-forum shopping requires personal
knowledge by the party who executed the same. To merit
the Courts consideration, petitioners here must show
reasonable cause for failure to personally sign the
certification. The petitioners must convince the court that
the outright dismissal of the petition would defeat the
administration of justice."
In this case, petitioner has not adequately explained its failure to have
the certification against forum shopping signed by one of its officers.
Neither has it shown any compelling reason for us to disregard strict
compliance with the rules.
As we further stated in Spouses Ortiz,
"Utter disregard of the rules cannot justly be rationalized
by harking on the policy of liberal construction."[3]
WHEREFORE, finding no merit in the petition, the petition is hereby
DENIED.
SO ORDERED.
32
 THIRD DIVISION

GENEROSO A. G.R. No. 170049

JUABAN and FRANCIS
M. ZOSA, Present:
Petitioners,
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
- versus - CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

RENE ESPINA and Promulgated:

CEBU DISCOVERY
BAY PROPERTIES, March 14, 2008
INC.,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

33
 This is a Petition for Review on Certiorari under Rule
45 of the Rules of Court filed by the late Generoso A. Juaban
(Juaban), now substituted by his heirs, and Francis M. Zosa
(Zosa), assailing the Decision[1] dated 31 January 2005 of the
Court of Appeals in CA-G.R. CV No. 60721, wherein the
appellate court (1) made permanent the Writ of Preliminary
Injunction it had earlier issued, enjoining petitioners from
exercising rights of ownership over Lots No. 6720-C-2 and
6720-B-2, respectively, covered by Transfer Certificates of
Title (TCTs) No. 36425 and No. 36426 of the Registry of
Deeds of Lapu-Lapu City; (2) set aside the Decision of the
Lapu-Lapu City Regional Trial Court (RTC), Branch 54, in
Civil Case No. 4871-L which ordered the dismissal of the
case; and (3) directed the RTC to undertake further
proceedings in Civil Case No. 4871-L insofar as the issue of
damages was concerned.
The present Petition stems from the proceedings in
Civil Case No. 4871-L before the Lapu-Lapu City RTC,
Branch 54, but is still directly related to two other cases,
particularly, Civil Case No. 2309-L before the Lapu-Lapu
RTC, Branch 27, and (2) A.M. No, P-02-1580 before this
Court, which we cannot simply overlook. The direct
antecedent of the present petition, Civil Case No. 4871-L
before the Lapu-Lapu City RTC, Branch 54, is the last of the
three cases we are presenting hereunder:
CASE No. 1: Bancale
v. Paras, Civil Case
No. 2309-L,
Lapu-Lapu City RTC,
Branch 27
The Heirs of Conrado Bancale filed before the
Lapu-Lapu City RTC, Branch 27, a case for the recovery of
the properties subject of the present Petition against a certain
Eva Paras and other persons, which was docketed as Civil
Case No. 2309-L. On 22 January 1996, petitioners Juaban and
Zosa entered their appearance as counsels for the Heirs of
Bancale.
The Heirs of Bancale later entered into a 31 January
1997 Agreement to Sell and to Buy with respondent Rene
Espina (Espina), paragraph 5 of which states:
That after the title is transferred to their names,
the First Party [Heirs of Bancale] will execute an
absolute deed of sale in favor of the second party [herein
respondent Rene Espina] or whoever will be designated
by him as the vendee for the consideration mentioned in
paragraph 2 hereof. The amount of P2,000,000.00
advanced by the Second Party shall form part of said
consideration.[2]
In accordance with said Agreement, respondent Espina
paid petitioners P2,000,000.00 as an advance on the purchase
price for the subject properties for the benefit of the Heirs of
Bancale. Respondent Espina then designated the other
respondent in this case, Cebu Bay Discovery Properties, Inc.
(CDPI), as the vendee of the said properties.
34

Later, on 1 September 1997, respondents learned that
petitioners, counsels Juaban and Zosa, had filed on 26 August
1997, at around 1:10 p.m., a Motion to fix their attorneys fees
in Civil Case No. 2309-L. They also learned that the
Lapu-Lapu City RTC, Branch 27, had issued an Order on the
very same date of 26 August 1997, at around 2:20 p.m.,
granting the motion and fixing petitioners attorneys fees in
the amount of P9,000,000.00. The Heirs of Bancale filed a
Motion for Reconsideration, but the same was denied in an
Order dated 22 September 1997. The Heirs of Bancale
received a copy of the Order denying their Motion for
Reconsideration on 9 October 1997, after which they filed a
Notice of Appeal dated 15 October 1997. However, without
waiting for the expiration of the period to appeal of the Heirs
of Bancale, the Lapu-Lapu City RTC, Branch 27, issued
on 10 October 1997 an Order, which states:
Considering that the Order of this Court dated 26
August 1997 has already become final and executory, not
having been appealed, the motion for execution is hereby
GRANTED.
Let a Writ of Execution issue to satisfy the Order
dated August 26, 1997 to enforce the same fixing the
attorneys fees.
Sheriff Juan A. Gato of this Branch is hereby
directed to implement the Writ.[3]
The Heirs of Bancale filed another Motion for
Reconsideration, this time, of the 10 October
1997 Order. Without directly ruling on this Motion, the
Lapu-Lapu City RTC, Branch 27, issued on 14 October
1997 a Writ of Execution directing Sheriff Juan A. Gato
(Gato) to satisfy the judgment for attorneys fees in the
amount of P9,000,000.00 in favor of petitioners.
On 23 October 1997, Sheriff Gato served notice that
the rights, shares, interests and participation of the Heirs of
Bancale in the subject properties were being levied on
execution to satisfy the Writ of Execution dated 14 October
1997. This was done despite the fact that the Writ of
Execution issued by the trial court specifically directed that
the attorneys fees were to be taken from the money due from
the buyer to the sellers under the agreement to buy and
sell. Thereafter, Sheriff Gato issued a Notice of Sale on
Execution dated 24 October 1997, announcing that the subject
properties were to be sold at a public auction on 28 November
1997 at 2:00 p.m.
On 18 November 1997, respondents filed a Third Party
Claim with the office of Sheriff Gato. On motion of
petitioners, the Lapu-Lapu City RTC, Branch 27 fixed the
sheriffs indemnity bond at P500,000.00.
On 28 November 1997, the subject properties were
sold at public auction to petitioners for P9,000,000.00. The
sale was registered on 3 December 1997.
On 1 December 1998, the Lapu-Lapu City RTC,
Branch 27, under a new presiding judge, issued an Order
resolving the Motions of the Heirs of Bancale seeking
reconsideration of the previous Orders of the same court
35
dated 22 September 1997 and 10 October 1997, and disposing
thus:
WHEREFORE, in view of the foregoing
premises, this Court hereby sets aside the order issued in
this case on October 10, 1997 which considered as final
and executory the August 26, 1997 order and, in its stead,
hereby gives due course to the appeal filed by the [Heirs
of Bancale] from the order issued in this case on
September 22, 1997, which in effect is an appeal from
the said August 26, 1997 order.[4]
This 1 December 1998 Order is currently on appeal
with the Nineteenth Division of the Court of Appeals, where
it is docketed as CA- G.R. CEB CV No. 61696. The Court of
Appeals Resolutions granting due course to said appeal were
elevated via a Petition for Certiorari, docketed as G.R. No.
156011, still pending before this Court.
On 27 January 1999, petitioners wrote a letter to
Sheriff Gato requesting him to execute a final deed of sale in
their favor since no redemption of the subject properties was
made. Sheriff Gato, in a letter dated 4 February 1999,
answered that he no longer had any authority to issue the final
deed of sale by virtue of the 1 December 1998 Order of the
Lapu-Lapu City RTC, Branch 27. Nonetheless, in direct
contravention of the contents of his letter, Sheriff Gato still
transmitted to petitioners the final Deed of Conveyance
without the approval of the trial court.
CASE No. 2: Espina v.
Gato, A.M. No.
P-02-1580, Supreme
Court
The second case is an administrative complaint filed
against Sheriff Gato by respondents, for allegedly acting with
manifest bias and partiality in Civil Case No. 2309-L while it
was still pending with the Lapu-Lapu City RTC, Branch
27. On 9 April 2003, this Court, speaking through Associate
Justice Adolfo Azcuna, held:
Firstly, the haste with which respondent levied
upon the plaintiffs property is unexplained. Furthermore,
despite a third-party claim filed by complainant Espina for
CDPI on November 18, 1997, the property was sold at
public auction to Attys. Juaban and Zosa on November 28,
1997. It is true that sheriffs are responsible for the prompt
service and implementation of writs and other orders
issued by the court. They cannot afford to be inefficient in
the work assigned to them. However, prompt service and
efficiency should not be reasons to compromise the
integrity of the court and the proper administration of
justice. By the very nature of their duties, sheriffs perform
a very sensitive function in the dispensation of
justice. Thus, their conduct must, at all times, be above
suspicion.
Secondly, as stated earlier, the trial court ordered
in the writ of execution that the P9 million to be paid to
Attys. Juaban and Zosa as attorneys fees be taken from
the money due from the buyer to the sellers under the
agreement to buy and sell. Nevertheless, respondent
36
levied upon the aforementioned property in blatant
disregard of this order. It is a well-settled rule that the
duty of a sheriff is merely ministerial. When a writ is
placed in the hands of the sheriff, it is his ministerial duty
to proceed to execute in accordance with the terms of its
mandate.
CASE No. 3: Espina v.
Thirdly, when Attys. Juaban and Zosa requested Gato, Civil Case No.
respondent to issue a Final Deed of Conveyance to them,
4871-L, Lapu-Lapu
respondent already knew that he no longer had authority
to issue the same. He had already been appraised of the City RTC, Branch 54
fact that a subsequent order, dated December 1, 1998, set
aside the orders that were the basis of the writ of
execution. This was admitted by him in his letter to Attys. On 28 November 1997, respondents filed a complaint
Juaban and Zosa. Despite this knowledge, he still issued a for injunction and damages with an application for the
final deed of sale in favor of the said lawyers without the issuance of a temporary restraining order to enjoin, at
approval of the court. whatever stage, the sale in a public auction of the subject
properties by Sheriff Gato. Said complaint was docketed as
From all these facts, it is clear that respondent
Civil Case No. 4871-L before the Lapu-Lapu City RTC,
showed manifest partiality in favor of Attys. Juaban and
Zosa, giving them unwarranted benefit, advantage and Branch 54. Respondents claim that they were, as of the
preference and that, with evident bad faith, he caused institution of said case, unaware that the subject properties
undue injury to complainants. Respondent thereby failed had already been sold at a public auction.
to comply with the strict standards required of public
officers and employees. On 19 December 1997, petitioners filed a Motion to
Dismiss, which was granted by the Lapu-Lapu City RTC,
WHEREFORE, respondent Sheriff Juan Gato is Branch 54, in an Order dated 30 July 1998. On 2 September
found GUILTY of grave abuse of official functions and 1998, respondents filed a Notice of Appeal, which was given
manifest partiality amounting to grave misconduct and due course by the Lapu-Lapu City RTC, Branch 54, in an
conduct prejudicial to the administration of justice, and is Order dated 7 September 1998.
hereby SUSPENDED FROM SERVICE FOR THREE (3)
MONTHS WITHOUT PAY, with the warning that
Respondents appeal before the Court of Appeals was
repetition in the future of the same or similar misconduct
will be dealt with more severely.[5]
docketed as CA-G.R. CV No. 60721. Respondents filed
therein an Urgent Motion for Issuance of a Temporary
37
Restraining Order and Writ of Preliminary Injunction
dated 19 October 1998. On 26 November 1998, the Court of
Appeals issued a Resolution granting respondents application
for the issuance of a temporary restraining order, restraining
Sheriff Gato from consolidating ownership over the subject
properties in favor of petitioners.
On 1 December 1998, respondents filed an Urgent
Manifestation/Motion dated 1 December 1998 wherein they
tendered the amount of P10,962,347.20 as payment for the
redemption price of the subject properties, on the condition
that if the application for preliminary injunction was denied
or if the case is finally resolved in favor of petitioners, the
said amount shall be considered as valid tender of the
redemption price of the subject properties retroacting to the
date of the filing of the Manifestation/Motion. In a comment
dated 17 December 1998, petitioners interposed no objection
to the deposit of said amount, but excepted to respondents
claim that the tender would stop the running of interest on the
redemption price.
On 15 June 1999, the Court of Appeals issued a
Resolution stating that respondents application for a writ of
preliminary injunction to enjoin Sheriff Gato from
consolidating ownership over the subject properties in favor
of petitioners had been rendered moot in view of the 1
December 1998 Order by the Lapu-Lapu City RTC, Branch
27, in Civil Case No. 2309-L setting aside its Order dated 10
October 1997 and giving due course to respondents appeal
therein.
In the meantime, petitioners were able to acquire the
Definite Deed of Sale of the subject properties from Sheriff
Gato. Hence, respondents filed a Motion for Clarification
and/or Reconsideration to Cite [Petitioners] in
Contempt. Petitioners, however, proceeded to register the
Definite Deed of Sale issued by Sheriff Gato with the
Register of Deeds in Lapu-Lapu City.
In a Resolution dated 30 September 1999, the Court of
Appeals granted respondents application for a writ of
preliminary injunction and enjoined petitioners from
exercising rights of ownership over the subject properties,
such as alienating or encumbering the same.
On 31 January 2005, the Court of Appeals rendered the
assailed Decision, the dispositive portion of which reads:
WHEREFORE, the Order dated July 30 1998
issued by the Regional Trial Court, Branch 54,
Lapu-Lapu City, in Civil Case No. 4871-L dismissing the
complaint, is hereby REVERSED and SET ASIDE.
The Writ of Preliminary Injunction issued
pursuant to the Courts resolution promulgated
on September 30, 1999, subject to the conditionalities
therein, is hereby made PERMANENT.
The Regional Trial Court, Branch 54, Lapu-Lapu
City is directed to undertake further proceedings in Civil
Case No. 4871-L sofar as the issue on damages is
concerned.
Costs against appellees.[6]
38

Petitioners Motion for Reconsideration of the foregoing
decision was denied in a Resolution dated 20 September
2005. Hence, the present recourse, wherein petitioners bring
forth the following issues for this Courts consideration:
1. Whether or not Rene Espina had a cause
of action to file the Injunction and
Damages Case against petitioners;
2. Whether or not the trial court acquired
jurisdiction over the complaint and over
CDPI in said case;
3. Whether or not only questions of law
were raised in respondents appeal, which
allegedly required the Court of Appeals to
dismiss said appeal;
4. Whether or not the Court of Appeals erred
in taking cognizance of the records in
another case which were not offered and
admitted as evidence as basis for its
findings of facts;
5. Whether or not the Court of Appeals erred
in issuing a permanent injunction against
petitioners considering that there was
allegedly no prayer in the complaint
therefor.
We find no merit in the present Petition.
Authority of Rene
Espina to File the
Case and the
Jurisdiction of the
RTC
Only respondent Espina signed the Verification and
Certification of Non-Forum Shopping attached to the
complaint in the third case, Civil Case No. 4178-L, before the
Lapu-Lapu City RTC, Branch 54; and apart from him, there
was no signatory of the Verification and Certification of
Non-Forum Shopping on behalf of respondent
CDPI. Petitioners claim that the complaint should have been
dismissed by the trial court since (1) respondent Espina had
no more personal interest in the case, having assigned his
rights to the subject properties to respondent CDPI; and (2)
there was no authority or board resolution authorizing
respondent Espina to file the complaint on behalf of his
co-respondent CDPI.
Sec. 2, Rule 3 of the Rules of Court requires that
parties to a civil case must be real parties in interest, to wit:
39
 SEC. 2. Parties in interest.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. Unless otherwise authorized by law or these
Rules, every action must be prosecuted or defended in
the name of the real party in interest.
We quote with approval the following ruling of the
Court of Appeals on the issue of respondent Espinas
personality to institute Civil Case No. 4178-L:
The personality of appellant Rene Espina to sue
in his personal capacity finds basis in the Agreement to
Sell and to Buy. It is readily apparent in the Agreement
that he has been designated as the Second Party, in his
personal capacity, and not as agent or representative of a
corporate entity. On the other hand, the Deed of Sale
which was subsequently executed, is based on the
aforesaid Agreement. Therefore, there is no gainsaying
that appellant Rene Espina has a personal interest in the
case.[7]
Respondents right to the subject properties is based on
the 31 January 1997 Agreement to Sell and to Buy executed
between the Heirs of Bancale and respondent Espina.Hence,
the said Agreement is the very source of the right, the
violation of which constituted the cause of action in
respondents complaint for injunction before the court a
quo. It was respondent Espina who entered into the
Agreement, and his rights as a party to the said contract were
not extinguished just because he designated his co-respondent
CDPI as vendee of the subject properties, pursuant to the
authority given to him in paragraph 5 thereof. Among
respondent Espinas rights as a party to the Agreement is his
right to the full realization of the purpose of the contract,
which in this case, would be the transfer of the ownership of
the subject properties from the Heirs of Bancale either to him
or to his designated vendee. The public auction sale of the
subject properties to petitioners would not only prevent the
intended transfer of ownership under the Agreement, but
would also render inutile respondent Espinas designation of
respondent CPDI as a vendee. Moreover, it was undisputed
that respondent Espina advanced P2,000.000 to the Heirs of
Bancale, which formed part of the consideration for the
ensuing sale of the subject properties. There was no proof that
respondent Espina had already been reimbursed for the said
amount.Having paid part of the purchase price for the subject
properties, then respondent Espina has an interest therein.
Having been established as a real party in interest,
respondent Espina has not only the personality to file the
complaint in Civil Case No. 4178-L, but also the authority to
sign the certification against forum shopping as a plaintiff
therein. We held in Mendigorin v. Cabantog,[8] Escorpizo v.
University of Baguio[9] and Condo Suite Club Travel, Inc. v.
National Labor Relations Commission[10] that the certification
against forum shopping must be signed by the plaintiff or any
of the principal parties and not by counsel.[11]We have also
held in Cua v. Vargas,[12] that:
The general rule is that the certificate of
non-forum shopping must be signed by all the plaintiffs or
petitioners in a case and the signature of only one of them
40
 is insufficient. Nevertheless, the rules on forum shopping,
which were designed to promote and facilitate the orderly
administration of justice, should not be interpreted with
such absolute literalness as to subvert their own ultimate
and legitimate objective. Strict compliance with the
provisions regarding the certificate of non-forum
shopping merely underscores its mandatory nature in that
the certification cannot be altogether dispensed with or its
requirements completely disregarded. Under justifiable
circumstances, the Court has relaxed the rule requiring the
submission of such certification considering that although
it is obligatory, it is not jurisdictional.
Thus, when all the petitioners share a common
interest and invoke a common cause of action or defense,
the signature of only one of them in the certification
against forum shopping substantially complies with the
rules.
In Bases Conversion and Development Authority v.
[13]
Uy, we held:
Signature of a principal party sufficient for verification
and certification
Anent the assailed verification and certification of
non-forum shopping, it is shown that it substantially
complied with the requirements of the Rules. Dismissal
of appeals that is purely on technical grounds is frowned
upon. While only petitioner Ramon P. Ereneta signed
the verification and certification of non-forum shopping
such is not fatal to the instant petition. In Calo, we
agreed with petitioners that the signature of only one
petitioner in the verification and certification of
non-forum shopping satisfies the requirement under
Section 2, Rule 42 of the Revised Rules on Civil
Procedure. In Calo, we relied on Condo Suite Club
Travel, Inc., v. NLRCwhere we ruled that the certification
of non-forum shopping may be signed not only by the
petitioners but also any of the principal parties. In the
instant case, Mr. Ramon P. Erenta, a member of the
Investment Committee of the Heritage Park Management
Corporation, is a principal party in the instant case
having been impleaded in Civil Case No. 99-0425
pending in the RTC.
More so, in Calo, we also cited Cavile, et al. v.
Heirs of Clarita Cavile, et. al.where we held that there
was substantial compliance with the Rules when only
petitioner Thomas George Cavile, Sr. signed in behalf of
all the other petitioners of the certificate of non-forum
shopping as the petitioners, being relatives and
co-owners of the properties in dispute, shared a common
interest in them, had a common defense in the complaint
for partition, and filed the petition as a collective, raising
only one argument to defend their rights over the
properties in question. We reasoned that there was
sufficient basis for Cavile, Sr., to speak for and in behalf
of his co-petitioners, stating that they had not filed any
action or claim involving the same issues in another
court or tribunal, nor was there other pending action or
claim in another court or tribunal involving the same
issues. In the same vein, this is also true in the instant
case where petitioners have filed their petition as a
collective, sharing a common interest and having a
common single defense.
Thus, the certificate against forum shopping is not
rendered invalid by the absence of the signature of an
41
authorized official of respondent CDPI. The signature of
respondent Espina as one of the plaintiffs therein suffices.
Furthermore, the allegation concerning the defect in the
Certificate against Forum Shopping was raised for the first
time on appeal. The Motion to Dismiss filed by petitioners
was based only on the following grounds:
I - That the claim or demand set forth in the plaintiffs
pleading has been paid, waived, abandoned, or
otherwise extinguished;
II - That there is another cause of action pending between
the parties for the same cause;
III - That plaintiff Rene Espina has no legal capacity to
sue.[14]
The grounds alleged by petitioners and ruled upon by
the trial court are thus (1) extinguishment, (2) litis pendentia,
and (3) lack of legal capacity to sue on the part of Rene
Espina. Of these grounds, only litis pendentia is related to the
present allegation of petitioners concerning the defect in the
Certification against Forum Shopping. Forum shopping exists
where the elements of litis pendentia are present or where a
final judgment in one case will amount to res judicata in the
other. However, forum shopping as a ground for the
dismissal of actions is distinct and separate from the
failure to submit a proper Certificate against Forum
Shopping. One need not be held liable for forum shopping
for his complaint to be dismissed on the ground of an absence
or a defect in the Certificate against Forum
Shopping. Conversely, one can be liable for forum shopping
regardless of the presence or absence of a Certification
against Forum Shopping. The presence of a Certification in
such a case would only have the effect of making the person
committing forum shopping additionally liable for
perjury. Thus, we held in Spouses Melo v. Court of
Appeals[15]:
Indeed, compliance with the certification against
forum shopping is separate from, and independent of, the
avoidance of forum shopping itself. Thus, there is a
difference in the treatment - in terms of imposable
sanctions - between failure to comply with the
certification requirement and violation of the prohibition
against forum shopping. x x x.
There being no allegation of a defect in the
Certification against Forum Shopping on the part of
respondents, neither the RTC nor the Court of Appeals was
able to rule thereon. Both courts only ruled on the issue
concerning litis pendentia, on which the Court of Appeals
correctly held that:
Litis pendentia is not present in this case vis--vis
Civil Case No. 2309-L. The requisites of litis
pendentia are: (a) identity of parties, or at least such
parties who represent the same interest in both actions; (b)
identity of rights asserted and relief prayed for, the relief
being founded on the same facts; (c) identity with respect
to the two (2) preceding particulars in the two (2) cases is
such that any judgment that may be rendered in the
42
 present case, regardless of which party is successful,
would amount to res judicata in another case.
The appellants herein are not parties in Civil Case
No. 2309-L. There is no identity of rights asserted and
reliefs prayed for. Civil Case No. 2309 is for recovery of
ownership and possession; while the instant case is for
injunction and damages. The judgment in one will not be
a bar to the other case. These cases were conjoined only
because of the incident in Civil Case No. 2309-L, i.e. the
fixing of the attorneys fees and the subsequent execution
on the subject properties which were, in the meantime,
sold to and purchased by the appellants pursuant to an
Agreement to Sell and to Buy.
Appellees charge that appellants are guilty of
forum shopping is without legal basis. It has been held
that where the elements of litis pendentia are not present
or where final judgment in one will not amount to res
judicata in the other, there is no forum shopping.[16]
Propriety of the Mode
of Appeal
Petitioners also claim that since only questions of law
were raised in respondents appeal to the Court of Appeals, the
proper remedy should have been a Petition for Review filed
directly with this Court under Rule 45 of the Rules of Court.
Petitioners cite the Assignment of Errors raised by
respondents before the Court of Appeals in CA-G.R. CV No.
60721:
ASSIGNMENT OF ERRORS
I. The court a quo erred in dismissing the complaint on
the ground of litis pendentia.
II. The court a quo erred in dismissing the complaint on
the ground that the appellant Rene Espina has no legal
capacity to sue.
III. The court a quo should have issued a temporary
restraining order, and after due hearing should have
issued an injunction to enjoin appellee Sheriff Gato from
erroneously levying on and selling at public auction the
Subject Property to satisfy the Writ of Execution dated
14 October 1997 issued by the Trial Court in Civil Case
No. 2309-L.
Petitioners contend that since no evidence was
presented by the parties in the lower court, the complaint
having been dismissed on the timely motion by the petitioners,
the appeal of the dismissal of the complaint required no
determination by the appellate court of the probative value of
the evidence presented by the parties.
The Court of Appeals addressed this issue, thus:
Appellees [Juaban and Espina] contend that since
the assignment of errors raises only questions of law, the
43
proper course of action is a Petition for Review direct to
the Supreme Court in accordance with Rule 45, Revised
Rules of Court. The appellees unduly limit themselves to
the assignment of errors in the appeal and close their
eyes to the glaring fact that, from the narration of facts
above, certain acts taken by RTC Br. 27 before then
Presiding Judge Risos, which are immoral, devious, and
patently illegal, has constrained the Court to take a
second look at the circumstances which gave rise to the
instant appeal. As succinctly observed by the Court in its
Resolution on appellants prayer for the issuance of a writ
of preliminary injunction,
However, inspite full knowledge
Inc.
that the appeal has been given due course
and that therefore there is no more basis
for further action on the execution sale,
appellees Zosa and Juaban caused the
consolidation of ownership and the
issuance of new titles in their names. Said
appellees are even aware that the
redemption money for the properties in
the sum of P10,962,347.20 has been
deposited with this Court by the
appellants. In fact, appellees when asked
to comment on the deposit, manifested
that they have no objection to the deposit
although they disagreed that interest or the
redemption price would stop running.
It is therefore without legal basis
that notwithstanding those circumstances,
the appellees, upon expiration of the
temporary restraining order issued by this
Court, immediately asked for the
execution of a deed of sale in their favor
since no redemption has been made and
managed to obtain titles in their
names. Such consolidation of ownership is
patently erroneous as the decision
granting them attorneys fees is not yet
final and executory and is in fact the
subject of appeal in this Court under
CA-GR CV No. 61696.[17]
We have held in Microsoft Corporation v. Maxicorp,
[18]
and Morales v. Skills International Company,[19] that:
The distinction between questions of law and
questions of fact is settled. A question of law exists when
the doubt or difference centers on what the law is on a
certain state of facts. A question of fact exists if the
doubt centers on the truth or falsity of the alleged
facts. Though this delineation seems simple, determining
the true nature and extent of the distinction is sometime
problematic. For example, it is incorrect to presume that
all cases where the facts are not in dispute automatically
involve purely questions of law.
There is a question of law if the issue raised is
capable of being resolved without need of reviewing the
probative value of the evidence. The resolution of the
issue must rest solely on what the law provides on a
given set of circumstances. Once it is clear that the issue
invites a review of the evidence presented, the question
posed is one of fact. If the query requires a re-evaluation
of the credibility of witnesses, or the existence or
44
 relevance of surrounding circumstances and their relation in the trial court and in his or her brief as appellant in the
to each other, the issue in that query is factual. appellate court.

The provision relied upon by respondent, Section

In the fairly recent case of First Bancorp Inc. v. Court 15, Rule 44 of the Rules of Court, reads:
of Appeals,[20] we discussed the implications of the allegation Sec. 15. Questions that may be
by a party of the lack of jurisdiction of the Court of Appeals raised on appeal. Whether or not the
based on the ground that the appeal was based solely on appellant has filed a motion for new trial
in the court below, he may include in his
questions of law:
assignment of errors any question of law
or fact that has been raised in the court
If the aggrieved party appeals by writ of error
below and which is within the issues
under Rule 41 of the Rules of Court to the CA and it
framed by the parties.
turns out, from the brief of appellant, that only questions
of law are raised, the appeal shall be dismissed:
This rule, however, does not relate to the nature
of the issues that may be raised on appeal by the
Sec. 2. Dismissal of improper
aggrieved party, whether issues of fact or issues of law,
appeal to the Court of Appeals. An appeal
or the mode of appeal of the aggrieved party from a final
under Rule 41 taken from the Regional
order or resolution of the trial court in the exercise of its
Trial Court to the Court of Appeals raising
original jurisdiction; it merely provides the nature of the
only questions of law shall be dismissed,
issues appellant may include in his assignment of error
issues purely of law not being reviewable
incorporated in his Brief as appellant. It may happen
by said court. Similarly, an appeal by
that the appellant may have raised in the trial court errors
notice of appeal instead of by petition for
of fact or law or both, and need not include all said issues
review from the appellate judgment of a
in his appeal in the appellate court. The appellant has
Regional Trial Court shall be dismissed.
the right to choose which issues of law he or she may
raise in the CA in addition to factual issues already
An appeal erroneously taken to the
raised.
Court of Appeals shall not be transferred
to the appropriate court but shall be
A question of fact exists when a doubt or
dismissed outright.
difference arises as to the truth or falsity of alleged
facts. If the query requires a reevaluation of the
The nature of the issues to be raised on appeal
credibility of witnesses or the existence or relevance of
can be gleaned from the appellants notice of appeal filed
surrounding circumstances and their relation to each

45
 other, the issue in that query is factual. On the other
hand, there is a question of law when the doubt or
difference arises as to what the law is on certain state of
facts and which does not call for an existence of the
probative value of the evidence presented by the
parties-litigants. In a case involving a question of law,
the resolution of the issue rests solely on what the law
provides on the given set of circumstances. Ordinarily,
the determination of whether an appeal involves only
questions of law or both questions of law and fact is
best left to the appellate court. All doubts as to the
correctness of the conclusions of the appellate court
will be resolved in favor of the CA unless it commits
an error or commits a grave abuse of discretion.
In case of doubt, therefore, the determination of the
Court of Appeals of whether an appeal involves only
questions of law or both questions of law and fact shall be
affirmed. As explained by the Court of Appeals, it was only
after the appellate courts painstaking review of the facts
surrounding the dispute that the immoral, devious and
patently illegal acts which attended the transfer of the subject
properties to petitioners were brought to light. This Court
finds no error or grave abuse of discretion on the part of the
Court of Appeals in making the aforesaid finding. No less
than this Court, in the second case, A.M. No. P-02-1580,
found that Sheriff Gato showed manifest partiality in favor of
Attys. Juaban and Zosa, giving them unwarranted benefit,
advantage and preference and that, with evident bad faith, he
caused undue injury to complainants [Espina and
CDPI].[21] Irrefragably, respondents appeal before the Court
of Appeals involved not only questions of law, because for
the determination thereof, the appellate court was first called
upon to make its own findings of facts which were significant
to its complete and judicious resolution of the appeal.
Taking Cognizance of
Records in Another
Case
Petitioners claim that the Court of Appeals, in
resolving CA-G.R. CV No. 60721, the appeal of the dismissal
of Civil Case No. 4178-L by Lapu-Lapu City RTC, Branch
54, erred in taking cognizance of the records in another case
as basis for its findings of facts. According to petitioners, the
Court of Appeals based its findings of facts on the records of
the first case, Civil Case No. 2309-L, pending before another
Branch (Branch 27) of the RTC of Lapu-Lapu City.
In Bongato v. Malvar,[22] we held:
Second, as a general rule, courts do not take
judicial notice of the evidence presented in other
proceedings, even if these have been tried or are pending
in the same court or before the same judge. There are
exceptions to this rule. Ordinarily, an appellate court
cannot refer to the record in another case to ascertain a
fact not shown in the record of the case before it, yet, it
has been held that it may consult decisions in other
proceedings, in order to look for the law that is
determinative of or applicable to the case under
46
 review. In some instances, courts have also taken
judicial notice of proceedings in other cases that are
closely connected to the matter in controversy. These
cases may be so closely interwoven, or so clearly
interdependent, as to invoke a rule of judicial notice.
We find that the circumstances in Case No. 1 (Civil
Case No. 2309-L) are too closely interwoven and so clearly
interdependent with those in Case No. 3 (Civil Case No.
4178-L). Petitioners and respondents are claiming the very
same subject properties. Case No. 3, the case at bar, calls for
a determination of who has the superior right to the subject
properties, petitioners or respondents. Petitioners are the ones
who actually rely on Case No. 1 because their right to the
subject properties is rooted in the proceedings therein. It
should be recalled that they served as the counsels of the
Heirs of Bacale in Case No. 1; they had the subject properties
sold at a public auction to satisfy the award in their favor of
attorneys fees; and they were the successful bidders at the
auction. Petitioners cannot insist on their right to the subject
properties, yet prevent the Court of Appeals from looking into
the basis or source of said right, as well as the circumstances
surrounding their acquisition of the same. They cannot invoke
orders, rulings or findings of the trial court in Case No. 1
which are supportive of their right to the subject properties
but suppress those which are damaging.
Even assuming for the sake of argument that the
proceedings in Case No. 1 cannot be stated in our narration of
facts on the ground that said proceedings have not yet been
terminated, there is certainly nothing that prevents us from
consulting Case No. 2 (A.M. No. P-02-1580) wherein Sheriff
Gato was suspended by this Court for acting with grave abuse
of official functions and manifest partiality amounting to
grave misconduct and conduct prejudicial to the
administration of justice in selling to petitioners the subject
properties at a public auction despite respondents third-party
claim. It bears to emphasize that Case No. 2 has already been
decided with finality by this Court.
Lack of Prayer for the
Issuance of a
Permanent Injunction
Petitioners argue that the respondents did not make any
allegation in their Complaint that they were the owners of the
disputed properties and there was no prayer in their
Complaint for the issuance of a permanent injunction against
petitioners prohibiting them from exercising acts of
ownership.
An inspection of respondents Complaint, however,
reveals that petitioners actually alleged ownership of the
property in dispute:
47

The defendants are doing, threatening, and/or
attempting to conduct the said public auction sale which
is in violation of the rights of the plaintiffs, as the
property sought to be sold now belong to the plaintiffs,
and not of Concordia Bancale et. al., and this tends to
render whatever favorable judgment the Honorable Court
may grant to the plaintiffs ineffectual.[23]
As regards the alleged lack of prayer for the court to
issue a permanent injunction prohibiting petitioners from
exercising acts of ownership, it is necessary to examine the
actual Prayer made by the respondents in their Complaint,
which reads:
WHEREFORE, plaintiffs most respectfully pray
this Honorable Court, that upon filing of this complaint,
a temporary restraining order be issued enjoining
defendants from proceeding with the auction sale, or at
whatever stage it is, of Lot 6720-C-2 of the subdivision
plan Psd-07-05-012144, containing an area of 13,677 sq.
meters and covered by Transfer Certificate of Title No.
36425 and Lot No. 6720-B-2 of the same subdivision
plan, containing an area of 4,560 sq. meters and covered
by Transfer Certificate of Title No. 36426, all located at
Lapulapu City, and upon notice to all the concerned, to
issue the writ of preliminary injunction for the same
purpose;
After trial on the merits to make the injunction
permanent, and to order the defendants, jointly and
severally:
1. To reimburse the plaintiffs, jointly and severally
the sum of P35,000,000.00 representing the purchase
price of the properties, subject matter of this case, which
were already paid by the plaintiffs to the Bancales;
2. To pay the plaintiffs the sum of P5,000,000.00
for moral damages;
3. To reimburse plaintiffs the sum of P20,000.00
for attorneys fees, plus the sum of P2,000.00 per court
appearance, and the sum of P20,000.00 for litigation
expenses;
Plaintiffs further pray for such orders as may be
just, appropriate and equitable under the premises.[24]
We hold that the issuance by the Court of Appeals of a
permanent injunction prohibiting petitioners from exercising
acts of ownership is included in respondents prayer for such
orders as may be just and equitable under the
circumstances. Such a prayer in the complaint justifies the
grant of a relief not otherwise specifically prayed for.[25] More
importantly, we have ruled that it is the allegations in the
pleading which determine the nature of the action and the
Court shall grant relief warranted by the allegations and proof
even if no such relief is prayed for.[26] It is the material
allegations of the fact in the complaint, not the legal
conclusions made in the prayer, that determine the relief to
which the plaintiff is entitled.[27] If respondents were seeking
to enjoin the sale of the subject properties, in effect, to
prevent the transfer of ownership of the subject properties to
others, then such prayer must be deemed to logically and
48
reasonably include the prayer to enjoin others from exercising
rights of ownership over the subject properties, for if the
ownership of the subject properties are not transferred to any
one else, then no one else has the right to exercise the rights
appurtenant thereto.

WHEREFORE, the Petition is DENIED. The

Decision dated 31 January 2005 of the Court of Appeals in
CA-G.R. CV No. 60721 is AFFIRMED. Costs against
petitioners.

SO ORDERED.
G.R. No. 109645 January 21, 2015

ORTIGAS & COMPANY LIMITED PARTNERSHIP, Petitioner,

vs.
JUDGE TIRSO VELASCO and DOLORES V. MOLINA, Respondents.

x-----------------------x

G.R. No. 112564

DOLORES V. MOLINA, Petitioner,

vs.
HON. PRESIDING JUDGE OF RTC, QUEZON CITY, BR. 105 and
MANILA BANKING CORPORATION,Respondents.

x-----------------------x

G.R. No. 128422

DOLORES V. MOLINA, Petitioner,

vs.
THE HONORABLE COURT OF APPEALS and EPIMACO
ORETA, Respondents.

49
x-----------------------x
G.R. No. 128911
THE MANILA BANKING CORPORATION and ALBERTO V.
REYES, Petitioners,
vs.
DOLORES V. MOLINA and HON. MARCIANO BACALLA, in his
capacity as Presiding Judge of the Regional Trial Court of Quezon
City, Branch 216, Respondents.
DECISION
LEONEN, J.:
These consolidated cases involve matters that have long been settled by
this court. However, petitioner in G.R. Nos. 112564 and 128422, Dolores V.
Molina, remained incessant in filing suits that led to the unnecessary
clogging not only of this court's but the lower courts' dockets as well.
G.R. Nos. 109645 and 112564 were decided by this court on July 25,
1994. A Motion for Reconsideration was filed by Dolores V. Molina (Molina)
1 yet to acquire jurisdiction over the owners of the adjacent properties.
on August 10, 1994. She later filed two supplements to the Motion for
Reconsideration. Her Motion for Reconsideration was denied with finality in
2
the Resolution dated January 23, 1995. Despite the denial of Molina's
Motion for Reconsideration, she filed a "Motion for Leave to File the Herein
Incorporated Second Motion for Reconsideration and to Allow x x x Dolores
V. Molina a Day in Court Relative to Her Petition for Reconstitution." In the
3
Resolution dated March 1, 1995, this court denied with finality Molina's
Motion for Reconsideration. 4
In the Resolution dated March 4, 1996, this court found Molina guilty of
contempt of court and imposed a fine of ₱1,000.00. 5
On August 15, 1997, this court decided the administrative case against
Judge Tirso Velasco (Judge Velasco). 6
In order to fully comprehend the facts of G.R. Nos. 128422 and 128911, we
summarize this court’s decision in G.R. Nos. 109645 and 112564.
I
G.R. No. 109645 7
On November 14, 1991, Molina filed a Petition for Reconstitution of
Transfer Certificate of Title (TCT) No. 124088. She alleged that the original
8
copy of TCT No. 124088 was lost when the Quezon City Register of Deeds
was gutted by fire on June 11, 1988 and that she has an "owner’s duplicate
copy of the title . . . and that the title is not subject of any document or
contract creating a lien or encumbrance on the land therein described." 9
Several days later, Molina moved to withdraw her Petition, explaining that
she had to go to the United States. Judge Velasco granted her Motion to
Withdraw and dismissed the case. 10
On April 3, 1992, Molina "filed an ex-parte motion for review of LRC Case
No. Q-5404." The Motion was granted on the same date.
11 12
The Office of the Solicitor General objected to the Ex-parte Motion on the
ground that the owners of the adjacent properties were not notified. In the
13
Order dated July 3, 1992, Judge Velasco acknowledged that his court had
14
On July 13, 1992, Molina filed an Ex-parte Motion praying for Notices of
Hearing to be served on the:
(a) "subject owners" of specified lots in the corresponding "Technical
Description of the subject land;" (b) the "President of the Corinthian
Neighborhood Association or Corinthian Homeowners Association thru the
Barangay Chairman of Barangay Corinthian because the adjoining property
designated as Vicente Madrigal is now part of this Barangay Corinthian;" (c)
the "Director, Bureau of Land, Plaza Cervantes Manila as adjoining owner
designated as Public Land;" and (d) the "City Engineer of Quezon City for
the adjoining boundaries designated as Roads or Road Lot." 15
However, the Clerk of Court gave the Notices of Hearing only to the
President of the Corinthian Neighborhood Association, the Director of the
Bureau of Lands, and the City Engineer of Quezon City. Thus, the owners
of the adjacent lots were not served copies of the Notices of Hearing. 16
50
At this point, Ortigas & Company Limited (Ortigas) found out about Molina’s
Petition and filed an Opposition. Ortigas subsequently filed a supplemental
17
pleading and alleged the following: (1) The "proliferation of syndicates
taking advantage of the destruction by fire of land titles kept by the Quezon
City Register of Deeds."18
(2) Molina is ‘a well-known land speculator’ as shown by the petitions she
has previously filed. Further, the bases for her claims are contradictory. In
Land Registration Case No. Q-336 (WIDORA case), Molina claimed
ownership by acquisition through prescription, having been in open and
adverse possession of the property for more than thirty (30) years while in
Civil Case No. 90-4749, she claimed that she purchased the property from
a certain Eusebia Molina. (3) The Land Registration Authority’s report
19
which states that:
[T]he plan [being] relied upon by Molina, Psd-16740 "appears to be derived
from two different surveys, numbered Psu-1148 & Psu-20191, neither of
which appear(s) to have been the subject of original registration; thus it is
presumed that no original title had been issued from which TCT-124088
could have emanated;" that said plan "is a portion of (LRC) SWO-15352
which is being applied for registration of title in Land Reg. Case No. Q-336,
LRC Rec. No. N-50589," etc. 20
Ortigas’ counsel informed the Manila Mission of Jesus Christ of Latter Day
Saints, Inc. (Mormons) of Molina’s pending Petition. Thus, the Mormons
filed an Opposition.
21
During the hearing, Molina did not mention that she acquired the land
through prescription. Instead, she testified as follows:
[S]he and her late husband had acquired the two (2) parcels of land in
question from the latter's relatives in 1939; that she had in truth seen the
deed of sale and the titles in her husband's possession; that her husband
was killed by the Japanese in 1944; that it was only in the 1960's that she
attempted to obtain titles to the property in her name, and sought the help
of President Marcos, who "became her boyfriend;" that Marcos had, in turn,
referred her for legal assistance to former Judge Echeverri; that she had
subsequently left for the United States where she stayed until her return
during the martial law regime at which time, however, she could no longer
get in touch with either Judge Echeverri or President Marcos; that
sometime in 1990 she met Gen. Fabian Ver in Singapore, and she was
then told that Marcos had given instructions for the delivery to her of the title
to the disputed lands, to be accomplished back in Manila; that the title (TCT
124088) was actually delivered to her by Col. Balbino Diego in November,
1990 at her house in Philam Life Homes Subdivision in Quezon City; that
she learned that the title had been entrusted to Col. Diego in 1986, when
Gen. Ver and President Marcos fled the country, but Diego had been
unable to give her the title earlier because he was placed under house
arrest shortly after Marcos' deposal and remained under such restraint until
May 11, 1988. 22
On September 23, 1992, Judge Velasco granted Molina’s Petition and
directed the Quezon City Register of Deeds to reconstitute TCT No. 124088
in Molina’s name. 23
Ortigas and the Office of the Solicitor General filed their respective Notices
of Appeal, while the Mormons filed a Motion for Reconsideration. 24
Meanwhile, Molina "filed a motion to strike the notice of appeal or in the
alternative, to allow execution of the decision pending appeal." 25
Judge Velasco dismissed Ortigas’ Notice of Appeal, denied the Mormons’
Motion for Reconsideration, and granted Molina’s Motion for Execution
pending appeal. Consequently, Molina was issued TCT No. RT-58287.
26 27
The Solicitor General’s Notice of Appeal was dismissed in a separate Order
on the ground that:
the Solicitor General has not filed any formal opposition to the petition and
neither has it introduced and/or formally offered any evidence to warrant its
dismissal, it appearing on the contrary, that the Land Management Bureau,
the DENR, the Register of Deeds and the City Engineer’s Office of Quezon
City, which are the government agencies directly involved in this kind of
proceeding has not registered any opposition to the petition, the notice of
appeal filed by him was sham aside from being ten (10) days late.
28 29
51
The Mormons withdrew their Appeal because Molina recognized their
ownership and possession of "an area of8,860 sq. m. and covered by TCT
No. 348048[.]" 30
Molina subdivided the property covered by TCT No. RT-58287 into five
parcels. One of the parcels of land was purchased by Gateway Enterprises
Co., Inc. 31
Ortigas then filed a Petition for Certiorari and Mandamus with prayer for the
issuance of a temporary restraining order. Ortigas prayed that this court:
32
(1) Invalidate Judge Velasco’s Orders dated October 14, 1992 and
February 10, 1993; and
(2) That the TCTs issued, based on Judge Velasco’s Order dated October
14, 1992, "be declared void abinitio and that, alternatively, respondent
Judge be ordered to act on the notices of appeal seasonably filed by
forwarding the records of LRC Case No. Q-5404 to the Court of Appeals." 33
II
G.R. No. 112564 34
G.R. No. 112564 originated from an action for "Annulment of Transfer
Certificate of Title with Damages and Prayer for Preliminary Injunction and
Restraining Order" filed by The Manila Banking Corporation (TMBC)
35
against Molina and Gateway Enterprises Company, Inc. This was docketed
as Case No. Q93-15920. 36
TMBC alleged that it owned several parcels of land covered by TCT No.
124088. The subject properties of TMBC’s claim were "formerly covered by
TCT Nos. 77652 and 77653" under Ortigas’ name. These properties were
37
converted into a subdivision of several lots. Some of the lots were sold to
Manila Inter public Development Corporation and to Breeders Feeds, Inc.
The lots purchased by these two corporations were mortgaged to TMBC as
security for their respective loans. The mortgages were foreclosed, and
titles were issued in TMBC’s name "as the highest bidder at the foreclosure
sales."
38
Molina filed a Motion to Dismiss, citing "litis pendentia, lack of jurisdiction,
bar by prior judgment, plaintiff’s [referring to TMBC] lack of status as a real
party in interest, and failure of the complaint to state a cause of action."
39
Molina also alleged that a restraining order was issued with regard to TCT
No. 124088 and that the trial court where Case No. Q93-15920 was
pending "had no jurisdiction to annul the judgment of a coordinate court." 40
The trial court denied Molina’s Motion to Dismiss. 41
Molina filed supplemental pleadings to support her Motion to Dismiss,
which were denied in the Order dated November 25, 1993. 42
Molina filed a Petition for Certiorari before this court, praying for the
annulment of the Orders denying her Motion to Dismiss. She also prayed
that this court dismiss the action for annulment filed by TMBC. 43
Molina filed the same Petition for Certiorari before the Court of Appeals on
December 9, 1993. 44
III
Ruling in G.R. Nos. 109645 and 112564
In the Decision dated July 25, 1994, this court granted Ortigas’ Petition for
Certiorari in G.R. No. 109645and denied Molina’s Petition in G.R. No.
112564. The dispositive portion of the Decision states:
WHEREFORE, the petition in G.R. No. 109645 is GRANTED; and that in
G.R. No. 112564[,] DENIED for lack of merit.
In G.R. No. 109645, the Decision dated September 23, 1992 of
Respondent Judge Tirso Velasco, Presiding Judge of Branch 88 of the
Regional Trial Court of Quezon City, in LRC Case No. Q-5404, as well as
his Orders dated April 3, 1992, October 14, 1992, and February 10, 1993,
are NULLIFIED AND SET ASIDE; the titles of Dolores Molina upheld and
reconstituted by said decision and orders — namely, Transfer Certificates
of Title Numbered 124088 and RT-58287 — and those derived therefrom
and subsequently issued — namely, Transfer Certificates of Title
52
Numbered 83163, 83164, 83165, 83166 and 83167 — are all Declared
NULL AND VOID and are hereby CANCELLED; said LRC Case No.
Q-5404 of the Regional Trial Court of Quezon City is DISMISSED; and the
temporary restraining order of this Court of May 12, 1993 is MADE
PERMANENT.
In G.R. No. 112564, the Orders of respondent Presiding Judge of Branch
105 of the Regional Trial Court of Quezon City in Case No. Q-93-15920
dated September 17, 1993 and November 25, 1993 are AFFIRMED; and
said Judge is DIRECTED to proceed to dispose of said Case No.
Q-93-15920 with all deliberate dispatch conformably with this decision.
Dolores Molina and her counsel, Atty. Eufracio T. Layag, and Dr. Jose
Teodorico V. Molina, are ORDERED to SHOW CAUSE, within ten (10)
days from notice of this judgment, why they should not be pronounced
liable, and correspondingly dealt with, for violation of the rule against
forum-shopping.
SO ORDERED. 45
This court explained that Judge Velasco had no jurisdiction to decide the
reconstitution case since no notice was given to the owners of the adjacent
properties. This defect was in violation of Republic Act No. 26, Section
46
13.47
In addition, Judge Velasco erred in reviving the case after Molina’s Motion
to Withdraw had been granted. This court discussed that:
[t]he dismissal of the case, and the lapse of the reglementary period to
reconsider or set aside the dismissal, effectively operated to remove the
case from the Court’s docket. Even assuming the dismissal to be without
prejudice, the case could no longer be reinstated or "revived" by mere
motion in the original docketed action, but only by the payment of the
corresponding filing fees prescribed by law. . . . There having been a
dismissal or withdrawal of the action, albeit without prejudice, and the order
considering the action withdrawn having become final, revival of the case
could not be done except through the commencement of a new action, i.e.,
by the filing of another complaint and the payment of the concomitant
docketing fees. 48
As to Molina’s claim of ownership, her contradictory statements proved
otherwise. In this court’s Decision, the following facts were noted:
(1) In the WIDORA case, Molina claimed that she, together with her
predecessors-in-interest, were in "open, public, adverse, continuous and
uninterrupted possession" of the property for more than 30 years.
49
Subsequently, she claimed to have acquired the property through purchase
from Eusebia Molina and her heirs.
(2) As to possession of document of title, Molina claimed that when she
purchased the property from Eusebia Molina, she had no time to attend to
the property’s titling since "she was so preoccupied as the sole
breadwinner of the family." She later changed her story and claimed that
50
she asked President Marcos to help her. Next, she claimed that she was in
51
possession of the owner’s duplicate copy of TCT No. 124088. She again
52
changed her story and claimed that the owner’s duplicate copy was not in
her possession but she had "a certification from the Land Management
Bureau [and] that there [was] a record of her property in a microfilm
negative."53
(3) The quitclaim and waiver she executed in favor of the Mormons was an
"implied recognition of Ortigas’ ownership." 54
(4) Jurisprudence shows that the validity of Ortigas’ titles had been decided
upon in several cases, namely:
(a) Cia. Agricola de Ultramar v. Domingo 55
(b) Ortigas v. Hon. Ruiz 56
(c) Del Rosario v. Ortigas 57
(d) Navarro v. Ortigas 58
(e) Resolution dated August 7, 1992,where this court affirmed the Court of
Appeals Decision in CA G.R. SP No. 18085. The Court of Appeals stated
59
that "Widora and Molina had no more right to apply for the same lands
which had already been titled in the name of Ortigas." 60
53
This court also held that Judge Velasco erred in dismissing the Notices of
Appeal filed by Ortigas and the Office of the Solicitor General and in 61
granting Molina’s Motion for Execution pending appeal. 62
The filing of numerous Petitions by Molina was noted, and this court held
that she engaged in forum shopping. Thus, the dispositive portion of the
Decision ordered her and her counsel to show cause why they should not
be held in contempt. 63
Ortigas filed a Motion for Reconsideration on the ground that its prayer,
"that Hon. Judge Tirso D.C. Velasco be purged from the judiciary," was not
64
granted.
On the other hand, Molina filed the Motion for Reconsideration dated
August 10, 1994, and two supplements to the Motion dated September 22,
1994. The Motion and the supplements were denied in the Resolution
65
dated January 23, 1995. Thus, the Decision dated July 25, 1994 became
final and executory for G.R. No. 112564 and G.R. No. 109645. 66
Also, the Resolution dated January 23, 1995 included the pronouncement
that Dr. Teodorico Molina and counsel Atty. Eufracio Layag were "guilty of
contempt of court for willful violation of the rule against forum shopping." A 67
fine of ₱500.00 was imposed on each of them. Despite the denial of her
68
Motion for Reconsideration, Molina still filed a "Motion for Leave to File the
Herein Incorporated Second Motion for Reconsideration and to Allow x x x
Dolores V. Molina a Day in Court Relative to her Petition for
Reconstitution."69
The second Motion for Reconsideration was denied in the Resolution dated
March 1, 1995. This court further resolved:
TO DIRECT that no further pleadings, motions or papers be henceforth filed
in these cases except only as regards the issues directly involved in the
‘Motion for Reconsideration’ (Re: Dismissal of Respondent Judge) of
Ortigas & Co. Ltd., dated August 15, 1994.
IT IS SO ORDERED. 70
In the Resolution dated July 24, 1995, this court increased the fine
71
imposed on Dr. Teodorico Molina and counsel Atty. Eufracio Layag to
₱1,000.00 and resolved:
(2) To DECLARE THESE CASES CLOSED AND TERMINATED, DIRECT
ENTRY OF JUDGMENT, AND REITERATE the direction ‘that no further
pleadings, motion or papers be henceforth filed in these cases except only
as regards the issues directly involved in the Motion for Reconsideration
(Re: Dismissal of Respondent Judge) of Ortigas & Co. Ltd., dated August
15, 1994’ and the proceedings for contempt against Dr. Teodorico Molina
and Atty. Eufracio Layag; and (3) To DIRECT the Clerk of Court to transmit
the mittimus of both these cases to the corresponding Courts of origin for
appropriate action and disposition.
72
Despite these Resolutions stating that "no further pleadings, motions, or
others papers" be filed, Molina still filed the following:
(a) [m]otion to refer the cases to the Court En Banc dated April 5, 1995
(denied by Resolution of June 19, 1995);
(b) [c]onsolidated motion dated July 25, 1995, for reconsideration of the
June 19, 1995 Resolution (denied by Resolution dated August 28, 1995);
and
(c) [m]otion dated August 21, 1995 for reconsideration of the July 24, 1995
Resolution (Re: increasing fines on counsels and directing entry of
judgment) (denied by Resolution dated October 25, 1995). 73
TMBC filed a Motion for Contempt dated September 18, 1995, praying that
74
Molina be declared in contempt of court and that her Motion for
Reconsideration dated August 21, 1995 be denied.
In the Resolution dated March 4, 1996, this court found Molina guilty of
75
contempt of court:
It is clear that petitioner [Dolores V. Molina] was bent on pursuing her
claims despite the Court’s unequivocal declaration that her claims were
lacking in merit, that the proceedings were terminated, and that no further
pleadings, motions or papers should be filed. Her persistence constitutes a
54
deliberate disregard, even defiance, of these Court’s plain orders, and an
abuse of the rules of procedure to delay the termination of these cases.
....
Molina has had more than her day in court. She was accorded more than
ample opportunity to present the merits of her case. Her every argument
was heard and considered. . . . There has been a final determination of the
issues in these cases and petitioner has been repeatedly directed to abide
thereby. Her deliberate violation of the orders of the Court [is] unjustified
and inexcusable.
....
WHEREFORE, Dolores V. Molina is found GUILTY of contempt of court for
willful disregard and disobedience of the Resolutions of the Court, and a
FINE OF ONE THOUSAND PESOS (1,000.00) is hereby imposed on her,
payable within five (5) days from receipt of this Resolution, with the warning
that any subsequent disregard and disobedience of this Court’s orders will
be dealt with more severely.
Let this Resolution be published in the authorized Court reports for the
information and guidance of the bench and the bar respecting the nature
and effect of denials of motions for reconsideration of judgments and final
orders, the propriety of second motions for reconsideration, and the
prohibition against the filing of further pleadings, motions or other papers.
IT IS SO ORDERED. (Emphasis in the original)
76
With regard to the Administrative Complaint against Judge Velasco, TMBC
joined Ortigas in praying that he be removed from the judiciary. 77
TMBC’s Administrative Complaint against Judge Velasco was filed on July
12, 1993 ahead of Ortigas’ Complaint and was docketed as Administrative
Matter No. RTJ-93-1108. 78
In the Resolution dated August 15, 1997, this court held:
WHEREFORE, Judge Tirso D. C. Velasco is hereby DISMISSED from the
service, with forfeiture of all retirement benefits and accrued leave credits,
and with prejudice to reemployment in any branch or instrumentality of the
government including government-owned or controlled corporations.
Immediately upon service on him of notice of this adjudgment, he shall be
deemed to have VACATED his office and his authority to act in any manner
whatsoever as Judge shall be considered to have automatically CEASED.
SO ORDERED. (Emphasis in the original)
79
IV
Facts of G.R. No. 128422
Respondent Epimaco V. Oreta (Oreta) filed a Complaint against Molina for
falsification of public document before the Office of the City Prosecutor in
Quezon City. In his Affidavit-Complaint, he stated that he is "the Head of
80
the Security Force hired to secure certain properties of The Manila Banking
Corporation (TMBC)" and that he is the "duly-appointed statutory receiver
81
of TMBC." 82
Oreta alleged that TMBC owns several parcels of land in Greenmeadows,
Quezon City. These parcels of land were purchased at public auctions due
to the extrajudicial foreclosure of the mortgages over the lands.83
The registered owners of the properties in dispute purchased the land from
Ortigas.84
The one-year redemption period expired, and none of the mortgagors
exercised their right to redeem. Thus, "TMBC executed various Affidavits of
Consolidation of Ownership" and consolidated the titles to the properties.
85
TMBC paid real estate taxes and transfer taxes relative to the sale and its
consolidation of ownership. 86
In 1990, Molina filed "a case for Damages with Prayer for Reconveyance
and Preliminary Mandatory Injunction before Branch 88 of the Regional
Trial Court of Quezon City[.]" 87
55
Molina claimed that she owns "[a] parcel of residential land situated at
Ugong Norte, District of Cubao, Quezon City . . . containing an area of one
hundred twenty six thousand two hundred seventy eight (126,278) square
meters, more or less."88
Molina also claimed that she purchased the property in 1939 from Eusebia
Molina, Avelino P. Ramos, and Felix P. Micael. 89
However, Molina was unable to attend to the titling of the property because
"she was so preoccupied as the sole breadwinner of the family with children
to support[.]"
90
Several of the properties owned by TMBC overlapped with the properties
being claimed by Molina. 91
Oreta presented documentary evidence to support his allegations:
(1) Report of Atty. Benjamin Bustos, Chief of the Reconstitution Division of
92
the Land Registration Authority, a portion of which states:
Psd-16740 appears to be derived from two different surveys, numbered
Psu-1148 and Psu-20191; neither of which appear to have been the subject
of original registration; thus it is presumed that no original title had been
issued from which TCT-124088 could have emanated. 93
(2) Report of Privadi Dalire, Chief, Geodetic Survey Division of the Land
Management Bureau, stating that:
94
The procedures in the assignment of subdivision number is [sic] for each
kind of subdivision covering a particular original survey such as the Psu
survey. Since these two copies of Psd-16740, one covers Psu-1148 and
the other Psu-20191 both for the same survey claimant and located in the
same locality, and covered by same microfilm number gives rise to a
questionable status of the documents. 95
(3) Certification of Mr. Norberto B. Orense, Assistant Chief of the Ordinary
Decree Division of the Land Registration Authority, stating that LRC Record
No. 781:
from which TCT No. 124088 allegedly emanated, pertains to a land
registration case in the province of Palawan from which was issued Decree
No. 2827 on 28 February 1908. Furthermore, it was likewise certified that
Molina’s alleged plans Psu-Nos. 1148 (also appearing on the face of the
alleged TCT No. 124088) and 20191 are not subject of any land registration
proceedings. 96
(4) Certification of Ms. Carmelita Labrador, Administrative Officer V of the
Land Registration Authority, stating that the control number on Molina’s
TCT No. 124088 was issued on February 12, 1975, whereas Molina’s TCT
was issued on October 30, 1967. 97
Oreta further alleged that because of the issuance of TCT No.
RT-58287 and the subsequent issuance of TCT Nos. 83163, 83165, and
98
83167, an Information for coercion and other forms of trespass was filed
99
against him. However, the basis of the charge against him was a false
100
document. Thus, he prays that Molina "be prosecuted for the crime of
falsification of public document [under Article 171 and 172 of the Revised
Penal Code.]" Molina filed a Counter-affidavit, stating that she and her
101
husband, Pio Molina, had been in possession of the land covered by TCT
No. 124088 since 1939. 102
In September 1991, TCT No. 124088 was lost "and unfortunately, the
original thereof on file with the Registry of Deeds for Quezon City was also
lost or destroyed due to fire that gutted the said office[.]" Molina claimed
103
that she went to the Land Registration Authority to inquire where she could
find a copy of TCT No. 124088. She found a microfilm negative of TCT No.
124088, which the Land Registration Authority found to be correct. Further,
the existence of Psd-16740 was proven by Mr. Armando Bangayan,
Assistant Chief, Records Division, Land Management Bureau. 104
Molina questioned Oreta’s authority to file the Affidavit Complaint. 105
In the Resolution dated July 21, 1994, Assistant City Prosecutor Eduardo
106
D. Resurreccion recommended the dismissal of the case. 107
Oreta filed a Motion for Reconsideration, which was denied by Second
Assistant City Prosecutor Rogelio U. Concepcion in the Resolution dated
November 11, 1994. 108
56
Oreta filed a Petition for Review before the Department of Justice. Oreta
109
pointed out that TCT No. 124088 was declared null and void by this
court. He also pointed out that the alleged microfilm negative of
110
Psd-16740 was never presented by Molina. 111
With regard to the certification of the Land Management Bureau that the
microfilm negative was not falsified, Oreta pointed out that the certification
referred to Psd-16740 and not TCT No. 124088. 112
Molina filed a Comment, citing Judge Velasco’s Decision ordering the
113
reconstitution of TCT No. 124088 and arguing that Oreta’s Complaint had
114
no basis. 115
Chief State Prosecutor Zenon L. De Guia reversed the Resolution of the
City Prosecutor and directed the filing of "an information for falsification of
public document" in the Resolution dated April 18, 1996. 116
Molina filed a Motion for Reconsideration with Manifestation to File
Documents. This was denied by then Secretary of Justice Teofisto T.
117
Guingona, Jr. (Secretary Guingona, Jr.) in the Resolution dated November
29, 1996. 118
Undaunted, Molina filed a Petition for Review on Certiorari before the
119
Court of Appeals.
In her Petition, Molina raises the following issue:
Whether the circumstances that [envelop] this case constitute either the
offense of falsification of public documents or use of falsified document in a
judicial proceeding? 120
Molina imputes grave abuse of discretion on the part of the Department of
Justice when it directed the filing of an Information for Falsification of Public
Document against her. 121
The Court of Appeals dismissed Molina’s Petition on technical grounds.
The Court of Appeals Resolution dated February 4, 1997 states:
It appearing that petitioner failed to submit the certified true copies of the
assailed Resolutions dated April 18, 1996 and November 29, 1996, the
instant petition for review is hereby DISMISSED outright pursuant to
Supreme Court Circular No. 3-96 and Section 3(b) and 3(d)(1), Rule 6 of
the Revised Internal Rules of this Court.
SO ORDERED. 122
Molina filed a Motion for Reconsideration and to Admit Original Certified
True Copies of Annexes "J" and "K-1" to the Petition. She claimed that 123
she complied with Supreme Court Circular No. 3-96 and Section 3(b) of the
Revised Internal Rules of the Court of Appeals, but due to inadvertence, the
"original certified true copies of the assailed resolutions . . . [were] not
attached to the original copy of the petition but to one of the ten (10)
duplicates thereof." 124
The Motion for Reconsideration was denied in the Resolution dated March
11, 1997.125
The Court of Appeals found that contrary to Molina’s assertion that she filed
10 duplicate copies, only four were filed. Of the four duplicate copies,
126
none included the "duplicate original or certified true copy of the assailed
Resolutions." Gabionza v. Court of Appeals, cited by her, is not
127 128
applicable because there was substantial compliance with the rules of
procedure in that case. 129
From the denial of her Motion for Reconsideration, Molina filed a Petition for
Review on Certiorari before this court.
130
V
Facts of G.R. No. 128911
On January 7, 1997, Molina filed an action for quieting of title and
annulment of title before the Regional Trial Court of Quezon City. The
subject of the complaint was parcels of land covered by TCT Nos. 83163,
83164, 83165, and 83167. These titles were declared null and void by this
court in G.R. No. 109645 and G.R. No. 112564. 131
57
The action for quieting of title was docketed as Civil Case No. Let summons be served on the newly named defendant.
Q-97-29856. Molina then moved that the case be consolidated with Civil
132

Case No. Q-93-15920, which was a Petition for Annulment of Title. 133
There is no need to act on TMBC’s motion to dismiss given the above
circumstances.
TMBC filed a Motion to Dismiss Civil Case No. Q-97-29856, citing res
judicata, conclusiveness of judgment, bar by prior judgment, and forum SO ORDERED. 138

shopping. In addition, the Regional Trial Court cannot annul and set aside
the Decision of this court.
134
TMBC and Reyes filed a Motion for Reconsideration, which was denied. 139

Molina opposed the Motion to Dismiss. Subsequently, she filed a ‘With

135
TMBC and Reyes filed this Joint Petition for Certiorari and Prohibition with
Leave Motion to Admit Amended Complaint’ dated February 24, 1997. 136
prayer for the issuance of a writ of preliminary injunction/temporary
restraining order.140

TMBC and Alberto V. Reyes (Reyes) opposed Molina’s Motion. However,

137

the trial court admitted the Amended Complaint and did not act on TMBC’s
Motion to Dismiss. The trial court’s Order dated March 18, 1997 reads as
follows:
Before this Court are the following:
1. Supplement to Complaint dated January 21, 1997
2. TMBC Motion to Dismiss
TMBC and Reyes argue that:
[p]ublic respondent Judge should have dismissed private respondent
Molina’s Complaint dated 06 January 1997 considering that on its face, it is
clear that he has no jurisdiction to take cognizance of the same as it prays
for the court a quo to annul and set aside the final and executory decisions
of the Honorable Court and the Court of Appeals adjudicating in favor of
petitioner TMBC the ownership and possession of the subject properties,
subject matter of the private respondent Molina’s Complaint and Amended
Complaint.141

3. Bangko Sentral ng Pilipinas Motion to Dismiss

TMBC and Reyes also cite this court’s Decisions in the other cases
4. TMBC Motion to Strike Off and/or Dismiss Ad Cautelam Supplement to involving Molina. They point out that Molina’s Complaint and Amended
142

Complaint dated January 21, 1997 with the respective Complaint should have been dismissed outright for being a clear case of
comments/oppositions thereto. forum shopping. 143

Considering that it is undisputed that TMBC is under receivership, the VI

Motion to Dismiss filed by Bangko Sentral ng Pilipinas is hereby granted.
This case is dismissed as against Bangko Sentral ng Pilipinas, it appearing
that Alberto Reyes is the receiver and not the said bank.
Accordingly, the Motion to Admit Amended Complaint with leave is hereby
Procedural development
In G.R. No. 128422, this court granted the Motion for Extension of Time to
file Petition for Certiorari and required respondents to comment.
144

granted, and the amended complaint attached thereto wherein TMBC is

dropped as party-defendant and in lieu thereof, Alberto Reyes is impleaded
as such is admitted.

58
Oreta filed a Motion to Consolidate G.R. No. 128422 with G.R. Nos.
145
109645 and 112564. The Motion to Consolidate was granted in the
Resolution dated July 23, 1997. 146
In G.R. No. 128911, TMBC and Reyes filed a Motion to Consolidate their
147
Petition with G.R. Nos. 109645 and 112564. 148
Molina filed an Opposition to the Motion to Consolidate. 149
In the Resolution dated May 28, 1997,this court granted the Motion to
Consolidate. 150
Molina filed a Motion for Reconsideration regarding the consolidation of the
cases.151
In the Resolution dated June 23, 1997, this court noted the following:
152
(a) The manifestation filed by TMBC stating that more than two years after
the decision in G.R. No. 109645 and G.R. No. 112564 was promulgated,
the trial court where Civil Case No. Q-93-15920 is pending had yet to act on
TMBC’s application for writ of preliminary injunction;
(b) Counter-manifestation filed by Molina;
(c) Opposition to the motion to consolidate; and
(d) Required respondents to comment on the petition for certiorari in G.R.
No. 128911. TMBC and Reyes filed an Opposition to Molina’s Motion for
153
Reconsideration dated 16 June 1997. 154
On August 7, 1997, TMBC and Reyes filed a Manifestation and Urgent
Motion to Resolve [Application for Issuance of a Temporary Restraining
Order and/or Writ of Preliminary Injunction]. 155
TMBC and Reyes argue that in Ortigas & Company Limited Partnership v.
Velasco, this court ordered that Civil Case No. Q-93-15920 be disposed
156
with deliberate dispatch. Civil Case No. Q-97-29856 was consolidated with
Civil Case No. Q-93-15920. Thus, Judge Marciano Bacalla’s (Judge
Bacalla) cognizance of Civil Case No. Q-97-29856 in effect delayed the
disposition of Civil Case No. Q-93-15920. 157
TMBC and Reyes also argue that:
[p]ublic respondent Judge Bacalla’s acts of assuming jurisdiction over Civil
Case No. Q-97-29856 and conducting proceedings in said case shall
deprive petitioners of their unquestionable right to execute the previous
final and executory judgments promulgated by the Court of Appeals and the
Honorable Court declaring with finality petitioner TMBC’s absolute title and
right to possess the Subject Properties. To compel petitioners to defend
once again petitioner TMBC’s absolute title and right to the Subject
Properties would evidently result in a grave injustice.158
In the Resolution dated August 11, 1997, Molina’s Motion for Extension to
File Comment was granted, and TMBC’s Manifestation dated July 31, 1997
in G.R. No. 128911, "stating that the pretended issue on the real party in
interest in Civil Cases Nos. Q-93-15920 and Q-97-29856[,] has already
been rendered moot and academic with the effectivity of the 1997 Rules of
Civil Procedure."159
In the Resolution dated September 3, 1997, this court noted the following:
160
(a) In G.R. No. 128911:
(i) TMBC’s Manifestation and Urgent Motion to resolve the application for
issuance of a temporary restraining order and/or writ of preliminary
injunction dated August 5, 1997; and
(ii) Comment filed by Dolores Molina.
(b) In G.R. No. 128422:
(i) Comment filed by Oreta;
(ii) Reply filed by Molina; and
(iii) Granted the Motion for Leave to File Rejoinder to Reply.
59
Oreta filed the Motion for Further Extension of Time to File
Rejoinder dated September 4, 1997. He subsequently filed a Motion to
161
Admit (Rejoinder dated 09 September 1997) and attached a copy of the
162
Rejoinder. 163
In the Resolution dated September 10, 1997, this court issued a
164
temporary restraining order in favor of TMBC stating as follows:
Premises considered, therefore, and pending determination of the
proceeding at bar, the Court Resolved to ISSUE A TEMPORARY
RESTRAINING ORDER upon a bond in the sum of Ten Thousand Pesos
(₱10,000.00) to be posted by petitioner, The Manila Banking Corporation
(TMBC):
(1) COMMANDING the Presiding Judge of Branch 216 of the Regional Trial
Court at Quezon City, Judge Marciano Bacalla, to FORTHWITH CEASE
AND DESIST from proceeding with and acting on Civil Case No.
Q-97-29856, and to PROCEED to hear and resolve the issue of damages
in Civil Case No. Q-93-15920 and such others as arise from the pleadings,
absolutely and scrupulously excluding any claim of ownership of Dolores
Molina over the property in question which claim has, as aforestated, been
finally declared entirely spurious conformably with this Court’s Decision of
July24, 1994 and Resolution of August 15, 1997; and
(2) PROHIBITING Dolores V. Molina, her children, assigns or successors in
interest, or their counsel, from ventilating and litigating in any guise, manner,
shape, or form said Molina’s claim of title over the lands involved in any of
the actions and proceedings at bar, or in any other action or proceeding[.]
In the same Resolution, this court issued a Show Cause Order to Molina
166
and Judge Bacalla, stating as follows:
The Court further Resolved to DENY the motion to dismiss incorporated in
respondent Molina’s comment dated August 4, 1997, and to ORDER:
1) DOLORES V. MOLINA to SHOW CAUSE, within ten (10) days from
notice of this Resolution, why she should not be held in contempt of court
for forum shopping and otherwise disregarding and defying the judgment of
July 24, 1994 and resolutions of this Court in G.R. Nos. 109645 and 112564
(234 SCRA 455); and JUDGE MARCIANO BACALLA, to EXPLAIN within
the same period why he has taken and is taking cognizance of Molina’s
allegation and claim of ownership despite his attention having been drawn
to the aforesaid judgment.167
TMBC subsequently filed a Manifestation and Motion [To Partially Withdraw
the Joint Petition dated 07 May 1997]. 168
TMBC informed this court that Judge Bacalla ordered the withdrawal of Civil
Case No. Q-97-29856 from his docket and also ordered that Molina’s
169
"patently sham and dilatory pleadings" be stricken off the records of Civil
170
Case No. Q-93-15920. Thus, TMBC’s prayer for injunctive reliefs in the
Petition for Certiorari, related to Civil Case No. Q-97-29856, is moot and
academic. However, TMBC maintains its other prayers for relief,
171
specifically:
6.1. The issuance of a temporary restraining order and/or writ of preliminary
injunction against private respondent Molina and her alleged
representatives, counsel and successors-in-interest from filing pleadings
asserting her baseless claims of ownership and possession over the
properties subject matter of the Joint Petition dated 07 May 1997;
6.2. The promulgation of a resolution and/or judgment citing private
respondent Molina and her counsel, Atty. Cesar Turiano in contempt of
court for the contumacious acts of forum shopping, abuse of court
processes, deliberate disobedience of formal orders, resolutions and
decisions of the Honorable Court and obstruction of the orderly
165
administration [of] justice; and imposing disciplinary sanctions on private
respondent Molina’s counsel, Atty. Cesar Turiano, for violations of the
Lawyer’s Oath and the Code of Professional Responsibility and the final
and executory decisions rendered by the Honorable Court set forth in the
Joint Petition dated 07 May 1997. 172
From the records, this court issued the Resolution dated October 1, 1997
granting the Motions for Extension of Time to File Rejoinder filed by counsel
of Oreta in G.R. No. 128422 and the Motion to Admit Rejoinder. In the
same Resolution, this court noted Oreta’s Rejoinder, the Manifestation and
Motion of TMBC in G.R. No. 128911 partially withdrawing the Joint Petition,
60
and "the [E]ntry of [A]ppearance of Atty. Napoleon Uy Galit" as counsel for
173
Molina in G.R. No. 128911. 174
VII
Issues
In G.R. No. 128422, Molina raises the following issues:
(1) Whether this Honorable Supreme Court is bound by the conclusion of
the Honorable Court of Appeals, which, in effect deprive[d] [Dolores V.
Molina’s] right to appeal[;] [and]
(2) Whether [Dolores V. Molina’s] failure to comply strictly with the
requirements in appealing a decision is enough to deprive her of her right to
appeal.175
In G.R. No. 128911, TMBC and Reyes filed a Motion partially withdrawing
their Petition. Thus, the remaining issues for resolution are as follows:
(1) Whether there are grounds to issue a temporary restraining order/writ of
preliminary injunction to put an end to Dolores V. Molina’s continuous filing
of pleadings involving her "baseless claims of ownership and
possession" over TMBC’s properties; and
176
(2) Whether there are grounds to cite Dolores V. Molina and her counsel,
Atty. Cesar Turiano, and Judge Marciano Bacalla in contempt of court.
177
VIII
Arguments of the parties
G.R. No. 128422
Molina argues that contrary to the Court of Appeals Resolution, copies of
the certified true copy of the assailed Letter-Resolution were attached as
Annex "J" and Annex "K-1" to the Petition, except that the original copies
178
were attached to the copies sent to the Department of Justice and Quezon
City Prosecutor’s Office. This mistake was the fault of Molina’s counsel’s
179
office secretary and should be considered as an "honest mistake,
inadvertence and oversight." 180
Molina points out that since copies of the assailed Letter-Resolution were
attached to the Petitions filed before the Court of Appeals, she should be
considered as having substantially complied with SC Administrative
Circular No. 3-96 and Section 3(b) and (d) of the Revised Internal Rules of
the Court of Appeals. 181
Molina further argues that the procedural infirmity in the filing of her Petition
is not "enough to deprive [her] of her right to appeal." Hence, the dismissal
182
of her Petition is a violation of her right to due process. 183
On the other hand, Oreta argues that Molina’s Petition is a dilatory tactic.
An alias warrant of arrest was issued against Molina after she had failed to
appear at her scheduled arraignment. 184
Molina’s Petition may appear to raise procedural issues only. However, if
this court grants her Petition, she would be allowed to relitigate her claim
based on TCT No. 124088. 185
Oreta cites the principles of "res judicata, conclusiveness of judgment and
bar by prior judgment." He also cites Section 47 of Rule 39 of the 1997
186
Rules of Civil Procedure: Section 47. Effect of judgments or final orders.
187
— The effect of a judgment or final order rendered by a court of the
Philippines, having jurisdiction to pronounce the judgment or final order,
may be as follows:
(a) In case of a judgment or final order against a specific thing, or in respect
to the probate of a will, or the administration of the estate of a deceased
person, or in respect to the personal, political, or legal condition or status of
a particular person or his relationship to another, the judgment or final order
is conclusive upon the title to the thing, the will or administration or the
condition, status or relationship of the person, however, the probate of a will
or granting of letters of administration shall only be prima facie evidence of
the death of the testator or intestate;
61
(b) In other cases, the judgment or final order is, with respect to the matter
directly adjudged or as to any other matter that could have been missed in
relation thereto, conclusive between the parties and their successors in
interest, by title subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same title and in the
same capacity; and
(c) In any other litigation between the same parties or their successors in
interest, that only is deemed to have been adjudged in a former judgment or
final order which appears upon its face to have been so adjudged, or which
was actually and necessarily included therein or necessary thereto. (49a)
Molina has not shown any justifiable or compelling reasons why the Court
of Appeals Resolution should be set aside. 188
Since an Information against Molina was filed and docketed as Criminal
Case No. 62889 before Branch31 of the Metropolitan Trial Court of Quezon
City, she "can no longer ask for the review of the finding of a prima facie
case by the DOJ against her considering that she has failed to obtain prior
leave from said court." 189
Oreta points out that the Metropolitan Trial Court acquired jurisdiction over
the case when the Information was filed. Molina is considered a "fugitive
190
from justice" since she did not appear at her scheduled arraignment. 191
In her Reply, Molina argues that although this court declared TCT No.
192
124088 null and void, "it does not necessarily mean that it is falsified." She
193
also denies that she intends to relitigate her claim of ownership based on
TCT No. 124088. 194
Molina denies forestalling her prosecution by filing this Petition for Review.
She then reiterates her argument that she substantially complied with
Circular 3-96 and the Revised Internal Rules of the Court of Appeals. 195
Oreta filed a Rejoinder stating that the prosecutor’s finding of probable
196
cause to believe that Molina falsified a public document does not mean that
she is guilty. Her proper remedy is to present her evidence during trial, and
not to file a Petition for Review.197
G.R. No. 128911
TMBC and Reyes cite Supreme Court Administrative Circular No. 04-94,
the pertinent portion of which states:
2. Any violation of this Circular shall be a cause for the dismissal of the
complaint, petition, application or other initiatory pleading, upon motion and
after hearing. However, any clearly willful and deliberate forum shopping by
any party and his counsel through the filing of multiple complaints or other
initiatory pleadings to obtain favorable action shall be a ground for summary
dismissal thereof and shall constitute direct contempt of court. Furthermore,
the submission of a false certification or non-compliance with the
undertakings therein, as provided in Paragraph 1 hereof, shall constitute
indirect contempt of court, without prejudice to disciplinary proceedings
against the counsel and the filing of a criminal action against the guilty
party[.] 198
Ownership over the properties has been decided and passed upon with
finality in the following cases: Ortigas & Company Limited Partnership v.
Judge Tirso Velasco and Dolores V. Molina, Dolores V. Molina v. Hon.
199
Presiding Judge of RTC, Quezon City, Br. 105 and Manila Banking
Corporation, Dolores V. Molina and ApronianoL. Timbol v. Court of
200
Appeals and Epimaco V. Oreta, Epimaco V. Oreta v. Hon. George
201
Macliing, in his capacity as Presiding Judge of the Regional Trial Court of
Quezon City, Branch 100, and Dolores V. Molina and Aproniano L.
Timbol. 202
Despite these Decisions, Molina still filed a Complaint for quieting of
title and an Amended Complaint.
203 204
TMBC and Reyes also point out that Molina submitted a false verification
and certification in her Complaint and Amended Complaint when she stated
under oath the following:
That I hereby certify that I have not commenced any other action or
proceeding involving the same issues between the same parties in the
Supreme Court, the Court of Appeals, or divisions thereof or any other
quasi-judicial body and I undertake to inform this Honorable Court of such
fact within five (5) days from knowledge thereof. 205
62
Molina never informed this court of the previous Decisions declaring her
titles null and void. 206
In her Comment, Molina explained that
207
after she had filed an action for
quieting of title docketed as Civil Case No. Q-97-29856, TMBC filed a
Motion to Dismiss and to Strike Off and/or Dismiss Ad Cautelam
Supplement to Complaint on the ground that the issue of ownership had
been decided by this court. 208
She filed an Amended Complaint when she found out that TMBC was
under receivership. The Amended Complaint dropped TMBC as a party
and included the Central Bank as the proper party. 209
The Central Bank also moved to dismiss the Amended Complaint since
TMBC’s duly appointed receiver was Reyes. 210
The trial court issued the Order dated March 18, 1997, granting the Motion
to Admit Amended Complaint, dropping TMBC as a party, and impleading
Reyes. 211
TMBC filed a Motion for Reconsideration but was denied in the Order dated
April 23, 1997. Molina argues that the trial court did not rule upon the
212
merits of her case but only resolved who the real party in interest was. 213
Molina further argues that the delays in the resolution of Civil Case No.
Q-97-29856 were due to TMBC’s failure to file its responsive pleading. In
addition, TMBC should have filed its Answer instead of a Petition for
Certiorari when the trial court denied TMBC’s Motion to Dismiss. This 214
court now rules as follows:
G.R. No. 128422
The Court of Appeals erred in dismissing the Petition on procedural
grounds. Nevertheless, we affirm the Court of Appeals Resolutions dated
February 4, 1997 and March 11, 1997 on the ground that Molina availed
215 216
herself of the wrong remedy.
Section 3(b) and Section 3(d)(1) of the Revised Internal Rules of the Court
of Appeals, which were in force when Molina filed her Petition for Review
before the Court of Appeals, provide: Section 3. Petitions for Review. –
Within the period to appeal, the petitioner shall file a verified petition in
seven (7) legible copies and (1) one copy thereof shall be served on each
of the respondents. Upon proper motion presented before the expiration of
the original reglementary period, the Court may grant a non-extendible
additional period of fifteen (15) days save in exceptionally meritorious
cases within which to file the petition for review; Provided, however, that
should there be no petition filed within the extended period, the case shall
be dismissed. A petition filed after the period shall be denied due course
outright. The Regional Trial Court shall be furnished a copy of the resolution
to this effect.
....
b. What should be filed. – The petition shall be accompanied by a certified
true copy of the disputed decisions, judgments, or orders, of the lower
courts, together with true copies of the pleadings and other material
portions of the record as would support the allegations of the petition.
....
d. Judicial action. – The Court may dismiss the petition, or require the
private respondent to comment on the petition, or give it due course.
(1) If the petition is not prima facie sufficient in form and substance, the
Court may dismiss it outright stating the reasons therefor. If instead of a
petition for review, the appellant perfects his appeal pursuant to Rule 41 of
the Rules of Court, it shall nevertheless be dismissed even if the Regional
Trial Court had given it due course.
Supreme Court Administrative Circular No. 3-96 dated April 17, 1996
217
provides:
1. The "duplicate original copy" shall be understood to be that copy of the
decision, judgement, resolution or order which is intended for and furnished
to a party in the case or proceeding in the court or adjudicative body which
rendered and issued the same. The "certified true copy" thereof shall be
such other copy furnished to a party at his instance or in his behalf, duly
63
authenticated by the authorized officers or representatives or the issuing
entity as hereinbefore specified.
....
3. The certified true copy must further comply with all the regulations
therefor of the issuing entity and it is the authenticated original of such
certified true copy, and not a mere xerox copy thereof, which shall be
utilized as an annex to the petition or other initiatory pleading.
4. Regardless of whether a duplicate original copy or a certified true copy of
the adjudicatory document is annexed to the petition or initiatory pleading,
the same must be an exact and complete copy of the original, and all the
pages thereof must be clearly legible and printed on white bond or
equivalent paper of good quality with the same dimensions as the original
copy. Either of the aforesaid copies shall be annexed to the original copy of
the petition or initiatory pleading filed in court, while plain copies thereof
may be attached to the other copies of the pleading.
5. It shall be the duty and responsibility of the party using the documents
required by Paragraph (3) of Circular No. 1-88 to verify and ensure
compliance with all the requirements therefor as detailed in the preceding
paragraphs. Failure to do so shall result in the rejection of such annexes
and the dismissal of the case. Subsequent compliance shall not warrant
any reconsideration unless the court is fully satisfied that the
non-compliance was not in any way attributable to the party, despite due
diligence on his part and that there are highly justifiable and compelling
reasons for the court to make such other disposition as it may deem just
and equitable.
In Donato v. Court of Appeals, this court held that:
218
[i]n like manner, the failure of the petitioner to comply with Section 3,
paragraph b, Rule 6 of the RIRCA, that is, to append to his petition copies
of the pleadings and other material portions of the records as would support
the petition, does not justify the outright dismissal of the petition. It must be
emphasized that the RIRCA gives the appellate court a certain leeway to
require parties to submit additional documents as may be necessary in the
interest of substantial justice. Under Section 3, paragraph d of Rule 3 of the
RIRCA, the CA may require the parties to complete the annexes as the
court deems necessary, and if the petition is given due course, the CA may
require the elevation of a complete record of the case as provided for under
Section 3(d)(5) of Rule 6 of the RIRCA. At any rate, petitioner attached
copies of the pleadings and other material portions of the records below
with his motion for reconsideration.219
The ruling in Donatowas subsequently cited in Mendoza v. David and 220
Valdecantos v. People stating that the submission of the required
221
pleadings and attachments in the Motion for Reconsideration was deemed
substantial compliance.
In this case, the Court of Appeals admitted that Molina tried to rectify her
mistake. A portion of the Resolution dated March 11, 1997 states:
In the case at bar, the petition lacks the required certified true copy or
duplicate original of the assailed Resolutions which is clearly an omission
violative of the rules. The fact that petitioner in the instant motion has
attached the certified true copy of the assailed Resolutions will not cure the
defect. Pursuant to Paragraph 5 of Administrative Circular No. 3-96,
subsequent compliance shall not warrant any reconsideration. (Emphasis
222
supplied)
Thus, the Court of Appeals erred in dismissing Molina’s Petition for Review
on procedural grounds.
However, we affirm the dismissal of Molina’s Petition based on other
grounds.
Prior to the filing of the Information, Molina had filed a Motion for
Reconsideration of the Resolution dated April 18, 1996, which Resolution
directed the City Prosecutor to file an Information against her. The records
223
show that the Information against Molina was filed on May 27, 1996. Her 224
Petition for Review before the Court of Appeals was filed on January 16,
1997.225
In other words, while the trial court had acquired jurisdiction over the case,
Molina pursued another remedy, specifically, a review of the City
Prosecutor’s finding of probable cause.
64
In Crespo v. Judge Mogul: 226
[t]he rule therefore in this jurisdiction is that once a complaint or information
is filed in Court any disposition of the case as its dismissal or the conviction
or acquittal of the accused rests in the sound discretion of the Court.
Although the fiscal retains the direction and control of the prosecution of
criminal cases even while the case is already in Court he cannot impose his
opinion on the trial court. The Court is the best and sole judge on what to do
with the case before it. The determination of the case is within its exclusive
jurisdiction and competence. A motion to dismiss the case filed by the fiscal
should be addressed to the Court who has the option to grant or deny the
same. It does not matter if this is done before or after the arraignment of the
accused or that the motion was filed after a reinvestigation or upon
instructions of the Secretary of Justice who reviewed the records of the
investigation.
In order therefor to avoid such a situation whereby the opinion of the
Secretary of Justice who reviewed the action of the fiscal may be
disregarded by the trial court, the Secretary of Justice should, as far as
practicable, refrain from entertaining a petition for review or appeal from the
action of the fiscal, when the complaint or information has already been
filed in Court. The matter should be left entirely for the determination of the
Court.227
The ruling in Crespo was clarified in Chan v. Formaran III, et al.: 228
In subsequent cases, the Court clarified that Crespo does not bar the
Justice Secretary from reviewing the findings of the investigating prosecutor
in the exercise of his power of control over his subordinates. The Justice
Secretary is merely advised, as far as practicable, to refrain from
entertaining a petition for review of the prosecutor’s finding when the
Information is already filed in court. In other words, the power or authority of
the Justice Secretary to review the prosecutor’s findings subsists even after
the Information is filed in court. The court, however, is not bound by the
Resolution of the Justice Secretary, but must evaluate it before proceeding
with the trial. While the ruling of the Justice Secretary is persuasive, it is not
binding on courts. 229
Chan v. Formaran III, et al. also discussed that the proper remedy to review
the Resolutions of the Secretary of Justice was the filing of a Petition for
Certiorari under Rule 65. It was further discussed that:
230
[a]lbeit the findings of the Justice Secretary are not absolute and are
subject to judicial review, this Court generally adheres to the policy of
non-interference in the conduct of preliminary investigations, particularly
when the said findings are well-supported by the facts as established by the
evidence on record. Absent any showing of arbitrariness on the part of the
prosecutor or any other officer authorized to conduct preliminary
investigation, courts as a rule must defer to said officer’s finding and
determination of probable cause, since the determination of the existence
of probable cause is the function of the prosecutor. Simply stated, findings
of the Secretary of Justice are not subject to review, unless made with
grave abuse of discretion. Thus, the Court of Appeals did not err in
231
dismissing Molina’s Petition.
In any case, a review of the records shows that no grave abuse of
discretion can be attributed to Secretary Guingona, Jr. when he affirmed
the findings of Chief State Prosecutor Zenon L. De Guia (Chief State
Prosecutor De Guia).
Chief State Prosecutor De Guia, acting on the Petition for Review filed by
Oreta, directed the City Prosecutor in Quezon City "to file an information for
falsification of public document against respondent Dolores V. Molina." He
232
discussed the following:
Contrary to your finding, the issue in this case is not whether respondent’s
reconstituted title may be considered as a falsified document but whether or
not respondent used a fictitious and non-existent title, TCT No. 124088, in
support of her application for reconstitution of title.
We have gone over the record and we find that the evidence presented by
complainant supports a finding that respondent’s photocopy of TCT No.
124088 was simulated and given the appearance of authenticity. Several
certifications and testimonies from personnel of the Land Registration
Authority and the Register of Deeds of Quezon City attest to the fact that
the entries in said photocopy of TCT No. 124088 are fictitious and totally
inconsistent with the record on file. In fact, in the cases of Ortigas and
65
Company Limited Partnership vs. Judge Tirso Velasco and Dolores Molina,
G.R. No. 109645; and Dolores Molina vs. Hon. Presiding Judge of RTC,
Quezon City, Branch 108 and Manila Banking Corporation, G.R. No.
112564, jointly resolved and promulgated on July 25, 1994, the Supreme
Court declared null and void the reconstituted title of respondent and
expressly found respondent guilty of forum shopping by filing cases one
after another in order to obtain a judgment in her favor upholding her claim
to the subject lands. These facts support a prima facie finding that
respondent presented a falsified transfer certificate of title to support her
application for reconstitution of title.
233
Molina filed a Motion for Reconsideration, which was denied in a
Letter-Resolution dated November 29, 1996. Secretary Guingona, Jr.
explained:
After an examination of your motion, we find no compelling reason to justify
an amendment or reversal of our earlier ruling. Your allegations as to the
authenticity and genuineness of TCT No. 124088 have earlier been
considered and passed upon by this Office. We reiterate that respondent’s
documentary evidence can not [sic] be given greater weight than the
documentary evidence submitted by complainant which proves that the
entries in TCT No. 124088 are spurious. The conflicting evidence submitted
by both parties is best left for the court to determine in a full[-]blown trial.
Suffice it to say that the evidence warrants a finding that the crime of
falsification may have been committed and that respondent is responsible
therefor.
234
Chief State Prosecutor De Guia’s Resolution extensively discussed why
probable cause existed to file an Information against Molina. He sufficiently
explained the reason why he reversed the finding of the City Prosecutor.
Clearly, no grave abuse of discretion can be attributed to Secretary
Guingona, Jr. when he denied Molina’s Motion for Reconsideration.
This court reminds Molina of the discussion in Punzalan v. Plata: 235
[T]he Court considers it a sound judicial policy to refrain from interfering in
the conduct of preliminary investigations and to leave the DOJ a wide
latitude of discretion in the determination of what constitutes sufficient
evidence to establish probable cause for the prosecution of the supposed
offenders. The rule is based not only upon the respect for the investigatory
and prosecutor powers granted by the Constitution to the executive
department but upon practicality as well. 236
G.R. No. 128911
In the Resolution dated September 10, 1997, this court issued a
237
temporary restraining order and made the following pronouncements:
In its Decision dated July 24, 1994 in the consolidated cases of G.R. No.
109645 and G.R. No. 112564 (234 SCRA 455), this Court pertinently ruled
that:
"Ordinarily, the relief indicated by the material facts would be the remand of
the reconstitution case (LRC No. Q-5404 [instituted by petitioner Molina]) to
the Court of origin with instructions that Ortigas’ and the Solicitor General’s
appeals from the judgment rendered therein, which were wrongly
disallowed, be given due course and the records forthwith transmitted to the
appellate tribunal. This, in fact, is a relief alternatively prayed for by
petitioner Ortigas. Considering however the fatal infirmities afflicting
Molina’s theory or cause of action, evident from the records before this
Court, such a remand and subsequent appeal proceedings would be
pointless and unduly circuitous. Upon the fact, it is not possible for Molina’s
cause to prosper. To defer adjudication thereon would be unwarranted and
unjust.
....
(T)he titles of Dolores Molina upheld and reconstituted by said decision (in
LRC Case No. Q-54040 [sic] and others — namely Transfer Certificates of
Title Numbered 124088 and RT-58287 — and those derived therefrom and
subsequently issued namely, Transfer Certificates of Title Numbered 83163,
83164, 83165, 832166 [sic] and 83167 — are all declared NULL AND VOID
and are hereby CANCELLED; said LRC Case No. Q-5404 of the Regional
Trial Court of Quezon City is DISMISSED; and the temporary restraining
order of this Court of May 12, 1993 is MADE PERMANENT.
In G.R. No. 112564, the Orders of respondent Presiding Judge of Branch
105 of the Regional Trial Court of Quezon City in Case No. Q-93-15920
66
dated September 17, 1993 and November 25, 1993 are AFFIRMED; and
said Judge is DIRECTED to proceed to dispose of said Case No.
Q-93-15920 with all deliberate dispatch conformably with this decision"
The case above referred to, No. Q-93-15920, was instituted in the Regional
Trial Court of Quezon City by The Manila Banking Corporation (TMBC)
against Dolores V. Molina and Gateway Enterprises Company, Inc.,
essentially praying for annulment of Molina’s title (and others derived
therefrom) and for damages. The plain import of this Court’s directions in
said judgment of July 24, 1994 — that "said Judge proceed to dispose of
**
said Case No. Q-93-15920 with all deliberate dispatch conformably with
this decision" —is that the Judge should resolve the issue of damages only;
NOT that he should allow re-litigation of, and rehear again and pass upon,
Molina’s claim of adverse title which conformably with this (Court’s)
decision, is bereft of any merit whatever. The spuriousness of Molina’s
claim of ownership having already been adjudged definitively,
authoritatively, and finally, that claim should not and could not be legitimate
subject ofany subsequent action or proceeding in any court, regardless of
the guise, manner or form in which it might later be presented.
Now, it appears that Dolores Molina has instituted a new action in the
Regional Trial Court of Quezon City, for quieting of title, docketed as
Q-97-29856. In this case, she alleged ownership of the land described in
Certificates of Title Nos. 83163, 83164, 83165, 832166 [sic] and 83167 –
which are the very same titles, already declared fictitious and worthless in
this Court’s judgment of July 24, 1994; and she has succeeded in
consolidating said Case No. Q-97-29856 with Case No. Q-93-15920,
pending before Branch 216 of the Quezon City RTC, presided over by
Judge Marciano Bacalla. It further appears that Judge Bacalla is disposed
to take cognizance of and allow ventilation of the action involving Molina’s
aforesaid fake titles; this, over the opposition of TMBC which insists that
Case No. Q-97-29856 be summarily dismissed in light of this Court’s
judgment of July 24, 1994.
Premises considered, therefore, and pending determination of the
proceeding at bar, the Court Resolved to ISSUE A TEMPORARY
RESTRAINING ORDER upon a bond in the sum of Ten Thousand Pesos
(₱10,000.00) to be posted by petitioner, The Manila Banking Corporation
(TMBC):
(1) COMMANDING the Presiding Judge of Branch 216 of the Regional Trial
Court at Quezon City, Judge Marciano Bacalla, to FORTHWITH CEASE
AND DESIST from proceeding with and acting on Civil Case No.
Q-97-29856, and to PROCEED to hear and resolve the issue of damages
in Civil Case No. Q-93-15920 and such others as arise from the pleadings,
absolutely and scrupulously excluding any claim of ownership of Dolores
Molina over the property in question which claim has, as aforestated, been
finally declared entirely spurious conformably with this Court’s Decision of
July24, 1994 and resolution of August 15, 1997; and
(2) PROHIBITING Dolores V. Molina, her children, assigns or successors in
interest, or their counsel, from ventilating and litigating in any guise, manner,
shape, or form said Molina’s claim of title over the lands involved in any of
the actions and proceedings at bar, or in any other action or proceeding;
The Court further Resolved to DENY the motion to dismiss incorporated in
respondent Molina’s comment dated August 4, 1997, and to ORDER:
(1) DOLORES V. MOLINA to SHOW CAUSE, within ten (10) days from
notice of this Resolution, why she should not be held in contempt of court
for forum shopping and otherwise disregarding and defying the judgment of
July 24, 1994 and resolutions of this Court on G.R. Nos. 109645 and
112564 (234 SCRA 455); and JUDGE MARCIANO BACALLA, to EXPLAIN
within the same period why he has taken and is taking cognizance of
Molina’s allegation and claim of ownership despite his attention having
been drawn to the aforesaid judgment.
SO ORDERED. 238
TMBC posted a cash bond amounting to ₱10,000.00 on October 2, 1997. 239
Molina filed a With Leave of Court Explanation in compliance with the
240
September 10, 1997 Resolution. She explained that the cause of action in
the reconstitution case was different from the cause of action in the quieting
of title case:
241
3. The Reconstitution case decided by the Hon. Judge Velasco which was
reversed by this Honorable Court merely speaks on the existence of
Molina’s titles which reconstitution case is a special proceeding and does
67
not touch on the issue of the validity of the respective claim of ownership of
Molina and TMBC. 242
Molina also pleads lack of malice in filing the cases. 243
In addition, TMBC’s claim that it derived its ownership from Ortigas is
negated by a certification from the Quezon City Register of Deeds. TCT No.
77652 is under the name of Chua Sick Luan while TCT No. 77653 is under
the names of Raselle V. Javier, Rodel V. Javier, Regina V. Javier, and
Rubespierre V. Javier. 244
Judge Bacalla also filed his explanation. According to him, he was aware
245
of this court’s ruling in G.R. Nos. 109645 and 112564. In fact, in Civil Case
No. Q-93-15920 entitled Manila Banking Corporation v. Dolores V. Molina,
he granted TMBC’s Motion to Strike Sham and Dilatory Pleadings in the
Order dated August 12, 1997. Also, Civil Case No. Q-97-29856 was no
246
longer pending since he granted Molina’s Motion to Withdraw in the Order
dated August 11, 1997. 247
Molina subsequently filed a "Supplemental Motion to Withdraw Complaint
to have the same re-raffled to other sala without necessarily dismissing the
complaint (with entry of appearance)," but Judge Bacalla stated that he did
not act on the Motion since he considered Civil Case No. Q-97-29856
closed and terminated. 248
This court holds that Judge Bacalla’s explanation is satisfactory, while
Molina’s explanation is unsatisfactory.
In the July 25, 1994 Decision in G.R. Nos. 109645 and 112564, this court
clearly stated that: WHEREFORE, the petition in G. R. No. 109645 is
GRANTED; and that in G. R. No. 112564, DENIED for lack of merit.
In G. R. No. 109645, the Decision dated September 23, 1992 of
Respondent Judge Tirso Velasco, Presiding Judge of Branch 88 of the
Regional Trial Court of Quezon City, inLRC Case No. Q-5404, as well as
his Orders dated April 3, 1992, October 14, 1992, and February 10, 1993,
are NULLIFIED AND SET ASIDE; the titles of Dolores Molina upheld and
reconstituted by said decision and orders — namely, Transfer Certificates
of Title Numbered 124088 and RT-58287 — and those derived therefrom
and subsequently issued — namely, Transfer Certificates of Title
Numbered 83163, 83164, 83165, 83166 and 83167 — are all Declared
NULL AND VOID and are hereby CANCELLED; said LRC Case No.
Q-5404 of the Regional Trial Court of Quezon City is DISMISSED; and the
temporary restraining order of this Court of May 12, 1993 is MADE
PERMANENT.
In G. R. No. 112564, the Orders of respondent Presiding Judge of Branch
105 of the Regional Trial Court of Quezon City in Case No. Q-93-15920
dated September 17, 1993 and November 25, 1993 are AFFIRMED; and
said Judge is DIRECTED to proceed to dispose of said Case No.
Q-93-15920 with all deliberate dispatch conformably with this decision.
Dolores Molina and her counsel, Atty. Eufracio T. Layag, and Dr. Jose
Teodorico V. Molina, are ORDERED to SHOW CAUSE, within ten (10)
days from notice of this judgment, why they should not be pronounced
liable, and correspondingly dealt with, for violation of the rule against
forum-shopping.
SO ORDERED. 249
That Molina actually filed an action for quieting of title, in clear violation of
this court’s ruling in G.R. Nos. 109645 and 112564, constitutes deliberate
forum shopping.
Forum shopping is defined as:
[w]hen a party repetitively avails of several judicial remedies in different
courts, simultaneously or successively, all substantially founded on the
same transactions and the same essential facts and circumstances, and all
raising substantially the same issues either pending in or already resolved
adversely by some other court. 250
Forum shopping consists of the following elements:
(a) identity of parties, or at least such parties as represent the same
interests in both actions; (b) identity of rights asserted and relief prayed for,
the relief being founded on the same facts; and
68
(c) the identity of the two preceding particulars, such that any judgment
rendered in the other action will, regardless of which party is successful,
amount to res judicata in the action under consideration.251
All the elements of forum shopping are present in this case. The parties in
G.R. No. 112564 and this case are the same: Molina and TMBC.
For the second element, the test in determining whether the causes of
action are the same: ascertain[s] whether the same evidence will sustain
both actions, or whether there is an identity in the facts essential to the
maintenance of the two actions. If the same facts or evidence would sustain
both, the two actions are considered the same, and a judgment in the first
case is a bar to the subsequent action. 252
In this case, Molina asserts that the reconstitution case she previously filed
was a special proceeding and did not touch upon the issue of ownership.
On the other hand, Civil Case No. Q-97-29856, an action for quieting of title,
involved the issue of ownership. 253
Molina’s arguments do not hold. These two cases involved relitigating her
claim of ownership over the properties covered by the nullified TCT No.
124088.
Further, the ruling in G.R. Nos.109645 and 112564 is res judicata on this
case.
The elements of res judicata are:
(a) the former judgment must be final;
(b) it must have been rendered by a court having jurisdiction over the
subject matter and the parties;
(c) it must be a judgment on the merits; and
(d) there must be between the first and the second actions
(i) identity of parties,
(ii) identity of subject matter, and
(iii) identity of cause of action. 254
These requisites are fulfilled. The former judgment, Ortigas & Company
Limited Partnership v. Velasco, is final and executory. This court had
255
jurisdiction over the former case, and the judgment was on the merits.
Further, although the causes of action may appear to be different, the end
result would be the same: to determine the validity of Molina’s claim of
ownership over the properties covered by the nullified TCT No. 124088.
This court also takes notice that Molina was previously found guilty of
contempt of court and was fined ₱1,000.00. 256
This court held that:
[w]hat has been stated also suffices to dispose of Molina’s theory that her
second motion for reconsideration, filed on February 27, 1995, was not
covered by the Resolution of March 1, 1995 — in which this Court reiterated
the denial with finality of her motions for reconsideration and, in addition,
ordered that "no further pleadings, motions or papers shall be filed x x x
except only as regards the issues directly involved in the ‘Motion for
Reconsideration’ (Re: Dismissal of Respondent Judge)"; and since Manila
bank had manifested that it was no longer filing an opposition thereto, said
second motion for reconsideration remains pending and unopposed. To
repeat, the second motion for reconsideration, having been filed without
express leave, was nothing but a scrap of paper, mere surplusage,
incapable of producing any legal effects whatsoever.
....
Apart from the original directive in its Resolution of March 1, 1995, the
Court twice reiterated the admonition that no further pleadings, motions or
papers should be filed in these cases, except only as regards issues
directly involved in the ‘Motion for Reconsideration’ (Re: Dismissal of
Respondent Judge). This it did in its Resolutions dated July 24 and October
25, 1995, respectively.
69
Evidently, an order of this character is directed to parties who obstinately
refuse to accept the Court’s final verdict and who, despite such verdict and
in defiance of established procedural rules, mulishly persist in still arguing
the merits of their cause. They continue to take up the time of the Court
needlessly, by filing unauthorized, forbidden, even worthless pleadings,
motions and papers, serving no real purpose other than to delay
termination of the case.
Evidently, too, the directive against the filing of any further pleadings,
motions or papers is one that exacts observance by all parties concerned,
such that wil[l]ful and unjustifiable disregard or disobedience thereof
constitutes constructive contempt under Section 3 (b), Rule 71 of the Rules
of Court. The record shows just such wilful disobedience or resistance
which is not satisfactorily explained in Molina’s "Comment/Answer" dated
October 11, 1995, submitted on requirement by the Court.
....
Molina has had more than her day in court. She was accorded more than
ample opportunity to present the merits of her case. Her every argument
1âwphi 1
was heard and considered. The Court cannot countenance defiance of its
authority on repetitious assertions of the meritoriousness of a party’s cause,
no matter how sincerely or genuinely entertained. There has been a final
determination of the issues in these cases and petitioner has been
repeatedly directed to abide thereby. Her deliberate violation of the orders
of the Court are unjustified and inexcusable. The refusal of petitioner Molina
to concede defeat, manifested by her unceasing attempts to prolong the
final disposition of these cases, obstructs the administration of justice and,
therefore, constitutes contempt of Court.
WHEREFORE, Dolores V. Molina is found GUILTY of contempt of court for
willful disregard and disobedience of the Resolutions of the Court, and a
FINE OF ONE THOUSAND PESOS (₱1,000.00) is hereby imposed on her,
payable within five (5) days from receipt of this Resolution, with the warning
that any subsequent disregard and disobedience of this Court’s orders will
be dealt with more severely.
Let this Resolution be published in the authorized Court reports for the
information and guidance of the bench and the bar respecting the nature
and effect of denials of motions for reconsideration of judgments and final
orders, the propriety of second motions for reconsideration, and the
prohibition against the filing of further pleadings, motions or other papers.
IT IS SO ORDERED. (Emphasis in the original)
257
Regarding TMBC and Reyes’ prayer that Atty. Cesar Turiano also be held
in contempt, this court notes that he was not included in the Show Cause
Order in the Resolution dated September 10, 1997. Further, it appears
258
that he withdrew his appearance as counsel prior to the issuance of the
Show Cause Order. Thus, this court shall refrain from making any
pronouncements with regard to Atty. Cesar Turiano.
WHEREFORE, premises considered, the Petition for Review on Certiorari,
docketed as G.R. No. 128422, is DENIED for lack of merit.
In G.R. No. 128911, this court resolves to:
G.R. Nos. 109645, 112564, 128422, 128911
(1) DECLARE Dolores V. Molina GUILTY of contempt of court due to her
willful and deliberate violation of the rule against forum shopping, and for
willful and deliberate disobedience of the lawful orders of this court, and
impose a fine of ₱10,000.00, payable within five (5) days from receipt of this
Decision;
(2) The temporary restraining order dated September 10, 1997 1s made
PERMANENT; and
(3) Treble costs are imposed against Dolores V. Molina.
259
SO ORDERED.
70
 THIRD DIVISION

G.R. No. 195876, December 05, 2016

PILIPINAS SHELL PETROLEUM CORPORATION, Petitioner, v. COMMISSIONER

OF CUSTOMS, Respondent.

DECISION

PEREZ, J.:

Before the Court is a Petition for Review on Certiorari seeking to reverse

and set aside the 13 May 2010 Decision1 and the 22 February 2011
Resolution2 rendered by the Court of Tax Appeals (CTA) Former En
Banc in C.T.A. EB No. 472 which dismissed petitioner's petition, and
accordingly affirmed with modification as to the additional imposition of
legal interest the 19 June 2008 Decision3 of the CTA Former First Division
(CTA in Division) ordering petitioner to pay the amount of
P936,899,883.90, representing the total dutiable value of its 1996 crude
oil importation, which was considered as abandoned in favor of the
government by operation of law.

The Facts

The factual antecedents of the case are as follows:

On 16 April 1996, Republic Act (R.A.) No. 8180,4 otherwise known as the
"Downstream Oil Industry Deregulation Act of 1996" took effect. It
provides, among others, for the reduction of the tariff duty on imported
crude oil from ten percent (10%) to three percent (3%). The particular
provision of which is hereunder quoted as follows:

Section 5. Liberalization of Downstream Oil Industry and

Tariff Treatment. - x x x

71
 b) Any law to the contrary notwithstanding and starting
with the effectivity of this Act, tariff shall be imposed and
collected on imported crude oil at the rate of three
percent (3%) and imported refined petroleum products
at the rate of seven percent (7%), except fuel oil and LPG,
the rate for which shall be the same as that for imported
crude oil Provided, That beginning on January 1, 2004 the
tariff rate on imported crude oil and refined petroleum
products shall be the same: Provided, further, That this
provision may be amended only by an Act of Congress.
Prior to its effectivity, petitioner's importation of 1,979,674.85 U.S. barrels
of Arab Light Crude Oil, thru the Ex MT Lanistels, arrived on 7 April 1996
nine (9) days earlier than the effectivity of the liberalization provision.
Within a period of three days thereafter, or specifically on 10 April 1996,
said shipment was unloaded from the carrying vessels docked at a
wharf owned and operated by petitioner, to its oil tanks located at
Batangas City.
Subsequently, petitioner filed the Import Entry and Internal Revenue
Declaration and paid the import duty of said shipment in the amount of
P11,231,081.00 on 23 May 1996.
More than four (4) years later or on 1 August 2000, petitioner received a
demand letter5 dated 27 July 2000 from the Bureau of Customs (BOC),
through the District Collector of Batangas, assessing it to pay the
deficiency customs duties in the amount of P120,162,991.00 due from
the aforementioned crude oil importation, representing the difference
between the amount allegedly due (at the old rate often percent (10%)
or before the effectivity of R.A. No. 8180) and the actual amount of
duties paid by petitioner (on the rate of 3%).
Petitioner protested the assessment on 14 August 2000,6 to which the
District Collector of the BOC replied on 4 September 2000 7 reiterating his
demand for the payment of said deficiency customs duties.
On 11 October 2000,8 petitioner appealed the 4 September 2000
decision of the District Collector of the BOC to the respondent and
requested for the cancellation of the assessment for the same customs
duties.
However, on 29 October 2001,9 five years after petitioner paid the
allegedly deficient import duty' it received by telefax from the
respondent a demand letter for the payment of the amount of
P936,899,885.90, representing the dutiable value of its 1996 crude oil
importation which had been allegedly abandoned in favor of the
government by operation of law. Respondent stated that Import Entry
No. 683-96 covering the subject importation had been irregularly filed
and accepted beyond the thirty-day (30) period prescribed by law.
Petitioner protested the aforesaid demand letter on 7 November
200110 for lack of factual and legal basis, and on the ground of
prescription.
Seeking clarification as to what course of action the BOC is taking, and
reiterating its position that the respondent's demand letters dated 29
October 2001 and 27 July 2000 have no legal basis, petitioner sent a
letter to the Director of Legal Service of the BOC on 3 December 2001
for said purpose.
On 28 December 2001,11 BOC Deputy Commissioner Gil A. Valera sent
petitioner a letter which stated that the latter had not responded to the
respondent's 29 October 2001 demand letter and demanded payment
of the amount of P936,899,885.90, under threat to hold delivery of
petitioner's subsequent shipments, pursuant to Section 1508 12 of the Tariff
and Customs Code of the Philippines (TCCP),13 and to file a civil
complaint against petitioner.
In reply thereto, petitioner sent a letter dated 4 January 2002 14 to the
BOC Deputy Commissioner and expressed that it had already
responded to the aforesaid demand letter through the letters dated 7
November 2001 and 3 December 2001 sent to respondent and to the
Director of Legal Service of the BOC, respectively.
On 11 April 2002, the BOC filed a civil case for collection of sum of
money against petitioner, together with Caltex Philippines, Inc. as
72
co-party therein, docketed as Civil Case No. 02103239, before Branch
XXV, Regional Trial Court (RTC), of the City of Manila.15
Consequently, on 27 May 2002, petitioner filed with the Court of Tax
Appeals (CTA) a Petition for Review, raffled to the Former First Division
(CTA in Division), and docketed as C.T.A. Case No. 6485, upon
consideration that the civil complaint filed in the RTC of Manila was the
final decision of the BOC on its protest.16
Respondent filed on 2 August 2002 a motion to dismiss the said petition
raising lack of jurisdiction and failure to state a cause of action as its
grounds, which the CTA in Division denied in the Resolution dated 17
January 2003. Likewise, respondent's motion for reconsideration filed on
14 February 2003 was denied on its 16 June 2003 Resolution.17
Subsequently, respondent, through the Office of the Solicitor General,
filed on 13 August 2003 before the Court of Appeals (CA) a Petition for
Certiorari and Prohibition with Prayer for the Issuance of a Temporary
Restraining Order and Writ of Preliminary Injunction, docketed as CA-G.R.
SP No. 78563, praying for the reversal and setting aside of the CTA in
Division's Resolutions dated 17 January 2003 and 16 June 2003.18
In the interim, respondent filed his Answer to the petition in C.T.A. Case
No. 6485 on 20 October 2003 which reiterated the lack of jurisdiction
and failure to state a cause of action. Thereafter, trial on the merits
ensued.
On 15 February 2007, the Former First Division of the CA dismissed
respondent's petition in CA-G.R. SP No. 78563. Similarly, respondent's
motion for reconsideration of the 15 February 2007 Decision was denied
in its 24 July 2007 Resolution.19
The Ruling of the CTA in Division
In a Decision dated 19 June 200820, the CTA in Division ruled to dismiss
the Petition for Review on C.T.A. Case No. 6485 for lack of merit and
accordingly ordered petitioner to pay the entire amount of
P936,899,883.9021 representing the total dutiable value of the subject
shipment of Arab Light Crude Oil on the ground of implied
abandonment pursuant to Sections 1801 and 1802 of the TCCP.
Relevant thereto, the CTA in Division made the following factual and
legal findings: (a) that petitioner filed the specified entry form (Import
Entry and Internal Revenue Declaration) beyond the 30-day period
prescribed under Section 1301 of the TCCP;22 (b) that for failure to file
within the aforesaid 30-day period, the subject importation was deemed
abandoned in favor of the government in accordance with Sections
1801 and 1802 of the TCCP;23 (c) that petitioner's excuses in the delay of
filing its Import Entry and Internal Revenue Declaration were
implausible24; (d) that since the government became the owner of the
subject shipment by operation of law, petitioner has no right to withdraw
the same and should be held liable to pay for the total dutiable value of
said shipment computed at the time the importation was withdrawn
from the carrying vessel pursuant to Section 204 of the TCCP; 25 (e) that
there was fraud in the present case considering that "the District
Collector, in conspiracy with the officials of Caltex and Shell acted
without authority or [with] abused (sic) [of] authority by giving undue
benefits to the importers by allowing the processing, payment and
subsequent release of the shipments to the damage and prejudice of
the government who, under the law is already the owner of the
shipments x x x;" thus, prescription under Section 1603 of the TCCP does
not apply herein;26 and (f) that the findings of facts of administrative
bodies charged with their specific field of expertise, are afforded great
weight by the courts; and in the absence of substantial showing that
such findings are made from an erroneous estimation of the evidence
presented, they are conclusive, and in the interest of stability of the
government structure, should not be disturbed.27
On 24 February 2009, the CTA in Division denied petitioner's Motion for
Reconsideration for lack of merit citing Section 5(b),28 Rule 6 of the 2005
Revised Rules of the CTA, as sole legal basis in considering the
Memorandum dated 2 February 2001 issued by the Customs Intelligence
& Investigation Service, Investigation & Prosecution Division (CIIS-IPD) of
the BOC as evidence to establish fraud, and the case of Chevron Phils.,
Inc. v. Commissioner of the Bureau of Customs,29 as the jurisprudential
foundation therein.30
73
Aggrieved, petitioner appealed to the CTA Former En Banc by filing a
Petition for Review on 31 March 2009, under Section 3(b), Rule 8 of the
2005 Revised Rules of the CTA, as amended, in relation to Rule 43 of the
1997 Rules of Civil Procedure, as amended, docketed as C.T.A. EB No.
472.
The Ruling of the CTA Former En Banc
In the 13 May 2010 Decision31, the CTA Former En Banc affirmed the CTA
in Division's ruling pertaining to the implied abandonment caused by
petitioner's failure to file the Import Entry and Internal Revenue
Declaration within the 30-day period, and transfer of ownership by
operation of law to the government of the subject shipment in
accordance with Sections 1801 and 1802, in relation to Section 13.01, of
the TCCP, and with the pronouncements made in the Chevron case.
Notably however, the ponente of the assailed Decision declared therein
that the existence of fraud is not controlling in the case at bench and
would not actually affect petitioner's liability to pay the dutiable value of
its imported crude oil, pertinent portion of which are quoted hereunder
for ready reference, to wit:
As regards the issue on the existence of fraud, it should
be emphasized that fraud is not controlling in this case.
Even in the absence of fraud, petitioner Shell is still liable
for the payment of the dutiable value by operation of
law. The liability of petitioner Shell for the payment of the
dutiable value of its imported crude oil arose from the
moment it appropriated for itself the said importation,
which were already a property of the government by
operation of law. Absence of fraud in this case would not
exclude petitioner Shell from the coverage of Sections
1801 and 1802 of the TCCP.32 (Emphasis supplied)
Furthermore, citing the case of Eastern Shipping Lines, Inc. v. Court of
Appeals and Mercantile Insurance Company, Inc.,33 the CTA Former En
Banc imposed an additional legal interest of six percent (6%) per
annum on the total dutiable value of P936,899,883.90, accruing from the
date said decision was promulgated until its finality; and afterwards, an
interest rate of twelve percent (12%) per annum shall be applied until its
full satisfaction.34
Not satisfied, petitioner filed a motion for reconsideration thereof which
was denied in the assailed Resolution dated 22 February 2011.
Consequently, this Petition for Review wherein petitioner seeks the
reversal and setting aside of the aforementioned Decision and
Resolution dated 13 May 2010 and 22 February 2011, respectively, and
accordingly prays that a decision be rendered finding: (a) that
petitioner has already paid the proper duties on its importation and
therefore not liable anymore; and (b) that petitioner is not deemed to
have abandoned its subject shipment; or, in the alternative, (c) that
respondent's attempt to collect is devoid of any legal and factual basis
considering that the right to collect against petitioner relating to its
subject shipment has already prescribed.
In support of its petition, petitioner posits the following assigned errors:
I
THE CTA FORMER EN BANC ERRED WHEN IT HELD IN THE
QUESTIONED DECISION THAT PETITIONER PSPC IS DEEMED
TO HAVE IMPLIEDLY ABANDONED THE SUBJECT SHIPMENT
AND, THUS, IS LIABLE FOR THE ENTIRE VALUE OF THE
SUBJECT SHIPMENT, PLUS INTEREST, DESPITE THE FACT THAT
SUCH CLAIM, IF ANY AT ALL, HAS ALREADY PRESCRIBED,
ESPECIALLY BECAUSE PETITIONER PSPC DID NOT COMMIT
ANY FRAUD.
II
THE CTA FORMER EN BANC ERRED WHEN IT FAILED TO
RECOGNIZE THAT THE GOVERNMENT DID NOT SUFFER ANY
DAMAGE OR REVENUE LOSS SINCE ALL TARIFF DUTIES
IMPOSABLE ON THE SUBJECT SHIPMENT WERE ALREADY
PAID TO THE GOVERNMENT, SUCH THAT TO ALLOW
RESPONDENT COMMISSIONER TO RECOVER THE ENTIRE
74
VALUE OF THE SUBJECT SHIPMENT WOULD BE
CONFISCATORY AND AMOUNT TO UNJUST ENRICHMENT
ON THE PART OF THE GOVERNMENT.
III
THE CTA FORMER EN BANC ERRED WHEN IT CONSIDERED
THE SUBJECT SHIPMENT AS IMPLIEDLY ABANDONED,
DEPRIVING PETITIONER PSPC OF ITS RIGHT TO DUE
PROCESS AND EQUAL PROTECTION OF THE LAW,
CONSIDERING:
1. RESPONDENT COMMISSIONER DID NOT OBSERVE
THE DUE NOTICE REQUIREMENT UNDER SECTION
1801 OF THE TCCP OR COMPLIED WITH THE RULES
THAT BOC HAD PROMULGATED, WHICH DUE
NOTICE IS MANDATORY IN THE ABSENCE OF
FRAUD AS HELD IN THE CHEVRON CASE.
2. THE DUE NOTICE REQUIRED UNDER SECTION 1801
OF THE TCCP ACTUALLY REFERS TO THE NOTICE TO
FILE ENTRY FOR IMPORTED ARTICLES AND NOT THE
ARRIVAL THEREOF.
3. PETITIONER PSPC'S ADVANCE FILING OF ITS IED
WHICH, BY LAW, ALREADY CONSTITUTES A VALID
AND EFFECTIVE IMPORT ENTRY FORM, AND ITS
CLEAR ACTUATIONS SHOWED AN
INTENTION NOT TO ABANDON THE SUBJECT
SHIPMENT ESPECIALLY SINCE IT HAD
ALREADY FULLY PAID THE TARIFF DUTY DUE ON THE
SHIPMENT IN ADVANCE.
4. RESPONDENT COMMISSIONER DID NOT CONSIDER
PETITIONER PSPC'S REASONABLE AND JUSTIFIABLE
REASONS FOR THE SLIGHT DELAY IN FILING ITS
IEIRD.
5. TO SUSTAIN THE CTA FORMER EN BANC IS TO TREAT
PETITIONER PSPC WORSE THAN SMUGGLERS AND
COMMON CRIMINALS, AS TO DEPRIVE IT OF ITS
RIGHT TO EQUAL PROTECTION OF THE LAW.
IV
THE CTA [FORMER] EN BANC ERRED IN FAILING TO
RECOGNIZE THAT THE IMPOSITION OF A NINE HUNDRED
THIRTY-SIX MILLION EIGHT HUNDRED EIGHTY-NINE
THOUSAND EIGHT HUNDRED EIGHTY-THREE AND 90/100
PESOS (P936,889,883.90) PENALTY BY REASON OF IMPLIED
ABANDONMENT AGAINST PETITIONER PSPC, DESPITE ITS
FULL PAYMENT OF THE TARIFF DUTY DUE ON THE SHIPMENT
AND THE JUSTIFIABLE SLIGHT DELAY IN THE LATTER'S
SUBMISSION OF ITS IEIRD, IS IN VIOLATION OF
INTERNATIONAL LAW UNDER THE REVISED KYOTO
CONVENTION.
V
THE CTA [FORMER] EN BANC ERRED IN FAILING TO
RECOGNIZE THAT THERE IS NO STATUTORY PROVISION
EMPOWERING RESPONDENT COMMISSIONER TO
SUBSTITUTE ITS CLAIMS FOR THE ABANDONED GOODS WITH
THE VALUE THEREOF.
VI
THE CTA [FORMER] EN BANC GROSSLY MISAPPRECIATED
THE FACTS AND MISAPPLIED THE RULING OF THE
HONORABLE COURT IN THE CHEVRON CASE WHEN IT HELD
THAT PRESCRIPTION IS NOT A DEFENSE AND THAT THE
NOTICE REQUIREMENT UNDER SECTION 1801 OF THE TCCP
AND THE BOC'S OWN RULES AND REGULATIONS DO NOT
APPLY EVEN IN THE ABSENCE OF FRAUD. QUITE THE
CONTRARY, THE CHEVRON CASECLEARLY RECOGNIZED
THAT THE PRESCRIPTIVE PERIOD OF THE FINALITY OF THE
75
 LIQUIDATION UNDER SECTION 1603 OF THE TCCP IS A
DEFENSE IN THE ABSENCE OF FRAUD AND THE NOTICE
REQUIREMENT WAS SET ASIDE DUE TO THE FINDING OF
FRAUD AGAINST CHEVRON. MOREOVER, UNLIKE
IN CHEVRON CASE WHERE THE HONORABLE COURT
FOUND CHEVRON TO HAVE BENEFITED FROM ITS DELAY
AND WAS GUILTY OF FRAUD, THE
QUESTIONED DECISION AND RESOLUTION BOTH DID NOT
FIND FRAUD ON THE PART OF PETITIONER PRPC.35
Petitioner asseverates that: (a) in the absence of fraud, the right of
respondent to claim against petitioner, assuming there is any, has
already prescribed since an action involving payment of customs duties
demanded after a period of one (1) year from the date of final
payment of duties shall not succeed, relying on Section 1603 of the
TCCP; (b) the alleged Memorandum dated 2 February 2001 issued by
the Investigation and Prosecution Division (IPD) of the BOC, which
served as the court a quo's basis in finding fraud on the part of petitioner,
was never presented, authenticated, marked, identified, nor formally
offered in evidence; hence, inadmissible and cannot be the basis of
any finding of fraud; (c) even if the Memorandum dated 2 February
2001 is legally admitted in evidence, it still does not constitute clear and
convincing proof to establish any fraud on the part of petitioner since,
unlike in the Chevron case, it was entitled to avail of the reduced three
percent (3%) rate under R.A. No. 8180, which was already in effect as
early as 16 April 1996; thus, petitioner did not gain any undue
advantage or benefit from its justifiable delay in filing the Import Entry
and Internal Revenue Declaration within the 30-day mandatory period;
and (d) the evidence on record and the acts of petitioner [filing of
Import Entry Declaration (JED) and paying advance duties] disclose
honest and good faith on its part showing clear absence of any
fraudulent intent to evade the payment of the proper customs duties
and taxes due at the time of the entry of its imported crude oil in the
Philippines.36
Petitioner further argues that the government suffered or lost nothing
when petitioner filed its Import Entry and Internal Revenue Declaration
thirteen (13) days beyond the period allowed by law, considering that
the former did not lose any tax collection when petitioner had allegedly
paid in advance the amount of P71,923,285.00 for the regular tariff duty
of 10% then prevailing, notwithstanding its entitlement to the reduced
3% rate under RA No. 8180. Consequently, by ordering petitioner to pay
for the entire dutiable value amounting to P936,899,883.90, the
government shall be guilty of unjust enrichment, and such would result
to deprivation of property on the part of petitioner without due process
of law.37
Moreover, it is petitioner's contention that the principles enunciated in
the Chevron case were misapplied in the case at bench. It explained
that the reason for such ruling establishing the "ipso factoabandonment"
doctrine was because there was a finding of fraud on the part of
Chevron, being the importer. The existence of fraud was a critical and
essential fact in the disposition on the issues in the Chevron case that
justified the goods to be deemed impliedly abandoned in favor of the
government. Corollarily, in the absence of fraud, goods cannot be
deemed impliedly abandoned and ipso facto owned by the
government arising from a mere delay in the submission of the Import
Entry and Internal Revenue Declaration, such as in the present case. In
other words, petitioner is convinced that the provisions of Sections 1801
and 1802 cannot be applied blindly which may cause goods to be
impliedly abandoned in favor of the government, without even
recognizing the peculiar circumstances of the case and without
allowing the importer (petitioner herein) to provide justifications for the
delay in the submission of its Import Entry and Internal Revenue
Declaration. Allegedly, both notices to the importer to file entry and for
its failure to file an entry within the non-extendible period of 30 days are
essential before a shipment can be considered impliedly abandoned.
Otherwise, to do so would constitute violation of the basic substantial
constitutional rights of petitioner.
Petitioner explains that, in issuing Customs Administrative Order (CAO)
No. 5-93 dated 1 September 1993 and Customs Memorandum Order
(CMO) No. 15-94 dated 29 April 1994, respondent even recognized the
significance of the due notice requirement before any goods may be
deemed impliedly abandoned articles. Such notice purportedly refers to
notice to file entry, and not notice of arrival as mistakenly interpreted by
the CTA Former En Banc. Thus, in the absence of such notice in the
present case, there could have been no implied abandonment in favor
76
of the government of the said imported crude oil by petitioner pursuant
to Section 1801 of the TCCP.
Lastly, petitioner believes that affirmance of the ruling a quo, would be
tantamount to a clear violation of international laws, i.e. the Revised
Kyoto Convention, which generally prohibit the imposition of substantial
penalties for errors when there is no fraud or gross negligence on the
part of an importer. Consequently, such current and reasonable trend in
the international and uniform application of customs rules and laws
shows how unreasonable, unjust, confiscatory, iniquitous and
incongruent the disposition made against petitioner in the instant case;
hence, the very need to set aside the assailed Decision and Resolution
of the CTA Former En Banc in C.T.A. EB No. 472, in order to prevent the
creation of a legal precedent which contravenes State commitments.
Respondent, on the other hand, counters that petitioner's failure to file its
Import Entry and Internal Revenue Declaration within the non-extendible
period of 30 days was fatal to its cause of action. Resultantly, the subject
imported crude oil is deemed abandoned in favor of the government
by reason of such non-filing of the imported entries within said
prescriptive period.38
Our Ruling
The submissions of the parties to this case bring to fore two timelines and
the consequences of the lapse of the prescribed periods. Petitioner
appears to be covered by Section 1801, in relation to Section 1301,
which respectively states:
Sec. 1801. Abandonment, Kinds and Effects of. - An
imported article is deemed abandoned under any of the
following circumstances:
(a) When the owner, importer, or consignee of the
imported article expressly signifies in writing to the
Collector of Customs his intentions to abandon; or
Tersely put, when an importer after due notice fails to file an Import Entry
and Internal Revenue Declaration within an unextendible period of thirty
(b) When the owner, importer, consignee or interested
party after due notice, fails to file an entry within thirty (30)
days, which shall not be extendible, from the date of
discharge of the last package from the vessel or aircraft,
or having filed such entry, fails to claim his importation
within fifteen (15) days which shall not likewise be
extendible, from the date of posting of the notice to
claim such importation. (Emphasis supplied)
Any person who abandons an article or who fails to claim
his importation as provided for in the preceding
paragraph shall be deemed to have renounced all his
interests and property rights therein.
xxxx
Sec. 1301. Persons Authorized to Make Import Entry.-
Imported articles must be entered in the customhouse at
the port of entry within thirty (30) days, which shall not be
extendible, from the date of discharge of the last
package from the vessel or aircraft either (a) by the
importer, being holder of the bill of lading, (b) by a duly
licensed customs broker acting under authority from a
holder of the bill or (c) by a person duly empowered to
act as agent or attorney-in-fact for each
holder: Provided, That where the entry is filed by a party
other than the importer, said importer shall himself be
required to declare under oath and under the penalties
of falsification or perjury that the declarations and
statements contained in the entry are true and
correct: Provided, further, That such statements under
oath shall constitute prima facie evidence of knowledge
and consent of the importer of violations against
applicable provisions of this Code when the importation
is found to be unlawful.
77
(30) days from the discharge of the last package, the imported article is
deemed abandoned in favor of the government.
Upon the other hand, respondent is covered in a manner likewise
mandatory, by the provisions of Section 1603 which states that:
Sec. 1603. Finality of Liquidation. - When articles have
been entered and passed free of duty or final adjustment
of duties made, with subsequent delivery, such entry and
passage free of duty or settlement of duties will, after the
expiration of one year, from the date of the final
payment of duties, in the absence of fraud or protest, be
final and conclusive upon all parties, unless the
liquidation of the import entry was merely tentative.
(Emphasis supplied)
We rule that in this case, Section 1603 is squarely applicable. The finality
of liquidation which arises one (1) year after the date of the final
payment of duties, which is in this case 23 May 1996, renders inoperable
the provisions of Section 1801.
Discussion
At the outset, it bears emphasis that the determination of the issues
presented in this case requires a comprehensive assessment of the
pronouncements made in the case of Chevron Philippines, Inc. v.
Commissioner of the Bureau of Customs;39 thus, we find it imperative to
reproduce hereunder the points there considered which are germane
to the controversy under review.
THE IMPORTATION WERE ABANDONED
IN FAVOR OF THE GOVERNMENT
The law is clear and explicit. It gives a non-extendible
period of 30 days for the importer to file the entry which
we have already ruled pertains to both the IED and IEIRD.
Thus under Section 1801 in relation to Section 1301, when
the importer fails to file the entry within the said period, he
"shall be deemed to have renounced all his interests and
property rights" to the importations and these shall be
considered impliedly abandoned in favor of the
government:
Section 1801. Abandonment, Kinds and
Effect of. -
xxxx
Any person who abandons an article or
who fails to claim his importation as
provided for in the preceding
paragraph shall be deemed to have
renounced all his interests and property
rights therein.
According to petitioner, the shipments should not be
considered impliedly abandoned because none of its
overt acts (filing of the IEDs and paying advance duties)
revealed any intention to abandon the importations.
Unfortunately for petitioner, it was the law itself which
considered the importation abandoned when it failed to
file the IEIRDs within the allotted time. Before it was
amended, Section 1801 was worded as follows:
Sec. 1801. Abandonment, Kinds and
Effect of. - Abandonment is express when
it is made direct to the Collector by the
interested party in writing and it is implied
when, from the action or omission of the
interested party, an intention to abandon
can be clearly inferred. The failure of any
interested party to tile the import entry
within fifteen days or any extension
thereof from the discharge of the vessel or
aircraft, shall be implied abandonment.
78
 An implied abandonment shall not be
effective until the article is declared by
the Collector to have been abandoned
after notice thereof is given to the
interested party as in seizure cases.
Any person who abandons an imported
article renounces all his interests and
property rights therein.
After it was amended by RA 7651, there was an
indubitable shift in language as to what could be
considered implied abandonment:
Section 1801. Abandonment, Kinds and
Effect of. - An imported article is deemed
abandoned under any of the following
circumstances:
1. When the owner, importer,
consignee of the imported article
expressly signifies in writing to the
Collector of Customs his intention
to
abandon;ChanRoblesVirtualawlibr
ary
2. When the owner, importer,
consignee or interested party after
due notice, fails to file an entry
within thirty (30) days, which shall
not be extendible, from the date of
discharge of the last package
from the vessel or aircraft x x x.
From the wording of the amendment, RA 7651 no longer
requires that there be other acts or omissions where an
intent to abandon can be inferred. It is enough that the
importer fails to file the required import entries within the
reglementary period. The lawmakers could have easily
retained the words used in the old law (with respect to
the intention to abandon) but opted to omit them. It
would be error on our part to continue applying the old
law despite the clear changes introduced by the
amendment.40 (Emphasis and underlining supplied)
Based on the foregoing, it appears that in the Chevron case, the Court
simply applied the clear provision of Section 1801(b), in relation to
Section 1301, of the TCCP, as amended, which categorically provides
that mere failure on the part of the owner, importer, consignee or
interested party, after due notice, to file an entry within a
non-extendible period of 30 days from the date of discharge of the last
package (shipment) from the vessel, would mean that such owner,
importer, consignee or interested party is deemed to have abandoned
said shipment. Consequently, abandonment of such shipment
(imported article) constitutes renouncement of all his interests and
property rights therein.
The rationale of strict compliance with the non-extendible period of 30
days within which import entries (IEIRDs) must be filed for imported
articles are as follows: (a) to prevent considerable delay in the payment
of duties and taxes; (b) to compel importers to file import entries and
claim their importation as early as possible under the threat of having
their importation declared as abandoned and forfeited in favor of the
government; (c) to minimize the opportunity of graft; (d) to compel both
the BOC and the importers to work for the early release of cargo, thus
decongesting all ports of entry; (e) to facilitate the release of goods and
thereby promoting trade and commerce; and (f) to minimize the
pilferage of imported cargo at the ports of entry.41 The aforesaid policy
considerations were significant to justify a firm observance of the
aforesaid prescriptive period.
It was observed that it is the law itself that considers an imported article
abandoned for failure to file the corresponding Import Entry and Internal
Revenue Declaration within the allotted time. No acts or omissions to
establish intent to abandon is necessary to effectuate the clear
provision of the law. Since Section 1801(b) does not provide any
79
qualification as to what may have caused such failure in filing said
import entry within the prescriptive period in order to render the
imported article abandoned, this Court shall likewise make no distinction
and plainly apply the law as clearly stated. Hence, upon the lapse of
the aforesaid non-extendible period of 30 days, without the required
import entry filed by the importer within said period, its imported article is
therefore deemed abandoned.
Moreover, Section 1.802 of the same Code states to whom said
abandoned imported articles belong as a consequence of such
renouncement by the owner, importer, consignee or interested party. It
provides:
Sec. 1802. Abandonment of Imported Articles. An
abandoned article shall ipso facto be deemed the
property of the Government and shall be disposed of in
accordance with the provisions of this Code.
x x x x (Emphasis supplied)
In the Chevron case, we explained that the term "ipso facto" is defined
as "by the very act itself” or "by mere act." Hence, there is no need for
any affirmative act on the part of the government with respect to
abandoned imported articles given that the law itself categorically
provides that said articles shall ipso facto be deemed the property of
the government. By using the term "ipso facto" in Section 1802 of the
TCCP, as amended by R.A. No. 7651,42 the legislature removed the need
for abandonment proceedings and for any declaration that imported
articles have been abandoned before ownership thereof can be
effectively transferred to the government. In other words, ownership
over the abandoned imported articles is transferred to the government
by operation of law.
The rulings in Chevron was generously applied by CTA Former En Banc in
the present case. Thus:
Petitioner Shell's failure to file the required entries, within
the prescribed non-extendible period of thirty (30) days
from the date of discharge of the last package from the
carrying vessel, constitutes implied abandonment of its
oil importation. This means, that from the precise moment
that the non-extendible thirty-day period had lapsed, the
abandoned shipment was deemed the property of the
government. Therefore, when petitioner withdrew the oil
shipment for consumption, it appropriated for itself
properties which already belonged to the government. x
xx
Petitioner Shell's contention that the belated filing of its
import entries is justified due to the late arrival of its import
documents, which are necessary for the proper
computation of the import duties, cannot be sustained.
xxxx
The [CTA Former En Banc] cannot also accept such
excuses, as the absence of supporting documents should
not have prevented petitioner Shell from complying with
the mandatory non-extendible period, since the law
prescribes an extremely serious consequence for
delayed filing. If this kind of excuse was to be accepted,
then the collection of customs duties would be at the
mercy of importers, which our lawmakers try to avoid.
For all the foregoing, we rule that the late filing of the
IEIRDs alone, which constituted implied abandonment,
makes petitioner Shell liable for the payment of the
dutiable value of the imported crude oil. x x x43 (Emphasis
supplied)
Since it is undisputed that the Import Entry and Internal Revenue
Declaration was belatedly filed by petitioner on 23 May 1996, or more
than 30 days from the last day of discharge of its importation counted
from 10 April 1996, the importation may be considered impliedly
abandoned in favor of the government. Petitioner argues that before
Section 1802 can be applied and the ipso facto provision invoked, the
80
requirement of due notice to file entry and the determination of the know that the shipments have already
intent of the importer are essential in order to consider the subject arrived.
imported crude oil of petitioner impliedly abandoned in favor of the
government. It further asserts that, in the Chevron case, it was Second, your Honor, the legitimate
conceded that as a general rule, due notice is indeed required before businessmen always have ... they have
any imported article can be considered impliedly abandoned, but their agents with the shipping companies,
Chevron's non-entitlement to such prior notice was legally justified and so they should know the arrival of
because of the finding of fraud established against it, rendering it their shipment.
impossible for the BOC to comply with the due notice requirement
under the prevailing rules. Consequently, it is petitioner's conclusion that xxxx
such finding of fraud is indispensable in order to waive the "due notice
requirement," that would eventually consider the subject imported HON. QUIMPO. Okay. Comparing the two,
crude oil impliedly abandoned in favor of the government. Mr. Chairman, I cannot help but notice
that in the substitution now there is a
In Chevron, we observed that: failure to provide the phrase AFTER
NOTICE THEREOF IS GIVEN TO THE
The minutes of the deliberations in the House of INTERESTED PARTY, which was in the
Representatives Committee on Ways and Means on the original. Now in the second, in the
proposed amendment to Section 1801 of the TCC show substitution, it has been deleted. I was first
that the phrase "after due notice" was intended for wondering whether this would be
owners, consignees, importers of the shipments who live necessary in order to provide for due
in rural areas or distant places far from the port where the process. I'm thinking of certain cases, Mr.
shipments are discharged, who are unfamiliar with Chairman, where the owner might not
customs procedures and need the help and advice of have known. This is now on implied
people on how to file an entry: abandonment not the express
abandonment.
xxxx
xxxx
MR. FERIA. 1801, your Honor. The question
that was raised here in the last hearing HON. QUIMPO. Because I'm thinking, Mr.
was whether notice is required to be sent Chairman. I'm thinking of certain situations
to the importer. And, it has been brought where the importer even though, you
forward that we can dispense with the know, in the normal course of business
notice to the importer because sometimes they fail to keep up the date or
the shipping companies are notifying the something to that effect.
importers on the arrival of their shipment.
And, so that notice is sufficient to ... THE CHAIRMAN. Sometimes their cargoes
sufficient for the claimant or importer to get lost.

81
 HON. QUIMPO. So just to, you know . . .
anyway, this is only a notice to be sent to
them that they have a cargo there.
xxxx
MR. PARAYNO. Your Honor, I think as a
general rule, five days [extendible] to
another five days is a good enough
period of time. But we cannot discount
that there are some consignees of
shipments located in rural areas or distant
from urban centers where the ports are
located to come to the [BOC] and to ask
for help particularly if a ship consignment
is made to an individual who is uninitiated
with customs procedures. He will probably
have the problem of coming over to the
urban centers, seek the advice of people
on how to file entry. And therefore, the five
day extendible to another five days might
really be a tight period for some. But the
majority of our importers are
knowledgeable of procedures. And in
fact, it is in their interest to file the entry
even before the arrival of the shipment.
That's why we have a procedure in the
bureau whereby importers can file their
entries even before the shipment arrives in
the country. (Emphasis supplied)
xxxx
Petitioner, a regular, large-scale and multinational
importer of oil and oil products, fell under the category of
a knowledgeable importer which was familiar with the
governing rules and procedures in the release of
importations.
Furthermore, notice to petitioner was unnecessary
because it was fully aware that its shipments had in fact
arrived in the Port of Batangas. The oil shipments were
discharged from the carriers docked in its private pier or
wharf, into its shore tanks. From then on, petitioner had
actual physical possession of its oil importations. It was
thus incumbent upon it to know its obligation to file the
IEIRD within the 30-day period prescribed by law. As a
matter of fact, importers such as petitioner can, under
existing rules and regulations, file in advance an import
entrv even before the arrival of the shipment to expedite
the release of the same. However, it deliberately chose
not to comply with its obligation under Section 1301.
The purpose of posting an "urgent notice to file entry"
pursuant to Section B.2.1 of CMO 15-94 is only to notify the
importer of the "arrival of its shipment" and the details of
said shipment. Since it already had knowledge of such,
notice was superfluous. Besides, the entries had already
been filed, albeit belatedly. It would have
been oppressive to the government to demand a literal
implementation of this notice requirement.44 (Emphasis
and underlining supplied)
Therefrom, it is without a doubt that the requirement of due notice
contemplated under Section 1801(b) of the TCCP, as amended, refers
to the notice to the owner, importer, consignee or interested party of
thearrival of its shipment and details thereof. The legislative intent was
clear in emphasizing the importance of said notice of arrival, which is
intended solely to persons not considered as knowledgeable importers,
or those who are not familiar with the governing rules and procedures in
the release of importations. We as much as said that the due notice
requirement under Section 1801(b), do not apply to knowledgeable
importers, such as Chevron in the above-cited case, for having been
considered as one of the regular, large-scale and multinational
importers of oil and oil products, familiar with said rules and procedures
(including the duty and obligation of filing the IEIRD within a
non-extendible period of 30 days) and fully aware of the arrival of its
82
shipment on its privately owned pier or wharf in the Port of Batangas.
Applying Chevron, the decision assailed here said:
The due notice required under Section 1301 is the notice
of the arrival of the shipment. In this case, pursuant to the
Chevron case, notice to petitioner Shell is not required
under the peculiar circumstances of the case. Petitioner
Shell, like Chevron, is a regular, large-scale and
multinational importer of oil and oil products, who falls
under the category of a knowledgeable importer,
familiar with the governing rules and procedures in the
release of importations.
More importantly, petitioner Shell even admitted that it
filed an application for Special Permit to Discharge and
paid the corresponding advance duties on March 22,
1996 (Exhibits "K" and "P"),, which undeniably proved
knowledge on the part of petitioner Shell of the arrival of
the shipment. Likewise, upon arrival of the shipment, they
were unloaded from the carrying vessels docked at the
wharf owned by petitioner Shell at Tabangao, Batangas
City; thus, petitioner Shell was fully aware that their
importation had already arrived.45 (Emphasis supplied)
The foregoing having been said, we must with equal concern, go to the
other timeline which is provided for in Section 1603 of the TCCP, to wit:
Sec. 1603. Finality of Liquidation. - When articles have
been entered and passed free of duty or final adjustment
of duties made, with subsequent delivery, such entry and
passage free of duty or settlement of duties will, after the
expiration of one year, from the date of the final
payment of duties, in the absence of fraud or protest, be
final and conclusive upon all parties, unless the
liquidation of the import entry was merely tentative.
Petitioner insists that, in the absence of fraud, the right of respondent to
claim against it has already prescribed considering that an action
involving the entry and payment of customs duties involving imported
articles demanded after a period of one (1) year from the date of final
payment of duties, shall not succeed, pursuant to the clear provision of
Section 1603. It therefore contends that even if the subject imported
crude oil of petitioner is by law deemed abandoned by operation of
law under Sections 1801(b), in relation to Section 1301, of the Code,
respondent's right to claim abandonment had already lapsed since
fraud is wanting in this case. On the other hand, respondent counters
that since there was a factual finding of fraud committed by petitioner
in the filing of its Import Entry and Internal Revenue Declaration beyond
the 30-day period prescribed under Section 1301 of the TCCP, the 1-year
prescriptive period under Section 1603 therefore does not apply.
At this point, it bears emphasis that in a petition for review
on certiorari under Rule 45 of the Rules of Court, only questions of law
may be raised.46 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 CA are conclusive and binding on the
Court47 and they carry even more weight when the CA affirms the
factual findings of the trial court.48 However, it is already a settled matter
that, the Court had recognized several exceptions to this rule, to wit: (1)
when the findings are grounded entirely on speculation, surmises or
conjectures; (2) when the inference made is manifestly mistaken, absurd
or impossible; (3) when there is grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5) when the findings
of facts are conflicting; (6) when in making its findings the Court of
Appeals went beyond the issues of the case, or its findings are contrary
to the admissions of both the appellant and the appellee; (7) when the
findings are contrary to the trial court; (8) when the findings are
conclusions without citation of specific evidence on which they are
based; (9) when the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the
respondent; (10) when the findings of fact are premised on the
supposed absence of evidence and contradicted by the evidence on
record; and (11) when the Court of Appeals manifestly overlooked
certain relevant facts not disputed by the parties, which, if properly
considered, would justify a different conclusion.49
83
Records of this case reveal that the CTA in Division in its 19 June 2008
Decision50 made a pronouncement that there was indeed fraud
committed by petitioner based on the factual finding contained in the
Memorandum dated 2 February 2001 issued by Special Investigator II
Domingo B. Almeda and Special Investigator III Nemesio C. Magno, Jr.
of the CIIS-IPD of the BOC. Consequently, since such memorandum
made such factual finding of fraud against petitioner, the court a
quo ruled that prescription does not set in even if respondent's claim
was made beyond the 1-year reglementary period.
Upon an assiduous review of the factual finding of fraud, we find
petitioner's contention meritorious. Hence, the instant case falls among
the exceptions to the general rule previously mentioned which would
require this Court's judicial prerogative to review the court a quo's
findings of fact.
Generally, fraud has been defined as "the deliberate intention to cause
damage or prejudice. It is voluntary execution of a wrongful act, or a
willful omission, knowing and intending the effects which naturally and
necessarily arise from such act or omission.51 For fraud to exist, it must be
intentional, consisting of deception willfully and deliberately done or
resorted to in order to induce another to give up some right.52 It is never
presumed and the burden of proof to establish lies in the person making
such allegation since every person is presumed to be in good faith. 53 To
discharge this burden, fraud must be proven by clear and convincing
evidence.54 Also, fraud must be alleged and proven as a fact where the
following requisites must concur: (a) the fraud must be established by
evidence; and (b) the evidence of fraud must be clear and convincing,
and not merely preponderant. Upon failure to establish these two (2)
requisites, the presumption of good faith must prevail.
Section 3611(c) of the TCCP, as amended defines the term fraud as the
occurrence of a "material false statement or act in connection with the
transaction which was committed or omitted knowingly, voluntarily and
intentionally, as established by clear and convincing evidence." Again,
such factual finding of fraud should be established based on clear,
convincing, and uncontroverted evidence.
Relevant thereto, in the landmark case of Aznar v. Court of Tax
Appeals,55 we explained the general concept of fraud as applied to tax
cases in the following fashion:
The fraud contemplated by law is actual and not
constructive. It must be intentional fraud, consisting of
deception willfully and deliberately done or resorted to in
order to induce another to give up some legal
right. Negligence, whether slight or gross, is not
equivalent to the fraud with intent to evade the tax
contemplated by the law. It must amount to intentional
wrong doing with the sole object of avoiding the tax. It
necessarily follows that a mere mistake cannot be
considered as fraudulent intent, and if both petitioner and
respondent Commissioner of Internal Revenue
committed mistakes in making entries in the returns and
in the assessment, respectively, under the inventory
method of determining tax liability, it would be unfair to
treat the mistakes of the petitioner as tainted with fraud
and those of the respondent as made in good
faith.56 (Emphasis supplied)
In the case at bench, a perusal of the records reveals that there is
neither any iota of evidence nor concrete proof offered and admitted
to clearly establish that petitioner committed any fraudulent acts. The
CTA in Division relied solely on the Memorandum dated 2 February 2001
issued by the CIIS-IPD of the BOC in ruling the existence of fraud
committed by petitioner. However, there is no showing that such
document was ever presented, identified, and testified to or offered in
evidence by either party before the trial court.
Time and again, this Court has consistently declared that cases filed
before the CTA are litigated de novo, party-litigants must prove
every minute aspect of their cases.57 Section 8 of R.A. No. 1125,58 as
amended by R.A. No. 9282,59 categorically described the CTA as a court
of record. Indubitably, no evidentiary value can be given to any
documentary evidence merely attached to the BOC Records, as the
rules on documentary evidence require that such documents must be
84
formally offered before the CTA. Pertinent is Section 34, Rule 132 of the
Rules of Court which reads:
Section 34. Offer of evidence. - The court shall consider
no evidence which has not been formally offered. The
purpose for which the evidence is offered must be
specified.
From the foregoing provision, it is clear that for evidence to be
considered by the court, the same must be formally offered. Corollarily,
the mere fact that a particular document is identified and marked as an
exhibit does not mean that it has already been offered as part of the
evidence of a party. In Interpacific Transit, Inc. v. Aviles,60 We had the
occasion to make a distinction between identification of documentary
evidence and its formal offer as an exhibit. We said that the first is done
in the course of the trial and is accompanied by the marking of the
evidence as an exhibit while the second is done only when the party
rests its case and not before. A party, therefore, may opt to formally
offer his evidence if he believes that it will advance his cause or not to
do so at all. In the event he chooses to do the latter, the trial court is not
authorized by the Rules to consider the same.61
The Rule on this matter is patent that even documents which are
identified and marked as exhibits cannot be considered into evidence
when the same have not been formally offered as part of the evidence,
but more so if the same were not identified and marked as exhibits, such
as in the present case. An assay of the records reveals that the subject
Memorandum dated 2 February 2001 was neither identified nor offered
in evidence by respondent during the entire proceedings before the
CTA in Division. Consequently, this is fatal to respondent's cause in
establishing the existence of fraud committed by petitioner since the
burden of proof to establish the same lies with the former alone.
As a matter of fact, even if the aforesaid documentary evidence was
included as part of the ROC Records submitted before the CTA in
compliance with a lawful order of the court,62 this does not permit the
trial court to consider the same in view of the fact that the Rules prohibit
it. The reasoning forwarded by the CTA in Division in its Resolution dated
24 February 2009, that the apparent purpose of transmittal of the
records is to enable it to appreciate and properly review the
proceedings and findings before an administrative agency, is misplaced.
Unless any of the party formally offered in evidence said Memorandum,
and accordingly, admitted by the court a quo, it cannot be considered
as among the legal and factual bases in resolving the controversy
presented before it.
By analogy, in Dizon v. CTA,63 this Court underscored the importance of
a formal offer of evidence and the corresponding admission thereafter.
We quote:
While the CTA is not governed strictly by technical rules of
evidence, as rules of procedure are not ends in
themselves and are primarily intended as tools in the
administration of justice, the presentation of the BIR's
evidence is not a mere procedural technicality which
may be disregarded considering that it is the only means
by which the CTA may ascertain and verify the truth of
BIR's claims against the Estate. The BIR's failure to formally
offer these pieces of evidence, despite CTA's directives,
is fatal to its cause. Such failure is aggravated by the fact
that not even a single reason was advanced by the BIR
to justify such fatal omission. This, we take against the BIR.
Per the records of this case, the BIR was directed to
present its evidence in the hearing of February 21, 1996,
but BIR's counsel failed to appear. The CTA denied
petitioner's motion to consider BIR's presentation of
evidence as waived, with a warning to BIR that such
presentation would be considered waived if BIR's
evidence would not be presented at the next hearing.
Again, in the hearing of March 20, 1996, BIR's counsel
failed to appear. Thus, in its Resolution dated March 21,
1996, the CTA considered the BIR to have waived
presentation of its evidence. In the same Resolution, the
parties were directed to file their respective
memorandum. Petitioner complied but BIR failed to do so.
In all of these proceedings, BIR was duly notified. Hence,
85
in this case, we are constrained to apply our ruling in Heirs
of Pedro Pasag v. Parocha:
A formal offer is necessary because
judges are mandated to rest their findings
of facts and their judgment only and
strictly upon the evidence offered by the
parties at the trial. Its function is to enable
the trial judge to know the purpose or
purposes for which the proponent is
presenting the evidence. On the other
hand, this allows opposing parties to
examine the evidence and object to its
admissibility. Moreover, it facilitates
review as the appellate court will not be
required to review documents' not
previously scrutinized by the trial court.
Strict adherence to the said rule is not a
trivial matter. The Court in Constantino v.
Court of Appeals ruled that the formal
offer of one's evidence is deemed waived
after failing to submit it within a
considerable period of time. It explained
that the court cannot admit an offer of
evidence made after a lapse of three (3)
months because to do so would ''condone
an inexcusable laxity if not
non-compliance with a court order which,
in effect, would encourage needless
delays and derail the speedy
administration of justice."
Applying the aforementioned principle in this case, we
find that the trial court had reasonable ground to
consider that petitioners had waived their right to make a
formal offer of documentary or object evidence. Despite
several extensions of time to make their formal offer,
petitioners failed to comply with their commitment and
allowed almost five months to lapse before finally
submitting it. Petitioners' failure to comply with the rule on
admissibility of evidence is anathema to the efficient,
effective, and expeditious dispensation of
justice. (Emphasis and underlining supplied)
Clearly therefore, evidence not formally offered during the trial cannot
be used for or against a party litigant by the trial court in deciding the
merits of the case. Neither may it be taken into account on appeal.
Since the rule on formal offer of evidence is not a trivial matter, failure to
make a formal offer within a considerable period of time shall be
deemed a waiver to submit it. Consequently, any evidence that has not
been offered and admitted thereafter shall be excluded and rejected.
Moreover, even if not submitted as a contention herein, We find it
apropos to rule that the CTA likewise cannot motu proprio justify the
existence of fraud committed by petitioner by applying the rules on
judicial notice.
Judicial notice is the cognizance of certain facts which judges may
properly take and act on without proof because they already know
them.64 Under the Rules of Court, judicial notice may either be
mandatory or discretionary. Pertinent portions of Rule 129 of the Rules of
Court provide as follows:
RULE 129
What Need Not Be Proved
Section 1. Judicial notice, when mandatory. - A court
shall take judicial notice, without the introduction of
evidence, of the existence and territorial extent of states,
their political history, forms of government and symbols of
nationality, the law of nations, the admiralty and
maritime courts of the world and their seals, the political
constitution and history of the Philippines, the official acts
of legislative, executive and judicial departments of the
86
 Philippines, the laws of nature, the measure of time, and
the geographical divisions.
Section 2. Judicial notice, when discretionary. - A court
may take judicial notice of matters which are of public
knowledge, or are capable to unquestionable
demonstration, or ought to be known to judges because
of their judicial functions.
Section 3. Judicial notice, when hearing necessary.
-During the trial, the court, on its own initiative, or on
request of a party, may announce its intention to take
judicial notice of any matter and allow the parties to be
heard thereon.
After the trial, and before judgment or on appeal, the
proper court, on its own initiative or on request of a party,
may take judicial notice of any matter and allow the
parties to be heard thereon if such matter is decisive of a
material issue in the case.
xxxx
In relation thereto, it has been held that the doctrine of judicial notice
rests on the wisdom and discretion of the courts; however, the power to
take judicial notice is to be exercised by the courts with caution; care
must be taken that the requisite notoriety exists; and every reasonable
doubt upon the subject should be promptly resolved in the negative.65
As a general rule, courts are not authorized to take judicial notice of the
contents of the records of other cases, even when such cases have
been tried or are pending in the same court, and notwithstanding the
fact that both cases may have been tried or are actually pending
before the same judge.66 However, this rule is subject to the exception
that in the absence of objection and as a matter of convenience to all
parties, a court may properly treat all or any part of the original record
of the case filed in its archives as read into the records of a case
pending before it, when with the knowledge of the opposing party,
reference is made to it, by name and number or in some other manner
by which it is sufficiently designated.67 Thus, for said exception to apply,
the party concerned must be given an opportunity to object before the
court could take judicial notice of any record pertaining to other cases
pending before it.
Such being the case, it would also be an error for the CTA in Division to
even take judicial notice of the subject Memorandum being merely a
part of the BOC Records submitted before the court a quo, without the
same being identified by a witness, offered in and admitted as
evidence, and effectively, depriving petitioner, first and foremost, an
opportunity to object thereto. Hence, the subject Memorandum should
not have been considered by the CTA in Division in its disposition.
It is well-settled that procedural rules are designed to facilitate the
adjudication of cases. Courts and litigants alike are enjoined to abide
strictly by the rules. While it is true that 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. Party litigants and their counsel are well
advised to abide by, rather than flaunt, procedural rules for these rules
illumine the path of the law and rationalize the pursuit of justice.68
The claim of respondent against petitioner has already prescribed
Since we have already laid to rest the question on whether or not there
was fraud committed by petitioner, the last issue for Our resolution is
whether respondent's claim against petitioner has already prescribed.
This Court rules in the affirmative.
There being no evidence to prove that petitioner committed fraud in
belatedly filing its Import Entry and Internal Revenue Declaration within
the 30-day period prescribed under Section 1301 of the TCCP, as
amended, respondent's rights to question the propriety thereof and to
collect the amount of the alleged deficiency customs duties, more so
the entire value of the subject shipment, have already prescribed.
Simply put, in the absence of fraud, the entry and corresponding
87
payment of duties made by petitioner becomes final and conclusive
upon all parties after one (1) year from the date of the payment of
duties in accordance with Section 1603 of the TCCP, as amended:
Section 1603. Finality of Liquidation. - When articles have
been entered and passed free of duty or final
adjustments of duties made, with subsequent
delivery, such entry and passage free of duty or
settlements of duties as well, after the expiration of one (1)
year, from the date of the final payment of duties, in the
absence of fraud or protest or compliance audit pursuant
to the provisions of this Code, be final and
conclusive upon all parties, unless the liquidation of the
import entry was merely tentative. (Emphasis and
underscoring supplied)
The above provision speaks of entry and passage free of duty or
settlements of duties. Generally, in customs law, the term "entry" has a
triple meaning, to wit: (1) the documents filed at the customs house; (2)
the submission and acceptance of the documents and (3) the
procedure of passing goods through the customs house.69 As explained
in the Chevron case, it specifically refers to the filing and acceptance of
the Import Entry and Internal Revenue Declaration of the imported
article. Simply put, the entry of imported goods at the custom house
consists in submitting them to the inspection of the revenue officers,
together with a statement or description of such goods, and the original
invoices of the same, for the purpose of estimating the duties to be paid
thereon.70 The term "duty" used therein denotes a tax or impost due to
the government upon the importation or exportation of goods. It means
that the duties on imports signify not merely a duty on the act of
importation, but a duty on the thing imported. It is not confined to a duty
levied while the article is entering the country, but extends to a duty
levied after it has entered the country.71
Based on the foregoing definitions, it is commonsensical that the finality
of liquidation referred to under Section 1603 covers the propriety of the
submission and acceptance of the Import Entry and Internal Revenue
Declaration covering the imported articles being brought in the country
for the sole purpose of determining whether it is subject to tax or not;
and if it is, whether the computation of the tax or impost to be paid to
the government was properly made. These shall include, among others,
the declarations and statements contained in the entry, made under
oath and under the penalties of falsification or perjury that such
declarations and statements contained therein are true and correct,
which shall constitute prima facie evidence of knowledge and consent
of the importer of violation against applicable provisions of the TCCP
when the importation is found to be unlawful.72
Indubitably, the matters which become final and conclusive against all
parties include the timeliness of filing the import entry within the period
prescribed by law, the declarations and statements contained therein,
and the payment or non-payment of customs duties covering the
imported articles by the owner, importer, consignee or interested party.
Since the primordial issue presented before us focuses on petitioner's
non-compliance in filing its Import Entry and Internal Revenue
Declaration within a non-extendible period of 30 days from the date of
discharge of' the last package from the vessel, respondent may only
look into it within a limited period of one (1) year in accordance with the
above-quoted provision.
In the case at bench, it is undisputed that petitioner filed its IEIRD and
paid the remaining customs duties due on the subject shipment only on
23 May 1996. Yet, it was only on 1 August 2000, or more than four (4)
years later, that petitioner received a demand letter from the District
Collector of Batangas for the alleged unpaid duties covering the said
shipment. Thereafter, on 29 October 2001, or after more than five (5)
years, petitioner received another demand letter from respondent
seeking to collect for the entire dutiable value of the same shipment
amounting to P936,899,855.90.
Consequently, applying the foregoing provision and considering that
we have determined already that there is no factual finding of fraud
established herein, the liquidation of petitioner's imported crude oil
shipment became final and conclusive on 24 May 1997, or exactly upon
the lapse of the 1-year prescriptive period from the date of payment of
final duties. As such, any action questioning the propriety of the entry
and settlement of duties pertaining to such shipment initiated beyond
said date is therefore barred by prescription.
88
Since time immemorial, this Court has consistently recognized and
applied the statute of limitations to preclude the Government from
exercising its power to assess and collect taxes beyond the prescribed
period, and we intend to abide by our rulings on prescription and to
strictly apply the same in the case of petitioner; otherwise, both the
procedural and substantive rights of petitioner would be violated. After
all, prescription is a substantive defense that may be invoked to prevent
stale claims from being resurrected causing inconvenience and
uncertainty to a person who has long enjoyed the exercise. Thus,
symptomatic of the magnitude of the concept of prescription, this Court
has elucidated that:
The law prescribing a limitation of actions for the
collection of the income tax is beneficial both to the
Government and to its citizens; to the Government
because tax officers would be obliged to act promptly in
the making of assessment, and to citizens because after
the lapse of the period of prescription citizens would have
a feeling of security against unscrupulous tax agents who
will always find an excuse to inspect the books of
taxpayers, not to determine the latter's real liability, but to
take advantage of every opportunity to molest peaceful,
law-abiding citizens. Without such legal defense
taxpayers would furthermore be under obligation to
always keep their books and keep them open for
inspection subject to harassment by unscrupulous tax
agents. The law on prescription being a remedial
measure should be interpreted in a way conducive to
bringing about the beneficient purpose of affording
protection to the taxpayer within the contemplation of
the Commission which recommend (sic) the approval of
the law.73 (Emphasis supplied)
Basic is the rule that provisions of the law should be read in relation to
other provisions therein. A statute must be interpreted to give it efficient
operation and effect as a whole avoiding the nullification of cognate
provisions. Statutes are read in a manner that makes it wholly operative
and effective, consistent with the legal maxim ut res magis valeat quam
pereat.
This maxim applied, we read Sections 1301, 1801, and 1802, together
with Section 1603 of the TCCP. Thus, should there be failure on the part
of the owner, importer, consignee or interested party, after due notice
of the arrival of its shipment (except in cases of knowledgeable owners
or importers), to file an entry within the non-extendible period of 30 days
from the date of discharge of the last package (shipment) from the
vessel, such owner, importer, consignee or interested party is deemed to
have abandoned said shipment in favor of the government. As
imperative, however, is the strict compliance with Section 1603 of the
TCCP, which should be read as we have ruled. Any action or claim
questioning the propriety of the entry and settlement of duties
pertaining to such shipment made beyond the 1-year prescriptive
period from the date of payment of final duties, is barred by prescription.
In the present case, the failure on the part of respondent to timely
question the propriety of the entry and settlement of duties by petitioner
involving the subject shipment, renders such entry and settlement of
duties final and conclusive against both parties. Hence, respondent
cannot any longer have any claim from petitioner. Sections 1301, 1801,
and 1802 of the TCCP have been rendered inoperable by reason of the
lapse of the period stated in Section 1603 of the same Code.
Indeed, if the prescriptive period of one year specified in Section 1603 of
the TCCP is not applied against the respondent, the reality that the
shipment has been unloaded from the carrying vessels to petitioner's oil
tanks and that import duty in the amount of P11,231,081.00 has been
paid would be obliterated by the application of the principle
of deemed abandonment four years after the occurrence of
the facts of possession and payment, as a consequence of which
application, the petitioner would be made to pay the government
the entire value of the shipment it had as vendee of the shipper already
paid.
WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated 13
May 2010 and Resolution dated 22 February 2011 of the Court of Tax
Appeals Former En Banc in C.T.A. EB No. 472 are
hereby REVERSED and SET ASIDE on the ground of prescription.
No costs.
89
SO ORDERED.
G.R. No. 98023 October 17, 1991
MULTINATIONAL VILLAGE HOMEOWNERS' ASSOCIATION,
INC., petitioner,
vs.
COURT OF APPEALS and MULTINATIONAL REALTY and
DEVELOPMENT CORPORATION, respondents.
CRUZ, J.:
The subject of this controversy is a stretch of road connecting the
Multinational Village in Parañaque, Metro Manila, with the Ninoy Aquino
Avenue. The use of this road is disputed between the Multinational Village
Homeowners' Association, Inc., the herein petitioner, and private
respondent Multinational Realty and Development Corporation.
The issue arose when the Corporation filed a complaint on March 15, 1989,
against the Association and the G-Man Security Agency in the Regional
Trial Court of Makati for "Enforcement of Rights of Property Ownership,
Injunction with Temporary Restraining Order and Damages." The
Corporation alleged that, as owner, it had allowed the Association to use
the road and set up thereon a guardhouse manned by the Agency, but the
defendants were now preventing the plaintiff from using the road for
transporting construction materials needed to develop its other lots
adjacent to the Village. The plaintiff prayed that it be placed in peaceful
possession of the said road with full exercise and enforcement of the
attributes and rights of ownership plus damages, attorney's fees and costs.
On April 4, 1989, Judge Job B. Madayag, after hearing, granted the writs of
preliminary prohibitory and mandatory injunctions prohibiting the
defendants from preventing the plaintiff from using the road and ordering
them to remove the guardhouse and transfer it inside the Village. The
defendants filed their answer on April 13, 1989, and on July 20, 1989, a
motion to dismiss on the grounds of lack of jurisdiction and litis pendentia.
This motion was denied on October 3, 1989. The Association went to the
Court of Appeals on certiorari with a prayer for preliminary injunction, which
was also denied in a decision dated January 29, 1991. 1 The Association
then came to this Court to question that decision.
Specifically, the petitioner alleges that the complaint of the Corporation
comes under the jurisdiction of the Housing and Land Use Regulatory
Board under PD 957, as amended; that there is a pending administrative
case between the parties before the said agency that barred the filing of the
civil case; and that the civil case is a form of forum-shopping. The private
respondent has submitted its comment, and the Court is now ready to
decide.
We deal first with the question of jurisdiction.
The position of the petitioner is that the subject-matter of Civil Case No.
89-3446 comes under the jurisdiction of the HLURB conformably to PD 957,
providing as follows:
SECTION 1. In the exercise of its function to regulate the real estate trade
and business and in addition to its powers provided for in Presidential
Decree No. 957, the National Housing Authority shall have exclusive
jurisdiction to hear and decide cases of the following nature:
A. Unsound real estate business practices.
B. Claims involving refund and any other claims filed by subdivision, lot or
condominium unit buyer against the project owner, developer, dealer,
broker or salesman; and
C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lot or condominium unit against
the owner, developer, dealer, broker or salesman.
Parenthetically, exclusive jurisdiction over these cases was originally
vested in the National Housing Authority but was transferred by EO 648
dated February 7, 1981, to the Human Settlements Regulatory Commission,
90
which was renamed Housing and Land Use Regulatory Board by EO 90 on
December 17, 1986.
A study of the above-quoted section shows that the contention of the
Association is untenable. It disregards the fact that the Corporation has
directly asserted a claim of ownership over the subject property, which is
why it filed its complaint not with the HLURB but with the regional trial court.
The mere contention by the defendant that the road is subject to the
exclusive use of the Village will not remove the case from the jurisdiction of
the trial court and transfer it to the administrative agency. It is elementary
that jurisdiction is determined by the allegations in the complaint, not the
allegations in the answer. As we have held often enough —
Jurisdiction over the subject-matter is determined upon the allegations
made in the complaint, irrespective of whether the plaintiff is entitled or not
entitled to recover upon the claim asserted therein — a matter resolved
only after and as a result of the trial. Neither can the jurisdiction of the court
be made to depend upon the defenses made by the defendant in his
answer or motion to dismiss. If such were the rule, the question of
jurisdiction would depend almost entirely upon the defendant. 2
Significantly, the Association has admitted in its answer to the complaint of the
Corporation that the latter is the owner of the disputed road. The Association insists,
however, that the said road forms part of the Village and is reserved by agreement with
the Corporation for the exclusive use of the residents. True or not, that argument may be
— as it has been — asserted as a defense to resist the demands of the Corporation. But
such a submission surely cannot have the effect of transferring the controversy to the
HLURB as the complaint is not among the cases subject to its exclusive jurisdiction
under Section 1 of P.D. 957 as amended. The matter is clearly resoluble by the courts of
justice under the provisions of the Civil Code.
Invocation by the petitioner of Solid Homes, Inc. v. Payawal 3 does not advance its
cause. That case involved a complaint for the delivery of title to a subdivision lot and
clearly came under the exclusive jurisdiction of the HLURB pursuant to the
above-quoted Section 1 of PD 957.
The administrative case referred to by the petitioner is the complaint it filed with the
HLURB against the private respondent on May 28, 1987, for the latter's alleged failure to
provide the facilities, improvements and constructions in the Village as promised in its
brochures and advertisements. The decision of the Board was apparently satisfactory to
the Corporation, which moved for its immediate implementation, but was opposed by the
Association, which moved for its reconsideration. Reconsideration having been denied,
the Association filed a second motion for reconsideration, which was also denied. The
Association then appealed to the Office of the President, where the case is still pending.
4
a. Identity of parties, or at least such as representing the same interests in both actions.
b. Identity of rights asserted and relief prayed for, the relief being founded on the same
facts.
c. 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 adjudicata in the
other.
It must be noted in the first place that there is no clear identity of subject-matter in the
administrative and civil cases. The HLURB decision now under appeal referred only to
"the road lots and the sites for parks, playgrounds and recreational uses that (were) still,
vacant for preparation and/or levelling," 6
without definitely specifying if it
included the disputed road. No less importantly, it cannot be said that the
causes of action in the two cases are identical. The administrative case is
an action filed by the Association for the specific performance by the
Corporation of its legal obligations whereas the civil case is an action for the
enforcement of a claimed property right of the Corporation against the
Association. The wrongful act of the Association alleged in the civil action
91
commenced in 1989 could not have been litigated in the earlier
administrative action, which was filed against the Corporation in 1987.

Finally, the charge of forum-shopping must also be rejected, in light of the

considerations above discussed. As we held in Villanueva v. Adre: 7

There is forum-shopping whenever, as result of an adverse opinion in one forum, a party seeks a favorable

opinion (other than by appeal or certiorari) in another, and the principle applies not only with respect to suits

filed in the courts while an administrative proceeding is pending, in order to defeat administrative processes

and in anticipation of an unfavorable administrative ruling and a favorable court ruling.

It is noted that the private respondent found the decree in the administrative case acceptable and has not

seen fit to ask for its modification or reversal. The Association has not shown that the Corporation apprehends

an adverse opinion in the appeal now before the Office of the President and seeks at this time "to defeat

administrative processes" with "a favorable court ruling." In fact, the action commenced by the Corporation in

the regional trial court was precipitated by the refusal of the Association to allow the use of the road in question

by the complainant. The Corporation would not have filed its complaint at all had it not been denied access to

the said road.

We are satisfied that the complaint filed by the Corporation against the Association comes under the

jurisdiction of the Regional Trial Court of Makati and is not barred by the earlier administrative case filed by the

Association against the Corporation before the HLURB. The two actions can stand and proceed separately and

each may be decided either by the judicial tribunal or the administrative agency in the exercise of their

respective jurisdictions.

WHEREFORE, the petition is DENIED, with costs against the petitioner. It is so ordered.

92

THIRD DIVISION
G.R. No. 173186, September 16, 2015
ANICETO UY, Petitioner, v. COURT OF APPEALS, MINDANAO STATION,
CAGAYAN DE ORO CITY, CARMENCITA NAVAL-SAI, REP. BY HER
ATTORNEY-IN FACT RODOLFO FLORENTINO, Respondents.
DECISION
JARDELEZA, J.:
This is a Petition for Review on Certiorari1 under Rule 45 of the Revised
Rules of Court assailing the Decision2 dated January 26, 2006 of the
Court of Appeals, Mindanao Station, Cagayan de Oro City in CA-G.R.
CV No. 70648, and its Resolution3 dated May 18, 2006 denying
petitioner's motion for reconsideration.
The Facts
In 1979, private respondent Carmencita Naval-Sai (Naval-Sai) acquired
ownership of a parcel of land described as Lot No. 54-B (LRC) Psd 39172
and covered by Transfer Certificate of Title (TCT) No. T-19586 from her
brother. The land was later subdivided, with the corresponding titles
issued in Naval-Sai's name in the Register of Deeds of North
Cotabato.4 Two of these subdivided lots, Lots No. 54-B-8 (LRC) Psd
173106 and No. 54-B-9 (LRC) Psd 173106, covered by TCTs No. T-58334
and No. T-58335,5 respectively, are the subject of this case.
Subsequently, Naval-Sai sold Lot No. 54-B-76 (LRC) Psd 173106 to a
certain Bobby Adil on installment, on the condition that the absolute
deed of sale will be executed only upon full payment. Adil failed to pay
the amortization, forcing him to sell his unfinished building on the
property to spouses Francisco and Louella Omandac.7cralawrednad
Meanwhile, Naval-Sai borrowed money from a certain Grace Ng. As
security, Naval-Sai delivered to Ng TCTs No. T-58334 and No. T-58335
covering Lots No. 54-B-8 and No. 54-B-9, respectively. Ng, on the other
hand, borrowed money from petitioner and also delivered to the latter
the two titles to guarantee payment of the loan.8cralawrednad
Sometime thereafter, Naval-Sai learned that petitioner filed a case for
recovery of possession (Civil Case No. 1007) against Francisco
Omandac. Branch 17 of the Regional Trial Court (RTC) in Kidapawan
City ruled in favor of petitioner.9 Naval-Sai filed a motion for new trial
before the Court of Appeals, arguing that her signature in the purported
deed of sale presented in the case between her and petitioner was a
forgery. Civil Case No. I007, however, became final and executory in
2001.10 The spouses Omandac were ejected from the property and
petitioner gained possession of the same.11cralawrednad
In July 1999, Naval-Sai filed a Complaint for Annulment of Deed with
Damages12 before the same Branch 17 of the RTC in Kidapawan City
against petitioner. The subject of the complaint was the deed of sale
allegedly executed between Naval-Sai and petitioner involving Lots No.
54-B-8 and No. 54-B-9. Naval-Sai prayed that the deed of sale be
declared null and void ab initio because the alleged sale between her
and petitioner was a forgery. Naval-Sai argued that she never sold the
lots and that her signature in the purported deed of sale is spurious.
Naval-Sai filed an Amended Complaint 13 dated July 29, 1999. She
asserted that the subject TCTs were already cancelled by virtue of the
deed of sale. TCT No. T-62446 was issued in lieu of TCT No. T-58334 and
TCT No. T-62447 replaced TCT No. T-58335. Hence, the Amended
Complaint added as a relief the declaration of TCTs No. T-62446 and No.
T-62447, which were registered in the name of petitioner, as null and
void ab initio. Unlike the original complaint, however, the Amended
93
Complaint was not signed by Naval-Sai, but by her counsel.
In his Answer with Counterclaim14 dated October 4, 1999, petitioner
specifically denied that the two TCTs were delivered to him by Ng as a
guaranty for payment of her loan. Petitioner claimed that he and
Naval-Sai entered into a valid contract of sale in 1981 and that the lots
were sold for value. The corresponding TCTs were issued in his name
shortly thereafter and since then, he had been in complete control of
the properties. When Francisco Omandac constructed a house in one
of the properties, petitioner filed Civil Case No. 1007.
Petitioner also raised special and affirmative defenses of, among others,
non-compliance with the requisite certification of non-forum shopping
and prescription. He asserted that jurisdiction has never been acquired
over the parties and the subject matter because the certification
against forum shopping in the Amended Complaint was defective, for
having been merely signed by Naval-Sai's counsel. He further claimed
that the action for annulment of deed of sale is already barred by the
statute of limitations and that Naval-Sai is guilty of estoppel and laches.
The RTC dismissed the complaint on the grounds of prescription and a
defective certification against forum shopping. The dispositive portion of
its order reads:ChanRoblesvirtualLawlibrary
WHEREFORE, finding the defendant's defense meritorious,
this Court hereby orders the dismissal of the instant
complaint without prejudice to the prosecution in the
same action of the counterclaim pleaded in the answer
pursuant to Section 6 Rule 16 of the Rules of Court.
Let the hearing on the counterclaim be set on March 30,
2001.
SO ORDERED.15
The RTC found the action for annulment of deed of sale to be a
collateral attack on the titles, which is prohibited by law under the
principle of indefeasibility of title after the lapse of one year from
registration. The RTC explained that Naval-Sai's complaint was not only
for the annulment of deed of sale but, ultimately, for the cancellation of
the titles in the name of petitioner, thus:ChanRoblesvirtualLawlibrary
It is true that an action to set aside a contract which is
void [ab initio] docs not prescribe. However, a closer
glance on the substance of the plaintiffs claim would
reveal that its ultimate thrust is to have the Transfer
Certificate of Title Nos. T-62446 and T-62447 cancelled.
This is evidenced by the plaintiff's prayer asking for the
declaration of TCT Nos. T-62446 and TCT No. 62447
registered in the name of the defendant as null and void
[ab initio] in addition to her prayer for the declaration of
nullity of the subject deed of sale. x x x
Under the Land Registration Act, a title is valid and
effective until annulled or reviewed in a direct
proceeding and not in a collateral one, which review
must be made within one year from the issuance of the
title. After the lapse of such period, the title would be
conclusive against the whole world including the
government. In other words, the title, alter the lapse of
one year from registration become[s] indefeasible.16
On the issue of non-compliance with the required certification on
non-forum shopping, the RTC noted that Naval-Sai did not explain why
she failed to comply with the Rules. The RTC cited the case of Five Star
Bus Company, Inc. v. Court of Appeals17 where we, faced with the
similar issue of whether or not to dismiss a petition on the ground that the
certification was signed by counsel, ruled that there was
non-compliance with the Supreme Court Revised Circular No.
28-9118 and that substantial compliance cannot be
applied. cralawrednad
19
The Court of Appeals set aside the order of the RTC in the now assailed
Decision20 dated January 26, 2006. The Court of Appeals ruled that there
was substantial compliance with the requirement of verification and
certification of non-forum shopping. It noted that the original complaint
94
has a proper verification and certification of non-forum shopping signed
by Naval-Sai herself. What was signed by Naval-Sai's counsel was the
amended complaint dated July 29, 1999. Its verification and
certification carries the statement "x x x that this [a]mended [c]omplaint
should be taken and read together with the original complaint; x x
x"21 which the Court of Appeals found to be a "cautionary move"
tantamount to substantial compliance.22 The Court of Appeals further
explained that the rule on certification against forum shopping was
complied with in the original complaint because although an amended
complaint supersedes the pleading that it amends, it is not an initiatory
pleading contemplated under the Rules of Court.23cralawrednad
On the issue of whether the action is a collateral attack in relation to
prescription, the Court of Appeals ruled that it is neither a direct nor a
collateral attack. According to the Court of Appeals, the action is a
direct attack when the object of an action is to annul or set aside the
judgment in the registration proceeding. On the other hand, a collateral
attack is when, in an action to obtain a different relief, an attack on the
judgment or registration proceeding is nevertheless made as an incident
thereof.
Here, however, Naval-Sai is seeking a relief for an annulment of the
deed of sale, which is not an attack on the judgment or registration
proceeding pursuant to which the titles were decreed. It does not seek
to set aside the judgment of registration of titles nor does it seek to nullify
the title by challenging the judgment or proceeding that decreed its
issuance. The action is in reality one for reconveyance, which is
imprescriptible when based on a void contract.
Thus:ChanRoblesvirtualLawlibrary
is the transfer of the property which has been wrongfully
or erroneously registered in another person's name, to its
rightful owner or to one with a better right."
xxx
An action for reconveyance on the ground that the
certificate of title was obtained by means of a fictitious or
forged deed of sale is virtually an action for the
declaration of the nullity of the forged deed, hence, it
does not prescribe. x x x 24
However, the Court of Appeals emphasized that despite its discussion on
the prescriptibility of the action, it has not made a finding that the deed
of sale is indeed fictitious or forged because it is for the RTC to rule on
after evidence has been presented and evaluated. Thus, the relevant
dispositive portion of the Court of Appeals' decision
reads:ChanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the petition is
GRANTED. The assailed Order of dismissal dated 30 March
2001 is hereby SET ASIDE and deemed of no effect.
Let this case be remanded to the lower court for further
proceedings.
SO ORDERED.25cralawred

A perusal of the records of the case shows that the Petitioner filed a Motion for Reconsideration26 on March 3, 2006, which
caption of appellant's Complaint before the RTC is was denied by the Court of Appeals in its Resolution 27 dated May 18,
annulment of deed. However considering that the 2006.
ultimate relief sought is for the appellee to "return" the
subject property to him, it is in reality an action for Hence, this petition, which raises the following
reconveyance. In De Guzman [v.] Court of Appeals, the issues:ChanRoblesvirtualLawlibrary
Court held that, "the essence of an action for
I.
reconveyance is that the decree of registration is
respected as incontrovertible but what is sought instead
95

THE COURT OF APPEALS ERRED WHEN IT
RULED THAT THERE WAS SUBSTANTIAL
COMPLIANCE WITH THE REQUIREMENTS ON
CERTIFICATION FOR NON-FORUM
SHOPPING.
II.
THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
ACTION HAS PRESCRIBED AND/OR THE PRIVATE
RESPONDENT IS GUILTY OF INACTION, LACHES OR
ESTOPPEL.
Our Ruling
There was substantial compliance
with the requirements on
certification against forum
shopping.
A certification against forum shopping is a peculiar and personal
responsibility of the party, an assurance given to the court or other
tribunal that there are no other pending cases involving basically the
same parties, issues and causes of action.28 It must be executed by the
party-pleader, not by his counsel. If, however, for reasonable or
justifiable reasons, the party-pleader is unable to sign, he must execute
a Special Power of Attorney (SPA) designating his counsel of record to
sign on his behalf.29cralawrednad
Here, the original complaint contained a proper verification and
certification against forum shopping duly signed by Naval-Sai as plaintiff.
The verification and certification in the amended complaint, on the
other hand, was only signed by her counsel, Atty. Norberta L. Ela. Atty.
Ela was not authorized to sign on behalf of Naval-Sai, as in fact, she
assigned one Rodolfo Florentino as agent.30 The Court of Appeals
pointed out that in the certification in the amended complaint, Atty. Ela
specified that it should be taken and read together with the original
complaint. The Court of Appeals took this as a cautionary move on the
part of Naval-Sai, justifying the relaxation of the rules on the ground of
substantial compliance. We find, however, that this cautionary move is
ineffectual because under the Rules of Civil Procedure, an amended
complaint supersedes the original complaint.31 For all intents and
purposes, therefore, the original complaint and its verification and
certification ceased to exist. This, notwithstanding, we find there was still
substantial compliance with the Rules.
In the case of Far Eastern Shipping Company v. Court of
Appeals,32 while we said that, strictly, a certification against forum
shopping by counsel is a defective ce1iification, the verification, signed
by petitioner's counsel in said case, is substantial compliance because it
served the purpose of the Rules of informing the Court of the pendency
of another action or proceeding involving the same issues. We then
explained that procedural rules are instruments in the speedy and
efficient administration of justice which should be used to achieve such
end and not to derail it.33cralawrednad
We also find that the prima facie merits of the case serve as a special
circumstance or a compelling reason to relax the rules on certification
against forum shopping.
In Sy Chin v. Court of Appeals,34 we recognized the flaw in the
certification against forum shopping which was signed only by the
counsel, and not by the party. In LDP Marketing, Inc. v. Monter,35 there
was initially no proof that the one who signed the certification was
authorized to do so in behalf of the corporation. In these two cases, we
nonetheless chose to overlook the procedural lapses in the interest of
substantial justice and the existence of prima facie merit in the petitions.
We have ruled that the general rule is that non-compliance or a defect
in the certification is not curable by its subsequent submission or
correction. However, there are cases where we exercised leniency and
relaxed the rules on the ground of substantial compliance, the presence
of special circumstances or compelling reasons.36 The rules on
forum-shopping are designed to promote and facilitate the orderly
96
administration of justice and "should not be interpreted with such
absolute literalness as to subve1i its own ultimate and legitimate
objective or the goal of all rules of procedure which is to achieve
substantial justice as expeditiously as possible."37cralawrednad
The nature of Navai-Sai's action
is an action for reconveyance based
on a void contract, which does not
prescribe.
Petitioner argues that Naval-Sai 's action has already prescribed
because her action should have been filed within one year from the
time of the registration of the titles. He asse1is that even if the action is in
reality one for reconveyance as found by the Court of Appeals, the
same is still barred by prescription based on judicial pronouncements
that an action for reconveyance of registered land based on implied
trust prescribes in ten (l 0) years. Petitioner also accuses Naval-Sai guilty
of laches and estoppel for her failure to assert her right over the two lots
for more than eighteen (18) years.
In order to arrive at a conclusion on whether the action has prescribed,
we have to determine the nature of the action.
We agree with the Court of Appeals that the action of Navai-Sai ts one
for reconveyance. Although the designation of the complaint is
annulment of deed, and does not include reconveyance, the facts
alleged and reliefs sought show that reconveyance is the end goal.
What determines the nature of the action are the allegations in the
complaint The cause of action in a complaint is not determined by the
designation given by the complaint, but by what the allegations in the
body of the complaint define or describe,38 as well as the character of
the relief sought.39cralawrednad
An action for reconveyance is a legal and equitable remedy granted to
the rightful owner of land which has been wrongfully or erroneously
registered in the name of another for the purpose of compelling the
latter to transfer or reconvey the land to him.40 In an action for
reconveyance, the decree of registration is respected as
incontrovertible. What is sought instead is the transfer of the property,
which has been wrongfully or erroneously registered in another person's
name, to its rightful and legal owner, or to one with a better
right.41 However, such recourse cannot be availed of once the property
has passed to an innocent purchaser for value. For an action for
reconveyance to prosper, the property should not have passed into the
hands of an innocent purchaser for value.42cralawrednad
Here, Naval-Sai does not only seek to annul the purported deed of sale
but also to cancel TCTs No. T-62446 and No. 62447 in the name of
petitioner. If the reliefs are granted and the TCTs are cancelled, the titles
to the lots will revert to Naval-Sai as she was the previously registered
owner. Thus, a ruling in favor of Naval-Sai would be equal to what an
action for reconveyance seeks to accomplish.
An action for reconveyance is based on Section 53, paragraph 3 of
Presidential Decree (PD) No. 1529,43which
provides:ChanRoblesvirtualLawlibrary
In all cases of registration procured by fraud, the owner
may pursue all his legal and equitable remedies against
the parties to such fraud without prejudice, however, to
the rights of any innocent holder for value of a certificate
of title. x x x
In Caro v. Court of Appeals,44 we said that this provision should be read
in conjunction with Article 1456 of the Civil Code, which
provides:ChanRoblesvirtualLawlibrary
Article 1456. If property is acquired through mistake or
fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of
the person from whom the property comes.
The law creates the obligation of the trustee to reconvey the property
and its title in favor of the true owner. Correlating Section 53, paragraph
3 of PD No. 1529 and Article 1456 of the Civil Code with Article 1144 (2)
of the Civil Code,45 the prescriptive period for the reconveyance of
fraudulently registered real property is ten (10) years reckoned from the
97
date of the issuance of the certificate of title.46 This ten-year prescriptive v. Madrigal, et al., G.R. No. 62650, June 27, 1991; Baranda,
period begins to run from the date the adverse party repudiates the et al. v. Baranda, et al., G.R. No. 73275, May 20, 1987, 150
implied trust, which repudiation takes place when the adverse party SCRA 59). However, We simply cannot apply this principle
registers the land.47 An exception to this rule is when the patty seeking to the present case because the action filed by
reconveyance based on implied or constructive trust is in actual, petitioner before the trial court was 1) for reconveyance
continuous and peaceful possession of the property based on fraud since the ownership of private
involved.48 Prescription does not commence to run against him because respondents over the questioned property was allegedly
the action would be in the nature of a suit for quieting of title, an action established on "false assertions, misrepresentations and
that is imprescriptible.49cralawrednad deceptive allegations" (p. 182, Records); and 2) for
rescission of the "Kasulatan ng Pagmamana at
The foregoing cases on the prescriptibility of actions for reconveyance Paghahati" (pp. 173, 187, Records). x x x 55
apply when the action is based on fraud, or when the contract used as
basis for the action is voidable. Under Article 1390 of the Civil Code, a
On the other hand, in Daclag v. Macahilig,56 we rejected the claim of
contract is voidable when the consent of one of the contracting parties
petitioners that prescription is applicable because the action was based
is vitiated by mistake, violence, intimidation, undue influence or fraud.
on fraud. We ruled that the action was not subject to prescription
When the consent is totally absent and not merely vitiated, the contract
because it was, in fact, based on a deed of sale that was null and void.
is void.50 An action for reconveyance may also be based on a void
Thus:ChanRoblesvirtualLawlibrary
contract.51 When the action for reconveyance is based on a void
contract, as when there was no consent on the part of the alleged
However, a review of the factual antecedents of the
vendor, the action is imprescriptible.52 The property may be reconveyed
case shows that respondents' action for reconveyance
to the true owner, notwithstanding the TCTs already issued in another's
was not even subject to prescription.
name. The issuance of a certificate of title in the latter's favor could not
vest upon him or her ownership of the prope1ty; neither could it validate
The deed of sale executed by Maxima in favor of
the purchase thereof which is null and void. Registration does not vest
petitioners was null and void, since Maxima was not the
title; it is merely the evidence of such title. Our land registration laws do
owner of the land she sold to petitioners, and the
not give the holder any better title than what he actually has. Being null
one-half notihern portion of such land was owned by
and void, the sale produces no legal effects
respondents. Being an absolute nullity, the deed is
whatsoever.53cralawrednad
subject to attack anytime, in accordance with Article
1410 of the Civil Code that an action to declare the
Whether an action for reconveyance prescribes or not is therefore
inexistence of a void contract does not prescribe. x x x
determined by the nature of the action, that is, whether it is founded on
An action for reconveyance based on a void contract is
a claim of the existence of an implied or constructive trust, or one based
imprescriptible. As long as the land wrongfully registered
on the existence of a void or inexistent contract. This is evident in several
under the Torrens system is still in the name of the person
of our past decisions. In Casipit v. Court of Appeals,54 we rejected the
who caused such registration, an action in personam will
claim of imprescriptibility and applied the 1 0-year prescription where
lie to compel him to reconvey the property to the real
the action filed was based on fraud:ChanRoblesvirtualLawlibrary
owner.57 (Citations omitted)
There is no dispute that an action for reconveyance
based on a void contract is imprescriptible (Castillo, et al. In Santos v. Heirs of Dominga Lustre,58 the complaint alleged that the
98
deed of sale was simulated by forging the signature of the original
registered owner. We ruled in favor of imprescribility applying the
doctrine that the action for reconveyance on the ground that the
certificate of title was obtained by means of a fictitious deed of sale is
virtually an action for the declaration of its nul1ity, which does not
prescribe.
Also, and more illustrative of the discussion above, in Castillo v. Heirs of
Vicente Madrigal,59 it was alleged by the plaintiffs that they never
signed any document. We ruled as follows:ChanRoblesvirtualLawlibrary
Petitioners allege that a reading of paragraphs 9 and 10
of their complaint reveals that they impugn the existence
and validity of the alleged deed of sale. As contained
therein, petitioners never entered into any transaction
with any person conveying the subject property. They did
not sign any document in favor of [anyone] neither did
they give [anyone] authorization for that purpose.
Therefore, consent and cause did not exist in the
execution of the deed of sale, invoking Articles 1318, 1352
and 1409(3), of the Civil Code. And, pursuant to Article
1410 of the Civil Code, an action for the declaration of
the inexistence of a contract does not prescribe.
In dismissing petitioners' complaint on the ground of
prescription, the trial court opined (p.
123, Rollo):cralawlawlibrary
"x x x, any action for annulment of the
deed and TCT 72066 should have been
instituted within ten (10) years from the
accrual of the cause of action, that, (sic)
is, ten years from 1943 when the deed was
executed at the earliest, or ten years from
1944 at the latest. This action was filed on
December 17, 1979, or after more than 30
years from 1943 and 1944. The action,
therefore, has long prescribed. x x x."
The Court of Appeals expressed the same
opinion (p.
51, Rollo):ChanRoblesvirtualLawlibrary
"x x x, even as We consider that there was
fraud in the registration and the issuance
or title in favor of defendant Madrigal
creating thereby a constructive trust in
favor of the plaintiffs, the remedy of the
plaintiiTs is an action for reconveyance
within ten (1 0) years from the registration
of the property in the name of defendant
Madrigal (Alzona v. Capunitan, 4 SCRA
450; Gonzales v. Jimenez 13 SCRA, 80).
Again, the filing of the complaint was way
beyond the ten-year period of limitation."
Both courts ruled incorrectly. It is evident in paragraphs 9,
10 and 12 of the complaint, supra, that petitioners sought
the declaration of the inexistence of the deed of sale
because of the absence of their consent. Thus, following
the provision of Article 1410 of the Civil Code, this kind of
action is imprescriptible. The action for reconveyance is
likewise imprescriptible because its basis is the alleged
void contract of sale. x x x60 (Citations omitted)
We conclude that, contrary to the claim of petitioner, the action for
reconveyance is based neither on an implied or constructive trust nor
fraud. Naval-Sai alleged that the purpmied deed of sale, which
became the basis to transfer the titles in petitioner's name, was an
absolute forgery because she never sold the two lots to any
person.61 Naval-Sai also alleged that her signature and that of her
husband's, in the deed of sale are forgeries.62 These allegations make
the action one based on a void or inexistent contract for lack of consent
on the part of the alleged vendor, Naval-Sai. Based on the complaint,
Naval-Sai only consented to use the titles of the two lots as security to a
loan she obtained from Ng.63cralawrednad
99
Resolution of the issue of prescription hinges on whether the deed of WHEREFORE, the petition is DENIED. Let the records of this case be
sale was indeed forged and, thus, void. Unfortunately, both the RTC and remanded for further proceedings to the Regional Trial Comi of
the Court of Appeals did not make actual findings on the alleged Kidapawan City, Branch 17, which is hereby ORDERED to try and decide
forgery. No full-blown trial occurred in the RTC to prove that the deed of the case with dispatch.
sale was indeed simulated and that the signatures were forgeries. The
case was dismissed based on the pleadings of the parties. The Court of SO ORDERED.chanrobles virtuallawlibrary
Appeals also resolved to decide the case on available records and
pleadings, in order to avoid further delay, due to several resettings and
motions for postponement filed by the parties one after another. The
lack of factual findings on the alleged forgery from the lower courts
prevents us from ruling on the issue of prescription.

Since it is apparent that the complaint on its face does not show that
the action has already prescribed, the RTC erred in dismissing it. We
emphasize once more that a summary or outright dismissal of an action
is not proper where there are factual matters in dispute, which require
presentation and appreciation of evidence.64cralawrednad

Applying the foregoing cases and without prejudging the issue of

forgery, the action for reconveyance will not be subject to prescription if
the trial court finds that the deed of sale is indeed forged, because the
action would now be based on a fictitious and void contract. If the trial
court finds otherwise, then the issue of prescription would not matter as
the sale would stand and remain binding between Naval-Sai and
petitioner.

Similarly, the elements of laches must be proven positively. Laches is

evidentiary in nature, a fact that cannot be established by mere
allegations in the pleadings.65 Therefore, at this stage, the dismissal on
the ground of laches would be premature. The issues must be resolved in [G.R. No. 112287. December 12, 1997]
the trial on the merits.

Moreover, laches is a doctrine in equity, and applied only in the

absence of, and never against, statutory law.66 The positive mandate of NATIONAL STEEL CORPORATION, petitioner, vs. COURT OF APPEALS
Article 1410 of the Civil Code conferring imprescriptibility to actions or AND VLASONS SHIPPING, INC., respondents.
defense for the declaration of the inexistence of a contract should
pre-empt and prevaiI over all abstract arguments based only on
equity.67cralawrednad
[G.R. No. 112350. December 12, 1997]

100
VLASONS SHIPPING, INC., petitioner, vs. COURT OF APPEALS AND
NATIONAL STEEL CORPORATION, respondents.
DECISION
PANGANIBAN, J.:
The Court finds occasion to apply the rules on the seaworthiness of
a private carrier, its owners responsibility for damage to the cargo and its
liability for demurrage and attorneys fees.The Court also reiterates the
well-known rule that findings of facts of trial courts, when affirmed by the Court
of Appeals, are binding on this Court.
The Case
Before us are two separate petitions for review filed by National Steel
Corporation (NSC) and Vlasons Shipping, Inc. (VSI), both of which assail the
August 12, 1993 Decision of the Court of Appeals. [1] The Court of Appeals
modified the decision of the Regional Trial Court of Pasig, Metro Manila,
Branch 163 in Civil Case No. 23317. The RTC disposed as follows:
WHEREFORE, judgment is hereby rendered in favor of defendant and against the
plaintiff dismissing the complaint with cost against plaintiff, and ordering plaintiff to
pay the defendant on the counterclaim as follows:
1. The sum of P75,000.00 as unpaid freight and P88,000.00 as
demurrage with interest at the legal rate on both amounts from
April 7, 1976 until the same shall have been fully paid;
2. Attorneys fees and expenses of litigation in the
of P100,000.00; and
3. Cost of suit.
SO ORDERED. [2]
On the other hand, the Court of Appeals ruled:
WHEREFORE, premises considered, the decision appealed from is modified by
reducing the award for demurrage to P44,000.00 and deleting the award for attorneys
fees and expenses of litigation. Except as thus modified, the decision is
AFFIRMED. There is no pronouncement as to costs.
SO ORDERED. [3]
The Facts
The MV Vlasons I is a vessel which renders tramping service and, as such,
does not transport cargo or shipment for the general public. Its services are
available only to specific persons who enter into a special contract of charter
party with its owner. It is undisputed that the ship is a private carrier. And it is in
this capacity that its owner, Vlasons Shipping, Inc., entered into a contract of
affreightment or contract of voyage charter hire with National Steel Corporation.
The facts as found by Respondent Court of Appeals are as follows:
(1) On July 17, 1974, plaintiff National Steel Corporation (NSC) as Charterer and
defendant Vlasons Shipping, Inc. (VSI) as Owner, entered into a Contract of Voyage
Charter Hire (Exhibit B; also Exhibit 1) whereby NSC hired VSIs vessel, the MV
VLASONS I to make one (1) voyage to load steel products at Iligan City and
discharge them at North Harbor, Manila, under the following terms and
conditions, viz:
1. x x x x x x.
2. Cargo: Full cargo of steel products of not less than 2,500 MT, 10% more or less at
Masters option.
3. x x x x x x
sum
4. Freight/Payment: P30.00 /metric ton, FIOST basis. Payment upon presentation of
Bill of Lading within fifteen (15) days.
5. Laydays/Cancelling: July 26, 1974/Aug. 5, 1974.
6. Loading/Discharging Rate: 750 tons per WWDSHINC. (Weather Working Day of
24 consecutive hours, Sundays and Holidays Included).
101
7. Demurrage/Dispatch: P8,000.00/P4,000.00 per day.
8. x x x x x x
9. Cargo Insurance: Charterers and/or Shippers must insure the cargoes. Shipowners
not responsible for losses/damages except on proven willful negligence of the officers
of the vessel.
10. Other terms:(a) All terms/conditions of NONYAZAI C/P [sic] or other
internationally recognized Charter Party Agreement shall form part of this Contract.
xxxxxxxxx
The terms F.I.O.S.T. which is used in the shipping business is a standard provision in
the NANYOZAI Charter Party which stands for Freight In and Out including
Stevedoring and Trading, which means that the handling, loading and unloading of the
cargoes are the responsibility of the Charterer. Under Paragraph 5 of the NANYOZAI
Charter Party, it states, Charterers to load, stow and discharge the cargo free of risk
and expenses to owners. x x x (Underscoring supplied).
Under paragraph 10 thereof, it is provided that (o)wners shall, before and at the
beginning of the voyage, exercise due diligence to make the vessel seaworthy and
properly manned, equipped and supplied and to make the holds and all other parts of
the vessel in which cargo is carried, fit and safe for its reception, carriage and
preservation. Owners shall not be liable for loss of or damage of the cargo arising or
resulting from: unseaworthiness unless caused by want of due diligence on the part of
the owners to make the vessel seaworthy, and to secure that the vessel is properly
manned, equipped and supplied and to make the holds and all other parts of the vessel
in which cargo is carried, fit and safe for its reception, carriage and preservation; xxx;
perils, dangers and accidents of the sea or other navigable waters; xxx; wastage in bulk
or weight or any other loss or damage arising from inherent defect, quality or vice of
the cargo; insufficiency of packing; xxx; latent defects not discoverable by due
diligence; any other cause arising without the actual fault or privity of Owners or
without the fault of the agents or servants of owners.
Paragraph 12 of said NANYOZAI Charter Party also provides that (o)wners shall not
be responsible for split, chafing and/or any damage unless caused by the negligence or
default of the master and crew.
(2) On August 6, 7 and 8, 1974, in accordance with the Contract of Voyage Charter
Hire, the MV VLASONS I loaded at plaintiffs pier at Iligan City, the NSCs shipment
of 1,677 skids of tinplates and 92 packages of hot rolled sheets or a total of 1,769
packages with a total weight of about 2,481.19 metric tons for carriage to Manila. The
shipment was placed in the three (3) hatches of the ship. Chief Mate Gonzalo Sabando,
acting as agent of the vessel[,] acknowledged receipt of the cargo on board and signed
the corresponding bill of lading, B.L.P.P. No. 0233 (Exhibit D) on August 8, 1974.
(3) The vessel arrived with the cargo at Pier 12, North Harbor, Manila, on August 12,
1974. The following day, August 13, 1974, when the vessels three (3) hatches
containing the shipment were opened by plaintiffs agents, nearly all the skids of
tinplates and hot rolled sheets were allegedly found to be wet and rusty. The cargo was
discharged and unloaded by stevedores hired by the Charterer. Unloading was
completed only on August 24, 1974 after incurring a delay of eleven (11) days due to
the heavy rain which interrupted the unloading operations. (Exhibit E)
(4) To determine the nature and extent of the wetting and rusting, NSC called for a
survey of the shipment by the Manila Adjusters and Surveyors Company
(MASCO). In a letter to the NSC dated March 17, 1975 (Exhibit G), MASCO made a
report of its ocular inspection conducted on the cargo, both while it was still on board
the vessel and later at the NDC warehouse in Pureza St., Sta. Mesa, Manila where the
cargo was taken and stored. MASCO reported that it found wetting and rusting of the
packages of hot rolled sheets and metal covers of the tinplates; that tarpaulin hatch
covers were noted torn at various extents; that container/metal casings of the skids
were rusting all over. MASCO ventured the opinion that rusting of the tinplates was
caused by contact with SEA WATER sustained while still on board the vessel as a
consequence of the heavy weather and rough seas encountered while en route to
destination (Exhibit F). It was also reported that MASCOs surveyors drew at random
samples of bad order packing materials of the tinplates and delivered the same to the
M.I.T. Testing Laboratories for analysis. On August 31, 1974, the M.I.T. Testing
Laboratories issued Report No. 1770 (Exhibit I) which in part, states, The analysis of
bad order samples of packing materials xxx shows that wetting was caused by contact
with SEA WATER.
(5) On September 6, 1974, on the basis of the aforesaid Report No. 1770, plaintiff filed
with the defendant its claim for damages suffered due to the downgrading of the
damaged tinplates in the amount of P941,145.18. Then on October 3, 1974, plaintiff
formally demanded payment of said claim but defendant VSI refused and failed to
pay. Plaintiff filed its complaint against defendant on April 21, 1976 which was
docketed as Civil Case No. 23317, CFI, Rizal.
102
(6) In its complaint, plaintiff claimed that it sustained losses in the aforesaid amount
of P941,145.18 as a result of the act, neglect and default of the master and crew in the
management of the vessel as well as the want of due diligence on the part of the
defendant to make the vessel seaworthy and to make the holds and all other parts of
the vessel in which the cargo was carried, fit and safe for its reception, carriage and
preservation -- all in violation of defendants undertaking under their Contract of
Voyage Charter Hire.
(7) In its answer, defendant denied liability for the alleged damage claiming that the
MV VLASONS I was seaworthy in all respects for the carriage of plaintiffs cargo; that
said vessel was not a common carrier inasmuch as she was under voyage charter
contract with the plaintiff as charterer under the charter party; that in the course of the
voyage from Iligan City to Manila, the MV VLASONS I encountered very rough seas,
strong winds and adverse weather condition, causing strong winds and big waves to
continuously pound against the vessel and seawater to overflow on its deck and hatch
covers; that under the Contract of Voyage Charter Hire, defendant shall not be
responsible for losses/damages except on proven willful negligence of the officers of
the vessel, that the officers of said MV VLASONS I exercised due diligence and
proper seamanship and were not willfully negligent; that furthermore the Voyage
Charter Party provides that loading and discharging of the cargo was on FIOST terms
which means that the vessel was free of risk and expense in connection with the
loading and discharging of the cargo; that the damage, if any, was due to the inherent
defect, quality or vice of the cargo or to the insufficient packing thereof or to latent
defect of the cargo not discoverable by due diligence or to any other cause arising
without the actual fault or privity of defendant and without the fault of the agents or
servants of defendant; consequently, defendant is not liable; that the stevedores of
plaintiff who discharged the cargo in Manila were negligent and did not exercise due
care in the discharge of the cargo; and that the cargo was exposed to rain and seawater
spray while on the pier or in transit from the pier to plaintiffs warehouse after
discharge from the vessel; and that plaintiffs claim was highly speculative and grossly
exaggerated and that the small stain marks or sweat marks on the edges of the tinplates
were magnified and considered total loss of the cargo. Finally, defendant claimed that
it had complied with all its duties and obligations under the Voyage Charter Hire
Contract and had no responsibility whatsoever to plaintiff. In turn, it alleged the
following counterclaim:
(a) That despite the full and proper performance by defendant of its obligations under
the Voyage Charter Hire Contract, plaintiff failed and refused to pay the agreed charter
hire of P75,000.00 despite demands made by defendant;
(b) That under their Voyage Charter Hire Contract, plaintiff had agreed to pay
defendant the sum of P8,000.00 per day for demurrage. The vessel was on demurrage
for eleven (11) days in Manila waiting for plaintiff to discharge its cargo from the
vessel. Thus, plaintiff was liable to pay defendant demurrage in the total amount
of P88,000.00.
(c) For filing a clearly unfounded civil action against defendant, plaintiff should be
ordered to pay defendant attorneys fees and all expenses of litigation in the amount of
not less than P100,000.00.
(8) From the evidence presented by both parties, the trial court came out with the
following findings which were set forth in its decision:
(a) The MV VLASONS I is a vessel of Philippine registry engaged in the tramping
service and is available for hire only under special contracts of charter party as in this
particular case.
(b) That for purposes of the voyage covered by the Contract of Voyage Charter Hire
(Exh. 1), the MV VLASONS I was covered by the required seaworthiness certificates
including the Certification of Classification issued by an international classification
society, the NIPPON KAIJI KYOKAI (Exh. 4); Coastwise License from the Board of
Transportation (Exh. 5); International Loadline Certificate from the Philippine Coast
Guard (Exh. 6); Cargo Ship Safety Equipment Certificate also from the Philippine
Coast Guard (Exh. 7); Ship Radio Station License (Exh. 8); Certificate of Inspection
by the Philippine Coast Guard (Exh. 12); and Certificate of Approval for Conversion
issued by the Bureau of Customs (Exh. 9). That being a vessel engaged in both
overseas and coastwise trade, the MV VLASONS I has a higher degree of
seaworthiness and safety.
(c) Before it proceeded to Iligan City to perform the voyage called for by the Contract
of Voyage Charter Hire, the MV VLASONS I underwent drydocking in Cebu and was
thoroughly inspected by the Philippine Coast Guard. In fact, subject voyage was the
vessels first voyage after the drydocking. The evidence shows that the MV VLASONS
I was seaworthy and properly manned, equipped and supplied when it undertook the
voyage. It had all the required certificates of seaworthiness.
(d) The cargo/shipment was securely stowed in three (3) hatches of the ship. The hatch
openings were covered by hatchboards which were in turn covered by two or double
tarpaulins. The hatch covers were water tight. Furthermore, under the hatchboards
were steel beams to give support.
103
(e) The claim of the plaintiff that defendant violated the contract of carriage is not
supported by evidence. The provisions of the Civil Code on common carriers pursuant
to which there exists a presumption of negligence in case of loss or damage to the
cargo are not applicable. As to the damage to the tinplates which was allegedly due to
the wetting and rusting thereof, there is unrebutted testimony of witness Vicente
Angliongto that tinplates sweat by themselves when packed even without being in
contract (sic) with water from outside especially when the weather is bad or
raining. The rust caused by sweat or moisture on the tinplates may be considered as a
loss or damage but then, defendant cannot be held liable for it pursuant to Article 1734
of the Civil Case which exempts the carrier from responsibility for loss or damage
arising from the character of the goods x x x. All the 1,769 skids of the tinplates could
not have been damaged by water as claimed by plaintiff. It was shown as claimed by
plaintiff that the tinplates themselves were wrapped in kraft paper lining and
corrugated cardboards could not be affected by water from outside.
(f) The stevedores hired by the plaintiff to discharge the cargo of tinplates were
negligent in not closing the hatch openings of the MV VLASONS I when rains
occurred during the discharging of the cargo thus allowing rainwater to enter the
hatches. It was proven that the stevedores merely set up temporary tents to cover the
hatch openings in case of rain so that it would be easy for them to resume work when
the rains stopped by just removing the tent or canvas. Because of this improper
covering of the hatches by the stevedores during the discharging and unloading
operations which were interrupted by rains, rainwater drifted into the cargo through
the hatch openings. Pursuant to paragraph 5 of the NANYOSAI [sic] Charter Party
which was expressly made part of the Contract of Voyage Charter Hire, the loading,
stowing and discharging of the cargo is the sole responsibility of the plaintiff charterer
and defendant carrier has no liability for whatever damage may occur or maybe [sic]
caused to the cargo in the process.
(g) It was also established that the vessel encountered rough seas and bad weather
while en route from Iligan City to Manila causing sea water to splash on the ships deck
on account of which the master of the vessel (Mr. Antonio C. Dumlao) filed a Marine
Protest on August 13, 1974 (Exh. 15) which can be invoked by defendant as a force
majeure that would exempt the defendant from liability.
(h) Plaintiff did not comply with the requirement prescribed in paragraph 9 of the
Voyage Charter Hire contract that it was to insure the cargo because it did not. Had
plaintiff complied with the requirement, then it could have recovered its loss or
damage from the insurer. Plaintiff also violated the charter party contract when it
loaded not only steel products, i.e. steel bars, angular bars and the like but also
tinplates and hot rolled sheets which are high grade cargo commanding a higher
freight. Thus plaintiff was able to ship high grade cargo at a lower freight rate.
(I) As regards defendants counterclaim, the contract of voyage charter hire under
paragraph 4 thereof, fixed the freight at P30.00 per metric ton payable to defendant
carrier upon presentation of the bill of lading within fifteen (15) days. Plaintiff has not
paid the total freight due of P75,000.00 despite demands. The evidence also showed
that the plaintiff was required and bound under paragraph 7 of the same Voyage
Charter Hire contract to pay demurrage of P8,000.00 per day of delay in the unloading
of the cargoes. The delay amounted to eleven (11) days thereby making plaintiff liable
to pay defendant for demurrage in the amount of P88,000.00.
Appealing the RTC decision to the Court of Appeals, NSC alleged six
errors:
I
The trial court erred in finding that the MV VLASONS I was seaworthy, properly
manned, equipped and supplied, and that there is no proof of willful negligence
of the vessels officers.
II
The trial court erred in finding that the rusting of NSCs tinplates was due to the
inherent nature or character of the goods and not due to contact with seawater.
III
The trial court erred in finding that the stevedores hired by NSC were negligent
in the unloading of NSCs shipment.
IV
The trial court erred in exempting VSI from liability on the ground of force
majeure.
V
The trial court erred in finding that NSC violated the contract of voyage charter
hire.
VI
The trial court erred in ordering NSC to pay freight, demurrage and attorneys
fees, to VSI.[4]
104
 As earlier stated, the Court of Appeals modified the decision of the trial
court by reducing the demurrage from P88,000.00 to P44,000.00 and deleting
the award of attorneys fees and expenses of litigation. NSC and VSI filed
separate motions for reconsideration. In a Resolution[5] dated October 20, 1993,
the appellate court denied both motions. Undaunted, NSC and VSI filed their
respective petitions for review before this Court. On motion of VSI, the Court
ordered on February 14, 1994 the consolidation of these petitions. [6]
The Issues
In its petition[7] and memorandum,[8] NSC raises the following questions of
law and fact:
Questions of Law
1. Whether or not a charterer of a vessel is liable for demurrage due
to cargo unloading delays caused by weather interruption;
2. Whether or not the alleged seaworthiness certificates (Exhibits 3, 4,
5, 6, 7, 8, 9, 11 and 12) were admissible in evidence and
constituted evidence of the vessels seaworthiness at the
beginning of the voyages; and
3. Whether or not a charterers failure to insure its cargo exempts the
shipowner from liability for cargo damage.
Questions of Fact
1. Whether or not the vessel was seaworthy and cargo-worthy;
2. Whether or not vessels officers and crew were negligent in
handling and caring for NSCs cargo;
3. Whether or not NSCs cargo of tinplates did sweat during the
voyage and, hence, rusted on their own; and
(4) Whether or not NSCs stevedores were negligent and caused the
wetting[/]rusting of NSCs tinplates.
In its separate petition, [9] VSI submits for the consideration of this Court
the following alleged errors of the CA:
A. The respondent Court of Appeals committed an error of law in reducing the award
of demurrage from P88,000.00 to P44,000.00.
B. The respondent Court of Appeals committed an error of law in deleting the award
of P100,000 for attorneys fees and expenses of litigation.
Amplifying the foregoing, VSI raises the following issues in its
memorandum: [10]
I. Whether or not the provisions of the Civil Code of the Philippines on common
carriers pursuant to which there exist[s] a presumption of negligence against the
common carrier in case of loss or damage to the cargo are applicable to a private
carrier.
II. Whether or not the terms and conditions of the Contract of Voyage Charter Hire,
including the Nanyozai Charter, are valid and binding on both contracting parties.
The foregoing issues raised by the parties will be discussed under the
following headings:
1. Questions of Fact
2. Effect of NSCs Failure to Insure the Cargo
3. Admissibility of Certificates Proving Seaworthiness
4. Demurrage and Attorneys Fees.
The Courts Ruling
The Court affirms the assailed Decision of the Court of Appeals, except in
respect of the demurrage.
105
 Preliminary Matter: Common Carrier or Private Carrier?
At the outset, it is essential to establish whether VSI contracted with NSC
as a common carrier or as a private carrier. The resolution of this preliminary
question determines the law, standard of diligence and burden of proof
applicable to the present case.
Article 1732 of the Civil Code defines a common carrier as persons,
corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public. It has been held that the
true test of a common carrier is the carriage of passengers or goods, provided it
has space, for all who opt to avail themselves of its transportation service for a
fee. [11] A carrier which does not qualify under the above test is deemed a
private carrier. Generally, private carriage is undertaken by special agreement
and the carrier does not hold himself out to carry goods for the general
public. The most typical, although not the only form of private carriage, is the
charter party, a maritime contract by which the charterer, a party other than the
shipowner, obtains the use and service of all or some part of a ship for a period
of time or a voyage or voyages. [12]
In the instant case, it is undisputed that VSI did not offer its services to the
general public. As found by the Regional Trial Court, it carried passengers or
goods only for those it chose under a special contract of charter party. [13] As
correctly concluded by the Court of Appeals, the MV Vlasons I was not a
common but a private carrier. [14] Consequently, the rights and obligations of
VSI and NSC, including their respective liability for damage to the cargo, are
determined primarily by stipulations in their contract of private carriage or
charter party. [15]Recently, in Valenzuela Hardwood and Industrial Supply,
Inc., vs. Court of Appeals and Seven Brothers Shipping Corporation, [16] the
Court ruled:
x x x in a contract of private carriage, the parties may freely stipulate their duties and
obligations which perforce would be binding on them. Unlike in a contract involving a
common carrier, private carriage does not involve the general public. Hence, the
stringent provisions of the Civil Code on common carriers protecting the general
public cannot justifiably be applied to a ship transporting commercial goods as a
private carrier. Consequently, the public policy embodied therein is not contravened
by stipulations in a charter party that lessen or remove the protection given by law in
contracts involving common carriers.[17]
Extent of VSIs Responsibility and Liability Over NSCs Cargo
It is clear from the parties Contract of Voyage Charter Hire, dated July 17,
1974, that VSI shall not be responsible for losses except on proven willful
negligence of the officers of the vessel. The NANYOZAI Charter Party, which
was incorporated in the parties contract of transportation, further provided that
the shipowner shall not be liable for loss of or damage to the cargo arising or
resulting from unseaworthiness, unless the same was caused by its lack of due
diligence to make the vessel seaworthy or to ensure that the same was
properly manned, equipped and supplied, and to make the holds and all other
parts of the vessel in which cargo [was] carried, fit and safe for its reception,
carriage and preservation. [18] The NANYOZAI Charter Party also provided that
[o]wners shall not be responsible for split, chafing and/or any damage unless
caused by the negligence or default of the master or crew.[19]
Burden of Proof
In view of the aforementioned contractual stipulations, NSC must prove
that the damage to its shipment was caused by VSIs willful negligence or failure
to exercise due diligence in making MV Vlasons I seaworthy and fit for holding,
carrying and safekeeping the cargo. Ineluctably, the burden of proof was
placed on NSC by the parties agreement.
This view finds further support in the Code of Commerce which pertinently
provides:
Art. 361. Merchandise shall be transported at the risk and venture of the shipper, if the
contrary has not been expressly stipulated.
Therefore, the damage and impairment suffered by the goods during the transportation,
due to fortuitous event, force majeure, or the nature and inherent defect of the things,
shall be for the account and risk of the shipper.
The burden of proof of these accidents is on the carrier.
Art. 362. The carrier, however, shall be liable for damages arising from the cause
mentioned in the preceding article if proofs against him show that they occurred on
account of his negligence or his omission to take the precautions usually adopted by
106
careful persons, unless the shipper committed fraud in the bill of lading, making him
to believe that the goods were of a class or quality different from what they really
were.
Because the MV Vlasons I was a private carrier, the shipowners
obligations are governed by the foregoing provisions of the Code of Commerce
and not by the Civil Code which, as a general rule, places the prima
facie presumption of negligence on a common carrier. It is a hornbook doctrine
that:
In an action against a private carrier for loss of, or injury to, cargo, the burden is on the
plaintiff to prove that the carrier was negligent or unseaworthy, and the fact that the
goods were lost or damaged while in the carriers custody does not put the burden of
proof on the carrier.
Since x x x a private carrier is not an insurer but undertakes only to exercise due care
in the protection of the goods committed to its care, the burden of proving negligence
or a breach of that duty rests on plaintiff and proof of loss of, or damage to, cargo
while in the carriers possession does not cast on it the burden of proving proper care
and diligence on its part or that the loss occurred from an excepted cause in the
contract or bill of lading. However, in discharging the burden of proof, plaintiff is
entitled to the benefit of the presumptions and inferences by which the law aids the
bailor in an action against a bailee, and since the carrier is in a better position to know
the cause of the loss and that it was not one involving its liability, the law requires that
it come forward with the information available to it, and its failure to do so warrants an
inference or presumption of its liability. However, such inferences and presumptions,
while they may affect the burden of coming forward with evidence, do not alter the
burden of proof which remains on plaintiff, and, where the carrier comes forward with
evidence explaining the loss or damage, the burden of going forward with the evidence
is again on plaintiff.
Where the action is based on the shipowners warranty of seaworthiness, the burden of
proving a breach thereof and that such breach was the proximate cause of the damage
rests on plaintiff, and proof that the goods were lost or damaged while in the carriers
possession does not cast on it the burden of proving seaworthiness. x x x Where the
contract of carriage exempts the carrier from liability for unseaworthiness not
discoverable by due diligence, the carrier has the preliminary burden of proving the
exercise of due diligence to make the vessel seaworthy. [20]
In the instant case, the Court of Appeals correctly found that NSC has not
taken the correct position in relation to the question of who has the burden of
proof. Thus, in its brief (pp. 10-11), after citing Clause 10 and Clause 12 of the
NANYOZAI Charter Party (incidentally plaintiff-appellants [NSCs] interpretation
of Clause 12 is not even correct), it argues that a careful examination of the
evidence will show that VSI miserably failed to comply with any of these
obligations as if defendant-appellee [VSI] had the burden of proof.[21]
First Issue: Questions of Fact
Based on the foregoing, the determination of the following factual
questions is manifestly relevant: (1) whether VSI exercised due diligence in
making MV Vlasons I seaworthy for the intended purpose under the charter
party; (2) whether the damage to the cargo should be attributed to the willful
negligence of the officers and crew of the vessel or of the stevedores hired by
NSC; and (3) whether the rusting of the tinplates was caused by its own sweat
or by contact with seawater.
These questions of fact were threshed out and decided by the trial court,
which had the firsthand opportunity to hear the parties conflicting claims and to
carefully weigh their respective evidence. The findings of the trial court were
subsequently affirmed by the Court of Appeals. Where the factual findings of
both the trial court and the Court of Appeals coincide, the same are binding on
this Court. [22] We stress that, subject to some exceptional instances, [23] only
questions of law -- not questions of fact -- may be raised before this Court in a
petition for review under Rule 45 of the Rules of Court. After a thorough review
of the case at bar, we find no reason to disturb the lower courts factual findings,
as indeed NSC has not successfully proven the application of any of the
aforecited exceptions.
Was MV Vlasons I Seaworthy?
In any event, the records reveal that VSI exercised due diligence to make
the ship seaworthy and fit for the carriage of NSCs cargo of steel and
tinplates. This is shown by the fact that it was drydocked and inspected by the
Philippine Coast Guard before it proceeded to Iligan City for its voyage to
Manila under the contract of voyage charter hire. [24] The vessels voyage from
Iligan to Manila was the vessels first voyage after drydocking. The Philippine
Coast Guard Station in Cebu cleared it as seaworthy, fitted and equipped; it
met all requirements for trading as cargo vessel. [25] The Court of Appeals itself
107
sustained the conclusion of the trial court that MV Vlasons I was
seaworthy. We find no reason to modify or reverse this finding of both the trial
and the appellate courts.
Who Were Negligent: Seamen or Stevedores?
encountered again rough seas, strong winds and big waves which caused the same
canvass to give way and leaving the new canvass holding on;
xxx xxx xxx [28]
And the relevant portions of Jose Pascuas deposition are as follows:
Q: What is the purpose of the canvas cover?

As noted earlier, the NSC had the burden of proving that the damage to A: So that the cargo would not be soaked with water.
the cargo was caused by the negligence of the officers and the crew of MV A: And will you describe how the canvas cover was secured on the
Vlasons I in making their vessel seaworthy and fit for the carriage of
hatch opening?
tinplates. NSC failed to discharge this burden.
WITNESS
Before us, NSC relies heavily on its claim that MV Vlasons I had used an
old and torn tarpaulin or canvas to cover the hatches through which the cargo A: It was placed flat on top of the hatch cover, with a little canvas
was loaded into the cargo hold of the ship. It faults the Court of Appeals for flowing over the sides and we place[d] a flat bar over the canvas
failing to consider such claim as an uncontroverted fact [26] and denies that MV on the side of the hatches and then we place[d] a stopper so that
Vlasons I was equipped with new canvas covers in tandem with the old ones as the canvas could not be removed.
indicated in the Marine Protest xxx. [27] We disagree.
ATTY DEL ROSARIO
The records sufficiently support VSIs contention that the ship used the old
Q: And will you tell us the size of the hatch opening? The length and
tarpaulin, only in addition to the new one used primarily to make the ships
the width of the hatch opening.
hatches watertight. The foregoing are clear from the marine protest of the
master of the MV Vlasons I, Antonio C. Dumlao, and the deposition of the ships A: Forty-five feet by thirty-five feet, sir.
boatswain, Jose Pascua. The salient portions of said marine protest read:
xxxxxxxxx
x x x That the M/V VLASONS I departed Iligan City or or about 0730 hours of Q: How was the canvas supported in the middle of the hatch
August 8, 1974, loaded with approximately 2,487.9 tons of steel plates and tin plates opening?
consigned to National Steel Corporation; that before departure, the vessel was rigged,
fully equipped and cleared by the authorities; that on or about August 9, 1974, while in A: There is a hatch board.
the vicinity of the western part of Negros and Panay, we encountered very rough seas ATTY DEL ROSARIO
and strong winds and Manila office was advised by telegram of the adverse weather
conditions encountered; that in the morning of August 10, 1974, the weather condition Q: What is the hatch board made of?
changed to worse and strong winds and big waves continued pounding the vessel at
A: It is made of wood, with a handle.
her port side causing sea water to overflow on deck andhatch (sic) covers and which
caused the first layer of the canvass covering to give way while the new canvass Q: And aside from the hatch board, is there any other material there
covering still holding on; to cover the hatch?
A: There is a beam supporting the hatch board.
That the weather condition improved when we reached Dumali Point protected by
Mindoro; that we re-secured the canvass covering back to position; that in the Q: What is this beam made of?
afternoon of August 10, 1974, while entering Maricaban Passage, we were again
exposed to moderate seas and heavy rains; that while approaching Fortune Island, we A: It is made of steel, sir.
108
 Q: Is the beam that was placed in the hatch opening covering the
whole hatch opening?
A: No, sir.
Q: How many hatch beams were there placed across the opening?
A: There are five beams in one hatch opening.
ATTY DEL ROSARIO
Q: And on top of the beams you said there is a hatch board. How
many pieces of wood are put on top?
A: Plenty, sir, because there are several pieces on top of the hatch
beam.
Q: And is there a space between the hatch boards?
A: There is none, sir.
Q: They are tight together?
A: Yes, sir.
Q: How tight?
A: Very tight, sir.
Q: Now, on top of the hatch boards, according to you, is the canvas
cover. How many canvas covers?
A: Two, sir. [29]
That due diligence was exercised by the officers and the crew of the MV
Vlasons I was further demonstrated by the fact that, despite encountering
rough weather twice, the new tarpaulin did not give way and the ships hatches
and cargo holds remained waterproof. As aptly stated by the Court of Appeals,
xxx we find no reason not to sustain the conclusion of the lower court based on
overwhelming evidence, that the MV VLASONS I was seaworthy when it
undertook the voyage on August 8, 1974 carrying on board thereof
plaintiff-appellants shipment of 1,677 skids of tinplates and 92 packages of hot
rolled sheets or a total of 1,769 packages from NSCs pier in Iligan City arriving
safely at North Harbor, Port Area, Manila, on August 12, 1974; xxx. [30]
Indeed, NSC failed to discharge its burden to show negligence on the part
of the officers and the crew of MV Vlasons I. On the contrary, the records
reveal that it was the stevedores of NSC who were negligent in unloading the
cargo from the ship.
The stevedores employed only a tent-like material to cover the hatches
when strong rains occasioned by a passing typhoon disrupted the unloading of
the cargo. This tent-like covering, however, was clearly inadequate for keeping
rain and seawater away from the hatches of the ship. Vicente Angliongto, an
officer of VSI, testified thus:
ATTY ZAMORA:
Q: Now, during your testimony on November 5, 1979, you stated on
August 14 you went on board the vessel upon notice from the
National Steel Corporation in order to conduct the inspection of
the cargo. During the course of the investigation, did you chance
to see the discharging operation?
WITNESS:
A: Yes, sir, upon my arrival at the vessel, I saw some of the tinplates
already discharged on the pier but majority of the tinplates were
inside the hall, all the hatches were opened.
Q: In connection with these cargoes which were unloaded, where is
the place.
A: At the Pier.
Q: What was used to protect the same from weather?
ATTY LOPEZ:
We object, your Honor, this question was already asked. This
particular matter . . . the transcript of stenographic notes shows
the same was covered in the direct examination.
ATTY ZAMORA:
Precisely, your Honor, we would like to go on detail, this is the serious
part of the testimony.
COURT:
All right, witness may answer.
ATTY LOPEZ:
Q: What was used in order to protect the cargo from the weather?
109
 A: A base of canvas was used as cover on top of the tin plates, and
tents were built at the opening of the hatches.
Q: You also stated that the hatches were already opened and that
there were tents constructed at the opening of the hatches to
protect the cargo from the rain. Now, will you describe [to] the
Court the tents constructed.
A: The tents are just a base of canvas which look like a tent of an
Indian camp raise[d] high at the middle with the whole side
separated down to the hatch, the size of the hatch and it is soaks
[sic] at the middle because of those weather and this can be
used only to temporarily protect the cargo from getting wet by
rains.
Q: Now, is this procedure adopted by the stevedores of covering
tents proper?
A: No, sir, at the time they were discharging the cargo, there was a
typhoon passing by and the hatch tent was not good enough to
hold all of it to prevent the water soaking through the canvas and
enter the cargo.
Q: In the course of your inspection, Mr. Anglingto [sic], did you see in
fact the water enter and soak into the canvas and tinplates.
A: Yes, sir, the second time I went there, I saw it.
Q: As owner of the vessel, did you not advise the National Steel
Corporation [of] the procedure adopted by its stevedores in
discharging the cargo particularly in this tent covering of the
hatches?
A: Yes, sir, I did the first time I saw it, I called the attention of the
stevedores but the stevedores did not mind at all, so, I called the
attention of the representative of the National Steel but nothing
was done, just the same. Finally, I wrote a letter to them. [31]
NSC attempts to discredit the testimony of Angliongto by questioning his
failure to complain immediately about the stevedores negligence on the first
day of unloading, pointing out that he wrote his letter to petitioner only seven
days later. [32] The Court is not persuaded. Angliongtos candid answer in his
aforequoted testimony satisfactorily explained the delay. Seven days lapsed
because he first called the attention of the stevedores, then the NSCs
representative, about the negligent and defective procedure adopted in
unloading the cargo. This series of actions constitutes a reasonable response
in accord with common sense and ordinary human experience. Vicente
Angliongto could not be blamed for calling the stevedores attention first and
then the NSCs representative on location before formally informing NSC of the
negligence he had observed, because he was not responsible for the
stevedores or the unloading operations. In fact, he was merely expressing
concern for NSC which was ultimately responsible for the stevedores it had
hired and the performance of their task to unload the cargo.
We see no reason to reverse the trial and the appellate courts findings and
conclusions on this point, viz:
In the THIRD assigned error, [NSC] claims that the trial court erred in finding that the
stevedores hired by NSC were negligent in the unloading of NSCs shipment. We do
not think so. Such negligence according to the trial court is evident in the stevedores
hired by [NSC], not closing the hatch of MV VLASONS I when rains occurred during
the discharging of the cargo thus allowing rain water and seawater spray to enter the
hatches and to drift to and fall on the cargo. It was proven that the stevedores merely
set up temporary tents or canvas to cover the hatch openings when it rained during the
unloading operations so that it would be easier for them to resume work after the rains
stopped by just removing said tents or canvass. It has also been shown that on August
20, 1974, VSI President Vicente Angliongto wrote [NSC] calling attention to the
manner the stevedores hired by [NSC] were discharging the cargo on rainy days and
the improper closing of the hatches which allowed continuous heavy rain water to leak
through and drip to the tinplates covers and [Vicente Angliongto] also suggesting that
due to four (4) days continuos rains with strong winds that the hatches be totally
closed down and covered with canvas and the hatch tents lowered. (Exh 13). This
letter was received by [NSC] on 22 August 1974 while discharging operations were
still going on (Exhibit 13-A). [33]
The fact that NSC actually accepted and proceeded to remove the cargo
from the ship during unfavorable weather will not make VSI liable for any
damage caused thereby. In passing, it may be noted that the NSC may seek
indemnification, subject to the laws on prescription, from the stevedoring
company at fault in the discharge operations. A stevedore company engaged in
discharging cargo xxx has the duty to load the cargo xxx in a prudent manner,
and it is liable for injury to, or loss of, cargo caused by its negligence xxx and
where the officers and members and crew of the vessel do nothing and have no
responsibility in the discharge of cargo by stevedores xxx the vessel is not
liable for loss of, or damage to, the cargo caused by the negligence of
the stevedores xxx [34] as in the instant case.
110
 Do Tinplates Sweat?
The trial court relied on the testimony of Vicente Angliongto in finding that
xxx tinplates sweat by themselves when packed even without being in contact
with water from outside especially when the weather is bad or raining
xxx. [35] The Court of Appeals affirmed the trial courts finding.
A discussion of this issue appears inconsequential and unnecessary. As
previously discussed, the damage to the tinplates was occasioned not by
airborne moisture but by contact with rain and seawater which the stevedores
negligently allowed to seep in during the unloading.
Second Issue: Effect of NSCs Failure to Insure the Cargo
The obligation of NSC to insure the cargo stipulated in the Contract of
Voyage Charter Hire is totally separate and distinct from the contractual or
statutory responsibility that may be incurred by VSI for damage to the cargo
caused by the willful negligence of the officers and the crew of MV Vlasons
I. Clearly, therefore, NSCs failure to insure the cargo will not affect its right, as
owner and real party in interest, to file an action against VSI for damages
caused by the latters willful negligence. We do not find anything in the charter
party that would make the liability of VSI for damage to the cargo contingent on
or affected in any manner by NSCs obtaining an insurance over the cargo.
Third Issue: Admissibility of Certificates Proving Seaworthiness
NSCs contention that MV Vlasons I was not seaworthy is anchored on the
alleged inadmissibility of the certificates of seaworthiness offered in evidence
by VSI. The said certificates include the following:
1. Certificate of Inspection of the Philippine Coast Guard at Cebu
2. Certificate of Inspection from the Philippine Coast Guard
3. International Load Line Certificate from the Philippine Coast Guard
4. Coastwise License from the Board of Transportation
5. Certificate of Approval for Conversion issued by the Bureau of
Customs. [36]
NSC argues that the certificates are hearsay for not having been
presented in accordance with the Rules of Court. It points out that Exhibits 3, 4
and 11 allegedly are not written records or acts of public officers; while Exhibits
5, 6, 7, 8, 9, 11 and 12 are not evidenced by official publications or certified true
copies as required by Sections 25 and 26, Rule 132, of the Rules of Court. [37]
After a careful examination of these exhibits, the Court rules that Exhibits
3, 4, 5, 6, 7, 8, 9 and 12 are inadmissible, for they have not been properly
offered as evidence. Exhibits 3 and 4 are certificates issued by private parties,
but they have not been proven by one who saw the writing executed, or by
evidence of the genuineness of the handwriting of the maker, or by a
subscribing witness. Exhibits 5, 6, 7, 8, 9, and 12 are photocopies, but their
admission under the best evidence rule have not been demonstrated.
We find, however, that Exhibit 11 is admissible under a well-settled
exception to the hearsay rule per Section 44 of Rule 130 of the Rules of Court,
which provides that (e)ntries in official records made in the performance of a
duty by a public officer of the Philippines, or by a person in the performance of
a duty specially enjoined by law, are prima facie evidence of the facts therein
stated. [38] Exhibit 11 is an original certificate of the Philippine Coast Guard in
Cebu issued by Lieutenant Junior Grade Noli C. Flores to the effect that the
vessel VLASONS I was drydocked x x x and PCG Inspectors were sent on
board for inspection x x x. After completion of drydocking and duly inspected by
PCG Inspectors, the vessel VLASONS I, a cargo vessel, is in seaworthy
condition, meets all requirements, fitted and equipped for trading as a cargo
vessel was cleared by the Philippine Coast Guard and sailed for Cebu Port on
July 10, 1974. (sic) NSCs claim, therefore, is obviously misleading and
erroneous.
At any rate, it should be stressed that that NSC has the burden of proving
that MV Vlasons I was not seaworthy. As observed earlier, the vessel was a
private carrier and, as such, it did not have the obligation of a common carrier
to show that it was seaworthy. Indeed, NSC glaringly failed to discharge its duty
of proving the willful negligence of VSI in making the ship seaworthy resulting in
damage to its cargo. Assailing the genuineness of the certificate of
seaworthiness is not sufficient proof that the vessel was not seaworthy.
Fourth Issue: Demurrage and Attorneys Fees
111
 The contract of voyage charter hire provides inter alia:
xxx xxx xxx
2. Cargo: Full cargo of steel products of not less than 2,500 MT, 10% more or less at
Masters option.
xxx xxx xxx
6. Loading/Discharging Rate : 750 tons per WWDSHINC.
7. Demurrage/Dispatch : P8,000.00/P4,000.00 per day. [39]
The Court defined demurrage in its strict sense as the compensation
provided for in the contract of affreightment for the detention of the vessel
beyond the laytime or that period of time agreed on for loading and unloading of
cargo. [40] It is given to compensate the shipowner for the nonuse of the
vessel. On the other hand, the following is well-settled:
Laytime runs according to the particular clause of the charter party. x x x If laytime is
expressed in running days, this means days when the ship would be run continuously,
and holidays are not excepted. A qualification of weather permitting excepts only
those days when bad weather reasonably prevents the work contemplated. [41]
In this case, the contract of voyage charter hire provided for a four-day
laytime; it also qualified laytime as WWDSHINC or weather working days
Sundays and holidays included. [42] The running of laytime was thus made
subject to the weather, and would cease to run in the event unfavorable
weather interfered with the unloading of cargo. [43] Consequently, NSC may not
be held liable for demurrage as the four-day laytime allowed it did not lapse,
having been tolled by unfavorable weather condition in view of the WWDSHINC
qualification agreed upon by the parties. Clearly, it was error for the trial court
and the Court of Appeals to have found and affirmed respectively that NSC
incurred eleven days of delay in unloading the cargo. The trial court arrived at
this erroneous finding by subtracting from the twelve days, specifically August
13, 1974 to August 24, 1974, the only day of unloading unhampered by
unfavorable weather or rain which was August 22, 1974. Based on our
previous discussion, such finding is a reversible error. As mentioned, the
respondent appellate court also erred in ruling that NSC was liable to VSI for
demurrage, even if it reduced the amount by half.
Attorneys Fees
VSI assigns as error of law the Court of Appeals deletion of the award of
attorneys fees. We disagree. While VSI was compelled to litigate to protect its
rights, such fact by itself will not justify an award of attorneys fees under Article
2208 of the Civil Code when x x x no sufficient showing of bad faith would be
reflected in a partys persistence in a case other than an erroneous conviction of
the righteousness of his cause x x x. [44] Moreover, attorneys fees may not be
awarded to a party for the reason alone that the judgment rendered was
favorable to the latter, as this is tantamount to imposing a premium on ones
right to litigate or seek judicial redress of legitimate grievances. [45]
Epilogue
At bottom, this appeal really hinges on a factual issue: when, how and who
caused the damage to the cargo? Ranged against NSC are two formidable
truths. First, both lower courts found that such damage was brought about
during the unloading process when rain and seawater seeped through the
cargo due to the fault or negligence of the stevedores employed by it.Basic is
the rule that factual findings of the trial court, when affirmed by the Court of
Appeals, are binding on the Supreme Court. Although there are settled
exceptions, NSC has not satisfactorily shown that this case is one of
them. Second, the agreement between the parties -- the Contract of Voyage
Charter Hire -- placed the burden of proof for such loss or damage upon the
shipper, not upon the shipowner. Such stipulation, while disadvantageous to
NSC, is valid because the parties entered into a contract of private charter, not
one of common carriage. Basic too is the doctrine that courts cannot relieve a
party from the effects of a private contract freely entered into, on the ground
that it is allegedly one-sided or unfair to the plaintiff. The charter party is a
normal commercial contract and its stipulations are agreed upon in
consideration of many factors, not the least of which is the transport price which
is determined not only by the actual costs but also by the risks and burdens
assumed by the shipper in regard to possible loss or damage to the cargo. In
recognition of such factors, the parties even stipulated that the shipper should
insure the cargo to protect itself from the risks it undertook under the charter
party. That NSC failed or neglected to protect itself with such insurance should
not adversely affect VSI, which had nothing to do with such failure or neglect.
112
 WHEREFORE, premises considered, the instant consolidated petitions
are hereby DENIED. The questioned Decision of the Court of Appeals is
AFFIRMED with the MODIFICATION that the demurrage awarded to VSI is
deleted. No pronouncement as to costs.
SO ORDERED.

NELLIE VDA. DE FORMOSO and G.R. No. 154704

her children, namely, MA.
THERESA
FORMOSO-PESCADOR, ROGER
FORMOSO, MARY JANE Present:
FORMOSO, BERNARD
FORMOSO and PRIMITIVO CARPIO, J., Chairperso
MALCABA, NACHURA,
Petitioners, PERALTA,
ABAD, and

113
 - versus - MENDOZA, JJ.
Records show that on October 14, 1989, Nellie Panelo
Vda. De Formoso (Nellie) and her children namely: Ma.
PHILIPPINE NATIONAL BANK, Theresa Formoso-Pescador, Roger Formoso, Mary Jane
FRANCISCO ARCE, ATTY. Formoso, Bernard Formoso, and Benjamin Formoso,
BENJAMIN BARBERO, and Promulgated: executed a special power of attorney in favor of Primitivo
ROBERTO NAVARRO, Malcaba (Malcaba) authorizing him, among others, to secure
Respondents. June 1, 2011 all papers and documents including the owners copies of the
x titles of real properties pertaining to the loan with real estate
----------------------------------------------------------------------------- mortgage originally secured by Nellie and her late husband,
------------------------x Benjamin S. Formoso, from Philippine National Bank, Vigan
Branch (PNB) on September 4, 1980.
DECISION
On April 20, 1990, the Formosos sold the subject
mortgaged real properties to Malcaba through a Deed of
MENDOZA, J.:
Absolute Sale. Subsequently, on March 22, 1994, Malcaba
and his lawyer went to PNB to fully pay the loan obligation
including interests in the amount of ₱2,461,024.74.
Assailed in this petition are the January 25,
2002 Resolution[1] and the August 8, 2002 Resolution[2] of the
PNB, however, allegedly refused to accept Malcabas
Court of Appeals (CA) which dismissed the petition for
tender of payment and to release the mortgage or surrender
certiorari filed by the petitioners on the ground that the
the titles of the subject mortgaged real properties.
verification and certification of non-forum shopping was
signed by only one of the petitioners in CA G.R. SP No.
On March 24, 1994, the petitioners filed a Complaint
67183, entitled Nellie P. Vda. De Formoso, et al. v.
for Specific Performance against PNB before the Regional
Philippine National Bank, et al.
Trial Court of Vigan, Ilocos Sur (RTC) praying, among others,
The Factual and that PNB be ordered to accept the amount of ₱2,461,024.74
Procedural Antecedents as full settlement of the loan obligation of the Formosos.
114

After an exchange of several pleadings, the RTC
finally rendered its decision[3] on October 27, 1999 favoring
the petitioners. The petitioners prayer for exemplary or
corrective damages, attorneys fees, and annual interest and
daily interest, however, were denied for lack of evidence.
PNB filed a motion for reconsideration but it was denied for
failure to comply with Rule 15, Section 5 of the 1997 Rules
of Civil Procedure. PNB then filed a Notice of Appeal but it
was dismissed for being filed out of time.
The petitioners received their copy of the decision
on November 26, 1999, and on January 25, 2001, they filed
their Petition for Relief from Judgment[4] questioning the
RTC decision that there was no testimonial evidence
presented to warrant the award for moral and exemplary
damages. They reasoned out that they could not then file a
motion for reconsideration because they could not get hold of
a copy of the transcripts of stenographic notes. In its August 6,
2001 Order, the RTC denied the petition for lack of merit.[5]
On September 7, 2001, the petitioners moved for
reconsideration but it was denied by the RTC in its Omnibus
Order of September 26, 2001.[6]
Before the Court of Appeals
On November 29, 2001, the petitioners filed a petition for
certiorari before the CA challenging the RTC Order
of August 6, 2001 and its Omnibus Order dated September 26,
2001.
In its January 25, 2002 Resolution, the CA dismissed
the petition stating that:
The verification and certification of
non-forum shopping was signed by only one
(Mr. Primitivo Macalba) of the many
petitioners. In Loquias v. Office of the
Ombudsman, G.R. No. 139396, August 15,
2000, it was ruled that all petitioners must be
signatories to the certification of non-forum
shopping unless the one who signed it is
authorized by the other petitioners. In the case
at bar, there was no showing that the one who
signed was empowered to act for the rest.
Therefore, it cannot be presumed that the one
who signed knew to the best of his knowledge
whether his co-petitioners had the same or
similar claims or actions filed or pending. The
ruling in Loquias further declared that
substantial compliance will not suffice in the
matter involving strict observance of the Rules.
Likewise, the certification of non-forum
115
 shopping requires personal knowledge of the
party who executed the same and that
petitioners must show reasonable cause for
failure to personally sign the certification.
Utter disregard of the Rules cannot just be
rationalized by harping on the policy of liberal
construction.
Aggrieved, after the denial of their motion for reconsideration,
the petitioners filed this petition for review anchored on the
following
GROUNDS
THE COURT OF APPEALS PATENTLY ERRED
IN RULING THAT ALL THE PETITIONERS
MUST SIGN THE VERIFICATION AND
CERTIFICATION OF NON-FORUM SHOPPING
IN A PETITION FOR CERTIORARI WHEREIN
ONLY QUESTIONS OF LAW ARE INVOLVED.
ALTERNATIVELY, THE COURT OF APPEALS
PATENTLY ERRED IN DISMISSING THE
WHOLE PETITION WHEN AT THE VERY LEAST
THE PETITION INSOFAR AS PETITIONER
MALCABA IS CONCERNED BEING THE
SIGNATORY THEREOF SHOULD HAVE BEEN
GIVEN DUE COURSE.
THE COURT OF APPEALS PATENTLY ERRED
IN GIVING MORE WEIGHT ON
TECHNICALITIES WHEN THE PETITION
BEFORE IT WAS CLEARLY MERITORIOUS.[7]
The petitioners basically argue that they have
substantially complied with the requirements provided under
the 1997 Rules of Civil Procedure on Verification and
Certification of Non-Forum Shopping. The petitioners are of
the view that the rule on Verification and Certification of
Non-Forum Shopping that all petitioners must sign should be
liberally construed, since only questions of law are raised in a
petition for certiorari and no factual issues that require
personal knowledge of the petitioners.
The petitioners further claim that they have a
meritorious petition because contrary to the ruling of the RTC,
their Petition for Relief clearly showed that, based on the
transcript of stenographic notes, there was enough testimonial
evidence for the RTC to grant them damages and attorneys
fees as prayed for.
On the other hand, PNB counters that the mandatory
rule on the certification against forum shopping requires that
all of the six (6) petitioners must sign, namely: Nellie Vda.
De Formoso and her children Ma. Theresa Formoso-Pescador,
Roger Formoso, Mary Jane Formoso, and Bernard Formoso,
116
and Primitivo Malcaba. Therefore, the signature alone of
Malcaba on the certification is insufficient.
PNB further argues that Malcaba was not even a party
or signatory to the contract of loan entered into by his
co-petitioners. Neither was there evidence that Malcaba is a
relative or a co-owner of the subject properties. It likewise
argues that, contrary to the stance of the petitioners, the issue
raised before the CA, as to whether or not the petitioners were
entitled to moral and exemplary damages as well as attorneys
fees, is a factual one.
Finally, PNB asserts that the body of the complaint
filed by the petitioners failed to show any allegation that
Macalba alone suffered damages for which he alone was
entitled to reliefs as prayed for. PNB claims that the wordings
of the complaint were clear that all the petitioners were
asking for moral and exemplary damages and attorneys fees.
OUR RULING
The petition lacks merit.
Certiorari is an extraordinary, prerogative remedy and
is never issued as a matter of right. Accordingly, the party
who seeks to avail of it must strictly observe the
rules laiddown by law.[8] Section 1, Rule 65 of the 1997 Rules
of Civil Procedure provides:
SECTION 1. Petition for certiorari.-
When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted
without or in excess of its or his jurisdiction,
or with grave abuse of discretion amounting to
lack or excess of jurisdiction, and there is no
appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition
in the proper court, alleging the facts with
certainty and praying that judgment be
rendered annulling or modifying the
proceedings of such tribunal, board or officer,
and granting such incidental reliefs as law and
justice may require.
The petition shall be accompanied by a
certified true copy of the judgment, order or
resolution subject thereof, copies of all
pleadings and documents relevant and
pertinent thereto, and a sworn certification of
non-forum shopping as provided in the third
paragraph of Section 3, Rule 46. [Emphasis
supplied]
117
 Under Rule 46, Section 3, paragraph 3 of the 1997
Rules of Civil Procedure, as amended, petitions for certiorari
must be verified and accompanied by a sworn certification of
non-forum shopping.
SECTION 3. Contents and filing of
petition; effect of non-compliance with
requirements. The petition shall contain the
full names and actual addresses of all the
petitioners and respondents, a concise
statement of the matters involved, the factual
background of the case, and the grounds relied
upon for the relief prayed for.
In actions filed under Rule 65, the
petition shall further indicate the material
dates showing when notice of the judgment or
final order or resolution subject thereof was
received, when a motion for new trial or
reconsideration, if any, was filed and when
notice of the denial thereof was received.
It shall be filed in seven (7) clearly
legible copies together with proof of service
thereof on the respondent with the original
copy intended for the court indicated as such
by the petitioner, and shall be accompanied by
a clearly legible duplicate original or certified
true copy of the judgment, order, resolution,
or ruling subject thereof, such material
portions of the record as are referred to
therein, and other documents relevant or
pertinent thereto. The certification shall be
accomplished by the proper clerk of court or
his duly authorized representative, or by the
proper officer of the court, tribunal, agency or
office involved or by his duly authorized
representative. The other requisite number of
copies of the petition shall be accompanied by
clearly legible plain copies of all documents
attached to the original.
The petitioner shall also submit together
with the petition a sworn certification that he
has not theretofore commenced any other
action involving the same issues in the
Supreme Court, the Court of Appeals or
different divisions thereof, or any other
tribunal or agency; if there is such other action
or proceeding, he must state the status of the
same; and if he should thereafter learn that a
similar action or proceeding has been filed or
is pending before the Supreme Court, the
Court of Appeals, or different divisions thereof,
or any other tribunal or agency, he undertakes
to promptly inform the aforesaid courts and
other tribunal or agency thereof within five (5)
days therefrom.
The petitioner shall pay the
corresponding docket and other lawful fees to
118
 the clerk of court and deposit the amount
of P500.00 for costs at the time of the filing of
the petition.
The failure of the petitioner to comply
with any of the foregoing requirements shall be
sufficient ground for the dismissal of the
petition. [Emphases supplied]
The acceptance of a petition for certiorari as well as the
grant of due course thereto is, in general, addressed to the
sound discretion of the court. Although the Court has absolute
discretion to reject and dismiss a petition for certiorari, it does
so only (1) when the petition fails to demonstrate grave abuse
of discretion by any court, agency, or branch of the
government; or (2) when there are procedural errors, like
violations of the Rules of Court or Supreme Court
Circulars.[9] [Emphasis supplied]
In the case at bench, the petitioners claim that the
petition for certiorari that they filed before the CA
substantially complied with the requirements provided for
under the 1997 Rules of Civil Procedure on Verification and
Certification of Non-Forum Shopping.
The Court disagrees.
Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil
Procedure provide:
SEC. 4. Verification. Except when
otherwise specifically required by law or rule,
pleadings need not be under oath, verified or
accompanied by affidavit.
A pleading is verified by an affidavit that
the affiant has read the pleadings and that the
allegations therein are true and correct of his
personal knowledge or based on authentic
records.
A pleading required to be verified which
contains a verification based on information
and belief or upon knowledge, information
and belief or lacks a proper verification, shall
be treated as an unsigned pleading.
SEC. 5. Certification against forum
shopping. The plaintiff or principal party shall
certify under oath in the complaint or other
initiatory pleading asserting a claim for relief,
or in a sworn certification annexed thereto and
simultaneously filed therewith: (a) that he has
not theretofore commenced any action or filed
any claim involving the same issues in any
court, tribunal or quasi-judicial agency and, to
the best of his knowledge, no such other action
or claim is pending therein; (b) if there is such
other pending action or claim, a complete
statement of the present status thereof; and (c)
if he should thereafter learn that the same or
119
 similar action or claim has been filed or is
pending, he shall report that fact within five (5)
days therefrom to the court wherein his
aforesaid complaint or initiatory pleading has
been filed.
Failure to comply with the foregoing
requirements shall not be curable by mere
amendment of the complaint or other
initiatory pleading but shall be cause for the
dismissal of the case without prejudice, unless
otherwise provided, upon motion and after
hearing. The submission of a false certification
or non-compliance with any of the
undertakings therein shall constitute indirect
contempt of court, without prejudice to the
corresponding administrative and criminal
actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum
shopping, the same shall be ground for
summary dismissal with prejudice and shall
constitute direct contempt, as well as a cause
for administrative sanctions. x x x.
In this regard, the case of Oldarico S. Traveno v. Bobongon
Banana Growers Multi-Purpose Cooperative,[10] is
enlightening:
Respecting the appellate courts
dismissal of petitioners appeal due to the
failure of some of them to sign the therein
accompanying verification and certification
against forum-shopping, the Courts guidelines
for the bench and bar in Altres v.
Empleo, which were culled from
jurisprudential pronouncements, are
instructive:
For the guidance of the bench and bar,
the Court restates in capsule form the
jurisprudential pronouncements already
reflected above respecting non-compliance
with the requirements on, or submission of
defective, verification and certification against
forum shopping:
1) A distinction must be made between
non-compliance with the requirement on or
submission of defective verification, and
non-compliance with the requirement on or
submission of defective certification against
forum shopping.
2) As to verification, non-compliance
therewith or a defect therein does not
necessarily render the pleading fatally
defective. The Court may order its submission
or correction or act on the pleading if the
attending circumstances are such that strict
120
compliance with the Rule may be dispensed
with in order that the ends of justice may be
served thereby.
3) Verification is deemed substantially
complied with when one who has ample
knowledge to swear to the truth of the
allegations in the complaint or petition signs
the verification, and when matters alleged in
the petition have been made in good faith or
are true and correct.
4) As to certification against forum
shopping, non-compliance therewith or a
defect therein, unlike in verification, is
generally not curable by its subsequent
submission or correction thereof, unless there
is a need to relax the Rule on the ground of
substantial compliance or presence of special
circumstances or compelling reasons.
5) The certification against forum
shopping must be signed by all the plaintiffs or
petitioners in a case; otherwise, those who did
not sign will be dropped as parties to the case.
Under reasonable or justifiable circumstances,
however, as when all the plaintiffs or
petitioners share a common interest and
invoke a common cause of action or defense,
the signature of only one of them in the
certification against forum shopping
substantially complies with the Rule.
6) Finally, the certification against
forum shopping must be executed by the
party-pleader, not by his counsel. If, however,
for reasonable or justifiable reasons, the
party-pleader is unable to sign, he must
execute a Special Power of Attorney
designating his counsel of record to sign on his
behalf.
The petition for certiorari filed with the CA stated the
following names as petitioners: Nellie Panelo Vda. De
Formoso, Ma. Theresa Formoso-Pescador, Roger Formoso,
Mary Jane Formoso, Bernard Formoso, Benjamin Formoso,
and Primitivo Malcaba.
Admittedly, among the seven (7) petitioners mentioned,
only Malcaba signed the verification and certification of
non-forum shopping in the subject petition. There was no
proof that Malcaba was authorized by his co-petitioners to
sign for them. There was no special power of attorney shown
by the Formosos authorizing Malcaba as their attorney-in-fact
in filing a petition for review on certiorari. Neither could the
petitioners give at least a reasonable explanation as to why
only he signed the verification and certification of non-forum
shopping. In Athena Computers, Inc. and Joselito R. Jimenez
v. Wesnu A. Reyes, the Court explained that:
121
 The verification of the petition and
certification on non-forum shopping before
the Court of Appeals were signed only by
Jimenez. There is no showing that he was
authorized to sign the same by Athena, his
co-petitioner.
Section 4, Rule 7 of the Rules states that
a pleading is verified by an affidavit that the
affiant has read the pleading and that the
allegations therein are true and correct of his
knowledge and belief. Consequently, the
verification should have been signed not only
by Jimenez but also by Athenas duly
authorized representative.
In Docena v. Lapesura, we ruled that
the certificate of non-forum shopping should be
signed by all the petitioners or plaintiffs in a
case, and that the signing by only one of them is
insufficient. The attestation on non-forum
shopping requires personal knowledge by the
party executing the same, and the lone signing
petitioner cannot be presumed to have personal
knowledge of the filing or non-filing by his
co-petitioners of any action or claim the same as
similar to the current petition.
The certification against forum shopping
in CA-G.R. SP No. 72284 is fatally defective,
not having been duly signed by both petitioners
and thus warrants the dismissal of the petition
for certiorari. We have consistently held that
the certification against forum shopping must
be signed by the principal parties. With
respect to a corporation, the certification
against forum shopping may be signed for and
on its behalf, by a specifically authorized
lawyer who has personal knowledge of the
facts required to be disclosed in such
document.
While the Rules of Court may be relaxed
for persuasive and weighty reasons to relieve a
litigant from an injustice commensurate with
his failure to comply with the prescribed
procedures, nevertheless they must be
faithfully followed. In the instant case,
petitioners have not shown any reason which
justifies relaxation of the Rules. We have held
that procedural rules are not to be belittled or
dismissed simply because their
non-observance may have prejudiced a partys
substantive rights. Like all rules, they are
required to be followed except for the most
persuasive of reasons when they may be
relaxed. Not one of these persuasive reasons is
present here.
In fine, we hold that the Court of
Appeals did not err in dismissing the petition
for certiorari in view of the procedural lapses
committed by petitioners.[11] [Emphases
supplied]
Furthermore, the petitioners argue that the CA should
not have dismissed the whole petition but should have given
122
it due course insofar as Malcaba is concerned because he
signed the certification. The petitioners also contend that the
CA should have been liberal in the application of the Rules
because they have a meritorious case against PNB.
The Court, however, is not persuaded.
The petitioners were given a chance by the CA to
comply with the Rules when they filed their motion for
reconsideration, but they refused to do so. Despite the
opportunity given to them to make all of them sign the
verification and certification of non-forum shopping, they still
failed to comply. Thus, the CA was constrained to deny their
motion and affirm the earlier resolution.[12]
Indeed, liberality and leniency were accorded in some
cases.[13] In these cases, however, those who did not sign were
relatives of the lone signatory, so unlike in this case, where
Malcaba is not a relative who is similarly situated with the
other petitioners and who cannot speak for them. In the case
of Heirs of Domingo Hernandez, Sr. v. Plaridel Mingoa,
Sr.,[14] it was written:
In the instant case, petitioners share a
common interest and defense inasmuch as
they collectively claim a right not to be
dispossessed of the subject lot by virtue of
their and their deceased parents construction
of a family home and occupation thereof for
more than 10 years. The commonality of their
stance to defend their alleged right over the
controverted lot thus gave petitioners xxx
authority to inform the Court of Appeals in
behalf of the other petitioners that they have
not commenced any action or claim involving
the same issues in another court or tribunal,
and that there is no other pending action or
claim in another court or tribunal involving
the same issues.
Here, all the petitioners are immediate
relatives who share a common interest in the
land sought to be reconveyed and a common
cause of action raising the same arguments in
support thereof. There was sufficient basis,
therefore, for Domingo Hernandez, Jr. to
speak for and in behalf of his co-petitioners
when he certified that they had not filed any
action or claim in another court or tribunal
involving the same issues. Thus, the
Verification/Certification that Hernandez, Jr.
executed constitutes substantial compliance
under the Rules. [Emphasis supplied]
The same leniency was accorded to the petitioner in the
case of Oldarico S. Traveno v. Bobongon Banana Growers
Multi-Purpose Cooperative,[15] where it was stated:
The same leniency was applied by the
Court in Cavile v. Heirs of Cavile, because the
lone petitioner who executed the certification
of non-forum shopping was a relative and
123
 co-owner of the other petitioners with whom
he shares a common interest. x x x[16]
Considering the above circumstances, the Court does
not see any similarity at all in the case at bench to compel
itself to relax the requirement of strict compliance with the
rule regarding the certification against forum shopping.
At any rate, the Court cannot accommodate the petitioners
request to re-examine the testimony of Malcaba in the
transcript of stenographic notes of the April 25, 1999 hearing
concerning his alleged testimonial proof of damages for
obvious reasons.
Primarily, Section 1, Rule 45 of the Rules of Court
categorically states that the petition filed shall raise only
questions of law, which must be distinctly set forth. A
question of law arises when there is doubt as to what the law
is on a certain state of facts, while there is a question of fact
when the doubt arises as to the truth or falsity of the alleged
facts.For a question to be one of law, the same must not
involve an examination of the probative value of the evidence
presented by the litigants or any of them. The resolution of
the issue must rest solely on what the law provides on the
given set of circumstances. Once it is clear that the issue
invites a review of the evidence presented, the question posed
is one of fact.[17]
In this case, the petition clearly raises a factual issue.
As correctly argued by PNB, the substantive issue of whether
or not the petitioners are entitled to moral and exemplary
damages as well as attorneys fees is a factual issue which is
beyond the province of a petition for review on certiorari.
Secondly, even if the Court glosses over the technical
defects, the petition for relief cannot be granted. A perusal of
the Petition for Relief of Judgment discloses that there is no
fact constituting fraud, accident, mistake or excusable
negligence which are the grounds therefor. From the petition
itself, it appears that the petitioners counsel had a copy of the
transcript of stenographic notes which was in his cabinet all
along and only discovered it when he was disposing old and
terminated cases.[18] If he was only attentive to his records, he
could have filed a motion for reconsideration or a notice of
appeal in behalf of the petitioners.
WHEREFORE, the petition is DENIED.
SO ORDERED.
124
 SECOND DIVISION

SPOUSES RODOLFO G.R. No. 153171

CARPIO and
REMEDIOS Present:
ORENDAIN,
*
Petitioners, PUNO, J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
-versus- GARCIA, JJ.

Promulgated:

RURAL BANK OF STO. May 4, 2006

TOMAS (BATANGAS),
INC.,
Respondent.

x-------------------------------------------------------------------------
----------------x

DECISION

125
SANDOVAL-GUTIERREZ, J.:
Before us for resolution is the instant Petition for
Review on Certiorari[1] assailing the
[2]
Decision dated September 28, 2001 of the Court of Appeals
in CA-G.R. SP No. 58995, and its Resolution dated April 2,
2002, denying the Motion for Reconsideration.
The facts are:
On May 17, 1999, spouses
Rodolfo Carpio and Remedios Orendain, petitioners, filed
with the Regional Trial Court (RTC), Branch
83, Tanauan, Batangas, a Complaint (for annulment of
foreclosure sale and damages) against the Rural Bank of Sto.
Tomas, Batangas, Inc., respondent, and Jaime Ozaeta, clerk
of court and ex-officio sheriff of the same court. In their
Complaint, petitioners alleged that they are the absolute
owners of a parcel of land with an area of 19,405 square
meters, more or less, located at Barangay San Vicente, Sto.
Tomas, Batangas. On May 30, 1996, they obtained a loan
from respondent bank in the amount of P515,000.00, payable
on January 27, 1996. To secure the loan, they executed
on May 30, 1996 a real estate mortgage over the same
property in favor of respondent bank. On July 26, 1996,
without prior demand or notice to petitioners, respondent
bank filed a Petition for Extra-Judicial Foreclosure of
Mortgage. On September 26, 1996, sheriff
Jaime Ozaeta conducted a public auction sale of the
mortgaged property. Respondent bank was the only bidder for
P702,889.77.
Petitioners further alleged that the sale was conducted
without proper publication as the sheriffs notice of sale was
published in a newspaper which is not of general
circulation. On the same day the property was sold, the sheriff
issued a certificate of sale in favor of respondent
bank. On February 25, 1999, respondent bank executed an
affidavit of consolidation of ownership over petitioners
property. They claimed that they were not notified of the
foreclosure sale and were not given an opportunity to redeem
their property.
On August 9, 1999, respondent bank filed its Answer
with Counterclaim, denying specifically the material
allegations of the complaint. It alleged inter alia that oral and
written demands were made upon petitioners to pay their loan
but they ignored the same; that they were properly notified of
the filing of the petition for extra-judicial foreclosure of the
mortgage; that there was proper publication and notices of the
scheduled sale through public auction; and that petitioners
were actually given more than two (2) years to redeem the
property but they failed to do so.
126
 By way of counterclaim, respondent bank alleged that
it suffered: (a) actual damages of P100,000.00; (b)
compensatory damages of P100,000.00; (c) moral damages
of P500,000.00; and (d) litigation expenses of not less
than P50,000.00.
On September 8, 1999, petitioners filed a motion to
dismiss the counterclaim on the ground that respondent banks
counterclaim was not accompanied by a certification against
forum shopping.
Respondent bank filed an opposition to the motion,
contending that its counterclaim, which is compulsory in
nature, is not a complaint or initiatory pleading that requires
a certification against forum shopping.
On November 3, 1999, the RTC issued an Order
denying the motion to dismiss the counterclaim for lack of
merit, thus:
xxx
Under Section 5, Rule 7 of the Rules of
Court, the same requires the plaintiff or principal
party to certify under oath the complaint or other
initiatory pleading purposely to prevent forum
shopping.
In the case at bar, defendant Rural Banks
counterclaim could not be considered a complaint
or initiatory pleading because the filing of the
same is but a result of plaintiffs complaint and,
being a compulsory counterclaim, is outside the
coverage of Section 5, Rule 7 of the Rules of
Court.
WHEREFORE, premises considered, the
instant Motion is hereby denied for lack of merit.
SO ORDERED.
Petitioners filed a Motion for Reconsideration of the
above Order but it was likewise denied by the RTC in its
Order dated April 4, 2000.
Thereafter, petitioners filed with the Court of Appeals a
Petition for Certiorari under Rule 65 of the 1997 Rules of
Civil Procedure, as amended, alleging that the RTC acted
with grave abuse of discretion in holding that respondent
banks counterclaim need not be accompanied by a
certification against forum shopping.
In its Decision[3] dated September 28, 2001, the Court
of Appeals affirmed the assailed twin Orders of the RTC
denying petitioners motion to dismiss the counterclaim and
dismissed the petition. Petitioners motion for reconsideration
was also denied in a Resolution dated April 2, 2002.
127
 Hence, the instant Petition for Review on Certiorari.
The petition must fail.
Section 5, Rule 7[4] of the 1997 Rules of Civil
Procedure, as amended, provides:
Sec. 5. Certification against forum shopping.
The plaintiff or principal party shall certify
under oath in the complaint or other initiatory
pleading asserting a claim for relief, or in a
sworn certification annexed thereto and
simultaneously filed therewith: (a) that he
has not theretofore commenced any action or
filed any claim involving the same issues in any
court, tribunal or quasi-judicial agency and, to
the best of his knowledge, no such other action
or claim is pending therein; (b) if there is such
other pending action or claim, a complete
statement of the present status thereof; and (c) if
he should thereafter learn that the same or similar
action or claim has been filed or is pending, he
shall report that fact within five (5)
days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed.
Failure to comply with the foregoing
requirements shall not be curable by mere
amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the
casewithout prejudice, unless otherwise provided,
upon motion and after hearing. The submission of
a false certification or non-compliance with any of
the undertakings therein shall constitute indirect
contempt of court, without prejudice to the
corresponding administrative and criminal
actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum
shopping, the same shall be ground for summary
dismissal with prejudice and shall constitute direct
contempt, as well as a cause for administrative
sanctions. (Underscoring supplied)
The rationale of the above provisions is to curb the
malpractice commonly referred to as forum shopping an act
of a party against whom an adverse judgment has been
rendered in one forum of seeking and possibly getting a
favorable opinion in another forum, other than by appeal or
the special civil action of certiorari, or the institution of two
or more actions or proceedings grounded on the same cause
on the supposition that one or the other court would make a
favorable disposition.[5]
Petitioners contend that the trial court and the Court of
Appeals gravely abused their discretion in not dismissing
respondent banks counterclaim for lack of a certification
against forum shopping.
128
 Petitioners contention is utterly baseless. It bears
stressing that the Rule distinctly provides that the required
certification against forum shopping is intended to cover
an initiatory pleading, meaning an incipient application of a
party asserting a claim for relief.[6] Certainly, respondent
banks Answer with Counterclaim is a responsive pleading,
filed merely to counter petitioners complaint that initiates the
civil action. In other words, the rule requiring such
certification does not contemplate a defendants/respondents
claim for relief that is derived only from, or is necessarily THIRD DIVISION
connected with, the main action or complaint. In fact, upon
failure by the plaintiff to comply with such requirement, G.R. No. 79021 May 17, 1993
Section 5, quoted above, directs the dismissal of
ROMEO S. CHUA, Petitioner, vs. THE HON.
the case without prejudice, not the dismissal of
COURT OF APPEALS, DENNIS CANOY AND
respondents counterclaim.
ALEX DE LEON, Respondents.
In sum, we find no reversible error committed by the Roberto R. Palmares for petitioner. chanrobles virtual law lib rary

Court of Appeals in issuing the challenged Decision and

Resolution in CA-G.R. SP No. 58995. Josefino B. Remotigue for private respondents.

WHEREFORE, the petition is DENIED. The assailed BIDIN, J.:

Decision and Resolution of the Court of Appeals in CA-G.R.
This is a petition for review on certiorari under Rule
SP No. 58995 are AFFIRMED. Costs against petitioners.
45 of the Revised Rules of Court assailing the
decision of the Court of Appeals dated May 7, 1987
SO ORDERED.
which nullified the orders dated April 18, 1986 and
May 19, 1986 of the Regional Trial Court of Cebu
City Branch VIII.chan roblesv irt ua lawlibra ryc hanro bles vi rtua l law li bra ry

129
The facts of the case are not disputed. On April 12,
1986, Judge Lauro V. Francisco of the Regional Trial
Court of Cebu City Branch XIII, after examining 2Lt.
Dennis P. Canoy and two (2) other witnesses, issued
a search warrant directing the immediate search of
the premises of R.R. Construction located at M.J.
Cuenco Avenue, Cebu City, and the seizure of an
Isuzu dump truck with plate number GAP-175. At
twelve noon of the same date, respondent Canoy
seized the aforesaid vehicle and took custody
thereof.chanroble svirtualawl ibra ryc hanro bles vi rtua l law li bra ry
On April 14, 1986, a civil action for Replevin/Sum of
Money for the recovery of possession of the same
Isuzu dump truck was filed by petitioner against
respondent Canoy and one "John Doe" in the
Regional Trial Court of Cebu City Branch VIII,
presided by Judge Leonardo B. Cañares and
docketed thereat as Civil Case No. CEB 4384
alleging among other things, petitioner's lawful
ownership and possession of the subject vehicle;
that he has not sold the subject vehicle to anyone;
that he has not stolen nor carnapped it, and that he
has never been charged of the crime of carnapping
or any other crime for that matter. Further,
petitioner questioned the validity of the search
warrant and the subsequent seizure of the subject
vehicle on the strength of the aforesaid search
warrant. chanroblesvi rtua lawlib rary chan roble s virtual law l ibra ry
On the same date, April 14, 1986, Judge Cañares of
the Regional Trial Court of Cebu City Branch VIII
directed the issuance of a writ of replevin upon the
posting of a bond in the amount of one hundred
thousand pesos (P100,000.00). The writ of replevin
was also issued on the same date, and the subject
vehicle was seized on 15 April 1986 by Deputy
Sheriff Galicano V. Fuentes. chanroble svi rtualawl ib raryc hanrobles vi rt ual law li bra ry
On April 16, 1986, respondent Canoy filed a motion
for the dismissal of the complaint and for the
quashal of the writ of replevin. The motion was
opposed by petitioner. The motion to dismiss and to
quash the writ of replevin was denied in an Order
dated April 18, 1986. A motion for reconsideration
of the aforementioned Order was filed and was
opposed by petitioner. In an order dated May 19,
1986, the Regional Trial Court of Cebu Branch VIII
denied the motion for reconsideration and directed
the delivery of the subject vehicle to petitioner. Not
satisfied, herein private respondents filed with the
Court of Appeals a Petition for Certiorari and
Prohibition praying for the nullification of the orders
dated April 18, 1986 and May 19, 1986. chanroblesvi rtualaw lib raryc han robles v irt ual law li bra ry
Meanwhile, a case for Carnapping docketed as I.S.
No. 86-185, entitled "Alex De Leon, Complainant, vs.
Romeo Chua, Respondent" pending preliminary
investigation before the Office of the City Fiscal of
130
Cebu City was provisionally dismissed upon motion Petitioner moved for a reconsideration of the
of Romeo Chua with the following reservation: decision, but the respondent court denied the same.
"without prejudice to its reopening once the issue of Thus, petitioner filed this appeal by certiorari. The
ownership is resolved", (Rollo, p. 62).chanrob lesvi rtualaw lib raryc han robles v irt ual law l ibra ry parties submitted their respective memoranda, and
thereafter the case was deemed submitted for
In a decision dated May 17, 1987, the Court of decision.chanrob lesvi rtualaw lib raryc han robles v irt ual law li bra ry

Appeals reversed the Regional Trial Court of Cebu

City Branch VIII, and nullified the questioned orders. The issue presented before the Court is whether or
The appellate court ordered the dismissal of the not the validity of a seizure made pursuant to a
Replevin action, and directed that possession of the search warrant issued by a court can be questioned
subject vehicle be restored to Canoy. It applied the in another branch of the same court, where the
ruling in the case of Pagkalinawan vs. Gomez (21 criminal action filed in connection with which the
SCRA 1275 [1967]) which held: search warrant was issued, had been dismissed
provisionally. cha nrob lesvi rtua lawlib rary chan roble s virtual law l ibra ry

Once a Court of First Instance has been

informed that a search warrant has been At the outset, it must be pointed out that the ruling
issued by another court of first instance, made by the Office of the City Fiscal in the complaint
it cannot require a sheriff or any proper for carnapping was erroneous. It held: ". . . the
officer of the court to take the property preliminary investigation of that case is premature
subject of the replevin action, if until such time that the issue of ownership will be
theretofore it came into custody of resolved by the Court of Appeals, so that the instant
another public officer by virtue of a case is hereby dismissed provisionally without
search warrant. Only the court of first prejudice to its reopening once the issue of
instance that issued such a search ownership is resolved in favor of complainant."
warrant may order its release. (emphasis supplied). chan roblesv irt ualawli bra rycha nrob les vi rtua l law lib rary

Furthermore, it was also pointed out in the same A criminal prosecution for carnapping need not
case that the validity of a search warrant may only establish the fact that complainant therein is the
be questioned in the same court that issued it. chanrob lesvi rtualaw lib raryc han robles v irt ual law l ibra ry absolute owner of the motor vehicle. What is

131
material is the existence of evidence which would
show that respondent took the motor vehicle
belonging to another. The Anti-Carnapping Law or
Republic Act No. 6539 punishes as carnapping the
taking with intent to gain, of a motor vehicle
belonging to another person, without the latter's
consent or by means of violence or intimidation of
person or by using force upon things.
Another aspect which needs to be stressed is the
fact that since a preliminary investigation is not part
of the trial, the dismissal of a case by the fiscal will
not constitute double jeopardy and hence there is
no bar to the filing of another complaint for the
same offense (People vs. Medted, 68 Phil. 435).
law libra ry
We find no merit in the main issue presented before
Us. Petitioner seeks a reversal of a decision of the
Court of Appeals which relied on the decision
in Pagkalinawan vs. Gomez (supra). chanro blesvi rt ualawlib ra rychan roble s virtual law lib rary
The principle followed among courts in the
dispensation of justice is that a judge who presides
in a branch of a court cannot modify or annul the
orders issued by another branch of the same court,
since the two (2) courts are of the same rank, and
act independently but coordinately (Montesa vs.
Manila Cordage Co., 92 Phil. 25 [1952]).
It is a basic tenet of civil procedure that replevin will
not lie for property in custodia legis. A thing is
in custodia legis when it is shown that it has been
and is subjected to the official custody of a judicial
executive officer in pursuance of his execution of a
legal writ (Bagalihog vs. Fernandez, 198 SCRA 614
[1991]). The reason posited for this principle is that
chanrob lesvi rtua lawlib rary chan roble s virt ual law l ibra ry if it was otherwise, there would be interference with
the possession before the function of the law had
been performed as to the process under which the
property was taken. Thus, a defendant in an
execution or attachment cannot replevy goods in
the possession of an officer under a valid process,
although after the levy is discharged, an action to
chanroblesv irt ualawli bra rychan rob l e s v i rt u a l
recover possession will lie (Francisco, Revised Rules
of Court in the Philippines: Provisional Remedies, p.
402 [1985]).
chanroble svi rtualawl ib raryc hanrobles vi rt ual law li bra ry
The Court had occasion to rule on this issue in the
case of Vlasons Enterprises Corporation vs. Court of
Appeals (155 SCRA 186 [1987]). In the
aforementioned case, two (2) propeller pieces were
seized on the strength of a search warrant issued by
the Court of First Instance of Manila Branch XVIII.
After the seizure, criminal complaints were filed
against the alleged thieves. However, the
complaints were later on dismissed. Five (5) months
chanroblesvi rtua lawlib rary chan roble s virtual law l ibra ry
later, a civil action for the recovery of the
possession of the propellers were filed in the Court
132
of First Instance of Manila Branch XXIX. The latter
court granted the motion for repossession of the
propellers. On appeal this Court held:
The proceeding for the seizure of the
property in virtue of a search warrant
does not end with the actual taking of the
property . . . and its delivery . . ., to the
court . . . . It is merely the first step in the
process to determine the character of the
seized property. That determination is
done in the criminal action involving the
crime or crimes in connection with which
the search warrant was issued. Hence,
such a criminal action should be
prosecuted, or commenced if not yet
instituted, and prosecuted. The outcome
of the criminal action will dictate the
disposition of the seized property.
(Vlasons Enterprises Corp. vs. Court of
Appeals, supra.)
In the Vlasons case, the Court differentiated the
case brought before it therein, from
the Pagkalinawan case. It stated that in
the Pagkalinawancase, there was a conflict in
jurisdiction. On the other hand, in the Vlasons case,
it was certain that no criminal case would ensue
subsequent to or in connection with the search
warrant, hence no conflict in jurisdiction or in the
ultimate disposition of the property could arise.
Thus, where personal property is seized under a
search warrant and it appears that the seizure will
not be followed by the filing of any criminal action,
but there are conflicting claims asserted over the
seized property, the appropriate remedy is the
institution of an ordinary civil action by any
interested party, or of an interpleader action by the
Government itself, in the proper competent court to
which the seizing court shall transfer custody of the
articles. Another branch of the same court, in an
action to recover said property and during the
pendency thereof, cannot order the delivery of said
personal property to therein plaintiff pendente
lite.
chanroblesv irt ualawli bra rychan rob les vi rtual law lib rary
Construing the Pagkalinawan case together with
the Vlasons case, we rule that where personal
property is seized under a search warrant and there
is reason to believe that the seizure will not
anymore be followed by the filing of a criminal and
there are conflicting claims over the seized property,
the proper remedy is the filing of an action for
replevin, or an interpleader filed by the Government
in the proper court, not necessarily the same one
which issued the search warrant; however, where
there is still a probability that the seizure will be
followed by the filing of a criminal action, as in the
133
case at bar where the case for carnapping was SO ORDERED.
"dismissed provisionally, without prejudice to its
reopening once the issue of ownership is resolved in Feliciano, Romero and Melo, JJ., concur.
favor of complainant" (emphasis supplied), or the
criminal information has actually been commenced,
chanrob les vi rtual law lib rary

or filed, and actually prosecuted, and there are

conflicting claims over the property seized, the
chanrob les vi rtual law lib rary

proper remedy is to question the validity of the Separate Opinions

search warrant in the same court which issued it and
not in any other branch of the said court. chanroble svirtualawl ibra ryc hanro bles vi rtu al law li bra ry
DAVIDE, JR., J., concurring and dissenting: chanrobles vi rt ual law li bra ry

Thus, the Regional Trial Court of Cebu Branch VIII I agree with the majority that Branch VIII of the
erred when it ordered the transfer of possession of Regional Trial Court of Cebu should not have taken
the property seized to petitioner when the latter cognizance of the civil case for replevin (Civil Case
filed the action for replevin. It should have No. CEB-4384). chanroblesvi rt ualawlib ra rychan robles vi rtual law lib rary

dismissed the case since by virtue of the

"provisional dismissal", of the carnapping case there However, I am not prepared to go along with the
is still a probability that a criminal case would be restatement of the rule on the recovery of property
filed, hence a conflict in jurisdiction could still arise. seized by virtue of a search warrant, to wit:
The basic principle that a judge who presides in one
Construing the Pagkalinawan
court cannot annul or modify the orders issued by
case together with the Vlasons case, we
another branch of the same court because they are
rule that where personal property is
co-equal and independent bodies acting
seized under a search warrant and there
coordinately, must always be
is reason to believe that the seizure will
adhered to.
not anymore be followed by the filing of a
chanroblesv irt ualawli bra rycha nrob les vi rtua l law lib rary

WHEREFORE, the petition is denied. The decision of criminal action, and there are conflicting
the Court of Appeals dated May 7, 1987 is claims over the seized property, the
AFFIRMED. chanroble svirtualawl ibra ryc hanro bles vi rt ual law li bra ry
proper remedy is the filing of an action

134
 for replevin, or an interpleader filed by
the Government in the proper court, not
necessarily the same one which issued
the search warrant; however, where
there is still a probability that the seizure
will be followed by the filing of a criminal
action, as in the case at bar where the
case for carnapping was "dismissed
provisionally, without prejudice to
reopening once issue of ownership
resolved in favor of
complainant" (emphasis supplied), or
the criminal information has actually
been commenced, or filed, and actually
prosecuted, and there are conflicting
claims over the property seized, the
proper remedy is to question the validity
of the search warrant in the same court
which issued it and not in any branch of
the said court.
I respectfully submit that regardless of the number
of claimants to the property seized, the remedy
should be obtained from the court which issued the
warrant either by a motion to quash the search
warrant or a motion to release the property.
Replevin does not lie because regardless of the
validity or invalidity of the search warrant, the
property was effectively placed in custodia legis and,
therefore, beyond the reach of a replevin suit. It
would be entirely different if the seizure was
unlawful, in which case replevin may prosper. chanroble svirtualawl ibra rycha nrob les vi rtua l law lib rary
The reasons why the application for the recovery of
the seized property must be made with the court
issuing the warrant are quite obvious. It had
acquired jurisdiction over the res. The pendency of
the application could prod the Government to
expedite the investigation and prosecution of the
criminal case, if any, in connection with which the
warrant was secured. The parties, especially the
innocent parties, should not be made to await
indefinitely the outcome of the criminal action which
the prosecution arm may either delay or not file at
all for reasons only known to itself.
Separate Opinions
DAVIDE, JR., J., concurring and dissenting:
chanrobles vi rt ual law li bra ry
I agree with the majority that Branch VIII of the
Regional Trial Court of Cebu should not have taken
cognizance of the civil case for replevin (Civil Case
No. CEB-4384).
chanroblesvi rt ualawlib ra rychan robles vi rtual law lib rary
However, I am not prepared to go along with the
restatement of the rule on the recovery of property
seized by virtue of a search warrant, to wit:
135
Construing the Pagkalinawan
case together with the Vlasons case, we
rule that where personal property is
seized under a search warrant and there
is reason to believe that the seizure will
not anymore be followed by the filing of a
criminal action, and there are conflicting
claims over the seized property, the
proper remedy is the filing of an action
for replevin, or an interpleader filed by
the Government in the proper court, not
necessarily the same one which issued
the search warrant; however, where
there is still a probability that the seizure
will be followed by the filing of a criminal
action, as in the case at bar where the
case for carnapping was "dismissed
provisionally, without prejudice to
reopening once issue of ownership
resolved in favor of
complainant" (emphasis supplied), or
the criminal information has actually
been commenced, or filed, and actually
prosecuted, and there are conflicting
claims over the property seized, the
proper remedy is to question the validity
of the search warrant in the same court
which issued it and not in any branch of
the said court.
I respectfully submit that regardless of the number
of claimants to the property seized, the remedy
should be obtained from the court which issued the
warrant either by a motion to quash the search
warrant or a motion to release the property.
Replevin does not lie because regardless of the
validity or invalidity of the search warrant, the
property was effectively placed in custodia legis and,
therefore, beyond the reach of a replevin suit. It
would be entirely different if the seizure was
unlawful, in which case replevin may prosper. chanroble svirtualawl ibra rycha nrob les vi rtua l law lib rary
The reasons why the application for the recovery of
the seized property must be made with the court
issuing the warrant are quite obvious. It had
acquired jurisdiction over the res. The pendency of
the application could prod the Government to
expedite the investigation and prosecution of the
criminal case, if any, in connection with which the
warrant was secured. The parties, especially the
innocent parties, should not be made to await
indefinitely the outcome of the criminal action which
the prosecution arm may either delay or not file at
all for reasons only known to itself.
136

THIRD DIVISION
G.R. No. 154080 January 22, 2008
NELSIE B. CAÑETE, RONA ANAS, MILAGROSA APUAN, ERLINDA
AQUINO, GODOFREDO AQUINO, CORITA BARREDO, TESSIE
BARREDO, JESUS BATRINA, ALBERTO BUENAVENTURA,
BONIFACIO BUENAVENTURA, EUSEBIO CAPIRAL, MARIO CAPIRAL,
LOLITA CAPIRAL, ELENA CAPIRAL, LETICIA CAPIRAL, RENATO
CAPIRAL, ELY CABANGON, ERWIN CATALUNA, JESSIE CONRADO,
JOEL CONRADO, NARCISIO CONRADO, RICARDO CALAMPIANO,
ALUMNIO CORSANES, NILO COLATOY, MARJETO DAYAN, HENRY
DIAZ, SALVACION ESMANDE, REYNALDO FUENTEBELLA, GERRY
GEQUILLANA, DELSIE GARCIA, NERISSA GONZALES, VISITACION
JUNSAY, ESTELA JOVEN, JOSE LANZUELA, MARLON
MALANGAYON, RENATO MARCELO, ANITA MARZONIA, MARCELINO
MONTALBO, AMADO MULI, JR., LEONITA MULI, EDUARDO OLVIDO,
ALMARIO PACON, ASUNCION PACON, SALVACION PAGAYUNAN,
ESTER PANTALEON, SHERLITA RABE, ANITA REYES, MEDELYN
RIOS, BERTITO RIVAS, ENGRACIA RIVERA, GERALYN RIVERA,
ARMANDO RIVERA, MA. MERCY SHERVA, ALEXANDER SANGALAN,
ERNESTO SANTIAGO, JOY SANTIAGO, ELENA TALION, JOE RANDY
TRESVALLES, ELIAS VALENZUELA, GERRY VALENZUELA, LILIBETH
VALENZUELA, JOSEPHINE VICTORINO, JOJO VICTORINO,
MAXIMINO VICTORINO, NOEL VICTORINO, REYNANTE VICTORINO,
ROBERTO VICTORINO and JOVITO VILLAREAL, represented by
NELSIE B. CAÑETE, petitioners,
vs.
GENUINO ICE COMPANY, INC., respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the Decision1 of the
Court of Appeals dated January 9, 2002 in CA-G.R. SP No. 64337 entitled
"Genuino Ice Company, Inc. vs. Hon. Victorino P. Evangelista, Nelsie B.
Cañete, et al.," and its Resolution2 dated June 26, 2002, dismissing
petitioners’ "Second Amended Complaint" in Civil Case No. Q-99-36483
filed in Branch 223 of the Regional Trial Court of Quezon City.
Records show that on January 11, 1999, petitioners filed a complaint for
cancellation of title to property covered by Transfer Certificate of Title (TCT)
Nos. N-140441;3 14399;4 RT-94384 (292245);5 RT-94794 (292246);6 and
292247.7 Petitioners alleged that said titles are spurious, fictitious and were
issued "under mysterious circumstances," considering that the holders
thereof – including their predecessors-in-interest – were never in actual,
adverse and physical possession of the property, rendering them ineligible
to acquire title to the said property under the Friar Lands Act.8 Petitioners
also sought to nullify Original Certificate of Title (OCT) No. 614 from which
the foregoing titles sought to be cancelled originated or were derived.
Respondent Genuino Ice Co., Inc. filed a motion to dismiss9 on the ground
that the complaint states no cause of action because petitioners are not real
parties-in-interest; that no relief may be granted as a matter of law; and that
petitioners failed to exhaust administrative remedies, but it was denied by
the trial court. Respondent moved for reconsideration but the same was
denied.
137
On November 4, 1999, petitioners filed a "Second Amended
Complaint"10 which sought to annul, in addition to the titles already alleged
in the original complaint, TCT Nos. 274095 and 274096;11 274097 and
274098;12 and 274099.13
The Second Amended Complaint alleged the following causes of action, as
well as the remedy sought to be obtained, thus:
4. That plaintiffs (petitioners) and their predecessors-in-interest are among
those who have been in actual, adverse, peaceful and continuous
possession in concept of owners of unregistered parcels of land situated at
Sitio Mabilog, Barangay Culiat, Quezon City, Metro Manila, which parcels
of land are more particularly described as follows:
(1) "A parcel of unregistered land known as Lot 668, situated at Barangay
Culiat, Quezon City x x x."
(2) "A parcel of unregistered land known as Lot 669, situated at Barangay
Culiat, Quezon City x x x."
5. That the above-described real property is a portion of a friar land known
as "Piedad Estate," which property is intended for distribution among the
bona fide occupants thereof pursuant to the Friar Lands Act.
6. That transfer certificates of title allegedly having originated or derived
from Original Certificate of Title No. 614 were issued by the Register of
Deeds of Quezon City, which transfer certificates of title are in truth and in
fact fictitious, spurious and null and void, for the following reasons: (a) that
no record of any agency of the government shows as to how and in what
manner was OCT 614 issued; (b) that no record of any proceedings
whatsoever, whether judicial or administrative, can support defendants’
claim that the above-described property originated from OCT 614; and (c)
that the transfer certificates of title over the above-described property were
issued under mysterious circumstances for the above-named defendants
and their so-called predecessors-in-interest never had any actual, adverse,
physical possession of the said property, thus, not allowed to acquire title
over the property in litigation pursuant to the Friar Lands Act.
7. That defendants are holders of transfer certificates of title of the
above-described property, which transfer certificates of title are null and
void, for reasons specifically mentioned in Paragraph 6 hereof x x x;
8. That the acts in acquiring and keeping the said transfer certificates of title
in violation of the Friar Lands Act and other existing laws are prejudicial to
plaintiffs’ rights over the above-described property.
9. That equity demands that defendants’ transfer certificates of title as
specified in Paragraph 7 hereof be declared fictitious, spurious and null and
void ab initio.
PRAYER
WHEREFORE, premises considered, it is most respectfully prayed of this
Honorable Court that judgment be rendered in favor of plaintiffs and against
defendants:
(1) Declaring as null and void ab initio OCT 614 and all transfer certificates
of title derived therefrom;
(2) Declaring as null and void defendants’ transfer certificates of title over
the property in litigation;
(3) Ordering defendant Register of Deeds of Quezon City to cancel
defendants’ transfer certificates of title and all transfer certificates of title
derived therefrom;
(4) Declaring the plaintiffs as bona fide occupants of the property in
litigation pursuant to the provisions of the Friar Lands Act and other existing
laws.14
Respondent moved to dismiss the Second Amended Complaint on the
following grounds:
a) The complaint states no cause of action because: (1) on the allegations
alone, plaintiffs (petitioners) are not real parties in interest who may bring
suit to cancel defendants’ (including respondent) titles; (2) based on the
138
allegations and prayer of the complaint, no relief, as a matter of law, may be
granted;
b) Prescription has set in;
c) There are earlier similar complaints (Civil Case Nos. Q-95-22834 and
Q-95-23111) filed by a different set of plaintiffs against a different set of
defendants but which involve the same subject matter, cause of action and
allegations of the plaintiffs, with respect to the cancellation of OCT 614 and
succeeding titles derived from it. Said complaints have since been
dismissed by Branch 93 of the Regional Trial Court of Quezon City, the
dismissal of which is the subject of a pending certiorari proceeding in the
appellate court.15
On January 3, 2001,16 the trial court denied respondent’s motion to dismiss
the Second Amended Complaint. Its motion for reconsideration was
likewise denied hence respondent filed a petition for certiorari with the
Court of Appeals.
The appellate court granted respondent’s petition for certiorari and
dismissed petitioners’ Second Amended Complaint for failure to state a
cause of action. Hence, the instant petition raising the following issues:
A. THAT THE COURT OF APPEALS ERRED IN DECLARING THAT THE
COMPLAINT FILED BY THE PETITIONERS WITH THE REGIONAL
TRIAL COURT OF QUEZON CITY IN CIVIL CASE NO. Q-99-36483 DOES
NOT STATE A VALID CAUSE OF ACTION;
B. THAT THE COURT OF APPEALS ERRED IN DECLARING THAT THE
PETITIONERS ARE NOT REAL PARTIES IN INTEREST;
C. THAT THE COURT OF APPEALS ERRED IN APPLYING THE
DOCTRINE OF "EXHAUSTION OF ADMINISTRATIVE REMEDIES"; and,
D. THAT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION AND DENIED PETITIONERS’ RIGHT TO DUE PROCESS
WHEN IT DISMISSED THEIR COMPLAINT.17
We deny the petition.
The subject lots are part of the Piedad Estate, Quezon City, a Friar Land
acquired on December 23, 1903 by the Philippine Government from the
Philippine Sugar Estates Development Company, Ltd., La Sociedad
Agricola de Ultramar, the British-Manila Estate Company, Ltd., and the
Recoleto Order of the Philippine Islands, as indicated in Public Act No.
1120 (Friar Lands Act) enacted on April 26, 1904.18
After the Piedad Estate was registered in OCT No. 614 in the name of the
Philippine Government in 1910 under the provisions of Act 496, the area
was subdivided originally into 874 lots. As a result of subsequent surveys
executed in the course of disposition, the number of lots increased to 1,305.
Disposition of these lots was made by the Bureau of Lands thru sales,
under the Friar Lands Act, as early as 1910 and records show that even
before the Second World War, all lots in the Piedad Estate have been
disposed of.19 The Piedad Estate has long been segregated from the mass
of the public domain and has become private land duly registered under the
Torrens system following the procedure for the confirmation of private lands
prescribed in Act 496. Thus the lands inside the Piedad Estate are no
longer lands of the public domain.20
One who acquires land under the Friar Lands Act, as well as his
successors-in-interest, may not claim successional rights to purchase by
reason of occupation from time immemorial, as this contravenes the
historical fact that friar lands were bought by the Government of the
Philippine Islands, pursuant to an Act of Congress of the United States,
approved on July 1, 1902, not from individual persons but from certain
companies, a society and a religious order. Under the Friar Lands Act, only
"actual settlers and occupants at the time said lands are acquired by the
Government" were given preference to lease, purchase, or acquire their
holdings, in disregard of the settlement and occupation of persons before
the government acquired the lands. 21
The basic rules of proper pleading and procedure require that every
pleading shall contain in a methodical and logical form, a plain, concise and
direct statement of the ultimate facts on which the party pleading relies for
his claim or defense, as the case may be, omitting the statement of mere
evidentiary facts.22 And in all averments of fraud or mistake, the
circumstances constituting fraud or mistake must be stated with
particularity.23
139
It is axiomatic that the averments of the complaint determine the nature of
the action, and consequently, the jurisdiction of the courts. This is because
the complaint must contain a concise statement of the ultimate facts
constituting the plaintiff's cause of action and must specify the relief sought.
No rule is better established than that which requires the complaint to
contain a statement of all the facts constituting the plaintiff's cause of action.
Additionally, Section 5, Rule 8 of the Rules of Court provides that in all
averments of fraud or mistake, the circumstances constituting fraud or
mistake must be stated with particularity. In the case at bar, while there are
allegations of fraud in the above quoted complaints, the same are not
particular enough to bring the controversy within the SEC's jurisdiction. The
said allegations are not statements of ultimate facts but are mere
conclusions of law.
A pleading should state the ultimate facts essential to the rights of action or
defense asserted, as distinguished from mere conclusions of fact, or
conclusions of law. General allegations that a contract is valid or legal, or is
just, fair and reasonable, are mere conclusions of law. Likewise, allegations
that a contract is void, voidable, invalid, illegal, ultra vires, or against public
policy, without stating facts showing its invalidity, are mere conclusions of
law.24
"Ultimate facts" means the essential facts constituting the plaintiff's cause
of action, or such facts as are so essential that they cannot be stricken out
without leaving the statement of the cause of action inadequate.25 "Cause
of action" has been defined as an act or omission of one party in violation of
the legal right or rights of the other;26 and its essential elements are: 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
the named defendant violative of the right of the 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. If these elements are not
extant, the complaint becomes vulnerable to a motion to dismiss on the
ground of failure to state a cause of action.27 In the resolution of a motion to
dismiss based on failure to state a cause of action, only the facts alleged in
the complaint as well as its annexes must be considered.28 The test in such
case is whether a court can render a valid judgment on the complaint based
upon the facts alleged and pursuant to the prayer therein.29
Corollarily, the question of whether or not a complaint states a cause of
action against a defendant or the action is premature is one of law. The trial
court can consider all the pleadings filed, including annexes, motions and
the evidence on record. However in so doing, the trial court does not rule on
the truth or falsity of such documents. It merely includes such documents in
the hypothetical admission. Any review of a finding of lack of cause of
action based on these documents would not involve a calibration of the
probative value of such pieces of evidence but would only limit itself to the
inquiry of whether the law was properly applied given the facts and these
supporting documents. Therefore, what would inevitably arise from such a
review are pure questions of law, and not questions of fact.
The trial court must likewise apply relevant statutes and jurisprudence in
determining whether the allegations in a complaint establish a cause of
action. While it focuses on the complaint, a court clearly cannot disregard
decisions material to the proper appreciation of the questions before it. In
resolving a motion to dismiss, every court must take cognizance of
decisions this Court has rendered because they are proper subjects of
mandatory judicial notice. The said decisions, more importantly, form part
of the legal system, and failure of any court to apply them shall constitute
an abdication of its duty to resolve a dispute in accordance with law, and
shall be a ground for administrative action against an inferior court
magistrate.30
Considering the foregoing, it is not difficult to see the need for particularity
and incipient substantiation in the petitioners’ Second Amended Complaint.
First, their initial claim that OCT 614 – of which all the other subject titles
are derivatives – is null and void, has been proven wrong. As has been held
in Pinlac and other cases, OCT 614 did legally exist and was previously
issued in the name of the Philippine Government in 1910 under the
provisions of Act 496.
Second, the Ad Hoc Committee of the then Ministry of Natural Resources,
which was specifically tasked to investigate the historical background of the
Piedad Estate, found that as early as the period prior to the Second World
War, all lots in the Piedad Estate had already been disposed of.
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Third, the Piedad Estate has been placed under the Torrens system of land
registration, which means that all lots therein are titled.
Fourth, as held in the Balicudiong case, one who acquires land under the
Friar Lands Act, as well as his successors-in-interest, may not claim
successional rights to purchase by reason of occupation from time
immemorial, which means that petitioners’ claimed actual, adverse,
peaceful and continuous possession of the subject property is really of no
moment unless it is shown that their predecessors-in-interest were actual
settlers and occupants at the time said lands were acquired by the
Government, and whose rights were not disregarded even though they
were in occupation of the same before the government acquired the land;
yet, no period of time in relation to adverse possession is alleged.
Petitioners’ Second Amended Complaint betrays no more than an
incomplete narration of facts unsupported by documentary or other exhibits;
the allegations therein partake of conclusions of law unsupported by a
particular averment of circumstances that will show why or how such
inferences or conclusions were arrived at. It is replete with sweeping
generalizations and inferences derived from facts that are not found therein.
While there are allegations of fraud upon the claim that the subject titles
were fictitious, spurious and obtained under "mysterious circumstances,"
the same are not specific to bring the controversy within the trial court’s
jurisdiction. There is no explanation or narration of facts as would show why
said titles are claimed to be fictitious or spurious, contrary to the
requirement of the Rules that the circumstances constituting fraud must be
stated with particularity; otherwise, the allegation of fraud would simply be
an unfounded conclusion of law. In the absence of specific averments, the
complaint is defective, for it presents no basis upon which the court should
act, or for the defendant to meet it with an intelligent answer.
As to the second issue raised, petitioners claim that they are bona
fide occupants of the subject property within the contemplation of the Friar
Lands Act, having allegedly been in actual, adverse, peaceful and
continuous possession of the property, although it is not stated for how long
and since when. In their second amended complaint, they seek judgment –
(4) Declaring the plaintiffs as bona fide occupants of the property in
litigation pursuant to the provisions of the Friar Lands Act and other existing
laws. (Emphasis supplied)
They do not pray to be declared owners of the subject property – despite
their alleged adverse possession – but only to be adjudged as the "bona
fide occupants" thereof. In other words, petitioners concede the State’s
ownership of the property.
Being so, petitioners may not be considered the real parties in interest for
the purpose of maintaining the suit for cancellation of the subject titles. The
Court of Appeals is correct in declaring that only the State, through the
Solicitor General, may institute such suit. Jurisprudence on the matter has
been settled and the issue need not be belabored. Thus –
The Court also holds that private respondents are not the proper parties to
initiate the present suit. The complaint, praying as it did for the cancellation
of the transfer certificates of title of petitioners on the ground that they were
derived from a "spurious" OCT No. 4216, assailed in effect the validity of
said title. While private respondents did not pray for the reversion of the
land to the government, we agree with the petitioners that the prayer in the
complaint will have the same result of reverting the land to the government
under the Regalian doctrine. Gabila vs. Barriga ruled that only the
government is entitled to this relief. The Court in that case held:
"The present motion to dismiss is actually predicated on Section 1(g), Rule
16 of the Revised Rules of Court, i.e., failure of the complaint to state a
cause of action, for it alleges in paragraph 12 thereof that the plaintiff
admits that he has no right to demand the cancellation or amendment of the
defendant’s title, because, even if the said title were canceled or amended,
the ownership of the land embraced therein, or of the portion thereof
affected by the amendment, would revert to the public domain. In his
amended complaint the plaintiff makes no pretense at all that any part of
the land covered by the defendant’s title was privately owned by him or by
his predecessors-in-interest. Indeed, it is admitted therein that the said land
was at all times a part of the public domain until December 18, 1964, when
the government issued a title thereon in favor of defendant. Thus, if there is
any person or entity to relief, it can only be the government.
141
In the case at bar, the plaintiff’s own averments negate the existence of
such right, for it would appear therefrom that whatever right might have
been violated by the defendant belonged to the government, not to the
plaintiff. Plaintiff-appellant argues that although his complaint is captioned
as one for cancellation of title, he has nevertheless stated therein several
causes of action based on his alleged rights of possession and ownership
over the improvements, on defendant-appellees alleged fraudulent
acquisition of the land, and on the damages allegedly incurred by him
(plaintiff-appellant) in relation to the improvements. These matters are
merely ancillary to the central issue of whether or not defendant-appellee’s
title should be canceled or amended, and they may not be leaned upon in
an effort to make out a cause of action in relation to the said focal issue.
Indeed, the principal relief prayed for in the amended complaint is the
cancellation or amendment of defendant-appellee’s title."31
Under Rule 3, Section 2 of the Rules of Court, 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. "Interest" within the meaning of
the rule 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. The interest of the party must also be personal
and not one based on a desire to vindicate the constitutional right of some
third and unrelated party. Real interest, on the other hand, means a present
substantial interest, as distinguished from a mere expectancy or a future,
contingent, subordinate, or consequential interest.32
If petitioners are to be believed, they would possess a mere inchoate
interest in the properties covered by the subject titles, a mere expectancy
conditioned upon the fact that if the questioned titles are cancelled and the
property is reverted to the State, they would probably or possibly be given
preferential treatment as qualified buyers or lessees of the property under
the Friar Lands Act. But this certainly is not the "interest" required by law
that grants them license or the personality to prosecute their case. Only to
the State does the privilege belong.
On the issue of exhaustion of administrative remedies, suffice it to state that
since petitioners do not possess the necessary interest to prosecute the
case for cancellation of title in the courts, neither do they have the right to
pursue administrative remedies outside thereof. They are not the owners;
nor are they qualified applicants therefor. It has not been shown by their
complaint that they have previously taken steps to avail of the benefits
under the Friar Lands Act, since all they seek, should the questioned titles
be nullified, is to be declared bona fide occupants of the property covered
by the questioned titles. Neither is there any indication that they possess
the qualifications necessary to enable them to avail of the preference
granted under the Act.
Finally, there is no merit in petitioners’ contention that respondent belatedly
filed the petition for certiorari with the Court of Appeals, and that the
appellate court gravely abused its discretion when it entertained and
resolved the same.
The Order of the trial court dated January 3, 2001 denying respondent’s
motion to dismiss the Second Amended Complaint was received by the
respondent on January 16, 2001. Respondent filed a motion for
reconsideration on January 18, 2001 which was denied on February 28,
2001. Respondent received the order denying its motion for reconsideration
on March 27, 2001. On the same day, it filed a Notice to File Petition for
Certiorari. On April 2, 2001, the petition for certiorari was filed with the Court
of Appeals. Clearly, the same was timely filed hence, the appellate court
correctly entertained the same.
WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals dated January 9, 2002 in CA-G.R. SP No. 64337 dismissing
petitioners’ "Second Amended Complaint" in Civil Case No. Q-99-36483
and the Resolution dated June 26, 2002 denying the motion for
reconsideration, are AFFIRMED.
SO ORDERED.
142
 G.R. No. 193964, December 02, 2015

ENGINEER BEN Y. LIM, RBL FISHING CORPORATION, PALAWAN

AQUACULTURE CORPORATION, AND PENINSULA SHIPYARD
CORPORATION, Petitioners, v. HON. SULPICIO G. GAMOSA,
OFFICER-IN-CHARGE, NCIP REGIONAL HEARING OFFICE, REGION IV AND
TAGBANUA INDIGENOUS CULTURAL COMMUNITY OF BARANGAY BUENAVISTA,
CORON, PALAWAN, AS REPRESENTED BY FERNANDO P. AGUIDO, ERNESTO
CINCO, BOBENCIO MOSQUERA, JURRY CARPIANO, VICTOR BALBUTAN,
NORDITO ALBERTO, EDENG PESRO, CLAUDINA BAQUID, NONITA SALVA, AND
NANCHITA ALBERTO, Respondents.

DECISION

PEREZ, J.:

While we recognize the rights of our Indigenous Peoples (IPs) and Indigenous Cultural
Communities (ICCs) as determined in the Indigenous Peoples Rights Act (IPRA), we
delineate, in this case, the jurisdiction of the National Commission on Indigenous
Peoples (NCIP) as provided in Section 661 of the IPRA.

Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court is
the Decision2 of the Court of Appeals in CA-G.R. SP No. 98268 which denied the petition
for certiorari of petitioners Engr. Ben Y. Lim, RBL Fishing Corporation, Palawan
Aquaculture Corporation, and Peninsula Shipyard Corporation. Affirmed, then, is the
Resolution3 of the NCIP in NCIP Case No. RHO 4-01-2006.

Respondent Tagbanua Indigenous Cultural Community of Barangay Buenavista, Coron,

Palawan, represented by individual respondents Fernando P. Aguido, Ernesto Cinco,

143
Bobencio Mosquera, Jurry Carpiano, Victor Balbutan, Nordito Alberto, Edeng Pesro,
Claudina Baquid, Nonita Salva, and Nanchita Alberto, filed a petition before the NCIP
against petitioners for "Violation of Rights to Free and Prior and Informed Consent (FPIC)
and Unauthorized and Unlawful Intrusion with Prayer for the Issuance of Preliminary
Injunction and Temporary Restraining Order."4
Thereafter, the NCIP issued an Order dated 20 October 2006 and directing the issuance
and service of summons, and setting the preliminary conference and initial hearing on
the prayer for the issuance of a Temporary Restraining Order on 22 November 2006 and
the conduct of an ocular inspection of the subject area on the following day, 23
November 2006.
Despite a motion to dismiss being a prohibited pleading under the NCIP Administrative
Circular No. 1-03, petitioners moved to dismiss the petition on the following grounds:
Lack of jurisdiction over the subject matter of the
petition because [petitioners] are not members of the
1)
Indigenous Cultural Communities/Indigenous
Peoples;
Lack of jurisdiction over the persons of [petitioners],
2) because summons were served by mail rather than by
personal service;
Lack of cause of action, because there is no allegation
in the petition or document attached thereto showing
that [respondents] were indeed authorized by the
3)
purported Tagbanua Indigenous Cultural Community,
and no Certificate of Ancestral Domain Title has as yet
been issued over the claim; [and]
Violation of the rule against forum shopping because
[respondents] have already filed criminal cases also
4)
based on the same alleged acts before the Municipal
Trial Court of Coron-Busuanga.5
Not contented with their filing of a Motion to Dismiss, petitioners, by way of special
appearance, filed a Motion to Suspend Proceedings, arguing that "considering the
nature of the issues raised [in the Motion to Dismiss], particularly, the issue on
jurisdiction, it is imperative that the [Motion to Dismiss] be resolved first before other
proceedings could be conducted in the instant case."6
On 30 November 2006, the NCIP issued a Resolution7 denying the motion to dismiss.
While affirming that a Motion to Dismiss is prohibited under Section 29 of the Rules on
Pleadings, Practice and Procedure before the NCIP, the NCIP squarely ruled that: (1) it
had jurisdiction over the petition filed by respondents; (2) it acquired jurisdiction over
the persons of petitioners; (3) it was premature to rule on the issue of lack of cause of
action; and (4) respondents did not violate the rule on forum shopping.8
After the denial of their motion for reconsideration, petitioners filed a petition
for certiorari before the appellate court, seeking to reverse, annul and set aside the
NCIP's twin resolutions for being tainted with grave abuse of discretion amounting to
lack or excess of jurisdiction.
As previously stated, the Court of Appeals denied the petition for certiorari and affirmed
the resolutions of the NCIP. The appellate court echoed the NCIP's stance that from the
wording of Section 66 of the IPRA, the NCIP was bestowed with an all-encompassing
grant of jurisdiction over all claims and disputes involving rights of ICCs/IPs and that the
requirement in the proviso contained in the section, i.e., obtaining a certification from
the Council of Elders/Leaders that the parties had exhausted all remedies provided
under their customary law prior to the filing of an action, applied only to instances where
both parties were members of an ICC/IP.
The NCIP also cited Section 14 of its own Rules on Pleadings, Practice and Procedure
Before the NCIP which provides exceptions to the requirement of exhaustion of
administrative remedies under customary laws, such as where one of the parties is: (1)
either a public or private corporation, partnership, association or juridical person or a
public officer or employee and the dispute is in connection with the performance of his
official functions; and (2) a non-IP/ICC or does not belong to the same IP/ICC. In all, the
Court of Appeals affirmed the NCIP's resolution that when a claim or dispute involves
rights of the IPs/ICCs, the NCIP has jurisdiction over the case regardless of whether the
opposing party is a non-IP/ICC.
144
Adamant, petitioners appeal to us by a petition for review on certiorari, echoing the ICCs/IPs and a dispute involving ICC/IP members and non-members. Thus, there is no
same issues raised before the appellate court: reason to draw a distinction and limit the NCIP's jurisdiction over "all claims and disputes
involving rights of ICCs/IPs."12 Effectively, even without asseverating it, the two
tribunals interpret the statutory grant of jurisdiction to the NCIP as primary, original and
1. WHETHER OR NOT THE HONORABLE COURT OF exclusive, in all cases and instances where the claim or dispute involves rights of
APPEALS SERIOUSLY ERRED IN HOLDING THAT x IPs/ICCs, without regard to whether one of the parties is non-IP/ICC.

x x THE [NCIP HAS] JURISDICTION OVER THE In addition, the NCIP promulgated its rules and regulations such as NCIP Administrative
Circular No. 1-03 dated 9 April 2003, known as the "Rules on Pleadings, Practice and
SUBJECT MATTER OF THE PETITION x x x; Procedure Before the NCIP," and Administrative Circular No. 1, Series of 2014, known as
"The 2014 Revised Rules of Procedure before the National Commission on Indigenous
2. WHETHER OR NOT THE HONORABLE COURT OF Peoples." Sections 5 and 1, respectively of both the 2003 and 2014 Administrative
Circular, Rule III, provide for the jurisdiction of the NCIP Regional Hearing Officer (RHO),
APPEALS COMMITTED SERIOUS ERRORS IN thus:
HOLDING THAT x x x THE [NCIP] ACQUIRED
Jurisdiction of the NCIP. - The NCIP through its
JURISDICTION OVER THE PERSONS OF THE
Regional Hearing Offices shall exercise
PETITIONERS; and
jurisdiction over all claims and disputes
3. WHETHER OR NOT THE HONORABLE COURT OF involving rights of ICCs/IPs and all cases
APPEALS GRAVELY ERRED IN HOLDING THAT x x pertaining to the implementation, enforcement,
x RESPONDENTS HAVE CAUSE/S OF ACTION and interpretation of R.A. 8371, including but
AGAINST THE PETITIONERS.9 not limited to the following:

(1) Original and Exclusive Jurisdiction of the

Notably, petitioners have dropped their issue that respondents are guilty of forum
shopping. Regional Hearing Office (RHO):
At the outset, we note that none of the petitioners, the NCIP, and the appellate court
have proffered an argument, and opined, on the specific nature of the jurisdiction of the 1. Cases involving disputes and controversies
NCIP, whether such is primary and concurrent with courts of general jurisdiction, and/or
original and exclusive, to the exclusion of regular courts.
over ancestral lands/domains of ICCs/IPs;

In the main, petitioners argue that the NCIP does not have jurisdiction over the petition 2. Cases involving violations of the
filed by respondents because they (petitioners) are non-IPs/ICCs. Essentially, they
interpret the jurisdiction of the NCIP as limited to claims and disputes involving rights of requirement of free and prior and informed
IPs/ICCs where both opposing parties are IPs/ICCs.
consent of ICCs/IPs;
On the other hand, the NCIP and the appellate court rely mainly on the wording of
Section 66 of the IPRA and the averred purpose for the law's enactment, "to fulfill the 3. Actions for enforcement of decisions of
constitutional mandate of protecting the rights of the indigenous cultural communities
to their ancestral land and to correct a grave historical injustice to our indigenous ICCs/IPs involving violations of customary
people."10 According to the two tribunals, "[a]ny interpretation that would restrict the laws or desecration of ceremonial sites,
applicability of the IPRA law exclusively to its members would certainly leave them open
to oppression and exploitation by outsiders."11 The NCIP and the appellate court sacred places, or rituals;
maintain that Section 66 does not distinguish between a dispute among members of

145
 4. Actions for redemption/reconveyance under
Section 8(b) of R.A. 8371; and
Such other cases analogous to the foregoing.
We first dispose of the primordial question on the nature and scope of the NCIP's
jurisdiction as provided in the IPRA. Specifically, the definitive issue herein boils down to
whether the NCIP's jurisdiction is limited to cases where both parties are ICCs/IPs or
primary and concurrent with regular courts, and/or original and exclusive, to the
exclusion of the regular courts, on all matters involving rights of ICCs/IPs.
We are thus impelled to discuss jurisdiction and the different classes thereof.
Jurisdiction is the power and authority, conferred by the Constitution and by statute, to
hear and decide a case.13 The authority to decide a cause at all is what makes up
jurisdiction.
Section 66 of the IPRA, the law conferring jurisdiction on the NCIP, reads:
Sec. 66. Jurisdiction of the NCIP. - The NCIP,
through its regional offices, shall have
jurisdiction over all claims and disputes
involving rights of ICCs/IPs: Provided,
however, That no such dispute shall be brought
to the NCIP unless the parties have exhausted all
remedies provided under their customary
laws. For this purpose, a certification shall be
issued by the Council of Elders/Leaders who
participated in the attempt to settle the dispute
that the same has not been resolved, which
certification shall be a condition precedent to
the filing of a petition with the NCIP. (Emphasis
supplied).
The conferment of such jurisdiction is consistent with state policy averred in the IPRA
which recognizes and promotes all the rights of ICCs/IPs within the framework of the
constitution. Such is likewise reflected in the mandate of the NCIP to "protect and
promote the interest and wellbeing of the ICCs/IPs with due regard to their beliefs,
customs, traditions and[,] institutions".14
In connection thereto, from Bank of Commerce v. Planters Development Bank,15 we
learned that the provisions of the enabling statute are the yardsticks by which the Court
would measure the quantum of quasi-judicial powers an administrative agency may
exercise, as defined in the enabling act of such agency.
Plainly, the NCIP is the "primary government agency responsible for the formulation and
implementation of policies, plans and programs to promote and protect the rights and
well-being of the ICCs/IPs and the recognition of their ancestral domains as well as their
rights thereto."16 Nonetheless, the creation of such government agency does not per
se grant it primary and/or exclusive and original jurisdiction, excluding the regular
courts from taking cognizance and exercising jurisdiction over cases which may involve
rights of ICCs/IPs.
Recently, in Unduran et al. v. Aberasturi et al.,17 we ruled that Section 66 of the IPRA
does not endow the NCIP with primary and/or exclusive and original jurisdiction over all
claims and disputes involving rights of ICCs/IPs. Based on the qualifying proviso, we
held that the NCIP's jurisdiction over such claims and disputes occur only when they
arise between or among parties belonging to the same ICC/IP. Since two of the
defendants therein were not IPs/ICCs, the regular courts had jurisdiction over the
complaint in that case.
In his concurring opinion in Unduran, Justice Jose P. Perez submits that the jurisdiction
of the NCIP ought to be definitively drawn to settle doubts that still linger due to the
implicit affirmation done in The City Government ofBaguio City, et al. v. Atty. Masweng,
et al.18 of the NCIP's jurisdiction over cases where one of the parties are not ICCs/IPs.
In Unduran and as in this case, we are hard pressed to declare a primary and/or
exclusive and original grant of jurisdiction to the NCIP over all claims and disputes
involving rights of ICCs/IPs where there is no clear intendment by the legislature.
Significantly, the language of Section 66 is only clear on the nature of the claim and
dispute as involving rights of ICCs/IPs, but ambiguous and indefinite in other respects.
While using the word "all" to quantify the number of the "claims and disputes" as
covering each and every claim and dispute involving rights of ICCs/IPs, Section 66
unmistakably contains a proviso, which on its face restrains or limits the initial
generality of the grant of jurisdiction.
Unduran lists the elements of the grant of jurisdiction to the NCIP: (1) the claim and
dispute involve the right of ICCs/IPs; and (2) both parties have exhausted all remedies
provided under their customary laws. Both elements must be present prior to the
invocation and exercise of the NCIP's jurisdiction.
Thus, despite the language that the NCIP shall have jurisdiction over all claims and
disputes involving rights of ICCs/IPs, we cannot be confined to that first alone and
therefrom deduce primary sole NCIP jurisdiction over all ICCs/IPs claims and
disputes to the exclusion of the regular courts. If it were the intention of the
legislative that: (1) the NCIP exercise primary jurisdiction over, and/or (2) the regular
courts be excluded from taking cognizance of, claims and disputes involving rights of
146
ICCs/IPs, the legislature could have easily done so as in other instances conferring illegal, unjust, improper, or
primary, and original and exclusive jurisdiction to a specific administrative body. We will
revert to this point shortly but find it pertinent to first discuss the classes of jurisdiction. inefficient.
Primary jurisdiction, also known as the doctrine of Prior Resort, is the power and
authority vested by the Constitution or by statute upon an administrative body to act does not exclude other government
upon a matter by virtue of its specific competence.19 The doctrine of primary jurisdiction
prevents the court from arrogating unto itself the authority to resolve a controversy agencies tasked by law to
which falls under the jurisdiction of a tribunal possessed with special competence.20 In investigate and prosecute cases
one occasion, we have held that regular courts cannot or should not determine a
controversy involving a question which is within the jurisdiction of the administrative involving public officials. If it
tribunal before the question is resolved by the administrative tribunal, where the
question demands the exercise of sound administrative discretion requiring the special
were the intention of the framers of
knowledge, experience, and services of the administrative tribunal to determine the 1987 Constitution, they would
technical and intricate matters of fact, and a uniformity of ruling is essential to comply
with the premises of the regulatory statute administered.21 The objective of the doctrine have expressly declared the
of primary jurisdiction is to guide a court in determining whether it should refrain from exclusive conferment of the power to
exercising its jurisdiction until after an administrative agency has determined some
question arising in the proceeding before the court.22 the Ombudsman. Instead, paragraph (8)
Additionally, primary jurisdiction does not necessarily denote exclusive jurisdiction.23 It
of the same Section 13 of the
applies where a claim is originally cognizable in the courts and comes into play whenever Constitution provides:
enforcement of the claim requires the resolution of issues which, under a regulatory
scheme, has been placed within the special competence of an administrative body; in (8) Promulgate its rules of
such case, the judicial process is suspended pending referral of such issues to the procedure and exercise such other
administrative body for its view.24 In some instances, the Constitution and statutes
grant the administrative body primary jurisdiction, concurrent with either similarly powers or perform such functions or
authorized government agencies or the regular courts, such as the distinct kinds of
jurisdiction bestowed by the Constitution and statutes on the Ombudsman.
duties as may be provided by law
Accordingly, Congress enacted R.A.
The case of Honasan II v. The Panel of Investigating Prosecutors of the Department of
Justice25delineated primary and concurrent jurisdiction as opposed to original and 6770, otherwise known as "The
exclusive jurisdiction vested by both the Constitution and statutes26 on the Ombudsman Ombudsman Act of 1989." Section 15
concurrent, albeit primary, with the Department of Justice.
thereof provides:
Paragraph (1) of Section 13, Article XI of the Constitution, viz.:
Sec. 15. Powers, Functions and Duties. - The
SEC. 13. The Office of the Ombudsman shall have
Office of the Ombudsman shall have the following
the following powers, functions, and duties:
powers, functions and duties:
1. Investigate on its own, or on
(1) Investigate and prosecute on its
complaint by any person, any act or
own or on complaint by any person,
omission of any public official,
any act or omission of any public
employee, office or agency, when
officer or employee, office or
such act or omission appears to be
147
agency, when such act or omission
appears to be illegal, unjust,
improper or inefficient. It has
primary jurisdiction over cases
cognizable by the Sandiganbayan and,
in the exercise of this primary
jurisdiction, it may take over, at
any stage, from any investigatory
agency of the government, the
investigation of such cases.
Pursuant to the authority given to
the Ombudsman by the Constitution
and the Ombudsman Act of 1989 to lay
down its own rules and procedure, the
Office of the Ombudsman promulgated
Administrative Order No. 8, dated
November 8, 1990,
entitled, Clarifying and Modifying
Certain Rules of Procedure of the
Ombudsman, to wit: chanRobl esvirt ualLaw librar y
A complaint filed in or taken
cognizance of by the Office of the
Ombudsman charging any public
officer or employee including those
in government-owned or controlled
corporations, with an act or
omission alleged to be illegal,
unjust, improper or inefficient is
an Ombudsman case. Such a complaint
may be the subject of criminal or
administrative proceedings, or both.
For purposes of investigation and
prosecution, Ombudsman cases
involving criminal offenses may be
subdivided into two classes, to wit:
(1) those cognizable by the
Sandiganbayan, and (2) those falling
under the jurisdiction of the
regular courts. The difference
between the two, aside from the
category of the courts wherein they
are filed, is on the authority to
investigate as distinguished from
the authority to prosecute, such
cases.
The power to investigate or conduct
a preliminary investigation on any
Ombudsman case may be exercised by an
investigator or prosecutor of the
Office of the Ombudsman, or by any
Provincial or City Prosecutor or
their assistance, either in their
regular capacities or as deputized
Ombudsman prosecutors.
The prosecution of cases cognizable
148
 by the Sandiganbayan shall be under
the direct exclusive control and
supervision of the Office of the
Ombudsman. In cases cognizable by
the regular Courts, the control and
supervision by the Office of the
Ombudsman is only in Ombudsman cases
in the sense defined above. The law
recognizes a concurrence of
jurisdiction between the Office of
the Ombudsman and other
investigative agencies of the
government in the prosecution of
cases cognizable by regular courts.
It is noteworthy that as early as 1990, the
Ombudsman had properly differentiated the
authority to investigate cases from the
authority to prosecute cases. It is on this note
that the Court will first dwell on the nature or
extent of the authority of the Ombudsman to
investigate cases. Whence, focus is directed to
the second sentence of paragraph (1), Section 15
of the Ombudsman Act which specifically provides
that the Ombudsman has primary jurisdiction over
cases cognizable by the Sandiganbayan, and, in
the exercise of this primary jurisdiction, it may
take over, at any stage, from any investigating
agency of the government, the investigation of
such cases.
That the power of the Ombudsman to investigate
offenses involving public officers or employees
is not exclusive but is concurrent with other
similarly authorized agencies of the government
such as the provincial, city and state
prosecutors has long been settled in several
decisions of the Court. (Emphasis supplied)
In Cojuangco, Jr. v. Presidential Commission on
Good Government, decided in 1990, the Court
expressly declared:chanRobl esvirt ual Lawlibra ry
A reading of the foregoing provision of the
Constitution does not show that the power of
investigation including preliminary
investigation vested on the Ombudsman is
exclusive.
Interpreting the primary jurisdiction of the
Ombudsman under Section 15 (1) of the Ombudsman
Act, the Court held in said case:
chanRobl esvirt ualLaw librar y
Under Section 15 (1) of Republic Act No. 6770
aforecited, the Ombudsman has primary
jurisdiction over cases cognizable by the
Sandiganbayan so that it may take over at any
stage from any investigatory agency of the
government, the investigation of such
cases. The authority of the Ombudsman to
investigate offenses involving public officers
149
or employees is not exclusive but is concurrent
with other similarly authorized agencies of the
government. Such investigatory agencies referred
to include the PCGG and the provincial and city
prosecutors and their assistants, the state
prosecutors and the judges of the municipal trial
courts and municipal circuit trial court.
In other words the provision of the law has opened
up the authority to conduct preliminary
investigation of offenses cognizable by the
Sandiganbayan to all investigatory agencies of
the government duly authorized to conduct a
preliminary investigation under Section 2, Rule
112 of the 1985 Rules of Criminal Procedure with
the only qualification that the Ombudsman may
take over at any stage of such investigation in
the exercise of his primary jurisdiction.
A little over a month later, the Court, in Deloso
vs. Domingo, pronounced that the Ombudsman, under
the authority of Section 13 (1) of the 1987
Constitution, has jurisdiction to investigate
any crime committed by a public official,
elucidating thus: chanRobl esvirt ualLaw librar y
As protector of the people, the office of the
Ombudsman has the power, function and duty to "act
promptly on complaints filed in any form or manner
against public officials" (Sec. 12) and to
"investigate x x x any act or omission of any
public official x x x when such act or omission
appears to be illegal, unjust, improper or
inefficient." (Sec. 1[3]). The Ombudsman is also
empowered to "direct the officer concerned," in
this case the Special Prosecutor, "to take
appropriate action against a public official x x
x and to recommend his prosecution" (Sec. 1[3]).
The clause "any [illegal] act or omission of any
public official" is broad enough to embrace any
crime committed by a public official. The law does
not qualify the nature of the illegal act or
omission of the public official or employee that
the Ombudsman may investigate. It does not
require that the act or omission be related to or
be connected with or arise from, the performance
of official duty. Since the law does not
distinguish, neither should we.
The reason for the creation of the Ombudsman in
the 1987 Constitution and for the grant to it of
broad investigative authority, is to insulate
said office from the long tentacles of
officialdom that are able to penetrate judges'
and fiscals' offices, and others involved in the
prosecution of erring public officials, and
through the exertion of official pressure and
influence, quash, delay, or dismiss
investigations into malfeasances and
150
misfeasances committed by public officers. It was
deemed necessary, therefore, to create a special
office to investigate all criminal complaints
against public officers regardless of whether or
not the acts or omissions complained of are
related to or arise from the performance of the
duties of their office. The Ombudsman Act makes
perfectly clear that the jurisdiction of the
Ombudsman encompasses "all kinds of malfeasance,
misfeasance, and non-feasance that have been
committed by any officer or employee as
mentioned in Section 13 hereof, during his tenure
of office" (Sec. 16, R.A. 6770).
Indeed, the labors of the constitutional
commission that created the Ombudsman as a
special body to investigate erring public
officials would be wasted if its jurisdiction
were confined to the investigation of minor and
less grave offenses arising from, or related to,
the duties of public office, but would exclude
those grave and terrible crimes that spring from
abuses of official powers and prerogatives, for
it is the investigation of the latter where the
need for an independent, fearless, and honest
investigative body, like the Ombudsman, is
greatest.
At first blush, there appears to be conflicting
views in the rulings of the Court in
the Cojuangco, Jr. case and the Deloso case.
However, the contrariety is more apparent than
real. In subsequent cases, the Court elucidated
on the nature of the powers of the Ombudsman to
investigate.
In 1993, the Court held in Sanchez vs. Demetriou,
that while it may be true that the Ombudsman has
jurisdiction to investigate and prosecute any
illegal act or omission of any public official,
the authority of the Ombudsman to investigate is
merely a primary and not an exclusive authority,
thus:chanRobl esvirt ualLaw librar y
The Ombudsman is indeed empowered under Section
15, paragraph (1) of RA 6770 to investigate and
prosecute any illegal act or omission of any
public official. However as we held only two years
ago in the case of Aguinaldo v. Domagas, this
authority "is not an exclusive authority but
rather a shared or concurrent authority in
respect of the offense charged."
Petitioners finally assert that the information
and amended information filed in this case needed
the approval of the Ombudsman. It is not disputed
that the information and amended information here
did not have the approval of the Ombudsman.
However, we do not believe that such approval was
necessary at all. In Deloso v. Domingo; 191 SCRA
151
545 (1990), the Court held that the Ombudsman has
authority to investigate charges of illegal acts
or omissions on the part of any public official,
i.e.; any crime imputed to a public official. It
must, however, be pointed out that the authority
of the Ombudsman to investigate "any [illegal]
act or omission of any public official" (191 SCRA
550) is not an exclusive authority but rather a
shared or concurrent authority in respect of the
offense charged, i.e.; the crime of sedition.
Thus, the non-involvement of the office of the
Ombudsman in the present case does not have any
adverse legal consequence upon the authority of
the panel of prosecutors to file and prosecute the
information or amended information.
In fact, other investigatory agencies of the
government such as the Department of Justice in
connection with the charge of sedition, and the
Presidential Commission on Good Government, in
ill gotten wealth cases, may conduct the
investigation.
In Natividad v. Felix, a 1994 case, where the
petitioner municipal mayor contended that it is
the Ombudsman and not the provincial fiscal who
has the authority to conduct a preliminary
investigation over his case for alleged Murder,
the Court held:
chanRobl esvirt ualLaw librar y
The Deloso case has already been re-examined in
two cases, namely Aguinaldo v.
Domagas and Sanchez v. Demetriou. However, by
way of amplification, we feel the need for tracing
the history of the legislation relative to the
jurisdiction of Sandiganbayan since the
Ombudsman's primary jurisdiction is dependent on
the cases cognizable by the former.
In the process, we shall observe how the policy
of the law, with reference to the subject matter,
has been in a state of flux.
These laws, in chronological order, are the
following: (a) Pres. Decree No. 1486, - the first
law on the Sandiganbayan; (b) Pres. Decree No.
1606 which expressly repealed Pres. Decree No.
1486; (c) Section 20 of Batas Pambansa Blg. 129;
(d) Pres. Decree No. 1860; and (e) Pres. Decree
No. 1861.
The latest law on the Sandiganbayan, Sec. 1 of
Pres. Decree No. 1861 reads as follows: chanRobl esvirt ual Lawlibra ry
"SECTION 1. Section 4 of Presidential Decree No.
1606 is hereby amended to read as follows:
'SEC. A. Jurisdiction. - The
Sandiganbayan shall exercise:
chanRobl esvirt ualLaw librar y
152
'(a) Exclusive original
jurisdiction in all cases involving:
. . .
(2) Other offenses or
felonies committed by
public officers and
employees in relation
to their office,
including those
employed in
government-owned or
controlled corporation,
whether simple or
complexed with other
crimes, where the
penalty prescribed by
law is higher than
prision correccional or
imprisonment for six (6)
years, or a fine of
P6,000: PROVIDED,
HOWEVER, that offenses
or felonies mentioned
in this paragraph where
the penalty prescribed
by law does not exceed
prision correccional or
imprisonment for six (6)
years or a fine of
P6,000 shall be tried by
the proper Regional
Trial Court,
Metropolitan Trial
Court, Municipal Trial
Court and Municipal
Circuit Trial Court."
A perusal of the aforecited law shows that two
requirements must concur under Sec. 4(a)(2) for
an offense to fall under the Sandiganbayan's
jurisdiction, namely: the offense committed by
the public officer must be in relation to his
office and than penalty prescribed be higher
then prision correccional or imprisonment for
six (6) years, or a fine of P6,000.00.
Applying the law to the case at bench, we find that
although the second requirement has been met, the
first requirement is wanting. A review of these
Presidential Decrees, except Batas Pambansa Blg.
129, would reveal that the crime committed by
public officers or employees must be "in relation
to their office" if it is to fall within the
jurisdiction of the Sandiganbayan. This phrase
which is traceable to Pres. Decree No. 1468, has
been retained by Pres. Decree No. 1861 as a
requirement before the Ombudsman can acquire
primary jurisdiction on its power to investigate.
153
It cannot be denied that Pres. Decree No. 1861 is
in pah materia to Article XI, Sections 12 and 13
of the 1987 Constitution and the Ombudsman Act of
1989 because, as earlier mentioned, the
Ombudsman's power to investigate is dependent on
the cases cognizable by the Sandiganbayan.
Statutes are in pari materia when they relate to
the same person or thing or to the same class of
persons or things, or object, or cover the same
specific or particular subject matter.
It is axiomatic in statutory construction that a
statute must be interpreted, not only to be
consistent with itself but also to harmonize with
other laws on the same subject matter, as to form
a complete, coherent and intelligible system. The
rule is expressed in the maxim, "interpretare et
concordare legibus est optimus interpretand," or
every statute must be so construed and harmonized
with other statutes as to form a uniform system
of jurisprudence. Thus, in the application and
interpretation of Article XI, Sections 12 and 13
of the 1987 Constitution and the Ombudsman Act of
1989, Pres. Decree No. 1861 must be taken into
consideration. It must be assumed that when the
1987 Constitution was written, its framers had in
mind previous statutes relating to the same
subject matter. In the absence of any express
repeal or amendment, the 1987 Constitution and
the Ombudsman Act of 1989 are deemed in accord
with existing statute, specifically, Pres.
Decree No. 1861.
R.A. No. 8249 which amended Section 4, paragraph
(b) of the Sandiganbayan Law (P.D. 1861) likewise
provides that for other offenses, aside from
those enumerated under paragraphs (a) and (c), to
fall under the exclusive jurisdiction of the
Sandiganbayan, they must have been committed by
public officers or employees in relation to their
office.
In summation, the Constitution, Section 15 of the
Ombudsman Act of 1989 and Section 4 of the
Sandiganbayan Law, as amended, do not give to the
Ombudsman exclusive jurisdiction to investigate
offenses committed by public officers or
employees. The authority of the Ombudsman to
investigate offenses involving public officers
or employees is concurrent with other government
investigating agencies such as provincial, city
and state prosecutors. However, the Ombudsman,
in the exercise of its primary jurisdiction over
cases cognizable by the Sandiganbayan, may take
over, at any stage, from any investigating agency
of the government, the investigation of such
cases.
In other words, respondent DOJ Panel is not
precluded from conducting any investigation of
154
cases against public officers involving
violations of penal laws but if the cases fall
under the exclusive jurisdiction of the
Sandiganbayan, then respondent Ombudsman may, in
the exercise of its primary jurisdiction[,] take
over at any stage.
x x x x
To reiterate for emphasis, the power to
investigate or conduct preliminary
investigation on charges against any public
officers or employees may be exercised by an
investigator or by any provincial or city
prosecutor or their assistants, either in their
regular capacities or as deputized Ombudsman
prosecutors. The fact that all prosecutors are
in effect deputized Ombudsman prosecutors under
the OMB-DOJ Circular is a mere superfluity. The
DOJ Panel need not be authorized nor deputized
by the Ombudsman to conduct the preliminary
investigation for complaints filed with it
because the DOJ's authority to act as the
principal law agency of the government and
investigate the commission of crimes under the
Revised Penal Code is derived from the Revised
Administrative Code which had been held in
the Natividad case as not being contrary to
the Constitution. Thus, there is not even a need
to delegate the conduct of the preliminary
investigation to an agency which has the
jurisdiction to do so in the first place. However,
the Ombudsman may assert its primary
jurisdiction at any stage of the
investigation.27 (Emphasis supplied)
In contrast to our holding in Honasan II, the NCIP cannot be said to have even primary
jurisdiction over all the ICC/IP cases comparable to what the Ombudsman has in cases
falling under the exclusive jurisdiction of the Sandiganbayan. We do not find such
specificity in the grant of jurisdiction to the NCIP in Section 66 of the IPRA.
Neither does the IPRA confer original and exclusive jurisdiction to the NCIP over all
claims and disputes involving rights of ICCs/IPs.
Thus, we revert to the point on the investiture of primary and/or original and exclusive
jurisdiction to an administrative body which in all instances of such grant was explicitly
provided in the Constitution and/or the enabling statute, to wit:
1. Commission on Elections' exclusive original
jurisdiction over all elections contests;28
2. Securities and Exchange Commission's original
and exclusive jurisdiction over all cases
enumerated under Section 5 of Presidential Decree
No. 902-A,29 prior to its transfer to courts of
general jurisdiction or the appropriate Regional
Trial Court by virtue of Section 4 of the
Securities Regulation Code;
3. Energy Regulatory Commission's original and
exclusive jurisdiction over all cases contesting
rates, fees, fines, and penalties imposed by it
in the exercise of its powers, functions and
responsibilities;30
4. Department of Agrarian Reform's31 primary
155
jurisdiction to determine and adjudicate
agrarian reform matters, and its exclusive
original jurisdiction over all matters involving
the implementation of agrarian reform except
those falling under the exclusive jurisdiction of
the Department of Agriculture (DA) and the
Department of Environment and Natural Resources
(DENR);32
5. Construction Industry Arbitration
Commission's original and exclusive jurisdiction
over disputes involving contracts of
construction, whether government or private, as
long as the parties agree to submit the same to
voluntary arbitration;33
6. Voluntary arbitrator's or panel of voluntary
arbitrator's original and exclusive jurisdiction
over all unresolved grievances arising from the
interpretation or implementation of the
collective bargaining agreement and those
arising from the interpretation or enforcement of
company personnel policies;34
7. The National Labor Relations Commission's
(NLRC's) original and exclusive jurisdiction
over cases listed in Article 217 of the Labor Code
involving all workers, whether agricultural or
non-agricultural; and
8. Board of Commissioners of the Bureau of
Immigration's primary and exclusive jurisdiction
over all deportation cases.35 ChanRobl esVirt ualawl ibrary
That the proviso found in Section 66 of the IPRA is exclusionary, specifically excluding
disputes involving rights of IPs/ICCs where the opposing party is non-ICC/IP, is
reflected in the IPRA's emphasis of customs and customary law to govern in the lives of
the ICCs/IPs. In fact, even the IPRA itself recognizes that customs and customary law
cannot be applied to non-IPs/ICCs since ICCs/IPs are recognized as a distinct sector of
Philippine society. This recognition contemplates their difference from the Filipino
majority, their way of life, how they have continuously lived as an organized community
on communally bounded and defined territory. The ICCs/IPs share common bonds of
language, customs, traditions and other distinctive cultural traits, which by their
resistance to political, social and cultural inroads of colonization, non-indigenous
religions and cultures, became historically differentiated from the majority. ICCs/IPs
also include descendants of ICCs/IPs who inhabited the country at the time of conquest
or colonization, who retain some or all of their own social, economic, cultural and
political institutions but who may have been displaced from their traditional territories,
or who may have resettled outside their ancestral domains.36
In all, the limited or special jurisdiction of the NCIP, confined only to a special cause
involving rights of IPs/ICCs, can only be exercised under the limitations and
circumstances prescribed by the statute.
To effect the IPRA and its thrust to recognize and promote the rights of ICCs/IPs within
the framework of the Constitution goes hand in hand with the IPRA's running theme of
the primary distinctiveness of customary laws, and its application to almost all aspects
of the lives of members of the IPs/ICCs, including the resolution of disputes among
ICCs/IPs. The NCIP was created under the IPRA exactly to act on and resolve claims and
disputes involving the tights of ICCs/IPs.37
Former Chief Justice Reynato Puno, in his separate opinion in Cruz, the first challenge to
the IPRA, emphasizes the primacy of customs and customary law in the lives of the
members of ICCs/IPs:
Custom, from which customary law is derived, is
also recognized under the Civil Code as a source
of law. Some articles of the Civil Code expressly
provide that custom should be applied in cases
where no codal provision is applicable. In other
words, in the absence of any applicable provision
in the Civil Code, custom, when duly proven, can
define rights and liabilities.
156
 "ART. 217. Jurisdiction of Labor
Customary law is a primary, not secondary, Arbiters and the Commission. - (a)
source of rights under the IPRA and uniquely The Labor Arbiters shall have
applies to ICCs/IPs. Its recognition does not the original and exclusive
depend on the absence of a specific provision in jurisdiction to hear and decide
the civil law. The indigenous concept of within thirty (30) working days
ownership under customary law is specifically after submission of the case by the
acknowledged and recognized, and coexists with parties for decision, the following
the civil law concept and the laws on land titling cases involving all workers, whether
and land registration38 ChanRobl esVirt ualawl ibrary agricultural or non-agricultural:
Once again, the primacy of customs and customary law sets the parameters for the
NCIP's limited and special jurisdiction and its consequent application in dispute 1. Unfair labor practice cases;
resolution.39 Demonstrably, the proviso in Section 66 of the IPRA limits the jurisdiction
of the NCIP to cases of claims and disputes involving rights of ICCs/IPs where both
parties are ICCs/IPs because customs and customary law cannot be made to apply to 2. Those that workers may file
non-ICCs/IPs within the parameters of the NCIP's limited and special jurisdiction. involving wages, hours of work
Indeed, non-ICCs/IPs cannot be subjected to this special and limited jurisdiction of the and other terms and conditions
NCIP even if the dispute involves rights of ICCs/IPs since the NCIP has no power and
authority to decide on a controversy involving, as well, rights of non-ICCs/IPs
of employment;
which may be brought before a court of general jurisdiction within the legal
bounds of rights and remedies. Even as a practical concern, non-IPs and 3. All money claims of workers,
non-members of ICCs ought to be excepted from the NCIP's competence since it cannot
determine the right-duty correlative, and breach thereof, between opposing parties who including those based on
are ICCs/IPs and non-ICCs/IPs, the controversy necessarily contemplating application
non-payment or underpayment
of other laws, not only customs and customary law of the ICCs/IPs. In short, the NCIP is
only vested with jurisdiction to determine the rights of ICCs/IPs based on customs and of wages, overtime
customary law in a given controversy against another ICC/IP, but not the applicable law
for each and every kind of ICC/IP controversy even against an opposing non-ICC/IP. compensation, separation pay
and other benefits provided by
In San Miguel Corporation v. NLRC,40 we delineated the jurisdiction of the Labor Arbiter
and the NLRC, specifically paragraph 3 thereof, as all money claims of workers, limited law or appropriate
to "cases arising from employer-employee relations." The same clause was not
expressly carried over, in printer's ink, in Article 217 as it exists today but the Court
agreement, except claims for
ruled that such was a limitation on the jurisdiction of the Labor Arbiter and the NLRC, employees' compensation,
thus:
social security, medicare and
The jurisdiction of Labor Arbiters and the maternity benefits;
National Labor Relations Commission is outlined
in Article 217 of the Labor Code x x x:

157
 4. Cases involving household
services; and
5. Cases arising from any
violation of Article 265 of
this Code, including
questions involving the
legality of strikes and
lockouts.
(b) The Commission
shall have exclusive
appellate jurisdiction
over all cases decided
by Labor Arbiters."
While paragraph 3 above refers to "all money
claims of workers," it is not necessary to
suppose that the entire universe of money claims
that might be asserted by workers against their
employers has been absorbed into the original and
exclusive jurisdiction of Labor Arbiters. In the
first place, paragraph 3 should not [be] read not
in isolation from but rather within the context
formed by paragraph 1 (relating to unfair labor
practices), paragraph 2 (relating to claims
concerning terms and conditions of employment),
paragraph 4 (claims relating to household
services, a particular species of
employer-employee relations), and paragraph 5
(relating to certain activities prohibited to
employees or to employers). It is evident that
there is a unifying element which runs through
paragraphs 1 to 5 and that is, that they all refer
to cases or disputes arising out of or in
connection with an employer-employee
relationship. This is, in other words, a
situation where the rule of noscitur a
sociis may be [used] in clarifying the scope of
paragraph 3, and any other paragraph of Article
217 of the Labor Code, as amended. We reach the
above conclusion from an examination of the terms
themselves of Article 217, as last amended by B.P.
Blg. 227, and even though earlier versions of
Article 217 of the Labor Code expressly brought
within the jurisdiction of the Labor Arbiters and
the NLRC "cases arising from employer-employee
relations," which clause was not expressly
carried over, in printer's ink, in Article 217 as
it exists today. For it cannot be presumed that
money claims of workers which do not arise out of
or in connection with their employer-employee
relationship, and which would therefore fall
within the general jurisdiction of the regular
courts of justice, were intended by the
legislative authority to be taken away from the
jurisdiction of the courts and lodged with Labor
Arbiters on an exclusive basis. The court,
therefore, believes and so holds that the "money
claims of workers" referred to in paragraph 3 of
Article 217 embraces money claims which arise out
158
 of or in connection with the employer-employee power of the SEC must be exercised. Thus the law
relationship, or some aspect or incident of such explicitly specified and delimited its
relationship. Put a little differently, that jurisdiction to matters intrinsically connected
money claims of workers which now fall within the with the regulation of corporations,
original and exclusive jurisdiction of Labor partnerships and associations and those dealing
Arbiters are those money claims which have some with the internal affairs of such corporations,
reasonable causal connection with the partnerships or associations.42 ChanRoblesVirtual awlibr ary

employer-employee relationship. Drawing a parallel to Union Glass,43 the expertise and competence of the NCIP cover
only the implementation and the enforcement of the IPRA and customs and customary
Clearly, the phraseology of "all claims and disputes involving rights of ICCs/IPs" does
law of specific ICCs/IPs; the NCIP does not have competence to determine rights, duties
not necessarily grant the NCIP all-encompassing jurisdiction whenever the case involves
and obligations of non-ICCs/IPs under other laws although such may also involve rights
rights of ICCs/IPs without regard to the status of the parties, i.e, whether the opposing
of ICCs/IPs. Consistently, the wording of Section 66 that "the NCIP shall have
parties are both ICCs/IPs.
jurisdiction over all claims and disputes involving rights of ICCs/IPs" plus the proviso
necessarily contemplate a limited jurisdiction over cases and disputes between IPs/ICCs.
In Union Glass & Container Corp., et al. v. SEC, et al.,41 we learned to view the bestowal
of jurisdiction in the light of the nature and the function of the adjudicative body that
That NCIP Administrative Circulars44 expand the jurisdiction of the NCIP as original and
was granted jurisdiction, thus:
exclusive in Sections 5 and 1, respectively of Rule III:

This grant of jurisdiction must be viewed in the Jurisdiction of the NCIP. - The NCIP through its
light of the nature and function of the SEC under Regional Hearing Offices shall exercise
the law. Section 4 of PD No. 902-A confers upon jurisdiction over all claims and disputes
the latter "absolute jurisdiction, supervision involving rights of ICCs/IPs and all cases
and control over all corporations, partnerships pertaining to the implementation, enforcement,
or associations, who are grantees of primary and interpretation of R.A. 8371, including but
franchise and/or license or permit issued by the not limited to the following: chanRobl esvirt ualLaw librar y

government to operate in the Philippines x x x."

The principal function of the SEC is the (A.) Original and Exclusive Jurisdiction of the
supervision and control over corporations, Regional Hearing Office (RHO):
partnerships and associations with the end in
view that investrnent in these entities may be 1.) Cases involving disputes and
encouraged and protected, and their activities controversies over ancestral
pursued for the promotion of economic development. lands/domains of ICCs/IPs;

It is in aid of this office that the adjudicative x x x

159
 5.) Cases involving violations of the standards prescribed by law.48

the requirement of free and prior and Perforce, in this case, the NCIP's Administrative Circulars' classification of its RHO's
jurisdiction as original and exclusive, supplants the general jurisdiction granted by Batas
informed consent of ICCs/IPs; Pambansa Bilang 129 to the trial courts and ultimately, modifies and broadens the scope
of the jurisdiction conferred by the IPRA on the NCIP. We cannot sustain such a
classification.
x x x
As previously adverted to, we are not unaware of The City Government of Baguio City,
et al. v. Atty. Masweng, et al.49 and similar cases where we made an implicit affirmation
6.) Actions for enforcement of of the NCIP's jurisdiction over cases where one of the parties are non-ICCs/IPs. Such
holding, however, and all the succeeding exercises of jurisdiction by the NCIP, cannot tie
decisions of ICCs/IPs involving our hands and declare a grant of primary and/or original and exclusive jurisdiction,
violations of customary laws or where there is no such explicit conferment by the IPRA. At best, the limited jurisdiction
of the NCIP is concurrent with that of the regular trial courts in the exercise of the latter's
desecration of ceremonial sites, general jurisdiction extending to all controversies brought before them within the legal
sacred places, or rituals; bounds of rights and remedies.50

Jurisprudence has held on more than one occasion that in determining which body has
jurisdiction over a case, we consider the nature of the question that is the subject of
x x x controversy as well as the status or relationship of the parties.51

Thus, we examine the pertinent allegations in respondents' petition:

8.) Actions for
redemption/reconveyance under 4. That [respondents] are members of the Tagbanua
Section8(b) of R.A. 8371; and Indigenous Cultural Communities in the
Calamianes group of islands [in] Coron, Palawan;
9.) Such other cases analogous to the
foregoing. 5. That Barangay Buenavista, Coron is part of the
ancestral domains of the Tagbanuas within Cluster
is of no moment. The power of administrative officials to promulgate rules in the
implementation of a statute is necessarily limited to what is provided for in the 1 of the Calamianes group of islands;
legislative enactment.45

It ought to be stressed that the function of promulgating rules and regulations may be 6. That prior to the enactment of the Indigenous
legitimately exercised only for the purpose of carrying out the provisions of the law into
effect. The administrative regulation must be within the scope and purview of the Peoples Rights Act of 1997 (IPRA), they have
law.46 The implementing rules and regulations of a law cannot extend the law or expand already filed their claim for the recognition of
its coverage, as the power to amend or repeal a statute is vested in the legislature.
Indeed, administrative issuances must not override, but must remain consistent with their ancestral domains with the Department of
the law they seek to apply and implement. They are intended to carry out, not to
supplant or to modify, the law.47
Environment and Natural Resources under DAO-2-93
and DAO No. 61-91;
However, administrative bodies are allowed, under their power of subordinate
legislation, to implement the broad policies laid down in the statute by 'filling in' the
details. All that is required is that the regulation does not contradict, but conforms with 7. That because of the enactment of the IPRA, the
160
Provincial Special Task Force on Ancestral
Domains (PSTFAD) recommended instead the
validation of their proofs and claims with the
newly created National Commission on Indigenous
Peoples (NCIP) for the corresponding issuance of
a Certificate of Ancestral Domains Title (CADT).
8. That Sections 3.1 and 11 of the IPRA provided
that the State recognizes the rights of the
Indigenous Cultural Communities (ICCs) to our
ancestral domains by virtue of their Native Title
and that, it was even optional on their part to
request for the issuance of a title or CADT;
9. That as such, it was not even required that they
have to obtain first a CADT before their rights
to their ancestral domains be recognized;
10. That furthermore, their free and prior
informed consent (FPIC) are required before any
person or entity, whether private or government
can enter or undertake any activity within their
ancestral domains;
11. That in order to ensure that their rights to
FPIC are not violated, Section 59 of the IPRA
provides that the NCIP had to issue first a
Certification Precondition (CP) that their
consent had been elicited first;
12. That their Free and Prior Informed Consent was
not elicited by [petitioners] Engr. Ben Lim, RBL
Fishing Corporation, Palawan Aquaculture
Corporation and Peninsula Shipyard Corporation
when they unlawfully entered and occupied
portions of their ancestral domains [in] Sitio
Makwaw and Sitio Minukbay Buenavista, Coron,
Palawan at a time when the IPRA was already
operative;
13. That the workers of the abovenamed persons had
destroyed the houses of [their] tribal members,
coerced some to stop from cultivating their lands
and had set up houses within the said portions of
their ancestral domains;
14. That the unlawful intrusion and occupation of
[petitioners] within the aforesaid portions of
their ancestral domains and their violation of
the rights of [respondents] to Free and Prior and
Informed Consent and the criminal acts committed
by [petitioners'] workers had cause (sic)
incalculable sufferings among [respondents] x x
x.52 ChanRobl esVirt ualawl ibrary
In their petition before the NCIP, respondents alleged: (1) their status as Tagbanuas,
claiming representation of the Tagbanua Indigenous Cultural Communities in the
Calamianes Group of Islands in Coron, Palawan; (2) the provision in the law which
recognizes native title of indigenous cultural communities and indigenous persons; (3)
that they have already filed their claim for the recognition of their ancestral domains
with the DENR; (4) that they have yet to obtain a Certificate of Ancestral Domain Title
(CADT) from the NICP which, under the IPRA, is the agency tasked to validate their
claim; (5) the purported violation of petitioners of their rights to free and prior and
informed consent; and (6) that petitioners unlawfully intruded and occupied
respondents' ancestral domains.
161

From their allegations in the petition, such call to the fore: (1) respondents' lack of CADT;
and (2) the status of petitioners as non-ICCs/IPs and petitioners' apparent ignorance
that respondents are IPs, and their claim of ancestral domain over the subject property.
It should be noted that a bare allegation that one is entitled to something is not an
allegation but a conclusion.53 Such allegation adds nothing to the pleading, it being
necessary to plead specifically the facts upon which such conclusion is founded.54 Rule 8
of the Rules of Court, entitled "Manner of Making Allegations in Pleadings" requires in
Section 1, as a general rule, for "[e]very pleading [to] contain in a methodical and
logical form, a plain, concise and direct statement of the ultimate facts on which the
party pleading relies for his claim or defense, as the case may be, omitting the
statement of mere evidentiary facts."
Respondents' status as Tagbanuas, as indigenous persons or members of an indigenous
cultural community, is not an ultimate fact from which respondents can anchor the
rights they claim to have been violated by petitioners.
In this case, respondents' petition, as written, does not mention ultimate facts that lead
to the conclusion that (1) they are Tagbanuas, and (2) they are the representatives of
the Tagbanua Indigenous Cultural Community. Neither are there allegations of ultimate
facts showing acts or omissions on the part of petitioners which constitute a violation of
respondents' rights.
We elucidate.
In this case, respondents allege that prior to the enactment of the IPRA, they have
previously applied for recognition of their ancestral domain with the DENR under DENR
Administrative Order No. 2-93 and No. 61-91; and with the advent of the IPRA, it was no
longer required that they first obtain a CADT. However, una voce, they aver that it has
been recommended that they validate "their proofs and claims" with the NCIP for the
issuance of a CADT. The allegation itself goes against respondents' conclusions that they
are Tagbanuas.
Such a pronouncement does not contradict the indigenous concept of ownership even
without a paper title and that the CADT is merely a formal recognition of native
title.55 This is clear from Section 11 of the IPRA, to wit:
SEC. 11. Recognition of Ancestral Domain Rights.
- The rights of ICCs/IPs to their ancestral
domains by virtue of Native Title shall be
recognized and respected. Formal recognition,
when solicited by ICCs/IPs concerned shall be
embodied in a Certificate of Ancestral Domain
Title (CADT), which shall recognize the title of
the concerned ICCs/IPs over the territories
identified and delineated.
And along those lines, we have subsequently held in Lamsis, et al. v. Dong-e56 that:
The application for issuance of a Certificate of
Ancestral Land Title pending before the NCIP is
akin to a registration proceeding. It also seeks
an official recognition of one's claim to a
particular land and is also in rem. The titling
of ancestral lands is for the purpose of
"officially establishing" one's land as an
ancestral land. Just like a registration
proceeding, the titling of ancestral lands does
not vest ownership upon the applicant but only
recognizes ownership that has already vested in
the applicant by virtue of his and his
predecessor-in-interest's possession of the
property since time immemorial.57 ChanRoblesVi rtuala wlibra ry
Nonetheless, the allegation that respondents are Tagbanuas and that they are
representatives of the Tagbanua Indigenous Cultural Communities are conclusions of
their status not derived from facts that should have been alleged. Indeed, respondents
did not even attempt to factually demonstrate their authority to represent the Tagbanua
Indigenous Cultural Community. This is crucial since intra IPs' conflicts and contest for
representation are not impossible.
In that regard, Section 3(f) of the IPRA defines "customary laws" as "a body of written
and/or unwritten rules, usages, customs and practices traditionally and continually
recognized, accepted and observed by respective ICCs/IPs" Section 3(i), on the other
hand, refers to "indigenous political structures" consisting of "organizational and
cultural leadership systems, institutions, relationships, patterns and processes for
decision making and participation, identified by ICCs/IPs such as, but not limited to,
Council of Elders, Council of Timuays, Bodong Holders, or any other tribunal or body of
similar nature." To establish their status as Tagbanuas or their representation as
representatives of Tagbanua Indigenous Cultural Community, respondents, as
"plaintiffs" claiming relief under the IPRA, should have alleged the ultimate facts
constitutive of their customs, political structures, institutions, decision making
processes, and such other indicators of indigenous persons nature distinct and native to
them.
162
 grants to ICCs/IPs rights over ancestral domains and ancestral lands where land is the
Truly, respondents should have asserted their identification through a reduction into central element of the IPs' existence, viz.:
facts of the defmition and description of an ICC/IP in the IPRA:
x x x There is no traditional concept of permanent,
Indigenous Cultural Communities/Indigenous
individual, land ownership. Among the Igorots,
Peoples refer to a group of people or homogenous
ownership of land more accurately applies to the
societies identified by self ascription and
tribal right to use the land or to territorial
ascription by others, who have continuously lived
control. The people are the secondary owners or
as organized community on communally bounded and
stewards of the land and that if a member of the
defined territory, and who have, under claims of
tribe ceases to work, he loses his claim of
ownership since time immemorial, occupied,
ownership, and the land reverts to the beings of
possessed and utilized such territories, sharing
the spirit world who are its true and primary
common bonds of language, customs, traditions and
owners. Under the concept of "trusteeship," the
other distinctive cultural traits, or who have,
right to possess the land does not only belong to
through resistance to political, social and
the present generation but the future ones as well.
cultural inroads of colonization, non indigenous
religions and cultures, became historically
Customary law on land rests on the traditional
differentiated from the majority of Filipinos.
belief that no one owns the land except the gods
ICCs/IPs shall likewise include peoples who are
and spirits, and that those who work the land are
regarded as indigenous on account of their
its mere stewards. Customary law has a strong
descent from the populations which inhabited the
preference for communal ownership, which could
country, at the time of conquest or colonization,
either be ownership by a group of individuals or
or at the time of inroads of non indigenous
families who are related by blood or by marriage,
religions and cultures, or the establishment of
or ownership by residents of the same locality who
present state boundaries, who retain some or all
may not be related by blood or marriage. The
of their own social, economic, cultural and
system of communal ownership under customary laws
political institutions, but who may have been
draws its meaning from the subsistence and highly
displaced from their traditional domains or who
collectivized mode of economic production. The
may have resettled outside their ancestral
Kalingas, for instance, who are engaged in team
domains[.]58
occupation like hunting, foraging for forest
ChanRobl esVirt ualawl ibrary

Also, the right of ancestral property requires historical proof which, of course, must products, and swidden farming found it natural
proceed from allegations in the petition. As noted in the separate opinion of former Chief
Justice Reynato S. Puno in Cruz v. Sec of Environment & Natural Resources,59 the IPRA that forest areas, swidden farms, orchards,
163
pasture and burial grounds should be
communally-owned. For the Kalingas, everybody
has a common right to a common economic base. Thus,
as a rule, rights and obligations to the land are
shared in common.
Although highly bent on communal ownership,
customary law on land also sanctions individual
ownership. The residential lots and terrace
rice farms are governed by a limited system of
individual ownership. It is limited because
while the individual owner has the right to use
and dispose of the property, he does not possess
all the rights of an exclusive and full owner as
defined under our Civil Code. Under Kalinga
customary law, the alienation of
individually-owned land is strongly discouraged
except in marriage and succession and except to
meet sudden financial needs due to sickness,
death in the family, or loss of crops. Moreover,
and to be alienated should first be offered to a
clan-member before any village-member can
purchase it, and in no case may land be sold to
a non-member of the ili.
Land titles do not exist in the indigenous
peoples' economic and social system. The concept
of individual land ownership under the civil law
is alien to them. Inherently colonial in origin,
our national land laws and governmental policies
frown upon indigenous claims to ancestral lands.
Communal ownership is looked upon as inferior,
if not inexistent.60 ChanRoblesVirt u alawlibr ary
Under the IPRA, ancestral domains and ancestral lands are two concepts, distinct and
different from one another:
a) Ancestral Domains. - Subject to Section 56
hereof, refer to all areas generally belonging to
ICCs/IPs comprising lands, inland waters,
coastal areas, and natural resources therein,
held under a claim of ownership, occupied or
possessed by ICCs/IPs by themselves or through
their ancestors, communally or individually
since time immemorial, continuously to the
present except when interrupted by war, force
majeure or displacement by force, deceit,
stealth or as a consequence of government
projects or any other voluntary dealings entered
into by government and private
individuals/corporations, and which are
necessary to ensure their economic, social and
cultural welfare. It shall include ancestral
lands, forests, pasture, residential,
agricultural, and other lands individually owned
whether alienable and disposable or otherwise,
hunting grounds, burial grounds, worship areas,
bodies of water, mineral and other natural
resources, and lands which may no longer be
exclusively occupied by ICCs/IPs but from which
they traditionally had access to for their
subsistence and traditional activities,
164
 particularly the home ranges of ICCs/IPs who are
still nomadic and/or shifting cultivators;
b) Ancestral Lands. - Subject to Section 56
hereof, refers to land occupied, possessed and
utilized by individuals, families and clans who
are members of the ICCs/IPs since time immemorial,
by themselves or through their
predecessors-in-interest, under claims of
individual or traditional group ownership,
continuously, to the present except when
interrupted by war, force majeure or
displacement by force, deceit, stealth, or as a
consequence of government projects and other
voluntary dealings entered into by government and
private individuals/corporations, including,
but not limited to, residential lots, rice
terraces or paddies, private forests, swidden
farms and tree lots.61 ChanRobl esVirt ualawl ibrary
Respondents made no allegation outlining and tracing the history of their indigenous
ownership of domain and land.
To further highlight the necessity of respondents' allegation of their status as Tagbanuas
is the stewardship concept of property which is most applicable to land among the
Philippine IP:62
Land is not an individual item which a man owns
for himself and by himself. For he secures the
rights to land in two ways: Firstly, as a citizen
of the tribe he is entitled to some arable land
and building land, and to the use of public
pasturage, fishing waters, and wild products.
Secondly, in all tribes except those who shift
their gardens widely and have an abundance of land,
he gets rights from membership of a village and
a group of kinsfolk. That is, a man's right to land
in the tribal home depends upon his accepting
membership of a tribe, with all its obligations.
The right of every subject, while he is a subject,
is jealously safeguarded.63 ChanRobl esVirt ualawl ibrary
It is also significant to note that respondents do not identify themselves with other
Tagbanuas who have been awarded a Certificate of Ancestral Domain Claim as of
1998.64
Palpably, in the factual milieu obtaining herein, the NCIP does not have ipso
facto jurisdiction over the petition of respondents just by the mere expedient that their
petition involves rights of ICCs/IPs.
One other thing jumps out from all the discussions herein: the IPRA does not contain a
repeal of Batas Pambansa Bilang 129 limiting the general jurisdiction of the trial, courts
even as the IPRA purportedly grants the NCIP jurisdiction over "all claims and disputes
involving rights of ICCs/IPs."
Section 83 of the IPRA, the repealing clause, only specifies Presidential Decree No. 410,
Executive Order Nos. 122B and 122C as expressly repealed. While the same section
does state that "all other laws, decrees, orders, rules and regulations or parts thereof
inconsistent with this Act are hereby repealed or modified accordingly," such an implied
repeal is predicated upon the condition that a substantial and an irreconcilable conflict
must be found in existing and prior Acts. The two laws refer to different subject matters,
albeit the IPRA includes the jurisdiction of the NCIP. As such, resolution of conflicts
between parties who are not both ICCs/IPs may still fall within the general jurisdiction of
the regular courts dependent on the allegations in the complaint or petition and the
status of the parties.
There is no clear irreconcilable conflict from the investiture of jurisdiction to the NCIP in
instances where, among others, all the parties are ICCs/IPs and the claim or dispute
involves their rights, and the specific wording of Batasang Pambansa Bilang 129,
Sections 19-2165 on the exclusive and original jurisdiction of the Regional Trial Courts,
and Sections 33-3566 on the exclusive original jurisdiction of the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts.
We should not, and cannot, adopt the theory of implied repeal except upon a clear and
unequivocal expression of the will of Congress, which is not manifest from the language
of Section 66 of the IPRA which, to reiterate: (1) did not use the words "primary" and/or
"original and exclusive" to describe the jurisdiction of the NCIP over "all claims and
disputes involving rights of ICCs/IPs" and (2) contained a proviso requiring certification
that the parties have exhausted their remedies provided under customary laws.
165
We are quick to clarify herein that even as we declare that in some instances the regular
courts may exercise jurisdiction over cases which involve rights of ICCs/IPs, the
governing law for these kinds of disputes necessarily include the IPRA and the rights the
law bestows on ICCs/IPs.

All told, we rule that Section 66 of the IPRA, even as it grants jurisdiction to the NCIP
over all claims and disputes involving rights of ICCs/IPs, requires that the opposing
parties are both ICCs/IPs who have exhausted all their remedies under their customs
and customary law before bringing their claim and dispute to the NCIP. The validity of
respondents' claim is another matter and a question that we need not answer for the
moment. Too, we do not resolve herein the other issues raised by petitioners given that
we already declared that the NCIP does not have jurisdiction over the case of
respondents against petitioners.

WHEREFORE, the appeal is GRANTED. The Decision of the Court of Appeals in CA-G.R.
SP No. 98268 dated 26 April 2010 and the Resolution of the National Commission on
Indigenous Peoples in RHO 4-01-2006 dated 30 November 2006 are REVERSED AND
SET ASIDE.

The petition in RHO 4-01-2006 is DISMISSED for lack of jurisdiction of the National
Commission on Indigenous Peoples. Section 1 of NCIP Administrative Circular No. 1,
Series of 2014, promulgated on 9 October 2014 declaring the jurisdiction of the Regional
Hearing Officer as original and exclusive is declared VOID for expanding the law.
Respondents may refile their complaint against petitioners in a court of general
jurisdiction.

No costs.

SO ORDERED. chanroblesvi rtua llawlib ra ry

166
 Respondents.

x
--------------------------------------------------------------------------
-------------- x

DECISION

MENDOZA, J.:

SECOND DIVISION This is a petition for review on certiorari under Rule 45

filed by petitioner Philippine Bank of
Communications (PBCom) seeking to set aside the July 28,
2006 Decision,[1]and the November 27, 2006 Resolution[2] of
PHILIPPINE BANK OF G.R. No. 175514
the Court of Appeals (CA) in CA G.R. CV No. 77714. The
COMMUNICATIONS,
CA decision reversed and set aside the January 25,
Petitioner, Present: 2002 Decision of the Regional Trial Court, Branch
42, Manila (RTC), which granted the motion for summary
CARPIO, J., Chairperson,
judgment and rendered judgment on the basis of the pleadings
NACHURA, and attached documents.
- versus - PERALTA,
ABAD, and THE FACTS
MENDOZA, JJ. On September 30, 1999, respondent Jose C.
Go (Go) obtained two loans from PBCom, evidenced by two
Promulgated: promissory notes, embodying his commitment to
SPOUSES JOSE C. GO pay P17,982,222.22 for the first loan, and P80 million for the
and ELVY T. GO, February 14, 2011
167
second loan, within a ten-year period from September 30,
1999 to September 30, 2009.[3]
Counterclaim denying the material allegations in the
complaint and stating, among other matters, that:
To secure the two loans, Go executed two (2) pledge
agreements, both dated September 29, 1999, covering shares
of stock in Ever Gotesco Resources and Holdings, Inc. The
first pledge, valued at P27,827,122.22, was to secure payment
of the first loan, while the second pledge, valued
at P70,155,100.00, was to secure the second loan.[4]
Two years later, however, the market value of the said
shares of stock plunged to less than P0.04 per share. Thus,
PBCom, as pledgee, notified Go in writing on June 15, 2001,
that it was renouncing the pledge agreements.[5]
Later, PBCom filed before the RTC a complaint[6] for
sum of money with prayer for a writ of preliminary
attachment against Go and his wife, Elvy T. Go (Spouses Go),
docketed as Civil Case No. 01-101190. PBCom alleged that
Spouses Go defaulted on the two (2) promissory notes,
having paid only three (3) installments on interest
paymentscovering the months of September, November and
December 1999. Consequently, the entire balance of the
obligations of Go became immediately due and demandable.
PBCom made repeated demands upon Spouses Go for the
payment of said obligations, but the couple imposed
conditions on the payment, such as the lifting of garnishment
effected by the Bangko Sentral ng Pilipinas (BSP) on Gos
accounts.[7]
Spouses Go filed their Answer with
[8]
8. The promissory note referred to in
the complaint expressly state that the loan
obligation is payable within the period of ten (10)
years. Thus, from the execution date of September
30, 1999, its due date falls on September 30,
2009 (and not 2001 as erroneously stated in the
complaint). Thus, prior to September 30, 2009, the
loan obligations cannot be deemed due and
demandable.
In conditional obligations, the acquisition of
rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening
of the event which constitutes the condition.
(Article 1181, New Civil Code)
9. Contrary to the plaintiffs proferrence,
defendant Jose C. Go had made substantial
payments in terms of his monthly payments. There
is, therefore, a need to do some accounting works
(sic) to reconcile the records of both parties.
10. While demand is a necessary
requirement to consider the defendant to be in
delay/default, such has not been complied with by
the plaintiff since the former is not aware of any
demand made to him by the latter for the
settlement of the whole obligation.
168
 11. Undeniably, at the time the pledge of
the shares of stock were executed, their total value
is more than the amount of the loan or at the very
least, equal to it. Thus, plaintiff was fully secured
insofar as its exposure is concerned.
12. And even assuming without
conceding, that the present value of said shares x x x
went down, it cannot be considered as something
permanent since the prices of stocks in the market
either increases (sic) or decreases (sic) depending
on the market forces. Thus, it is highly speculative
for the plaintiff to consider said shares to have
suffered tremendous decrease in its value. More so,
it is unfair for the plaintiff to renounce or abandon
the pledge agreements.
On September 28, 2001, PBCom filed a verified
motion for summary judgment[9] anchored on the following
grounds:
I. MATERIAL AVERMENTS OF THE
COMPLAINT ADMITTED BY
DEFENDANT-SPOUSES IN THEIR ANSWER TO
OBVIATE THE NECESSITY OF TRIAL
II. NO REAL DEFENSES AND NO
GENUINE ISSUES AS TO ANY MATERIAL FACT
WERE TENDERED BY THE
DEFENDANT-SPOUSES IN THEIR ANSWER
III. PLANTIFFS CAUSES OF ACTIONS
ARE SUPPORTED BY VOLUNTARY ADMISSIONS
AND AUTHENTIC DOCUMENTS WHICH MAY
NOT BE CONTRADICTED.[10]
PBCom contended that the Answer interposed no specific
denials on the material averments in paragraphs 8 to 11 of the
complaint such as the fact of default, the entire amount being
already due and demandable by reason of default, and the fact
that the bank had made repeated demands for the payment of
the obligations.[11]
Spouses Go opposed the motion for summary judgment
arguing that they had tendered genuine factual issues calling
for the presentation of evidence.[12]
The RTC granted PBComs motion in its
[13]
Judgment dated January 25, 2002, the dispositive portion
of which states:
WHEREFORE, in view of all the foregoing,
judgment is rendered for the plaintiff and against
the defendants ordering them to pay plaintiff jointly
and severally the following:
1. The total amount
of P117,567,779.75, plus interests
and penalties as stipulated in the
two promissory notes;
2. A sum equivalent to 10% of the
amount involved in this case, by
way of attorneys fees; and
169
 3. The costs of suit.
SO ORDERED.[14]
Spouses Go moved for a reconsideration but the motion was
denied in an order[15] dated March 20, 2002.
RULING OF THE COURT OF APPEALS
In its Decision dated July 28, 2006, the CA reversed and set
aside the assailed judgment of the RTC, denied PBComs
motion for summary judgment, and ordered the remand of the
records to the court of origin for trial on the merits. The
dispositive portion of the decision states:
WHEREFORE, premises considered, the
assailed judgment of the Regional Trial Court,
Branch 42 of Manila in Civil Case No. 01-101190 is
hereby REVERSED and SET ASIDE, and a new one
entered denying plaintiff-appellees motion for
summary judgment. Accordingly, the records of the
case are hereby remanded to the court of origin for
trial on the merits.
SO ORDERED.[16]
The CA could not agree with the conclusion of the RTC that
Spouses Go admitted paragraphs 3, 4 and 7 of the
complaint. It found the supposed admission to be insufficient
to justify a rendition of summary judgment in the case for
sum of money, since there were other allegations and
defenses put up by Spouses Go in their Answer which raised
genuine issues on the material facts in the action.[17]
The CA agreed with Spouses Go that paragraphs 3 and 4 of
the complaint merely dwelt on the fact that a contract of loan
was entered into by the parties, while paragraph 7 simply
emphasized the terms of the promissory notes executed by Go
in favor of PBCom. The fact of default, the amount of the
outstanding obligation, and the existence of a prior demand,
which were all material to PBComs claim, were hardly
admitted[18] by Spouses Go in their Answer and were, in fact,
effectively questioned in the other allegations in the
Answer.[19]
PBComs motion for reconsideration was denied in a
resolution[20] dated November 27, 2006.
Thus, this petition for review.
THE ISSUES
I
WHETHER THE COURT OF APPEALS ERRED
OR ACTED IN GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK, OR EXCESS OF
JURISDICTION IN RULING THAT THERE
EXISTS A GENUINE ISSUE AS TO MATERIAL
FACTS IN THE ACTION IN SPITE OF THE
UNEQUIVOCAL ADMISSIONS MADE IN THE
PLEADINGS BY RESPONDENTS; AND
170
 paragraph 5 of the Complaint pertaining to the Schedules of
II Payment for the liquidation of the two promissory notes did
not constitute a specific denial required by the Rules.[22]
WHETHER THE COURT OF APPEALS ERRED
OR ACTED IN GRAVE ABUSE OF
JURISDICTION [DISCRETION] IN HOLDING Even in the Comment[23] of Spouses Go, the clear, categorical
THAT ISSUES WERE RAISED ABOUT THE and unequivocal admission of paragraphs 3, 4, and 7 of the
FACT OF DEFAULT, THE AMOUNT OF THE Complaint had been conceded.[24]
OBLIGATION, AND THE EXISTENCE OF PRIOR
DEMAND, EVEN WHEN THE PLEADING
CLEARLY POINTS TO THE CONTRARY.

Petitioner PBCom faults the CA for having formulated

PBComs non-existent issues pertaining to the fact of default, the
Position: amount of outstanding obligation and the existence of prior
Summary demand, none of which is borne by the pleadings or the
judgment was records.[25]
proper, as there
were no genuine The Spouses Go, PBCom argues, cannot negate or
override the legal effect of the acceleration clauses embodied
issues raised as
in each of the two promissory notes executed by Go.
to any material
Moreover, the non-payment of arrearages constituting default
fact.
was admitted by Go in his letters to PBCom dated March 3
and April 7, 2000, respectively.[26] Therefore, by such default,
PBCom argues that the material averments in the complaint they have lost the benefit of the period in their favor, pursuant
categorically admitted by Spouses Go obviated the necessity to Article 1198[27] of the Civil Code.
of trial. In their Answer, Spouses Go admitted the allegations
in paragraphs 3 and 4 of the Complaint pertaining to the Further, PBCom claims that its causes of action are
security for the loans and the due execution of the promissory supported by authentic documents and voluntary admissions
notes,[21] and those in paragraph 7 which set forth the which cannot be contradicted. It cites the March 3 and April 7,
acceleration clauses in the promissory note. Their denial of 2000 letters of Go requesting deferment of interest payments
171
on his past due loan obligations to PBCom, as his assets had
been placed under attachment in a case filed by the
BSP.[28] PBCom emphasizes that the said letters, in addition
to its letters of demand duly acknowledged and received by
Go, negated their claim that they were not aware of any
demand having been made.[29]
Respondent
spouses position:
Summary
judgment was
not proper.
The core contention of Spouses Go is that summary judgment
was not proper under the attendant circumstances, as there
exist genuine issues with respect to the fact of default, the
amount of the outstanding obligation, and the existence of
prior demand, which were duly questioned in the special and
affirmative defenses set forth in the Answer. Spouses Go
agree with the CA that the admissions in the pleadings
pertained to the highlight of the terms of the contract. Such
admissions merely recognized the existence of the contract of
loan and emphasized its terms and conditions.[30] Moreover,
although they admitted paragraphs 3, 4, and 7, the special and
affirmative defenses contained in the Answer tendered
genuine issues which could only be resolved in a full-blown
trial.[31]
On the matter of specific denial, Spouses Go posit that the
Court decisions cited by PBCom[32] do not apply on all fours
in this case. Moreover, the substance of the repayment
schedule was not set forth in the complaint. It, therefore,
follows that the act of attaching copies to the complaint is
insufficient to secure an implied
admission. Assuming arguendo that it was impliedly admitted,
the existence of said schedule and the promissory notes would
not immediately make private respondents liable for the
amount claimed by PBCom.[33] Before respondents may be
held liable, it must be established, first, that they indeed
defaulted; and second, that the obligations has remained
outstanding.[34]
Spouses Go also state that although they admitted
paragraphs 3, 4 and 7 of the Complaint, the fact of default, the
amount of outstanding obligation and the existence of prior
demand were fully questioned in the special and affirmative
defenses.[35]
RULING OF THE COURT
The Court agrees with the CA that [t]he supposed admission
of defendants-appellants on the x x x allegations in the
complaint is clearly not sufficient to justify the rendition of
summary judgment in the case for sum of money, considering
that there are other allegations embodied and defenses raised
by the defendants-appellants in their answer which raise a
genuine issue as to the material facts in the action.[36]
The CA correctly ruled that there exist genuine issues as to
three material facts, which have to be addressed during
trial: first, the fact of default; second, the amount of the
172
outstanding obligation, and third, the existence of prior
demand.
Under the Rules, following the filing of pleadings, if, on
motion of a party and after hearing, the pleadings, supporting
affidavits, depositions and admissions on file show that,
except as to the amount of damages, there is no genuine issue
as to any material fact, and that the moving party is entitled to
a judgment as a matter of law,[37] summary judgment may be
rendered. This rule was expounded in Asian Construction and
Development Corporation v. Philippine Commercial
International Bank,[38] where it was written:
Under Rule 35 of the 1997 Rules of
Procedure, as amended, except as to the amount of
damages, when there is no genuine issue as to any
material fact and the moving party is entitled to a
judgment as a matter of law, summary judgment
may be allowed.[39] Summary or accelerated
judgment is a procedural technique aimed at
weeding out sham claims or defenses at an early
stage of litigation thereby avoiding the expense and
loss of time involved in a trial.[40]
Under the Rules, summary judgment is
appropriate when there are no genuine issues of fact
which call for the presentation of evidence in a
full-blown trial. Even if on their face the pleadings
appear to raise issues, when the affidavits,
depositions and admissions show that such issues
are not genuine, then summary judgment as
prescribed by the Rules must ensue as a matter of
law. The determinative factor, therefore, in a
motion for summary judgment, is the presence or
absence of a genuine issue as to any material fact.
A genuine issue is an issue of fact which
requires the presentation of evidence as
distinguished from a sham, fictitious, contrived or
false claim. When the facts as pleaded appear
uncontested or undisputed, then there is no real or
genuine issue or question as to the facts, and
summary judgment is called for. The party who
moves for summary judgment has the burden of
demonstrating clearly the absence of any genuine
issue of fact, or that the issue posed in the
complaint is patently unsubstantial so as not to
constitute a genuine issue for trial. Trial courts have
limited authority to render summary judgments
and may do so only when there is clearly no genuine
issue as to any material fact. When the facts as
pleaded by the parties are disputed or contested,
proceedings for summary judgment cannot take the
place of trial.[41] (Underscoring supplied.)
Juxtaposing the Complaint and the Answer discloses that the
material facts here are not undisputed so as to call for the
rendition of a summary judgment. While the denials of
Spouses Go could have been phrased more strongly or more
emphatically, and the Answer more coherently and logically
structured in order to overthrow any shadow of doubt that
such denials were indeed made, the pleadings show that they
did in fact raise material issues that have to be addressed and
threshed out in a full-blown trial.
PBCom anchors its arguments on the alleged implied
admission by Spouses Go resulting from their failure to
specifically deny the material allegations in the Complaint,
citing as precedent Philippine Bank of Communications v.
Court of Appeals,[42] and Morales v. Court of Appeals.
173
Spouses Go, on the other hand, argue that although
admissions were made in the Answer, the special and
affirmative defenses contained therein tendered genuine
issues.
Under the Rules, every pleading must contain, in a methodical
and logical form, a plain, concise and direct statement of the
ultimate facts on which the party pleading relies for his claim
or defense, as the case may be, omitting the statement of mere
evidentiary facts.[43]
To specifically deny a material allegation, a defendant must
specify each material allegation of fact the truth of which he
does not admit, and whenever practicable, shall set forth the
substance of the matters upon which he relies to support his
denial. Where a defendant desires to deny only a part of an
averment, he shall specify so much of it as is true and material
and shall deny only the remainder. Where a defendant is
without knowledge or information sufficient to form a belief
as to the truth of a material averment made in the complaint,
he shall so state, and this shall have the effect of a denial.[44]
Rule 8, Section 10 of the Rules of Civil Procedure
contemplates three (3) modes of specific denial, namely: 1) by
specifying each material allegation of the fact in the complaint,
the truth of which the defendant does not admit, and whenever
practicable, setting forth the substance of the matters which he
will rely upon to support his denial; (2) by specifying so much
of an averment in the complaint as is true and material and
denying only the remainder; (3) by stating that the defendant
is without knowledge or information sufficient to form a
belief as to the truth of a material averment in the complaint,
which has the effect of a denial.[45]
The purpose of requiring the defendant to make a specific
denial is to make him disclose the matters alleged in the
complaint which he succinctly intends to disprove at the trial,
together with the matter which he relied upon to support the
denial. The parties are compelled to lay their cards on the
table.[46]
Again, in drafting pleadings, members of the bar are enjoined
to be clear and concise in their language, and to be organized
and logical in their composition and structure in order to set
forth their statements of fact and arguments of law in the most
readily comprehensible manner possible. Failing such
standard, allegations made in pleadings are not to be taken as
stand-alone catchphrases in the interest of accuracy. They
must be contextualized and interpreted in relation to the rest
of the statements in the pleading.
In Spouses Gaza v. Lim, the Court ruled that the CA erred in
declaring that the petitioners therein impliedly admitted
respondents' allegation that they had prior and continuous
possession of the property, as petitioners did in fact enumerate
their special and affirmative defenses in their Answer. They
also specified therein each allegation in the complaint being
denied by them. The Court therein stated:
The Court of Appeals held that
spouses Gaza, petitioners, failed to deny
specifically, in their answer, paragraphs 2, 3
174
and 5 of the complaint for forcible entry
quoted as follows:
xxx xxx xxx
2. That plaintiffs are the
actual and joint occupants and in
prior continuous physical
possession since 1975 up to Nov.
28, 1993 of a certain commercial
compound described as follows:
A certain parcel of land
situated in Bo. Sta. Maria,
Calauag, Quezon. Bounded on the
N., & E., by Julian de Claro; on
the W., by Luis Urrutia.
Containing an area of 5,270
square meters, more or less.
Declared under Ramon J. Lim's
Tax Dec. No. 4576 with an Ass.
Value of P26,100.00
3. That plaintiffs have been
using the premises mentioned for
combined lumber and copra
business. Copies of plaintiffs'
Lumber Certificate of
Registration No. 2490 and PCA
Copra Business Registration No.
6265/76 are hereto attached as
Annexes "A" and "B" respectively;
the Mayor's unnumbered copra
dealer's permit dated Dec. 31,
1976 hereto attached as Annex
"C";
xxx xxx xxx
5. That defendants'
invasion of plaintiffs' premises
was accomplished illegally by
detaining plaintiffs' caretaker
Emilio Herrera and his daughter
inside the compound, then
proceeded to saw the chain that
held plaintiffs' padlock on the
main gate of the compound and
then busted or destroyed the
padlock that closes the backyard
gate or exit. Later, they forcibly
opened the lock in the upstairs
room of plaintiff Agnes J. Lim's
quarters and defendants
immediately filled it with other
occupants now. Copy of the
caretaker's (Emilio Herrera)
statement describing in detail is
hereto attached as Annex "D";
xxx xxx xxx.
7
The Court of Appeals then concluded
that since petitioners did not deny specifically
in their answer the above-quoted allegations
in the complaint, they judicially admitted that
Ramon and Agnes Lim, respondents, "were in
175
prior physical possession of the subject
property, and the action for forcible entry
which they filed against private respondents
(spouses Gaza) must be decided in their favor.
The defense of private respondents that they
are the registered owners of the subject
property is unavailing."
We observe that the Court of Appeals
failed to consider paragraph 2 of petitioners'
answer quoted as follows:
2. That defendants
specifically deny the allegations in
paragraph 2 and 3 of the
complaint for want of knowledge
or information sufficient to form a
belief as to the truth thereof, the
truth of the matter being those
alleged in the special and
affirmative defenses of the
defendants;"8
Clearly, petitioners specifically denied
the allegations contained in paragraphs 2 and
3 of the complaint that respondents have
prior and continuous possession of the
disputed property which they used for their
lumber and copra business. Petitioners did
not merely allege they have no knowledge or
information sufficient to form a belief as to
truth of those allegations in the complaint,
but added the following:
SPECIAL AND
AFFIRMATIVE DEFENSES
That defendants hereby
reiterate, incorporate and restate
the foregoing and further allege:
5. That the complaint states
no cause of action;
"From the allegations of
plaintiffs, it appears that their
possession of the subject property
was not supported by any concrete
title or right, nowhere in the
complaint that they alleged either
as an owner or lessee, hence, the
alleged possession of plaintiffs is
questionable from all aspects.
Defendants Sps. Napoleon Gaza
and Evelyn Gaza being the
registered owner of the subject
property has all the right to enjoy
the same, to use it, as an owner
and in support thereof, a copy of
the transfer certificate of title No.
T-47263 is hereto attached and
marked as Annex "A-Gaza" and a
copy of the Declaration of Real
Property is likewise attached and
marked as Annex "B-Gaza" to form
an integral part hereof;
176
 6. That considering that the
above-entitled case is an ejectment
case, and considering further that
the complaint did not state or
there is no showing that the matter
was referred to a Lupon for
conciliation under the provisions
of P.D. No. 1508, the Revised Rule
on Summary Procedure of 1991,
particularly Section 18 thereof
provides that such a failure is
jurisdictional, hence subject to
dismissal;
7. That the Honorable Court
has no jurisdiction over the subject
of the action or suit;
The complaint is for forcible
entry and the plaintiffs were
praying for indemnification in the
sum of P350,000.00 for those
copra, lumber, tools, and
machinery listed in par. 4 of the
complaint and P100,000.00 for
unrealized income in the use of the
establishment, considering the
foregoing amounts not to be
rentals, Section 1 A (1) and (2) of
the Revised Rule on Summary
Procedure prohibits recovery of
the same, hence, the Honorable
Court can not acquire jurisdiction
over the same. Besides, the
defendants Napoleon Gaza and
Evelyn Gaza being the owners of
those properties cited in par. 4 of
the complaint except for those
copra and two (2) live carabaos
outside of the subject premises,
plaintiffs have no rights
whatsoever in claiming damages
that it may suffer, as and by way of
proof of ownership of said
properties cited in paragraph 4 of
the complaint attached herewith
are bunche[s] of documents to
form an integral part hereof;
8. That plaintiffs' allegation
that Emilio Herrera was illegally
detained together with his
daughter was not true and in
support thereof, attached herewith
is a copy of said Herrera's
statement and marked as Annex
"C-Gaza."
xxx xxx xxx.9
The above-quoted paragraph 2 and
Special and Affirmative Defenses contained in
petitioners' answer glaringly show that
petitioners did not admit impliedly that
respondents have been in prior and actual
177
physical possession of the property. Actually,
petitioners are repudiating vehemently
respondents' possession, stressing that they
(petitioners) are the registered owners and
lawful occupants thereof.
Respondents' reliance on Warner
Barnes and Co., Ltd. v. Reyes10 in maintaining
that petitioners made an implied admission in
their answer is misplaced. In the cited case, the
defendants' answer merely alleged that they
were "without knowledge or information
sufficient to form a belief as to the truth of the
material averments of the remainder of the
complaint" and "that they hereby reserve the
right to present an amended answer with
special defenses and counterclaim."11 In the
instant case, petitioners enumerated their
special and affirmative defenses in their
answer. They also specified therein each
allegation in the complaint being denied by
them. They particularly alleged they are the
registered owners and lawful possessors of the
land and denied having wrested possession of
the premises from the respondents through
force, intimidation, threat, strategy and stealth.
They asserted that respondents' purported
possession is "questionable from all aspects."
They also averred that they own all the
personal properties enumerated in
respondents' complaint, except the two
carabaos. Indeed, nowhere in the answer can
we discern an implied admission of the
allegations of the complaint, specifically the
allegation that petitioners have priority of
possession.
Thus, the Court of Appeals erred in
declaring that herein petitioners impliedly
admitted respondents' allegation that they
have prior and continuous possession of the
property.[47] (Underscoring supplied.)
In this case, as in Gaza, the admissions made by Spouses Go
are to be read and taken together with the rest of the
allegations made in the Answer, including the special and
affirmative defenses.
For instance, on the fact of default, PBCom alleges in
paragraph 8 of the Complaint that Go defaulted in the
payment for both promissory notes, having paid only three
interest installments covering the months of September,
November, and December 1999.
In paragraph 6 of the Answer, Spouses Go denied the said
allegation, and further alleged in paragraphs 8 to 13 that Go
made substantial payments on his monthly loan amortizations.
The portions of the pleadings referred to are juxtaposed
below:
Complaint
178
8. The defendant defaulted in the payment of the obligations on the twoMoreover,
(2) promissory notes 6. Defendants
in paragraph deny the Spouses
10 of the Answer, allegationsGo in paragraphs
also
(Annexes A and B hereof) as he has paid only three (3) installments on interests (sic)
denied the existence of prior demand alleged by PBCom in
payments covering the months of September, November and December, 1999, on both x x x
paragraph
promissory notes, respectively. As a consequence of the default, the entire balance 10
dueofonthe
theComplaint. They stated therein that they
were not became
aware due
of any8. The promissory
demand madenotes referred to
by PBCom forin the
the comp
obligations of the defendant to plaintiff on both promissory notes immediately
is payable within the period of ten (10) years. T
and demandable pursuant to the terms and conditions embodied in the two (2) promissory
settlement of the whole obligation. Both sections are quoted
30, 1999, its due date falls on September 3o, 200
notes;[48]
below: complaint). Thus, prior to September 30, 2009,
and demandable.
Complaint
In conditional obligations, the acquisition of rig
10. Plaintiff made repeatedthose alreadyfrom
demands acquired, shall depend
(sic) defendant upon
for the the h
paymen
condition. (Article 1181, New Civil
which the latter acknowledged to have incurred however, defendant i Code)
such as [that] his [effecting] payments shall depend upon the lifting of ga
by the Bangko Sentral on 9. Contrary to thePhotocopies
his accounts. plaintiffs preference, defendan
of defendants com
March 3, 2000 and April in terms7, of his monthly
2000, payments.
with plaintiff are There
heretois ther
atta
F and Ghereof, as well as (sic)
its just to reconcile
demand to pay the records
dated Aprilof18,both parties.
2000. Dem
hereto attached as Annex H hereof. [50] [Emphases supplied]
10. While demand is a necessary requireme
delay/default, such has not been complied with b
of any demand made to him by the latter for the
11. Undeniably, at the time the pledge of the shar
Finally, as to the amount of the outstanding obligation,
is more than the amount of the loan, or at the ve
PBCom alleged in paragraph 9 of as
secured insofar theitsComplaint that the [49]
exposure is concerned.
outstanding balance on the couples obligations as of May 31,
2001 12. And even
was P21,576,668.64 forassuming
the without
first conceding,
loan that
(sic) down, it cannot be considered as something
and P95,991,111.11, for
market theeither
second
increasesloan
(sic)oror (sic)
a total
decreases d
of P117,567,779.75. highly speculative for the plaintiff to consider
decrease in its value. Moreso (sic), it is unfair f
pledge agreements.
In paragraph 9 of the Answer, however, Spouses Go, without
stating any specific amount, averred that substantial monthly
payments had been made, and there was a need to reconcile
the accounting records 13. As aptly
of the stated, it is not aware of any terminat
parties.
plaintiff.
Complaint

9. Defendants outstanding obligations under the two (2) promissory n

179
2001 are: P21,576,668.64 (Annex A) and P95,991,111.11 (Annex B), or a copy
P117,567,779.75. Copy of the Statement of Account is hereto attached as Annex E hereof. [51] just to reconcile
Clearly then, when taken within the context of the entirety of
the pleading, it becomes apparent that there was no implied
admission and that there were indeed genuine issues to be
addressed.
As to the attached March 3, 2000 letter, the Court is in
accord with the CA when it wrote:
The letter dated March 3, 2000 is insufficient
to support the material averments in PBComs
complaint for being equivocal and capable of
different interpretations. The contents of the letter
do not address all the issues material to the banks
claim and thus do not conclusively establish the
cause of action of PBCom against the spouses Go.
As regards the letter dated April 7, 2000, the trial
court itself ruled that such letter addressed to
PBCom could not be considered against the
defendants-appellants simply because it was not
signed by defendant-appellant Jose Go.
Notably, the trial court even agreed with the
defendant-appellants on the following points:
The alleged default and
outstanding obligations are based on
the Statement of Account. This Court
agrees with the defendants that since
the substance of the document was not
set forth in the complaint although a
total thereof
of in terms
was attached
of his monthly
thereto,payments.
or There is ther
the said document was nottheset
records
forthof both parties.[52]
verbatim in the pleading, the rule on
implied admission does not apply.[53]
It must also be pointed out that the cases cited by PBCom do
not apply to this case. Those two cases involve denial of lack
of knowledge of facts so plainly and necessarily within [the
knowledge of the party making such denial] that such
averment of ignorance must be palpably untrue.[54] Also, in
both cases, the documents denied were the same documents or
deeds sued upon or made the basis of, and attached to, the
complaint.
In Philippine Bank of Communications v. Court of
Appeals,[55] the Court ruled that the defendants contention that
it had no truth or information sufficient to form a belief as to
the truth of the deed of exchange was an invalid or ineffectual
denial pursuant to the Rules of Court,[56] as it could have
easily asserted whether or not it had executed the deed of
exchange attached to the petition. Citing Capitol Motors
Corporations v. Yabut,[57] the Court stated that:
x x x The rule authorizing an answer to the
effect that the defendant has no knowledge or
information sufficient to form a belief as to the
truth of an averment and giving such answer the
effect of a denial, does not apply where the fact as to
which want of knowledge is asserted, is so plainly
and necessarily within the defendants knowledge
that his averment of ignorance must be palpably
untrue.[58]
180
The Warner Barnes case cited above sprung from a suit for
foreclosure of mortgage, where the document that defendant
denied was the deed of mortgage sued upon and attached to
the complaint. The Court then ruled that it would have been
easy for the defendants to specifically allege in their answer
whether or not they had executed the alleged mortgage.
Similarly, in Capitol Motors, the document denied was the
promissory note sued upon and attached to the complaint. In
said case, the Court ruled that although a statement of lack of
knowledge or information sufficient to form a belief as to the
truth of a material averment in the complaint was one of the
modes of specific denial contemplated under the Rules,
paragraph 2 of the Answer in the said case was insufficient to
constitute a specific denial.[59] Following the ruling in
the Warner Barnes case, the Court held that it would have
been easy for defendant to specifically allege in the Answer
whether or not it had executed the promissory note attached to
the Complaint.[60]
In Morales v. Court of Appeals,[61] the matter denied was
intervenors knowledge of the plaintiffs having claimed
ownership of the vehicle in contention. The Court therein
stated:
Yet, despite the specific allegation as against
him, petitioner, in his Answer in Intervention with
Counterclaim and Crossclaim, answered the
aforesaid paragraph 11, and other paragraphs,
merely by saying that he has no knowledge or
information sufficient to form a belief as to its truth.
While it may be true that under the Rules one could
avail of this statement as a means of a specific
denial, nevertheless, if an allegation directly and
specifically charges a party to have done, performed
or committed a particular act, but the latter had not
in fact done, performed or committed it, a
categorical and express denial must be made. In
such a case, the occurrence or non-occurrence of
the facts alleged may be said to be within the partys
knowledge. In short, the petitioner herein could
have simply expressly and in no uncertain terms
denied the allegation if it were untrue. It has been
held that when the matters of which a defendant
alleges of having no knowledge or information
sufficient to form a belief, are plainly and
necessarily within his knowledge, his alleged
ignorance or lack of information will not be
considered as specific denial. His denial lacks the
element of sincerity and good faith, hence,
insufficient.[62]
Borrowing the phraseology of the Court in the Capitol
Motors case, clearly, the fact of the parties having executed
the very documents sued upon, that is, the deed of exchange,
deed or mortgage or promissory note, is so plainly and
necessarily within the knowledge of the denying parties that
any averment of ignorance as to such fact must be palpably
untrue.
In this case, however, Spouses Go are not disclaiming
knowledge of the transaction or the execution of the
promissory notes or the pledge agreements sued upon. The
matters in contention are, as the CA stated, whether or not
respondents were in default, whether there was prior demand,
181
and the amount of the outstanding loan. These are the matters
that the parties disagree on and by which reason they set forth
vastly different allegations in their pleadings which each will
have to prove by presenting relevant and admissible evidence
during trial.

Furthermore, in stark contrast to the cited cases where one of

the parties disclaimed knowledge of something so patently
within his knowledge, in this case, respondents Spouses Go
categorically stated in the Answer that there was no prior
demand, that they were not in default, and that the amount of
the outstanding loan would have to be ascertained based on
official records.

WHEREFORE, the petition is DENIED.

SO ORDERED.

182
 CEROFERR REALTY CORPORATION, petitioner, vs.
COURT OF APPEALS and ERNESTO D.
SANTIAGO, respondents.

DECISION
PARDO, J.:

The Case

This is an appeal via certiorari from the decision of the

[1]

Court of Appeals dismissing petitioners appeal from the

[2]

order of the Regional Trial Court, Branch 93, Quezon City,

[3]

which dismissed petitioners complaint for damages and

injunction with preliminary injunction, as well as its
resolution denying reconsideration.
[4] [5]

The Facts

The facts, as found by the Court of Appeals, are as

[6]

follows:

On March 16, 1994, plaintiff (Ceroferr Realty Corporation)

filed with the Regional Trial Court, Quezon City, Branch 93, a
complaint against defendant Ernesto D. Santiago (Santiago),
[7]

[G.R. No. 139539. February 5, 2002] for damages and injunction, with preliminary injunction. In the
complaint, Ceroferr prayed that Santiago and his agents be
enjoined from - claiming possession and ownership over Lot No.
68 of the Tala Estate Subdivision, Quezon City, covered by

183
TCT No. RT-90200 (334555); that Santiago and his agents be
prevented from making use of the vacant lot as a jeepney
terminal; that Santiago be ordered to pay Ceroferr P650.00 daily
as lost income for the use of the lot until possession is restored
to the latter; and that Santiago be directed to pay plaintiff
Ceroferr moral, actual and exemplary damages and attorneys
fees, plus expenses of litigation.
In his answer, defendant Santiago alleged that the vacant lot
referred to in the complaint was within Lot No. 90 of the Tala
Estate Subdivision, covered by his TCT No. RT-78 110
(3538); that he was not claiming any portion of Lot No. 68
claimed by Ceroferr; that he had the legal right to fence Lot No.
90 since this belonged to him, and he had a permit for the
purpose; that Ceroferr had no color of right over Lot No. 90 and,
hence, was not entitled to an injunction to prevent Santiago
from exercising acts of ownership thereon; and that the
complaint did not state a cause of action.
In the course of the proceedings, an important issue
metamorphosed as a result of the conflicting claims of the
parties over the vacant lot actually used as a jeepney terminal
the exact identity and location thereof. There was a verification
survey, followed by a relocation survey, whereby it would
appear that the vacant lot is inside Lot No. 68. The outcome of
the survey, however, was vigorously objected to by defendant
who insisted that the area is inside his lot. Defendant, in his
manifestation dated November 2, 1994, adverted to the report of
a geodetic engineer. Mariano V. Flotildes, to the effect that the
disputed portion is inside the boundaries of Lot No. 90 of the
Tala Estate Subdivision which is separate and distinct from Lot
No. 68, and that the two lots are separated by a concrete fence.
Because of the competing claims of ownership of the parties
over the vacant lot, it became inevitable that the eye of the
storm centered on the correctness of property boundaries which
would necessarily result in an inquiry as to the regularity and
validity of the respective titles of the parties. While both parties
have been brandishing separate certificates of title, defendant
asserted a superior claim as against that of the plaintiff in that,
according to defendant, his title has been confirmed through
judicial reconstitution proceedings, whereas plaintiffs title does
not carry any technical description of the property except only
as it is designated in the title as Lot No. 68 of the Tala Estate
Subdivision.
It thus became clear, at least from the viewpoint of defendant,
that the case would no longer merely involve a simple case of
collection of damages and injunction which was the main
objective of the complaint - but a review of the title of
defendant vis--vis that of plaintiff. At this point, defendant filed
a motion to dismiss the complaint premised primarily on his
contention that the trial court cannot adjudicate the issue of
damages without passing over the conflicting claims of
ownership of the parties over the disputed portion.
On May 14, 1996, the trial court issued the order now subject of
this appeal which, as earlier pointed out, dismissed the case for
lack of cause of action and lack of jurisdiction. The court held
that plaintiff was in effect impugning the title of defendant
which could not be done in the case for damages and injunction
184
before it. The court cited the hoary rule that a Torens certificate
of title cannot be the subject of collateral attack but can only be
challenged through a direct proceeding. It concluded that it
could not proceed to decide plaintiffs claim for damages and
injunction for lack of jurisdiction because its judgment would
depend upon a determination of the validity of defendants title
and the identity of the land covered by it.
From this ruling, plaintiff appealed to this court insisting that
the complaint stated a valid cause of action which was
determinable from the face thereof, and that, in any event, the
trial court could proceed to try and decide the case before it
since, under present law, there is now no substantial distinction
between the general jurisdiction vested in a regional trial court
and its limited jurisdiction when acting as a land registration
court, citing Ignacio v. Court of Appeals 246 SCRA 242 (1995).
On March 26, 1999, the Court of Appeals promulgated
a decision dismissing the appeal. On May 13, 1999,
[8]
petitioner filed with the Court of Appeals a motion for
reconsideration of the decision. On July 29, 1999, the
[9]
Court of Appeals denied petitioners motion for
reconsideration for lack of merit. [10]
Hence, this appeal. [11]
The Issues
The issues are: (1) whether Ceroferrs complaint states
a sufficient cause of action and (2) whether the trial court
has jurisdiction to determine the identity and location of the
vacant lot involved in the case.
The Courts Ruling
We grant the petition.
The rules of procedure require that the complaint must
state a concise statement of the ultimate facts or the
essential facts constituting the plaintiffs cause of action. A
fact is essential if it cannot be stricken out without leaving
the statement of the cause of action inadequate. A
complaint states a cause of action only when it has its
three indispensable elements, namely: (1) a right in favor
of the plaintiff by whatever means and under whatever law
it arises or is created; (2) an obligation on the part of the
named defendant to respect or not to violate such right;
and (3) an act or omission on the part of such defendant
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. If [12]
these elements are not extant, the complaint becomes
vulnerable to a motion to dismiss on the ground of failure
to state a cause of action. [13]
These elements are present in the case at bar.
The complaint alleged that petitioner Ceroferr
[14]
owned Lot 68 covered by TCT No. RT-90200
(334555). Petitioner Ceroferr used a portion of Lot 68 as a
jeepney terminal.
185
 The complaint further alleged that
respondent Santiago claimed the portion of Lot 68 used as
a jeepney terminal since he claimed that the jeepney
terminal was within Lot 90 owned by him and covered by
TCT No. RT-781 10 (3538) issued in his name.
Despite clarification from petitioner Ceroferr that the
jeepney terminal was within Lot 68 and not within Lot 90,
respondent Santiago persisted in his plans to have the
area fenced. He applied for and was issued a fencing
permit by the Building Official, Quezon City. It was even
alleged in the complaint that respondent- Santiago was
preventing petitioner Ceroferr and its agents from entering
the property under threats of bodily harm and destroying
existing structures thereon.
A defendant who moves to dismiss the complaint on
the ground of lack of cause of action, as in this case,
hypothetically admits all the averments thereof. The test of
sufficiency of the facts found in a complaint as constituting
a cause of action is whether or not admitting the facts
alleged the court can render a valid judgement upon the
same in accordance with the prayer thereof. The
hypothetical admission extends to the relevant and
material facts well pleaded in the complaint and inferences
fairly deducible therefrom. Hence, if the allegations in the
complaint furnish sufficient basis by which the complaint
can be maintained, the same should not be dismissed
regardless of the defense that may be assessed by the
defendants. [15]
In this case, petitioner Ceroferrs cause of action has
been sufficiently averred in the complaint. If it were
admitted that the right of ownership of petitioner Ceroferr
to the peaceful use and possession of Lot 68 was violated
by respondent Santiagos act of encroachment and fencing
of the same, then petitioner Ceroferr would be entitled to
damages.
On the issue of jurisdiction, we hold that the trial court
has jurisdiction to determine the identity and location of the
vacant lot in question.
Jurisdiction over the subject matter is conferred by law
and is determined by the allegations of the complaint
irrespective of whether the plaintiff is entitled to all or some
of the claims asserted therein. The jurisdiction of a court
[16]
over the subject matter is determined by the allegations of
the complaint and cannot be made to depend upon the
defenses set up in the answer or pleadings filed by the
defendant. [17]
While the lack of jurisdiction of a court may be raised at
any stage of an action, nevertheless, the party raising such
question may be estopped if he has actively taken part in
the very proceedings which he questions and he only
objects to the courts jurisdiction because the judgment or
the order subsequently rendered is adverse to him. [18]
In this case, respondent Santiago may be considered
estopped to question the jurisdiction of the trial court for he
took an active part in the case. In his answer,
respondent Santiago did not question the jurisdiction of
the trial court to grant the reliefs prayed for in the complaint.
186
His geodetic engineers were present in the first and
second surveys that the LRA conducted. It was only when
the second survey report showed results adverse to his
case that he submitted a motion to dismiss.
Both parties in this case claim that the vacant lot is
within their property. This is an issue that can be best
resolved by the trial court in the exercise of its general
jurisdiction.
After the land has been originally registered, the Court
of Land Registration ceases to have jurisdiction over
contests concerning the location of boundary lines. In such
case, the action in personam has to be instituted before an
ordinary court of general jurisdiction. [19]

The regional trial court has jurisdiction to determine the

precise identity and location of the vacant lot used as a
jeepney terminal.

The Fallo

IN VIEW WHEREOF, we GRANT the petition. We

REVERSE the decision of the Court of Appeals and the
[20]

order of the trial court dismissing the case. We remand

[21]

the case to the Regional Trial Court, Branch 93, Quezon

City, for further proceedings.
No costs.
SO ORDERED.

187

EN BANC
G.R. No. 89114 December 2, 1991
FRANCISCO S. TANTUICO, JR., petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, PRESIDENTIAL COMMISSION ON
GOOD GOVERNMENT, MATEO A. T. CAPARAS, AND THE
SANDIGANBAYAN, respondents.
PADILLA, J.:
In this petition for certiorari, mandamus and prohibition with a prayer for the
issuance of a writ of preliminary injunction and/or restraining order, the
petitioner seeks to annul and set aside the resolution of the Sandiganbayan,
dated 21 April 1989, denying his motion for a bill of particulars as well as its
resolution, dated 29 May 1989, which denied his motion for reconsideration;
to compel the respondent PCGG to prepare and file a bill of particulars, or
that said respondent be ordered to exclude petitioner as defendant in Civil
Case No. 0035 should they fail to submit the said bill of particulars; and to
enjoin the respondent Sandiganbayan from further proceeding against
petitioner until the bill of particulars is submitted, claiming that the
respondent Sandiganbayan acted with grave abuse of discretion amounting
to lack of jurisdiction in promulgating the aforesaid resolutions and that
there is no appeal, nor any plain, speedy and adequate remedy for him in
the ordinary course of law other than the present petition.
As prayed for, this Court issued on 1 August 1989 a temporary restraining
order "effective immediately and continuing until further orders from this
Court, ordering the respondent Sandiganbayan to CEASE and DESIST
from further proceeding in Civil Case No. 0035 (PCGG 35), entitled
"Republic of the Philippines vs. Benjamin (Kokoy) Romualdez, et al."
pending before it. 1
The antecedents are as follows:
On 31 July 1987, the Republic of the Philippines, represented by the PCGG, and assisted by the Office of the Solicitor General, fil ed with the Sandiganbayan Civil Case No. 0035, entitled "Republic of
the Philippines vs. Benjamin (Kokoy) Romualdez, et al." for reconveyance, reversion, accounting, restitution and damages. 2
The principal defendants in the said Civil Case No. 0035 are Benjamin (Kokoy) Romualdez, Ferdinand E. Marcos
and Imelda R. Marcos.
Petitioner Francisco S. Tantuico, Jr. was included as defendant in Civil Case No. 0035 on the theory that: (1) he acted in unlawful concert with the principal defendants in the misappropriation and
(2) he
theft of public funds, plunder of the nation's wealth, extortion, blackmail, bribery, embezzlement and other acts of corruption, betrayal of public trust and brazen abuse of power; 3
acted as dummy, nominee or agent, by allowing himself to be incorporator,
director, board member and/or stockholder of corporations beneficially held
and/or controlled by the principal defendants; (3) he acted singly or 4
collectively, and/or in unlawful concert with one another, in flagrant breach
of public trust and of their fiduciary obligations as public officers, with gross
and scandalous abuse of right and power and in brazen violation of the
Constitution and laws of the Philippines, embarked upon a systematic plan
to accumulate ill-gotten wealth ; (4) he (petitioner) taking undue advantage 5
of his position as Chairman of the Commission on Audit and with grave
failure to perform his constitutional duties as such Chairman, acting in
concert with defendants Ferdinand E. Marcos and Imelda R. Marcos,
facilitated and made possible the withdrawals, disbursements and
questionable use of government funds; and (5) he acted as dummy, 6
nominee and/or agent by allowing himself to be used as instrument in
accumulating ill-gotten wealth through government concessions, orders
and/or policies prejudicial to plaintiff, or to be incorporator, director, or
member of corporations beneficially held and/or controlled by defendants
Ferdinand E. Marcos, Imelda R. Marcos, Benjamin (Kokoy) Romualdez and
Juliette Gomez Romualdez in order to conceal and prevent recovery of
assets illegally obtained. 7
was denied by respondent court in its
On 11 April 1988, after his motion for production and inspection of documents 8
resolution dated 9 March 1988, petitioner filed a Motion for a Bill of
9
Particulars, alleging inter alia that he is sued for acts allegedly committed
10
by him as (a) a public officer-Chairman of the Commission on Audit, (b) as
a private individual, and (c) in both capacities, in a complaint couched in too
general terms and shorn of particulars that would inform him of the factual
188
and legal basis thereof, and that to enable him to understand and know with
certainty the particular acts allegedly committed by him and which he is
now charged with culpability, it is necessary that plaintiff furnish him the
particulars sought therein relative to the averments in paragraphs 2, 9(a),
15, 7 and 17 of the Second Amended Complaint so that he can intelligently
prepare his responsive pleading and prepare for trial. The particulars
sought for in the said motion are as follows:
a. Relative to the averments in paragraphs 2, 9(a) and l5 of the Second
Amended Complaint:
i) What are the dates of the resolutions (if on appeal) or the acts (if
otherwise) issued or performed by herein defendant which allowed the
facilitation of, and made possible the, withdrawals, disbursements and
questionable use of government funds;
ii) What ministries or Departments, offices or agencies of the government
were involved in these questionable use of government funds;
iii) What are the names of the auditors who had the original audit jurisdiction
over the said withdrawals, disbursements and questionable use of
government funds;
iv) How much government funds were involved in these
questionable-disbursements, individually and in totally?
v) Were the disbursements brought to herein defendant for action on
pre-audit, post-audit or otherwise or where they initiated and/or allowed
release by herein defendant alone, without them undergoing usual
governmental audit procedures, or in violation thereof.?
vi) What were herein defendant's other acts or omission or participation in
the matter of allowing such disbursements and questionable use of
government funds, if any?
b. Relative to paragraphs 7 and 17 of the Second Amended Complaint:
i) In what particular contract, dealing, transaction and/or relationship of any
nature of Ferdinand E. Marcos, Imelda R. Marcos, Juliette Gomez
Romualdez or Benjamin T. Romualdez did herein defendant act as dummy,
nominee or agent? Please specify the dealings, the dates, the corporations
or entities involved, the government offices involved and the private and
public documents, if any, showing herein defendant's complicity, since he is
not aware of any such instance. More basically, please specify whether the
defendant is a dummy or nominee or agent and of which corporation or
transaction?
ii) What particular government concession, order and/or policy obtained by
Ferdinand E. Marcos, or Imelda R. Marcos, or Juliette Gomez Romualdez
and/or Benjamin T. Romualdez allowed them either singly or jointly to
accumulate ill-gotten wealth by using herein defendant as instrument for
their accomplishment. Likewise please identify the nature of the
transactions, the dates and the document showing complicity on the part of
herein defendant; he is not aware of any such instance.
iii) Please specify the name or denominate the particular government
concession, order and/or policy prejudicial to the interest of the government
which was obtained by either of the above-named four defendants through
the participation of herein defendant as a dummy, nominee or agent of
herein defendant. Please likewise identify the government office involved,
the dates and other particulars, likewise defendant is not aware of any such
instance.
iv) Please name and specify the corporation whether stock or non-stock,
whether government or private, beneficially held and/or controlled by either
of the four above defendants, where herein defendant is an incorporator,
director or member and where his inclusion as such incorporator, director or
member of the corporation was made in order to conceal and prevent
recovery of assets illegally obtained by the aforementioned four defendants,
how many shares are involved and what are their values, how and when
have they been acquired.
The Solicitor General, for and in behalf of respondents (except the
respondent Sandiganbayan), opposed the motion. After the petitioner had
11
filed his reply thereto, the respondent Sandiganbayan promulgated on 21
12
April 1990 a resolution denying the petitioner's motion for a bill of
13
particulars on the ground that the particulars sought by petitioner
189
are evidentiary in nature, the pertinent part of which resolution reads, as
follows:
We are of the considered opinion that the allegations in the Expanded
Complaint are quite clear and sufficient enough for defendant-movant to
know the nature and scope of the causes of action upon which plaintiff
seeks relief. They provide the factual scenario which, coupled with other
allegations set forth in the "Common Averments" and further specified in
the "Specific Averments" of herein defendant-movant and his
co-defendants' illegal acts which are within defendant-movant's peculiar
and intimate knowledge as a government official and corporate executive,
will enable him to make the proper admission, denials or qualifications, set
out affirmative and/or special defenses and thereafter prepare for trial.
Evidentiary facts or matters are not essential in the pleading of the cause of
action, nor to details or probative value or particulars of evidence by which
these material evidence are to be established (Remitere vs. Yulu, 6 SCRA
251). The matters which he seeks are evidentiary in nature and, being
within his intimate or personal knowledge, may be denied or admitted by
him or if deemed necessary, be the subject of other forms of discovery. 14
but this was denied by respondent Sandiganbayan in its
Petitioner moved for reconsideration 15
resolution dated 29 May 1990.
16
Hence, petitioner filed the present petition.
The principal issue to be resolved in the case at bar is whether or not the
respondent Sandiganbayan acted with grave abuse of discretion in issuing
the disputed resolutions.
Petitioner argues that the allegations of the Second Amended Complaint in
Civil Case No. 0035 (PCGG 35) pertaining to him state only conclusions of
fact and law, inferences of facts from facts not pleaded and mere
presumptions, not ultimate facts as required by the Rules of Court.
On the other hand, the respondent Sandiganbayan, by and through the
Solicitor General, contends that the essential elements of an action for
recovery of ill-gotten wealth are: (1) an accumulation of assets, properties
and other possessions; (2) of former President Ferdinand E. Marcos, Mrs.
Imelda Romualdez Marcos, their close relatives, subordinates, business
associates, dummies, agents, or nominees; and (3) whose value is out of
proportion to their known lawful income, and that the ultimate facts
establishing these three (3) essential elements of an action for recovery of
ill-gotten wealth are sufficiently alleged in the complaint. Hence, petitioner
is not entitled to a bill of particulars.
A complaint is defined as a concise statement of the ultimate facts
constituting the plaintiff's cause or causes of action. Like all other
17
pleadings allowed by the Rules of Court, the complaint shall contain in a
18
methodical and logical form a plain, concise and direct statement of the
ultimate facts on which the plaintiff relies for his claim, omitting the
statement of mere evidentiary facts. Its office, purpose or function is to
19
inform the defendant clearly and definitely of the claims made against him
so that he may be prepared to meet the issues at the trial. The complaint
should inform the defendant of all the material facts on which the plaintiff
relies to support his demand; it should state the theory of a cause of action
which forms the bases of the plaintiff's claim of liability.
20
The rules on pleading speak of two (2) kinds of facts: the first, the "ultimate
facts", and the second, the "evidentiary facts." In Remitere vs. Vda. de
Yulo, the term "ultimate facts" was defined and explained as follows:
21
The term "ultimate facts" as used in Sec. 3, Rule 3 of the Rules of Court,
means the essential facts constituting the plaintiffs cause of action. A fact is
essential if it cannot be stricken out without leaving the statement of the
cause of action insufficient. . . . (Moran, Rules of Court, Vol. 1, 1963 ed., p.
213).
Ultimate facts are important and substantial facts which either directly form
the basis of the primary right and duty, or which directly make up the
wrongful acts or omissions of the defendant. The term does not refer to the
details of probative matter or particulars of evidence by which these
material elements are to be established. It refers to principal, determinate,
constitutive facts, upon the existence of which, the entire cause of action
rests.
while the term "evidentiary fact" has been defined in the following tenor:
190
Those facts which are necessary for determination of the ultimate facts; predicated are not set forth therein; and (g) the averment that "with intent
30

they are the premises upon which conclusions of ultimate facts are of circumventing the constitutional prohibition that 'no officer or employee in
based. Womack v. Industrial Comm., 168 Colo. 364,451 P. 2d 761, 764. the civil service shall be removed or suspended except for cause as
Facts which furnish evidence of existence of some other fact. 22
provided by law', respondents maliciously and illegally for the purpose of
political persecution and political vengeance, reverted the fund of the salary
Where the complaint states ultimate facts that constitute the three (3) essential elements of a cause of action, namely: (1) the legal right of the plaintiff, (2) the correlative obligation of the defendant,

and (3) the act or omission of the defendant in violation of said legal right, the complaint states a cause of action, otherwise, the complaint must succumb to a motion to dismiss on that ground of
item . . . and furthermore eliminated or abolished the said position effective
However, where the allegations of the complaint are vague,
failure to state a cause of action. 23 1 July 1960" is a mere conclusion of law unsupported by factual premises. 31

indefinite, or in the form of conclusions, the proper recourse would be, not a
motion to dismiss, but a motion for a bill of particulars. Thus, Section 1, 24

Rule 12 of the Rules of Court provides:

Bearing in mind the foregoing rules on pleading and case law, let us now examine the allegations of the Second
Amended Complaint against the petitioner to determine whether or no they were averred with sufficient
Before responding to a pleading or, if no responsive pleading is permitted
definiteness or particularity to enable him properly to prepare his responsive pleading or to prepare for trial. If the
by these rules, within ten (10) days after service of the pleading upon him, a
allegations of the said complaint are vague, indefinite or in the form of conclusions, then petitioner is entitled to a
party may move for a more definite statement or for a bill of particulars of
bill of particulars.
any matter which is not averred with sufficient definiteness or particularity to
enable him properly to prepare his responsive pleading or to prepare for
The allegations in the complaint pertaining to the alleged culpable and unlawful acts of herein petitioner are
trial. Such motion shall point out the defects complained of and the details
quoted hereunder as follows:
desired.

GENERAL AVERMENTS
In this connection, the following allegations have been held as mere
conclusions of law, inferences from facts not alleged or opinion of the
OF
pleader: (a) the allegations that defendants appellees were "actuated by
ulterior motives, contrary to law and morals, with abuse of their
DEFENDANTS' ILLEGAL ACTS
advantageous position as employers, in gross and evident bad faith and
without giving plaintiff . . . his due, wilfully, maliciously, unlawfully, and in
summary and arbitrary manner", are conclusions of law, inferences from 9. (a) From the early years of his presidency, Defendant Ferdinand E. Marcos took undue advantage of his

facts not alleged and expressions of opinion unsupported by factual powers as President. All throughout the period from September 21, 1972 to February 25, 1986, he gravely

premises; (b) an allegation of duty in terms unaccompanied by a

25 abused his powers under martial law and ruled as Dictator under the 1973 Marcos-promulgated Constitution.

statement of facts showing the existence of the duty, is a mere conclusion Defendant Ferdinand E. Marcos, together with other Defendants, acting singly or collectively, and/or in unlawful

of law, unless there is a relation set forth from which the law raises the concert with one another, in flagrant breach of public trust and of their fiduciary obligations as public officers, with

duty; (c) an averment . . . that an act was "unlawful" or "wrongful" is a

26 gross and scandalous abuse of right and power and in brazen violation of the Constitution and laws of the

mere legal conclusion or opinion of the pleader; (d) the allegation that 27 Philippines, embarked upon a systematic plan to accumulate ill-gotten wealth;

there was a violation of trust was plainly a conclusion of law, for "a mere
allegation that it was the duty of a party to do this or that, or that he was (b) Upon his unfettered discretion, and sole authority, for the purpose of implementing the plan referred to above,

guilty of a breach of duty, is a statement of a conclusion, not of a fact;" (e) 28 Defendant Ferdinand E. Marcos ordered and caused, among others:

an allegation that a contract is valid or void, is a mere conclusion of law; (f) 29

the averment in the complaint that "defendant usurped the office of Senator (b-i) the massive and unlawful withdrawal of funds, securities, reserves and other assets and property from the
of the Philippines" is a conclusion of law — not a statement of fact — National Treasury, the Central Bank, the other financial institutions and depositories of Plaintiff;
inasmuch as the particular facts on which the alleged usurpation is
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(b-ii) the transfer of such funds, securities, reserves and other assets and property to payees or transferees of his
choice and whether and in what manner such transactions should be recorded in the books and records of these
institutions and other depositories of Plaintiff;
10. Among others, in furtherance of the plan and acting in the manner referred to above, in unlawful concerted
with one another and with gross abuse of power and authority, Defendants Ferdinand E. Marcos and Imelda R.
Marcos;
xxx xxx xxx
b. Converted government-owned and controlled corporations into private enterprises and appropriated them
and/or their assets for their own benefit and enrichment;
c. Awarded contracts with the Government to their relatives, business associates, dummies, nominees, agents or
persons who were beholden to said Defendants, under terms and conditions grossly and manifestly
disadvantageous to the Government;
d. Misappropriated, embezzled and/or converted to their own use funds of Government financial institutions,
particularly those allocated to the Office of the President and other ministries and agencies of the Government
including, those conveniently denominated as intelligence or counter-insurgency funds, as well as funds provided
to Plaintiff by foreign countries, multinationals, public and private financial institutions;
e. Raided Government financial and banking institutions of billions of pesos in loans, guarantees and other types
of financial accommodations to finance dubious and/or overpriced projects of favored corporations or individuals
and misused and/or converted to their own use and benefit deposits found therein to the financial ruin of Plaintiff
and the Filipino people;
xxx xxx xxx
h. Sold, conveyed and/or transferred Government property, real and/or personal, to corporations beneficially held
and/ or controlled by them or through third persons, under such terms and conditions grossly and manifestly
disadvantageous to the Government;
i. Engaged in other illegal and improper acts and practices designed to defraud Plaintiff and the Filipino people, or
otherwise misappropriated and converted to their own use, benefit and enrichment the lawful patrimony and
revenues of Plaintiff and the Filipino people.
11. Among the assets acquired by Defendants in the manner above-described and discovered by the
Commission in the exercise of its official responsibilities are funds and other property listed in Annex "A" hereof
and made an integral part of this Complaint.
12. Defendants, acting singly or collectively, and/or in unlawful concert with one another, for the purpose of
preventing disclosure and avoiding discovery of their unmitigated plunder of the National Treasury and of their
other illegal acts, and employing the services of prominent lawyers, accountants, financial experts, businessmen
and other persons, deposited, kept and invested funds, securities and other assets estimated at billions of US
dollars in various banks, financial institutions, trust or investment companies and with persons here and abroad.
V
SPECIFIC AVERMENTS
OF
DEFENDANTS' ILLEGAL ACTS
xxx xxx xxx
14. Defendants Benjamin (Kokoy) Romualdez and Juliette Gomez Romualdez, acting by themselves and/or in
unlawful concert with Defendants Ferdinand E. Marcos and Imelda R. Marcos, and taking undue advantage of
their relationship, influence and connection with the latter Defendant spouses, engaged in devices, schemes and
strategems to unjustly enrich themselves at the expense of Plaintiff and the Filipino people, among others:
(a) obtained, with the active collaboration of Defendants Senen J. Gabaldon, Mario D. Camacho, Mamerto
Nepomuceno, Carlos J. Valdes, Delia Tantuico, Jovencio F. Cinco, Cesar C. Zalamea and Francisco Tantuico,
control of some of the biggest business enterprises in the Philippines, such as, the Manila Electric Company
(MERALCO), Benguet Consolidated Mining Corporation (BENGUET) and the Pilipinas Shell Corporation, by
employing devious financial schemes and techniques calculated to require the massive infusion and
hemmorrhage of government funds with minimum or negligible "cashout" from Defendant Benjamin Romualdez.
The following are the general features of a classic take-over bid by Defendant Benjamin Romualdez:
xxx xxx xxx
(ii) The shares were held in the name of corporations which were organized soldely (sic) for the purpose of
holding title to them. These corporations did not have any operating history nor any financial track record.
Projected cash flow consisted almost solely of future and contingent dividends on the shares held. In spite of
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these limitations, these companies enjoyed excellent credit lines from banks and other financial institutions, as 17. The following Defendants acted as dummies, nominees and/ or agents by allowing themselves (i) to be used
evidenced by the millions of pesos in loan and guarantees outstanding in their books; as instruments in accumulating ill-gotten wealth through government concessions, orders and/or policies
prejudicial to Plaintiff, or (ii) to be incorporators, directors, or members of corporations held and/or controlled by

(iii) The "seed money" used to wrest control came from government and taxpayers' money in the form of millions Defendants Ferdinand E. Marcos, Imelda R. Marcos, Benjamin (Kokoy) Romualdez, and Juliette Gomez

of pesos in loans, guarantees and standby L/C's from government financial institutions, notably the DBP and PNB, Romualdez in order conceal (sic) and prevent recovery of assets illegally obtained: Francisco Tantuico . . .

which were in turn rediscounted with the Central Bank;

17.a. THE NAMES OF SOME OF THE CORPORATIONS BENEFICALLY HELD AND/OR CONTROLLED BY

(iv) Additional funding was provided from the related interests; and THE DEFENDANTS BENJAMIN (KOKOY) ROMUALDEZ, FERDINAND E. MARCOS AND IMELDA R. MARCOS
WHERE THE POSITIONS/PARTICIPATIONS AND/OR INVOLVEMENTS OF SOME OF THE DEFENDANTS

(v) This intricate (sic) skein of inter-corporate dealings was controlled and administered by an exclusive and AS DUMMIES, NOMINEES AND/OR AGENTS ARE INDICATED ARE LISTED IN ANNEX "B" HEREOF AND

closely knit group of interlocking directorate and officership MADE AN INTEGRAL PART OF THIS COMPLAINT.

xxx xxx xxx xxx xxx xxx

(g) Secured, in a veiled attempt to justify MERALCO's anomalous acquisition of the electric cooperatives, with the 18. The acts of Defendants, singly or collectively, and/or in unlawful concert with one another, constitute gross

active collaborations of Defendants Cesar E. A. Virata, Juanita R. Remulla, Isidro Rodriguez, Jose C. Hernandez, abuse of official position and authority, flagrant breach of public trust and fiduciary obligations, acquisition of

Pedro Dumol, Ricardo C. Galing, Francisco C. Gatmaitan, Mario D. Camacho and the rest of the Defendants, the unexplained wealth, brazen abuse of official position and authority, flagrant breach of public trust and fiduciary

approval by Defendant Ferdinand E. Marcos and his cabinet of the so-called "Three-Year Program for the obligations, acquisition of unexplained wealth, brazen abuse of right and power, unjust enrichment, violation of

Extension of MERALCO's Services to Areas Within The 60-kilometer Radius of Manila", which required the Constitution and laws of the Republic of the Philippines, to the grave and irreparable damage of Plaintiff and

government capital investment amounting to millions of pesos; the Filipino people. (Emphasis supplied)

xxx xxx xxx Let us now analyze and discuss the allegations of the complaint in relation to which the petitioner pleads for a bill
of particulars.

(1) Caused the National Investment and Development Corporation (NIDC) to dispose of its interest in the oil
plants located in Tanauan, Leyte, which were owned and operated by its subsidiary, the NIDC Oil Mills, Inc., in As quoted above, paragraph 9(a) of the complaint alleges that "Defendant Ferdinand E. Marcos, together with

favor of the SOLO II, Inc., a corporation beneficially held and controlled by Defendant Benjamin Romualdez, with other Defendants, acting singly or collectively, and/or in unlawful concert with one another, in flagrant breach of

the active collaboration of Defendants Jose Sandejas, Francisco Tantuicoand Dominador G. Ingco, under terms public trust and of their fiduciary obligations as public officers, with gross and scandalous abuse of right and

and conditions grossly disadvantageous to NIDC, to the grave and irreparable damage of Plaintiff and the Filipino power and in brazen violation of the Constitution and laws of the Philippines, embarked upon a systematic plan to

people. accumulate ill-gotten wealth." In the light of the rules on pleading and case law cited above, the allegations that
defendant Ferdinand E. Marcos, together with the other defendants "embarked upon a systematic plan to

(2) Defendant Francisco Tantuico, taking undue advantage of his position as Chairman of the Commission on accumulate ill-gotten wealth" and that said defendants acted "in flagrant breach of public trust and of their

Audit and with grave failure to perform his constitutional duties as such Chairman, acting in concert with fiduciary obligations as public officers, with gross and scandalous abuse of right and in brazen violation of the

Defendants Ferdinand E. Marcos and Imelda R. Marcos, facilitated and made possible the withdrawals, Constitution and laws of the Philippines", are conclusions of law unsupported by factual premises.

disbursements and questionable use of government funds as stated in the foregoing paragraphs to the grave and
irreparable damage and injury of Plaintiff and the entire Filipino people. Nothing is said in the complaint about the petitioner's acts in execution of the alleged "systematic plan to
accumulate ill-gotten wealth", or which are supposed to constitute "flagrant breach of public trust", "gross and

xxx xxx xxx scandalous abuse of right and power", and "violations of the Constitution and laws of the Philippines". The
complaint does not even allege what duties the petitioner failed to perform, or the particular rights he abused.

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Likewise, paragraph 15 avers that "defendant Francisco Tantuico, taking undue advantage of his position as In other words, the Chairman of the COA does not participate or personally
Chairman of the Commission on Audit and with grave failure to perform his constitutional duties as such
audit all disbursements and withdrawals of government funds, as well as
Chairman, acting in concert with Defendants Ferdinand E. Marcos and Imelda R. Marcos facilitated and made
transactions involving government property. The averments in the particular
possible the withdrawals, disbursements and questionable use of government funds as stated in the foregoing
paragraph of the complaint merely assume that petitioner participated in or
paragraphs to the grave and irreparable damage and injury of Plaintiff and the entire Filipino people." In like
personally audited all disbursements and withdrawals of government funds,
manner, the allegation that petitioner "took undue advantage of his position as Chairman of the Commission on
and all transactions involving government property. Hence, the alleged
Audit," that he "failed to perform his constitutional duties as such Chairman," and acting in concert with Ferdinand withdrawals, disbursements and questionable use of government funds
E. Marcos and Imelda R. Marcos, "facilitated and made possible the withdrawals, disbursements, and
could not have been, as held by respondent Sandiganbayan, "within the
questionable use of government funds as stated in the foregoing paragraphs, to the grave and irreparable
peculiar and intimate knowledge of petitioner as Chairman of the COA."
damage and injury of plaintiff and the entire Filipino people", are mere conclusions of law. Nowhere in the
complaint is there any allegation as to how such duty came about, or what petitioner's duties were, with respect to
The complaint further avers in paragraph 17 that "(t)he following
the alleged withdrawals and disbursements or how petitioner facilitated the alleged withdrawals, disbursements,
Defendants acted as dummies, nominees and/or agents by allowing
or conversion of public funds and properties, nor an allegation from where the withdrawals and disbursements
themselves (i) to be instruments in accumulating ill-gotten wealth through
came from, except for a general allegation that they came from the national treasury. On top of that, the complaint
government concessions, order and/or policies prejudicial to Plaintiff, or (ii)
does not even contain any factual allegation which would show that whatever withdrawals, disbursements, or
to be incorporators, directors, or members of corporations beneficially held
conversions were made, were indeed subject to audit by the COA.
and/or controlled by Defendant Ferdinand E. Marcos, Imelda R. Marcos,
Benjamin (Kokoy) T. Romualdez and Juliette Gomez Romualdez in order to
conceal and prevent recovery of assets illegally obtained: Francisco
Tantuico . . ." Again, the allegation that petitioner acted as dummy,
37

In this connection, it may well be stated that the Commission on Audit (COA) is an independent, constitutional commission, which has no power or authority to withdraw, disburse, or use funds and

property pertaining to other government offices or agencies. This is done by the agency or office itself, the chief or head of which is primarily and directly responsible for t he funds and property
nominee, or agent by allowing himself "to be used as instrument in
The COA is merely authorized to audit, examine and settle
pertaining to such office or agency. 32 accumulating ill-gotten wealth through government concessions, orders
accounts of the various government offices or agencies, and this task is and/or policies prejudicial to Plaintiff" or "to be (an) incorporator, director, or
performed not by the Chairman of the COA but by the COA auditors member of corporations beneficially held and/or controlled" by the
assigned to the government office or agency subject to COA audit. Marcoses and Romualdezes, is a conclusion of law without factual basis.

Thus, in each agency of the government, there is an auditing unit headed The complaint does not contain any allegation as to how petitioner became,
by an auditor, whose duty is to audit and settle the accounts, funds, or why he is perceived to be, a dummy, nominee or agent. Besides, there is
financial transactions, and resources of the agency under his audit no averment in the complaint how petitioner allowed himself to be used as
jurisdiction. The decision of the auditor is appealable to the Regional
33 instrument in the accumulation of ill-gotten wealth, what the concessions,
Director, whose decision, is in turn, appealable to the COA
34 orders and/or policies prejudicial to plaintiff are, why they are prejudicial,
Manager. Any party dissatisfied with the decision of the COA Manager
35 and what petitioner had to do with the granting, issuance, and or
may bring the matter on appeal to the Commission proper, a collegiate formulation of such concessions, orders, and/or policies. Moreover, Annex
body exercising quasi-judicial functions, composed of three (3) COA "A" of the complaint lists down sixty-one (61) corporations which are
Commissioners, with the COA Chairman as presiding officer. It is only at 36 supposed to be beneficially owned or controlled by the Marcoses and
this stage that the COA Chairman would come to know of the matter and be Romualdezes. However, the complaint does not state which corporations
called upon to act on the same, and only if an aggrieved party brings the petitioner is supposed to be a stockholder, director, member, dummy,
matter on appeal. nominee and/or agent. More significantly, the petitioner's name does not
even appear in Annex "B" of the complaint, which is a listing of the alleged
"Positions and Participations of Some Defendants".
194
The allegations in the complaint, above-referred to, pertaining to petitioner
are, therefore, deficient in that they merely articulate conclusions of law and
presumptions unsupported by factual premises. Hence, without the
particulars prayed for in petitioner's motion for a bill of particulars, it can be
trial. As already discussed, the allegations of the complaint pertaining to the herein petitioner are deficient
because the averments therein are mere conclusions of law or presumptions, unsupported by factual premises.
In the light of the foregoing, the respondent Sandiganbayan acted with grave abuse of discretion amounting to

said the petitioner can not intelligently prepare his responsive pleading and lack or excess of jurisdiction in promulgating the questioned resolutions.

for trial.
WHEREFORE, the petition is GRANTED and the resolutions dated 21 April 1989 and 29 May 1989 are hereby

Furthermore, the particulars prayed for, such as, names of persons, names ANNULLED and SET ASIDE. The respondents are hereby ordered to PREPARE and FILE a Bill of Particulars

of corporations, dates, amounts involved, specification of property for containing the facts prayed for by petitioner within TWENTY (20) DAYS from notice, and should they fail to submit

identification purposes, the particular transactions involving withdrawals the said Bill of Particulars, respondent Sandiganbayan is ordered TO EXCLUDE the herein petitioner as

and disbursements, and a statement of other material facts as would defendant in Civil Case No. 0035.

support the conclusions and inferences in the complaint, are not evidentiary
in nature. On the contrary, those particulars are material facts that should SO ORDERED.

be clearly and definitely averred in the complaint in order that the defendant
may, in fairness, be informed of the claims made against him to the end that
he may be prepared to meet the issues at the trial.

Thus, it has been held that the purpose or object of a bill of particulars is —

. . . to amplify or limit a pleading, specify more minutely and particularly a

claim or defense set up and pleaded in general terms, give information, not
contained in the pleading, to the opposite party and the court as to the
precise nature, character, scope, and extent of the cause of action or
defense relied on by the pleader, and apprise the opposite party of the case
which he has to meet, to the end that the proof at the trial may be limited to
the matters specified, and in order that surprise at, and needless
preparation for, the trial may be avoided, and that the opposite party may
be aided in framing his answering pleading and preparing for trial. It has
also been stated that it is the function or purpose of a bill of particulars to
define, clarify, particularize, and limit or circumscribe the issues in the case,
to expedite the trial, and assist the court. A general function or purpose of a
bill of particulars is to prevent injustice or do justice in the case when that
cannot be accomplished without the aid of such a bill. 38

Anent the contention of the Solicitor General that the petitioner is not entitled to a bill of particulars because the
ultimate facts constituting the three (3) essential elements of a cause of action for recovery of ill-gotten wealth
have been sufficiently alleged in the complaint, it would suffice to state that in a motion for a bill of particulars, the
only question to be resolved is whether or not the allegations of the complaint are averred with sufficient
definiteness or particularity to enable the movant properly to prepare his responsive pleading and to prepare for

195