G.R. No.
188996, February 01, 2017 - SERI SOMBOONSAKDIKUL, Petitioner, In his answer,11 petitioner denied that the LOLANE mark was confusingly similar
v. ORLANE S.A., Respondent.
THIRD DIVISION
G.R. No. 188996, February 01, 2017
SERI SOMBOONSAKDIKUL, Petitioner, v. ORLANE S.A., Respondent.
DECISION
JARDELEZA, J.:
Assailed in this petition is the Decision1 of the Court of Appeals (CA) in CA-G.R.
SP No. 105229 dated July 14, 2009 which affirmed the decision of the Director
General of the Intellectual Property Office (IPO) denying the application for the
mark "LOLANE."
Facts
On September 23, 2003, petitioner Seri Somboonsakdikul (petitioner) filed an
application for registration2 of the mark LOLANE with the IPO for
goods3 classified under Class 3 (personal care products) of the International
Classification of Goods and Services for the Purposes of the Registration of Marks
(International Classification of Goods).4 Orlane S.A. (respondent) filed an
opposition to petitioner's application, on the ground that the mark LOLANE was
similar to ORLANE in presentation, general appearance and pronunciation, and
thus would amount to an infringement of its mark.5Respondent alleged that: (1) it
was the rightful owner of the ORLANE mark which was first used in 1948; (2) the
mark was earlier registered in the Philippines on July 26, 1967 under Registration
No. 129961 for the following goods:6
x x x perfumes, toilet water, face powders, lotions, essential oils, cosmetics, lotions
for the hair, dentrifices, eyebrow pencils, make-up creams, cosmetics & toilet
preparations under Registration No. 12996.7chanroblesvirtuallawlibrary
and (3) on September 5, 2003, it filed another application for use of the trademark
on its additional products:ChanRoblesVirtualawlibrary
x x x toilet waters; revitalizing waters, perfumes, deodorants and body deodorants,
anti-perspiration toiletries; men and women perfume products for face care and
body care; face, eye, lips, nail, hand make-up products and make-up removal
products, towels impregnated with cosmetic lotions; tanning and instant tanning
sunproducts, sunprotection products, (not for medical use), after suncosmetic
products; cosmetic products; slimming cosmetic aids; toiletries; lotions, shampoos
and hair care products; shave and after shave products, shaving and hair removing
products; essential oils; toothpastes; toiletry, cosmetic and shaving kits for travel,
filled or fitted vanity-cases[.]8chanroblesvirtuallawlibrary
Respondent adds that by promotion, worldwide registration, widespread and high
standard use, the mark had acquired distinction, goodwill, superior quality image
and reputation and was now well-known.9 Imputing bad faith on the petitioner,
respondent claimed that LOLANE's first usage was only on August 19, 2003. 10
to the mark ORLANE. He averred that he was the lawful owner of the mark
LOLANE which he has used for various personal care products sold worldwide.
He alleged that the first worldwide use of the mark was in Vietnam on July 4,
1995. Petitioner also alleged that he had continuously marketed and advertised
Class 3 products bearing LOLANE mark in the Philippines and in different parts of
the world and that as a result, the public had come to associate the mark with him
as provider of quality personal care products.12
Petitioner maintained that the marks were distinct and not confusingly similar
either under the dominancy test or the holistic test. The mark ORLANE was in
plain block upper case letters while the n;1ark LOLANE was printed in stylized
word with the second letter L and the letter A co joined. Furthermore, the similarity
in one syllable would not automatically result in confusion even if used in the same
class of goods since his products always appear with Thai characters while those of
ORLANE always had the name Paris on it. The two marks are also pronounced
differently. Also, even if the two marks contained the word LANE it would not
make them confusingly similar since the IPO had previously allowed the co-
existence of trademarks containing the syllable "joy" or "book" and that he also
had existing registrations and pending applications for registration in other
countries.13
The Bureau of Legal Affairs (BLA) rejected petitioner's application in a
Decision14 dated February 27, 2007, finding that respondent's application was filed,
and its mark registered, much earlier.15 The BLA ruled that there was likelihood of
confusion based on the following observations: (1) ORLANE and LOLANE both
consisted of six letters with the same last four letters - LANE; (2) both were used
as label for similar products; (3) both marks were in two syllables and that there
was only a slight difference in the first syllable; and (4) both marks had the same
last syllable so that if these marks were read aloud, a sound of strong similarity
would be produced and such would likely deceive or cause confusion to the public
as to the two trademarks.16
Petitioner filed a motion for reconsideration but this was denied by the Director of
the BLA on May 7, 2007.17 The BLA ruled that the law did not require the marks
to be so identical as to produce actual error or mistake as the likelihood of
confusion was enough. The BLA also found that the dominant feature in both
marks was the word LANE; and that the marks had a strong visual and aural
resemblance that could cause confusion to the buying public. This resemblance
was amplified by the relatedness of the goods.18
On appeal, the Director General of the IPO affirmed the Decision of the BLA
Director. Despite the difference in the first syllable, there was a strong visual and
aural resemblance since the marks had the same last four letters, i.e., LANE, and
1
such word is pronounced in this jurisdiction as in "pedestrian lane." 19 Also, the
mark ORLANE is a fanciful mark invented by the owner for the sole purpose of
functioning as a trademark and is highly distinctive. Thus, the fact that two or more
entities would accidentally adopt an identical or similar fanciful mark was too good
to be true especially when they dealt with the same goods or services. 20 The
Director General also noted that foreign judgments invoked by petitioner for the
grant of its application are not judicial precedents.21
Thus, petitioner filed a petition for review22 before the CA arguing that there is no
confusing similarity between the two marks. Petitioner maintained that LANE is
not the dominant feature of the mark and that the dominancy test did not apply
since the trademarks are only plain word marks and the dominancy test
presupposes that the marks involved are composite marks.23 Petitioner pointed out
that the IPO had previously allowed the mark GIN LANE under Registration No.
4-2004-006914 which also involved products under Class 3. 24 While petitioner
admitted that foreign judgments are not judicial precedents, he argued that the IPO
failed to recognize relevant foreign judgments, i.e., the Australian Registrar of
Trademarks and the IPO of Singapore which ruled that there was no confusing
similarity between the marks LOLANE and ORLANE. 25 Lastly, the Director
General should have deferred to the findings of the Trademark Examiner who
made a substantive examination of the application for trademark registration, and
who is an expert in the field and is in the best position to determine whether there
already exists a registered mark or mark for registration. Since petitioner's
application for registration of the mark LOLANE proceeded to allowance and
publication without any adverse citation of a prior confusingly similar mark, this
meant that the Trademark Examiner was of the view that LOLANE was not
confusingly similar to ORLANE.26
The CA Ruling
The CA denied the petition and held that there exists colorable imitation of
respondent's mark by LOLANE.27
The CA accorded due respect to the Decision of the Director General and ruled that
there was substantial evidence to support the IPO's findings of fact. Applying the
dominancy test, the CA ruled that LOLANE's mark is confusingly or deceptively
similar to ORLANE. There are predominantly striking similarities in the two marks
including LANE, with only a slight difference in the first letters, thus the two
marks would likely cause confusion to the eyes of the public. The similarity is
highlighted when the two marks are pronounced considering that both are one
word consisting of two syllables. The CA ruled that when pronounced, the two
.marks produce similar sounds.28 The CA did not heed petitioner's contention that
since the mark ORLANE is of French origin, the same is pronounced as "OR
LAN." Filipinos would invariably pronounce it as "OR-LEYN."29 The CA also
noted that the trademark ORLANE is a fanciful name and petitioner was not able
to explain why he chose the word LOLANE as trademark for his personal care
products. Thus, the only logical conclusion is that he would want to benefit from
the established reputation and goodwill of the ORLANE mark.30
The CA rejected petitioner's assertion that his products' cheaper price and low-
income market eliminates the likelihood of confusion. Low-income groups, and
even those who usually purchased ORLANE products despite the higher cost, may
be led to believe that LOLANE products are low-end personal care products also
marketed by respondent.31
The CA upheld the applicability of the dominancy test in this case. According to
the CA, the dominancy test is already recognized and incorporated in Section 155.1
of Republic Act No. 8293 (RA 8293), otherwise known as the Intellectual Property
Code of the Philippines.32 Citing McDonald's Corporation v. MacJoy Fastfood
Corporation,33 the CA ruled that the dominancy test is also preferred over the
holistic test. This is because the latter relies only on the visual comparison between
two trademarks, whereas the dominancy test relies not only on the visual, but also
on their aural and connotative comparisons, and their overall impressions
created.34 Nonetheless, the CA stated that there is nothing in this jurisdiction
dictating that the dominancy test is applicable for composite marks. 35
The CA was not swayed by the alleged favorable judgment by the IPO in the GIN
LANE application, ruling that in trademark cases, jurisprudential precedents should
be applied only to a case if they are specifically in point. 36 It also did not consider
the ruling of the IPOs in Australia, South Africa, Thailand and Singapore which
found no confusing similarity between the marks LOLANE and ORLANE, stating
that foreign judgments do not constitute judicial precedent in this jurisdiction. 37
Finally, the CA did not give merit to petitioner's contention that the Director
General should have deferred to the findings of the Trademark Examiner.
According to the CA, the proceedings before the Trademark Examiner are ex-
parte,38 and his findings are merely prima facie. Whatever his decision may be is
still subject to review and/or appeal.39
The Petition40
Petitioner maintains that the CA erred in its interpretation of the dominancy test,
when it ruled that the dominant feature of the contending marks is the suffix
"LANE."41 The CA failed to consider that in determining the dominant portion of a
mark, significant weight must be given to whether the buyer would be more likely
to remember and use one part of a mark as indicating the origin of the
goods.42Thus, that part which will likely make the most impression on the ordinary
viewer will be treated as the dominant portion of conflicting marks and given
greater weight in the comparison.43
2
Petitioner argues that both LOLANE and ORLANE are plain word marks which
are devoid of features that will likely make the most impression on the ordinary
viewer. If at all, the very word marks themselves, LOLANE and ORLANE are
each to be regarded as dominant features.44 Moreover, the suffix LANE is a weak
mark, being "in common use by many other sellers in the market."45 Thus, LANE
is also used in the marks SHELLANE and GIN LANE, the latter covering goods
under Class 3. Moreover, the two marks are aurally different since respondent's
products originate from France and is read as "OR-LAN" and not "OR-LEYN."46
Petitioner also claims that the CA completely disregarded the holistic test, thus
ignoring the dissimilarity of context between LOLANE and ORLANE. Assuming
that the two marks produce similar sounds when pronounced, the differences in
marks in their entirety as they appear in their respective product labels should still
be the controlling factor in determining confusing similarity. 47
Besides, there has been no explicit declaration abandoning the holistic test. 48 Thus,
petitioner urges us to go beyond the similarities in spelling and instead consider
how the marks appear in their respective labels, the dissimilarities in the size and
shape of the containers, their color, words appearing thereon and the general
appearance,49 hence: (1) the commonality of the marks ORLANE and LOLANE
starts from and ends with the four-letter similarity-LANE and nothing else;50 (2)
ORLANE uses "safe" or conventional colors while LOLANE uses loud or
psychedelic colors and designs with Thai characters;51and (3) ORLANE uses the
term "Paris," indicating the source of origin of its products. 52
Petitioner likewise claims that consumers will be more careful in their choice
because the goods in question are directly related to personal hygiene and have
direct effects on their well-being, health and safety.53 Moreover, with the huge
price difference between ORLANE and LOLANE products, relevant purchasers
are less likely to be confused.54
Finally, petitioner notes that respondent has neither validly proven nor presented
sufficient evidence that the mark ORLANE is in actual commercial use in the
Philippines. Respondent failed to allege in any of its pleadings submitted to the
IPO's BLA and the IPO Director General the names of local outlets that products
bearing the mark ORLANE are being marketed or sold to the general consuming
public.55
Respondent's Comment56
Respondent reiterates the decisions of the CA and the IPO. 57 It maintains that
ORLANE is entitled to protection under RA 8293 since it is registered with the
IPO with proof of actual use.58 Respondent posits that it has established in the
world59 and in the Philippines an image and reputation for manufacturing and
selling quality beauty products. Its products have been sold in the market for 61
years and have been used in the Philippines since 1972.60 Thus, to allow
petitioner's application would unduly prejudice respondent's right over its
registered trademark.61 Lastly, respondent argues that decisions of administrative
agencies such as the IPO shall not be disturbed by the courts, absent any showing
that the former have acted without or in excess of their jurisdiction, or with grave
abuse of discretion.62
Issue
We resolve the issue of whether there is confusing similarity between ORLANE
and LOLANE which would bar the registration of LOLANE before the IPO.
Our Ruling
We find that the CA erred when it affirmed the Decision of the IPO.
While it is an established rule in administrative law that the courts of justice should
respect the findings of fact of administrative agencies, the courts may not be bound
by such findings of fact when there is absolutely no evidence in support thereof or
such evidence is clearly, manifestly and patently insubstantial; and when there is a
clear showing that the administrative agency acted arbitrarily or with grave abuse
of discretion or in a capricious and whimsical manner, such that its action may
amount to an excess or lack of jurisdiction.63 Moreover, when there is a showing
that the findings or conclusions, drawn from the same pieces of evidence, were
arrived at arbitrarily or in disregard of the evidence on record, they may be
reviewed by the courts.64 Such is the case here.
There is no colorable imitation between the marks LOLANE and ORLANE which
would lead to any likelihood of confusion to the ordinary purchasers.
A trademark is defined under Section 121.1 of RA 8293 as any visible sign capable
of distinguishing the goods. It is susceptible to registration if it is crafted fancifully
or arbitrarily and is capable of identifying and distinguishing the goods of one
manufacturer or seller from those of another.65 Thus, the mark must be
distinctive.66 The registrability of a trademark is governed by Section 123 of RA
8293. Section 123.1 provides:ChanRoblesVirtualawlibrary
Section 123. Registrability. -
123.1. A mark cannot be registered if it:chanRoblesvirtualLawlibrary
xxx
d. Is identical with a registered mark belonging to a
different proprietor or a mark with an earlier filing or
priority date, in respect of:
3
 i. The same goods
or services, or
ii. Closely related
goods or services,
or
iii. If it nearly
resembles such a
mark as to be
likely to deceive
or cause
confusion;
e. Is identical with, or confusingly similar to, or constitutes
a translation of a mark which is considered by the
competent authority of the Philippines to be well-known
internationally and in the Philippines, whether or not it
is registered here, as being already the mark of a person
other than the applicant for registration, and used for
identical or similar goods or services: Provided, That in
determining whether a mark is well-known, account
shall be taken of the knowledge of the relevant sector of
the public, rather than of the public at large, including
knowledge in the Philippines which has been obtained
as a result of the promotion of the mark;
x supplied.)71chanroblesvirtuallawlibrary
x In determining colorable imitation, we have used either the dominancy test or the
x holistic or totality test. The dominancy test considers the similarity of the prevalent
In Mighty Corporation v. E. & J. Gallo Winery,67 we laid down the requirements
for a finding of likelihood of confusion, thus:ChanRoblesVirtualawlibrary
There are two types of confusion in trademark infringement. The first is "confusion
of goods" when an otherwise prudent purchaser is induced to purchase one product
in the belief that he is purchasing another, in which case defendant's goods are then
bought as the plaintiffs and its poor quality reflects badly on the plaintiffs
reputation. The other is "confusion of business" wherein the goods of the parties
are different but the defendant's product can reasonably (though mistakenly) be
assumed to originate from the plaintiff, thus deceiving the public into believing that
there is some connection between the plaintiff and defendant which, in fact, does
not exist.
In determining the likelihood of confusion, the Court must consider: [a] the
resemblance between the trademarks; [b] the similarity of the goods to which
the trademarks are attached; [c] the likely effect on the purchaser and [d] the
registrant's express or implied consent and other fair and equitable
considerations. (Citations omitted, emphasis
supplied.)68chanroblesvirtuallawlibrary
While Mighty Corporation enumerates four requirements, the most essential
requirement, to our mind, for the determination of likelihood of confusion is the
existence of resemblance between the trademarks, i.e., colorable imitation. Absent
any finding of its existence, there can be no likelihood of confusion. Thus we
held:ChanRoblesVirtualawlibrary
Whether a trademark causes confusion and is likely to deceive the public hinges on
"colorable imitation" which has been defined as "such similarity in form, content,
words, sound, meaning, special arrangement or general appearance of the
trademark or trade name in their overall presentation or in their essential and
substantive and distinctive parts as would likely mislead or confuse persons in the
ordinary course of purchasing the genuine article." (Citations
omitted.)69chanroblesvirtuallawlibrary
We had the same view in Emerald Garment Manufacturing Corporation v. Court
of Appeals,70 where we stated:ChanRoblesVirtualawlibrary
Proceeding to the task at hand, the essential element of infringement is colorable
imitation. This term has been defined as "such a close or ingenious imitation as to
be calculated to deceive ordinary purchasers, or such resemblance of the infringing
mark to the original as to deceive an ordinary purchaser giving such attention as a
purchaser usually gives, and to cause him to purchase the one supposing it to be the
other."
Colorable imitation does not mean such similitude as amounts to identity. Nor does
it require that all the details be literally copied. x x x (Citation omitted, emphasis
or dominant features of the competing trademarks that might cause confusion,
mistake, and deception in the mind of the purchasing public. More consideration is
given on the aural and visual impressions created by the marks on the buyers of
goods, giving little weight to factors like process, quality, sales outlets, and market
segments.72 On the other hand, the holistic test considers the entirety of the marks
as applied to the products, including the labels and packaging, in determining
confusing similarity. The focus is not only on the predominant words but also on
the other features appearing on the labels.73
The CA's use of the dominancy test is in accord with our more recent ruling in
UFC Philippines, Inc. (now merged with Nutria-Asia, Inc. as the surviving entity)
v. Barrio Fiesta Manufacturing Corporation.74 In UFC Philippines, Inc., we relied
on our declarations in McDonald's Corporation v. L.C. Big Mak Burger, Inc.,75Co
4
Tiong Sa v. Director of Patents,76 and Societe Des Produits Nestle, S.A. v. Court of
Appeals77that the dominancy test is more in line with the basic rule in trademarks
that confusing similarity is determined by the aural, visual and connotative and
overall impressions created by the marks. Thus, based on the dominancy test, we
ruled that there is no confusing similarity between "PAPA BOY & DEVICE"
mark, and "PAPA KETSARAP" and "PAPA BANANA CATSUP."
While there are no set rules as what constitutes a dominant feature with respect to
trademarks applied for registration, usually, what are taken into account are signs,
color, design, peculiar shape or name, or some special, easily remembered
earmarks of the brand that readily attracts and catches the attention of the ordinary
consumer.78 In UFC Philippines, Inc., what we considered as the dominant feature
of the mark is the first word/figure that catches the eyes or that part which appears
prominently to the eyes and ears.79
However, while we agree with the CA's use of the dominancy test, we arrive at a
different conclusion. Based on the distinct visual and aural differences between
LOLANE and ORLANE, we find that there is no confusing similarity between the
two marks.
The suffix LANE is not the dominant feature of petitioner's mark. Neither can it be
considered as the dominant feature of ORLANE which would make the two marks
confusingly similar.
First, an examination of the appearance of the marks would show that there are
noticeable differences in the way they are written or printed as shown below: 80
(see image)
As correctly argued by petitioner in his answer before the BLA, there are visual
differences between LOLANE and ORLANE since the mark ORLANE is in plain
block upper case letters while the mark LOLANE was rendered in stylized word
with the second letter L and the letter A co-joined.81
Second, as to the aural aspect of the marks, LOLANE and ORLANE do not sound
alike. Etepha v. Director of Patents, et al.82 finds application in this case.
In Etepha, we ruled that there is no confusing similarity between PERTUSSIN and
ATUSSIN. The Court considered among other factors the aural differences
between the two marks as follows:ChanRoblesVirtualawlibrary
5. As we take up Pertussin and Atussin once again, we cannot escape notice of the
fact that the two words do not sound alike-when pronounced. There is not much
phonetic similarity between the two. The Solicitor General well-observed that in
Pertussin the pronunciation of the prefix "Per", whether correct or incorrect,
includes a combination of three letters P, e and r; whereas, in Atussin the
whole starts with the single letter A added to suffix "tussin". Appeals to the
ear are dissimilar. And this, because in a word combination, the part that comes
first is the most pronounced. An expositor of the applicable rule here is the
decision in the Syrocol-Cheracol controversy. There, the ruling is that trademark
Syrocol (a cough medicine preparation) is not confusedly similar to
trademark Cheracol (also a cough medicine preparation). Reason: the two words
"do not look or sound enough alike to justify a holding of trademark infringement",
and the "only similarity is in the last syllable, and that is not uncommon in names
given drug compounds". (Citation omitted, emphasis
supplied.)83chanroblesvirtuallawlibrary
Similar to Etepha, appeals to the ear in pronouncing ORLANE and LOLANE are
dissimilar. The first syllables of each mark, i.e., OR and LO do not sound alike,
while the proper pronunciation of the last syllable LANE-"LEYN" for LOLANE
and "LAN" for ORLANE, being of French origin, also differ. We take exception to
the generalizing statement of the Director General, which was affirmed by the CA,
that Filipinos would invariably pronounce ORLANE as "ORLEYN." This is
another finding of fact which has no basis, and thus, justifies our reversal of the
decisions of the IPO Director General and the CA. While there is possible aural
similarity when certain sectors of the market would pronounce ORLANE as
"ORLEYN," it is not also impossible that some would also be aware of the proper
pronunciation-especially since, as respondent claims, its trademark ORLANE has
been sold in the market for more than 60 years and in the Philippines, for more
than 40 years.84
Respondent failed to show proof that the suffix LANE has registered in the mind of
consumers that such suffix is exclusively or even predominantly associated with
ORLANE products. Notably and as correctly argued by petitioner, the IPO
previously allowed the registration of the mark GIN LANE for goods also falling
under Class 3, i.e., perfume, cologne, skin care preparations, hair care preparations
and toiletries.85
We are mindful that in the earlier cases of Mighty Corporation and Emerald,
despite a finding that there is no colorable imitation, we still discussed the nature of
the goods using the trademark and whether the goods are identical, similar,
competing or related. We need not belabor a similar discussion here considering
that the essential element ih determining likelihood of confusion, i.e., colorable
imitation by LOLANE of the mark ORLANE, is absent in this case. Resemblance
between the marks is a separate requirement from, and must not be confused with,
the requirement of a similarity of the goods to which the trademarks are attached.
In Great White Shark Enterprises, Inc v. Caralde, Jr.,86 after we ruled that there
was no confusing similarity between Great White Shark's "GREG NORMAN
LOGO" and Caralde's "SHARK & LOGO" mark due to the visual and aural
dissimilarities between the two marks, we deemed it unnecessary to resolve
whether Great White Shark's mark has gained recognition as a well-known mark.
5
Finding that LOLANE is not a colorable imitation of ORLANE due to distinct Class 3 Bleaching preparations and other substances for laundry use; cleaning,
visual and aural differences using the dominancy test, we no longer find it polishing, scouring and abrasive preparations; soaps; perfumery, essential oils,
necessary to discuss the contentions of the petitioner as to the appearance of the cosmetics, hair lotions; dentifrices
marks together with the packaging, nature of the goods represented by the marks
5
and the price difference, as well as the applicability of foreign judgments. We rule Rollo, pp. 44-45.
that the mark LOLANE is entitled to registration.
6
Id. at 45.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals
7
dated July 14, 2009 is REVERSED and SET ASIDE. Petitioner's application of CA rollo, p. 86.
the mark LOLANE for goods classified under Class 3 of the International
8
Classification of Goods is GRANTED. Id. Respondent alleged in its comment before the CA that its goods fell under
Class 3 of the International Classification of Goods, CA rollo, p. 606.
SO ORDERED.chanroblesvirtuallawlibrary
9
Rollo, pp. 44-45.
*
Velasco, Jr., (Chairperson), Bersamin, Reyes, and Caguioa, JJ., concur.
10
Endnotes: Id. at 45.
* 11
Designated as Fifth Member of the Third Division per Special Order No. 2417 CA rollo, pp. 179-193.
dated January 4, 2017.
12
Id. at 184-186.
1
Rollo, pp. 43-60. Penned by Associate Justice Portia-Aliño Hormachuelos with
13
Associate Justices Magdangal M. De Leon and Myrna Dimaranan Vidal, Id. at 187-189.
concurring.
14
Id. at 463-468.
2
CA rollo, pp. 263-265. The application was docketed as Application No. 4-2003-
15
0008858 and published for opposition in the December 17, 2004 issue of the IPO's CA rollo, pp. 463-468.
electronic gazette, id. at 45.
16
Rollo, p. 46.
3
Hair decolorants; soaps; shampoos; hair colorants; hair dyes; hair lotion; hair
17
waving preparations; hair straightener cream; hair sprays; hair mousse; hair gel; CA rollo, pp. 479-482.
hair conditioner; henna color wax; pomades for cosmetic purpose; color treatment;
18
active mud for hair and scalp; skin whitening cream; cleansing cream; cleansing Id. at 481.
lotion; cream rinse; pearl cream, eye cream, skin cream, skin milk, skin lotion, cold
19
cream, moisture cream, moisture milk, moisture lotion, cleansing foam, cleansing Id. at 37.
milk; mineral water (for cosmetic purposes); mask powder (for cosmetic purposes);
20
mask cream (for cosmetic purposes); roll-on; whitening roll-on; deodorants for Id. at 38.
personal use; facial massaging cream; facial massaging powder, Declaration of
21
Actual Use, id. at 195. Id. at 34-35
4 22
World Intellectual Property Organization, International Classification of Goods Id. at 60-82.
and Services for the Purposes of the Registration of Marks, (Nice Classification),
23
Part II, With List of Goods and Services in Class Order, Eight Edition, 2001. Class Id. at 67-68.
3 provides:chanRoblesvirtualLawlibrary
6
24
Id. at 80.
44
Id.
25
Id. at 74-78.
45
Id. Citation omitted.
26
Id. at 79-80.
46
Rollo, pp. 22-23.
27
Rollo, p. 52.
47
Id. at 23-28.
28
Id. at 53-54.
48
Id. at 24.
29
Id. at 54.
49
Id. at 25-26.
30
Id. at 54-55.
50
Id. at 26.
31
Id. at 55.
51
Id. at 29.
32
An Act Prescribing the Intellectual Property Code and Establishing the
52
Intellectual Property Office, Providing for its Powers and Functions, and for Other Id.
Purposes (1997).
53
Rollo, p. 30.
33
G.R. No. 166115, February 2, 2007, 514 SCRA 95.
54
Id. at 31-32.
34
Rollo, p. 56.
55
Id. at 34.
35
Id. at 55.
56
Id. at 63-80.
36
Id. at 57.
57
Id. at 66-74.
37
Id. at 57-58.
58
Id. at 67.
38
Id. at 58, citing Rule 600 of the Rules and Regulations on Trademarks, Service
59
Marks, Tradenames and Marked or Stamped Containers. In its comment, respondent claimed that as early as 1946, it sought registration of
its mark in countries such as Canada, Russia, India, Indonesia, Korea, Singapore,
39
Id. at 58-59, citing Rule 1102 of the Rules and Regulations on Trademarks, Taiwan, Thailand, Australia, and through the Madrid Protocol, Algeria, Germany,
Service Marks, Tradenames and Marked or Stamped Containers and Sections 7.1 Austria, Benelux, Bosnia, Egypt, Macedonia, Hungary, Italy, Liechtenstein,
and 10.1 of RA 8293. Morocco, Monaco, Korea, Romania, San Marino, Switzerland, Vietnam,
Yugoslavia, Bulgaria, Poland, Portugal and Spain, id. at 76.
40
Id. at 11-36.
60
Id. at 74-75.
41
Id. at 21.
61
Id. at 76.
42
Id. at 21-22.
62
Id. at 77.
43
Id. at 22.
7
63 76
Office of the Ombudsman v. Capulong, G.R. No. 201643, March 12, 2014, 719 95 Phil. 1 (1954).
SCRA 209, 218.
77
G.R. No. 112012, April 4, 2001, 356 SCRA 207.
64
Leus v. St. Scholastica's College Westgrove, G.R. No. 187226, January 28, 2015,
78
748 SCRA 378, 397. Dermaline, Inc. v. Myra Pharmaceuticals, Inc., G.R. No. 190065, August 16,
2010, 628 SCRA 356, 367.
65
Great White Shark Enterprises, Inc. v. Caralde, Jr., G.R. No. 192294, November
79
21, 2012, 686 SCRA 201, 207. Supra note 74 at 471.
66 80
Id., citing McDonald's Corporation v. L.C. Big Mak Burger, Inc., G.R. No. CA rollo, p. 36.
143993, August 18, 2004, 437 SCRA 10, 26.
81
Rollo, p. 45.
67
G.R. No. 154342, July 14, 2004, 434 SCRA 473.
82
G.R. No. L-20675, March 31, 1966, 16 SCRA 495.
68
Id. at 504. We note that while in Mighty Corporation, likelihood of confusion
83
was discussed in relation to trademark infringement, the concept is similarly Id. at 501.
applicable to an application for trademark registration under Section 123.1(d).
84
Thus, in Great White Shark Enterprises, Inc. v. Caralde, Jr., supra note 65, which Rollo, pp. 74-75.
originated from a trademark application case, we discussed the dominancy test and
85
holistic test as modes of determining similarity or likelihood of confusion and Id. at 22. The mark GIN LANE for goods under Class 3 was registered on
consequently, determining whether a mark is capable of registration under Section January 15, 2007 but was eventually removed from register for non-use. See the
123.1(d). Philippine Trademark Database, <http://www.wipo.int/branddb/ph/en/>.
69 86
Supra note 67 at 506. Supra note 65.
70
G.R. No. 100098, December 29, 1995, 251 SCRA 600.
71
Id. at 614.
72
Skechers, US.A., Inc. v. Inter Pacific Industrial Trading Corp., G.R. No. 164321,
March 28, 2011, 646 SCRA 448, 455-456, citing Prosource International, Inc. v.
Horphag Research Management SA, G.R. No. 180073, November 25, 2009, 605
SCRA 523, 531; McDonald's Corporation v. Maclay Fastfood Corporation,
supra note 33 at 106; and McDonald's Corporation v. L.C. Big Mak Burger, Inc.,
G.R. No. 143993, August 18, 2004, 437 SCRA 10, 32.
73
Skechers, U.S.A., Inc. v. Inter Pacific Industrial Trading Corp., supra at
456; Philip Morris, Inc. v. Fortune Tobacco Corporation, G.R. No. 158589, June
27, 2006, 493 SCRA 333, 357.
74
G.R. No. 198889, January 20, 2016, 781 SCRA 424.
75
G.R. No. 143993, August 18, 2004, 437 SCRA 10.

8
G.R. No. 212376
MADAG BUISAN, et al., namely: HADJI MUSA MANALAG, HADJI
SUKOR MAMADRA, H. SALAM TUMAGANTANG, SUGRA SUKOR
BUISAN, MONAURA TUMAGANTAING, NOJA TUMAGANTANG,
SULTAN BUISAN, PAULO TUMAGANTANG, DAKUNDAY MANALAG,
KINGI BUISAN, BUGOY PANANGBUAN, TUMBA TUMAGANTANG,
MAMALO ELI, MALIGA ATOGAN, PAGUIAL SALDINA, EBRAHIM
TAGURAK, HADJI ESMAEL KASAN, OTAP GANDAWALI, TWAN IT
SALAM, EDEL SABAL, GUIMA H. SALAM, KATUNTONG H. SALAM,
THONY IBAD, BANGKALING BANTAS, ALON KIKI, DAMDAEN
TUMAGANTANG, MAMASALIDO KIKI, ROSTAN TUMAGANTANG,
MONTASER DAMDAMEN, MODSOL TANDIAN, RAHMAN SUKOR,
SUKARNO H. SUKOR, KUNGAS PAYAG, JIMIE BUISAN, MADAODAO
KEDTUNGEN, TUTIN MANALAG, DATU ALI MANALAG, TUGAYA
MANALAG, SAGANDINGAN MANALAG, SAUIATRA MANALAG,
KAUTIN MANALAG, PANTASDALANDAS,ULAD BANTAS, PALANO
BUISAN, PANIANG BUISAN, INDASIA BUISAN, MAKAKWA BUISAN,
SULTAN BUISAN, MANTIKAN BUISAN, ABULKARIM
TUMAGANTANG, SAKMAG MANALAG, DEMALANES BUISAN,
MANALAG PAKAMAMA, MALAMBONG PANDIAN, ABDULKARIM
TUMAGANTANG, GUIANDAL OPAO, KUSIN PUWI, H. SULAIMAN
UNAK, PABLO ALQUESAR, SAGIBA GABAO, TABUAN LUAY,
POTENCIANO NAVARRO, KUSIN PENEL, MALAMON TALIB, MALIGA
BIDA, MOKAMAD KUDALIS, CEDULA PAGABANGAN, SALILAGUIA
LENANDANG, ENGKEL ALILAYA, MANGATOG SUDANG,
MANAGKING MANGATONG, SEVERINO FERNANDEZ, JOSEAS
GOTOKANO, MALYOD LAWADI, MANSALGAN UDAY, SANDATO
DALANDAS, BANTAS DALANDAS, MAMANTAL DALANDAS,
MAKALIPUAS MAKALILAY, BINGKONG BUISAN, FARIDA
SUMAGKA, NUNET YUSOP, KADIGIA SABAL, NANANGGA TAYA,
MAMA BANGKALING, CORRY DAMO, BUKA LATIP, MADAODAO
KADTUNGAN, KOMINIE ADAM, BANGKALING BANTAS, RONIE
EDZAKAL, KEDOPAO BUTO, SARIP EDZEMBAGA, TUTEN
MANALAG, ABAS LATIP, MAKALIPUAS MAKALILAY,
DAGENDENGAN UMBAGA, PAGUIAL LUBALANG, JIMMY BUISAN,
KADIL SUKOR, JAKIRI LOZANO, MANUEL MAKATIMBEL, AISA
BANSUAN, TATO BUISAN, HARON ABO, MAMAAN LAMADA, THING
GUIAMILON, TATO SUMAGKA, NORALYN KAHAR, MOKAGI ANTAS,
KINGI BUISAN, ZAINUDEN PANAYAMAN, PIAGA MANALAG,
SAGIATRA MANALAG, SAILA LATIP, PINKI KADTUNGAN, ALI
ADTUNGAN, NANDING TAYA, INDAY BUISAN, KINTOL
KADTUNGAN, MALAWINIE EDZAKAL, MINGUTIN AMAL, BUGLI
MANALAG, MANGAPANG SADINA, KURANUNGAN SADINA,
SANGUTIN LUBALANG, DAUD H. LATIP, REY PALAMAN,
MONTANER KID, BAKATED KADTUNGAN, GUIAMATULA DIMAGIL,
ALON H. LATIP, SULTAN BUISAN, HADJI MUSA MANALAG, MANTO
BANTAS, ABAS L. LATIP, RODIEL KID, DATU BUTO ALI, ODIN
TIAGO, ABDUL ANTA, EMBIT BUKA, LAGA KID, ULAMA DALUS,
SUWAILA DAMDAMIN, TALILISAN PALEMBA, LANTOKA PATOG,
MAKATEGKA BANGKONG, BEMBI KUDO, MOGAWAN GINANTE,
PATANG BALODTO, EUSEBIO QUIJANO, FAISAN TAYA, LAGA
KAHAR, ESMAEL KID, TAYA PALAMAN, NORJANA BUISAN,
TONTONGAN MANALAG, SAMIER MANGULI, SINUMAGAD
BANSUAN, BHING HARON, NENENG BUISAN, DIDO KID, ZALDI
AGIONG, ROWENA MANALAG, NASSER MAMALANGKAP, TANOSI
ZUMBAGA, GUIDAT DANDALANAN, FATIMA KID, KIMAMA
KATIMPO, ALON GUIANDAL, MAMALUBA AKOD, AIN SUKOR and
NORIA DALANDAS, all represented by BAI ANNIE C.
MONTAWAL, Petitioners,
vs.
COMMISSION ON AUDIT and DEPARTMENT OF PUBLIC WORKS AND
HIGHWAYS, Respondents.
DECISION
REYES, J.:
Before the Court is a Petition for Review on Certiorari1under Rule 64, in relation
to Rule 65, of the Rules of Court assailing the Decision2 dated November 20, 2012
of the Commission on Audit (COA) in COA CP Case No. 2010-089, which denied
the money claims of Madag Buisan (Buisan), et al. (petitioners) against the
Department of Public Works and Highways (DPWH) in the amount of
₱122,051,850.00 for lack of merit, and the Resolution3 dated February 14, 2014
denying the motion for reconsideration.
The Antecedents
In 1989, the DPWH undertook the construction of the Liguasan Cut-off hannel
(Project) in Tunggol, Pagalungan, Maguindanao, to minimize the perennial
problem of flooding in the area. In April 2001, the DPWH received various claims
from land owners for damages allegedly caused to their properties, crops and
improvements by the premature opening of the Project. Hence, the Regional
Director (RD), DPWH Regional Office (R.O.) No. XII, Cotabato City, investigated
the claims.4
9
The DPWH R.O. No. XII and the Technical Working Group (TWG) recommended
in 2004 to pay just compensation to the claimants. The TWG, however, noted that
since the event occurred in 1989, it could not account physically the actual quantity
of the damaged crops and properties. In 2006, an ad hoc committee was created to
determine the legality and propriety of the claims. However, due to the
considerable lapse of time and the insufficiency of evidence, no final resolution
was made by the DPWH. The claims were forwarded to the RD of the DPWH R.O.
No. XII to be returned to the claimants, as such are considered to be under the
jurisdiction of the COA pursuant to Rule VIII of the 2009 Revised Rules of
Procedure of the COA.5
On April 14, 2010, the petitioners, represented by Mayor Bai Annie C. Montawal
(Montawal), filed a petition with the COA,6 praying that the DPWH be ordered to
pay the petitioners the sum of ₱122,051,850.00 as compensation for their damaged
crops, properties and improvements. On September 16, 2010, Buisan filed a
Motion to Dismiss the Petition alleging that Montawal was not authorized to
represent them. In fact, Buisan and the other claimants filed a separate petition with
the COA based on that same money claim.7
In its Answer, the DPWH averred that the petitioners failed to establish that they
are the owners of crops and properties allegedly damaged, and that the damage was
caused by the construction of the Project. Moreover, the DPWH asserted that the
petitioners' cause of action had already prescribed. 8
In its Decision9 dated November 20, 2012, the COA denied the money claims of
the petitioners, to wit:
WHEREFORE, premises considered, this Commission DENIES the herein
Petition for money claim for lack of merit. 10
The COA held that for the petitioners' failure to file their money claims within a
reasonable time, they are deemed to have committed laches. Furthermore, the
petitioners' cause of action had already prescribed in view of Article 1146 of the
Civil Code. 11
The petitioners filed a motion for reconsideration, but the same was denied by the
COA for lack of merit. 12
Issue
WHETHER THE COA GRAVELY ABUSED ITS DISCRETION IN FINDING
THAT THE PETITIONERS' CLAIM WAS BARRED BY LACHES AND
PRESCRIPTION.
Ruling of the Court
The Court denies the petition.
The petition failed to comply with
the rules on certification against
forum shopping.
Section 5 of Rule 64 of the Rules of Court requires, among others, that in a petition
for review of judgments and final orders or resolutions of COA, the petition should
be verified and contain a sworn certification against forum shopping as provided in
the fourth paragraph of Section 3, Rule 46, viz.:
SEC. 3. Contents and filing of petition; effect of non-compliance with
requirements. - x x x.
xxxx
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.
xxxx
The failure of the petitioner to comply any of the requirements shall be
sufficient ground for the dismissal of the petition. (Emphasis ours)
In the present case, the certification against forum shopping was signed by
Montawal, the mayor of the Municipality of Montawal, Maguindanao. 13 Her bare
statement that she was the petitioners' duly constituted attorney-in-fact in filing the
petition before the COA can hardly constitute as compliance with the rules. She did
not even append a Special Power of Attorney executed by the affected landowners.
10
Montawal's legal capacity to sue on behalf of the petitioners is questionable,
considering that her authority to represent the claimants was even assailed by the
petitioners, when they filed with the COA a Motion to Dismiss the Petition filed
therein by Montawal.14
In the case of natural persons, the rule requires the parties themselves to sign the
certification against forum shopping. The reason for such requirement is that the
petitioner himself knows better than anyone else whether a separate case has been
filed or pending which involves substantially the same issues. 15 In this case, the
certification against forum shopping in the filing of this petition was neither signed
by the petitioners nor their counsel, but by the mayor of their town who is not even
one of the petitioners in this case. Evidently, the petitioners failed to comply with
the certification against forum shopping requirement absent any compelling reason
as to warrant an exception based on the circumstances of the case. 16
The Doctrine of Non-Suability of
State insulates the DPWH, a
governmental entity, from claims of
damages.
The fundamental law of the land provides that the State cannot be sued without its
consent. 17 It is a fundamental postulate of constitutionalism flowing from the
juristic concept of sovereignty that the State, as well as its government, is immune
from suit unless it gives its consent. The rule, in any case, is not absolute for it does
not say that the State may not be sued under any circumstances. The doctrine only
conveys that "the state may not be sued without its consent;" its clear import then is
that the State may at times be sued. 18 Suits filed against government agencies may
either be against incorporated or unincorporated agencies. In case of incorporated
agencies, its suability depends upon whether its own organic act specifically
provides that it can sue and be sued in Court. 19
As the State's engineering and construction arm, the DPWH exercises
governmental functions that effectively insulate it from any suit, much less from
any monetary liability. The construction of the Project which was for the purpose
of minimizing the perennial problem of flood in the area of Tunggol, Montawal,
Maguindanao, is well within the powers and functions of the DPWH as mandated
by the Administrative Code of 1997.
Hence, the Doctrine of Non-Suability clothes the DPWH from being held
responsible for alleged damages it performed in consonance with its mandated
duty. Nowhere does it appear in the petition that the State has given its consent,
expressly or impliedly, to be sued before the courts. The failure to allege the
existence of the State's consent to be sued in the complaint is a fatal defect, and on
this basis alone, should cause the dismissal of the complaint. 20
The petitioners' cause of action has
been barred by prescription and
laches.
The COA denied the petition primarily on the ground that the petitioners filed their
money claims only on 2014, or 15 years after their cause of action arose in 1989.
The petitioners' assertion that the cause of action arose in 1992 is self-serving as no
pieces of evidence was presented or even attached as supporting documents in their
petition to prove their claim. Worse, the petitioners could not even pinpoint the
exact moment of time of the destruction of their properties.21
The petitioners' statement that there were already heavy rains since 1989 that
caused flooding in the area negates their previous claim that the cause of action
arose in 1992. If in fact there were already heavy rains since 1989, then it can also
be argued that prior to 1992, their properties were already damaged by the floods
and that would be the reckoning point of their cause of action. This further
establishes that their cause of action has already prescribed. Thus, while it may be
argued that the petitioners have a cause of action against the DPWH, the same has
already prescribed in view of Article 1146 of the Civil Code, viz.:
ART. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict. (Emphasis ours)
Undeniably, the petitioners' money claims which were only filed with the DPWH
in 2004 or even in 2001 had already prescribed.1âwphi1 As correctly pointed out
by the Office of the Solicitor General, "[i]t will be the height of injustice for
respondent DPWH to be confronted with stale claims, where verification on the
plausibility of the allegations remains difficult, either because the condition of the
alleged inundation of crops has changed, or the physical impossibility of
accounting for the lost and damaged crops due to the considerable lapse of time." 22
On the other hand, "[l]aches has been defined as the failure or neglect, for an
unreasonable and unexplained length of time, to do that which, by exercising due
diligence could or should have been done earlier." 23
11
In the case at bar, laches has set in as the elements24 thereof are present. Firstly, the
premature opening by the DPWH of the Project allegedly causing flash floods, and
damaging the petitioners' properties took place in 1989 or even in 1992. Secondly,
the petitioners took 15 years to assert their rights when they formally filed a
complaint in 2004 against the DPWH. Thirdly, as the petitioners failed to file a
formal suit for their claims before the COA, there is an apparent lack of notice that
would give the DPWH the opportunity to defend itself.
Under Commonwealth Act No. 327,25 as amended by Section 26 of Presidential
Decree No. 1445,26 which were the applicable laws at the time the cause of action
arose, the COA has primary jurisdiction over money claims against government
agencies and instrumentalities. Moreover, Rule II, Section 1 (b) of the 2009
Revised Rules of Procedure of the COA27 specifically enumerated those matters
falling under COA's exclusive jurisdiction, which include "money claims due from
or owing to any government agency." Rule VIII, Section l (a) further provides that
COA shall have original jurisdiction over money claims against the Government,
among others. Therefore, the petitioners' money claims have prescribed and are
barred by laches for their failure to timely file the petition with the COA.
COA did not abuse its discretion in
denying the petitioners' claims for
damages against the DPWH.
Even if the Court sets aside the technical and procedural issues in the interest of
substantive justice, the instant petition must be denied. The COA is endowed with
enough latitude to determine, prevent, and disallow irregular, unnecessary,
excessive, extravagant or unconscionable expenditures of government funds. It is
tasked to be vigilant and conscientious in safeguarding the proper use of the
government's and, ultimately, the people's property. The exercise of its general
audit power is among the constitutional mechanisms that gives life to the check and
balance system inherent in our form of government. 28
In denying the petitioners' money claims against the DPWH, the COA did not
abuse the exercise of its discretion as its denial was grounded on facts and
circumstances that would warrant such denial arising from the following
observations:
In her 5th Indorsement dated July 22, 2011, the ATL, DPWH, Cotabato
2nd Engineering District, interposed no objection to the claims for payment for
damaged crops allegedly caused by the construction of the [Project] but made
significant observations, among others, to wit:
xxxx
3. That the names of claimants and other details in the attached List of Claims for
Crop Damages Affected by the Overflow of the Diversion Cut-Off Channel in
Tunggol, Pagalungan, Maguindanao, (Annexes C-1 to C-12) submitted by the
IROW Task Force, DPWH Central Office amounting to ₱122,049,550.00, were
based on and the same with that of the following three (3) reports:
3.1) Undated and Unsigned "List of Improvements Affected by the Overflow of the
Diversion Cut-Off Channel in Tunggol, Pagalungan, Maguindanao amounting to
₱122,049,550.00 (Annex "D" to Annex "D-4") with sub-heading, "NOTE:
BASE[D] ON THE ATTACHED AFFIDAVIT AND APPROVED DATA FROM
ARMM" (Original List)
xxxx
4. That in the above-mentioned paragraph (3.1), the claimants/owners declared
their lots as either cornland, riceland, lowland or marshyland as opposed to
their claim for crop damages for coconut trees, mango trees, coffee, jackfruits
and banana under paragraphs (3.2) and (3.3) and Annexes "C-1" to "C-12",
mentioned below.
5. That [in the] analysis of all lists with regards to the population density of plant
and fruit trees, it was computed that population density was only about 2-3 per
square meter. This means that the distance of every fruit tree trunk/clump to each
other is only about 2-3 meters, hence, in order for the fruit trees to be fruit bearing,
it would appear that their branches would already be interlocking with each other.
(Schedule 1)
6. That in view of the above, the total number of fruit trees per lot indicated in
the lists were determined to be only estimates and not the actual
number/quantity of fruit trees allegedly damaged.
7. That review of the lists of claimants disclosed that there are instances that
two (2) or more claimants are owners of the same lot number. (Schedule 2)
8. That [in the] tracing [of] the affected lots in the parcellary map, there were lots
which we believe the flooding of which should not be attributed to the
construction of the Cut-Off Channel but to the original and existing course of
the river. Moreover, said lots are not on the downstream of the project (Lots #
61, 73, 74, 75, 76, 78, 297, 291, 289, 288, 287, 286, 284, 281, 282, 279, 280, 276,
273, 274, 271, 270, 265, 263, 301, 302, 303, 304, 305, 306, 307, 308, 309, 379,
377, 380, and 378). The construction of the Cut-Off Channel was actually a relief
12
to the upstream which [do not] experience perennial flooding, but sadly a disaster
to the downstream portion. (See attached parcellary Map).
xxxx
9. That there are listed lots which are not in the parcellary map. (Lot # 386,
1440, 1441, 1442, 1443 and 1444).
10. That all undated DECLARATION OF REAL PROPERTY submitted by
the owners/claimants in support of [their] claims for crop damages were all
signed by Municipal Assessor Babai M. Bangkulit of Datu Montawal,
Maguindanao, which we believe were issued only on April 12, 2007, the same
date the Statements of Tax Delinquency were signed by the aforementioned
Municipal Assessor.
11. That [in the] tracing [of] the lots on the parcellary map, majority of the lots
are located on the side of the Municipality of Pagalungan, Maguindanao, and
not in the Municipality of Datu Montawal, Maguindanao. (See attached
Parcellary Map).
xxxx
13. That not a single copy of land title was submitted by the claimants to prove
that they are the legal owners and rightful claimants to the alleged crop
damages therein.
xxxx
Finally, the then Cluster Director, Cluster D-Economic Services, National
Government Sector (NGS), this Commission, in her 8 th Indorsement dated
December 15, 2011, stated that taking into account the fact that DPWH
undertook the construction of the [Project] in the discharge of its
governmental function, it cannot be held liable. In support of her position, she
cited the decision of the Supreme Court in the case of Torio vs. Fontanilla, G.R.
No. L-29993 dated October 23, 1978, citing Palafox, et al. vs. Province of Ilocos
Norte, et al., 102 Phil 1186 (1958).
After observing that there are conflicting claims between the petitioners and
that it is a primary consideration that a claim must be instituted by the proper
party in interest otherwise the same will fail, the then Cluster Director, Cluster
D, NGS, this Commission, recommended the dismissal of the Petition, subject
to the final determination by the Commission Proper. 29 (Emphasis ours)
Absent any showing that COA capriciously, arbitrarily or whimsically exercised its
discretion that would tantamount to evasion of a positive duty or a virtual refusal to
perform the duty or to act at all in contemplation of law resulting to the prejudice
of the rights of the claimants, the Court believes that COA did not abuse, much less
gravely, its discretion in denying the claims of the petitioners.
Thus, the Court finds no grave abuse of discretion on the part of COA in denying
the petitioners' money claims for failure to present substantial evidence to prove
that their properties were damaged by floods due to the premature opening of the
Project of the DPWH. Without a doubt, the inconsistencies and discrepancies in the
evidence presented by the petitioners backed by the findings of COA lead only to
one inescapable conclusion: that there is no substantial evidence to prove the
petitioners' claims that would render the DPWH or the State liable for the amount
claimed.
In the absence of grave abuse of discretion, the factual findings of COA, which are
undoubtedly supported by the evidence on record, must be accorded great respect
and finality. COA, as the duly authorized agency to adjudicate money claims
against government agencies and instrumentalities has acquired special knowledge
and expertise in handling matters falling under its specialized jurisdiction. 30
Finally, it is the general policy of the Court to sustain the decision of administrative
authorities, especially one that was constitutionally created like herein respondent
COA, not only on the basis of the doctrine of separation of powers, but also of their
presumed expertise in the laws they are entrusted to enforce. It is, in fact, an oft-
repeated rule that findings of administrative agencies are accorded not only respect
but also finality when the decision and order are not tainted with unfairness or
arbitrariness that would amount to grave abuse of discretion. 31
WHEREFORE, the petition is DISMISSED. The Decision dated November 20,
2012 and Resolution dated February 14, 2014 of the Commission on Audit in COA
CP Case No. 2010-089 are hereby AFFIRMED.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
WE CONCUR:
13
 1
MARIA LOURDES P.A. SERENO Rollo, pp. 12-27.
Chief Justice
Chairperson 2
Rendered by Chairperson Ma. Gracia M. Pulido Tan, Commissioners
Juanito G. Espino, Jr. and Heidi L. Mendoza; id. at 28-35.
PRESBITERO J. VELASCO,
ANTONIO T. CARPIO 3
Id. at 36.
JR.
Associate Justice
Associate Justice
4
Id. at 28.
TERESITA J. LEONARDO-DE
DIOSDADO M. PERALTA 5
CASTRO Id. at 28-29.
Associate Justice
Associate Justice
6
Id. at 37-42.
MARIANO C. DEL
LUCAS P. BERSAMIN
CASTILLO 7
Associate Justice Id. at 29.
Associate Justice
8
ESTELA M. PERLAS- Id. at 29-30.
JOSE CATRAL MENDOZA
BERNABE
Associate Justice 9
Associate Justice Id. at 28-35.

MARVIC M.V.F. LEONEN FRANCIS H. JARDELEZA * 10

Id. at 34.
Associate Justice Associate Justice
11
Id. at 33.
ALFREDO BENJAMIN S. CAGUIOA
12
Associate Justice Id. at 36.

13
CERTIFICATION Id. at 25-26.

14
Pursuant to the Section 13, Article VIII of the Constitution, I certify that the Id. at 29.
conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court. 15
Fuentebella v. Castro, 526 Phil. 668, 675 (2006).

16
MARIA LOURDES P.A. SERENO Altres, et al. v. Empleo, et al., 594 Phil. 246, 261-262 (2008).
Chief Justice
17
1987 CONSTITUTION, Article XVI, Section 3.

18
Department of Agriculture v. NLRC, 298 Phil. 491, 498 (1993).

Footnotes 19
German Agency for Technical Cooperation, et al. v. Hon. Court of
Appeals, et al., 603 Phil. 150, 166 (2009).
*
No part.
14
20
Republic v. Feliciano, 232 Phil. 391, 396 (1987).

21
Rollo, p. 23.

22
See COA and DPWH's Comment, pp. 235-256, at 250.

23
Akang v. Municipality of Isulan, Sultan Kudarat Province, 712 Phil.
420, 439 (2013).

24
Republic v. Marjens Investment Corporation, G.R. No. 156205,
November 12, 2014, 739 SCRA 676, 689.

25
AN ACT FIXING THE TIME WITHIN WHICH THE AUDITOR
GENERAL SHALL RENDER HIS DECISIONS AND PRESCRIBING
THE MANNER OF APPEAL THEREFROM. Approved on June 18,
1938.

26
ORDAINING AND INSTITUTING A GOVERNMENT AUDITING
CODE OF THE PHILIPPINES. Approved on June 11, 1978.

27
Approved September 15, 2009.

28
Espinas v. Commission on Audit, G.R. No. 198271, April 1, 2014, 720
SCRA 302, citing Delos Santos, et al. v. Commission on Audit, 716 Phil.
322, 332 (2013).

29
Rollo, pp. 30-32.

30
Daraga Press, Inc. v. Commission on Audit and Department of
Education-Autonomous Region in Muslim Mindanao, G.R. No. 201042,
June 16, 2015.

31
Yap v. Commission on Audit, 633 Phil. 174, 195 (2010).

15