Beruflich Dokumente
Kultur Dokumente
11:07 PM
Jurisdiction
Subject matter jurisdiction
Allegations of complaint determine jurisdiction – Hasegawa et al v. Kitamura GR 149177
Nov 23, 2007
Jurisdiction by estoppel – Figueroa v. People, GR 147407, Jul 14, 2008;
Payment of filing fees - Ruby Shelter v. Hon. Formaran GR 174914 Feb 10, 2009
Distinguished from venue – Chavez v. CA GR 125813 Feb 6, 2007
Doctrine of non-interference – Springfield v. RTC Judge GR 142626 Feb 6, 2007
Primary jurisdiction – Sta. Ana v. Carpo GR 164340 Nov 28, 2008
Supreme Court
Philippine Constitution, Article VIII
Power of judicial review – Garcillano v. House GR 170338 Dec 23, 2008
Doctrine of stare decisis – Lazatin v. Desierto GR 147097 June 5, 2009
Hierarchy of courts – Ferdinand Cruz v. Priscilla Mijares et al GR 154404 Sep 11, 2008; First
United v. Poro Point GR 178799 Jan 19, 2009
Appellate jurisdiction – First Lepanto Ceramics, Inc. v. CA, GR 110571, Mar 10, 1994
SC Power of administrative supervision – Sarah Ampong v. CSC GR 167916 Aug 26, 2008
Court of Appeals
BP 129, as amended by RA 7902, Sec. 9 and RA 8246
Question of law , fact or both – CGP Transport v. PU Leasing GR 164547 Mar 28, 2007
Sandiganbayan
RA 8249
Family Courts
Sec 5, RA 8369 Family Courts Act of 1997
A.M. No. 02-11-10-SC Rules on Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages
A.M. No. 02-11-11 Rule on Legal Separation
A.M. No. 02-11-12 Rule on Provisional Orders
A.M. No. 03-04-04-SC Rule on Custody of Minors and Writ of Habeas Corpus in Relation to
Custody of Minors
A.M. No. 03-02-05-SC Rule on Guardianship of Minors
A.M. No. 02-6-02-SC Rule on Adoption
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A.M. No. 02-6-02-SC Rule on Adoption
Summary Proceedings under the Family Code, Title XI, Chapters 1 to 3 on separation in fact
between husband and wife or abandonment by one of the other and incidents involving
parental authority;
Chapter 4 on Art. 41 (declaration of a spouse as presumptively dead),
Art. 51(action of a child for presumptive legitime),
Art. 69 (judicial declaration of family domicile in case of disagreement of the spouses),
Art. 73 (spouse’s objection to the profession of the other spouse),
Arts. 96 and
124 (annulment of husband’s decision in the administration and enjoyment of community or
conjugal property; appointment of spouse as sole administrator except cases of “incompetent”
other spouse which shall be under Rules 93 and 95)
and Art. 217 (entrusting children to homes and orphanages).
Madrinan v. Madrinan GR 159374 Jul 12, 2007
Yu v Yu GR 164915 Mar 10, 2006
Commercial Courts
Sec. 5.2, RA 8799
A.M. No. 01-2-04-SC Interim Rules of Procedure Governing Intra-corporate Controversies
A.M. 00-8-10-SC Interim Rules of Procedure on Corporate Rehabilitation (note FRIA)
Oscar Reyes v. RTC Makati GR 165744 Aug 11, 2008
Barangay Lupon
RA 7160 (Local Government Code of 1991) Secs 399-422
Substantial compliance – Leo Wee v. George de Castro et al GR 1764095 Aug 20, 2008;
Aquino v. Aure, GR 153567 Feb 18, 2008
CIVIL PROCEDURE
Ordinary Civil Actions Rules 1 to 39
Rule 1 General Provisions of the Rules of Court
Liberal application – Makati Ins. V. Reyes et al GR 167403 Aug 6, 2008; Rural Bank of
Seven Lakes v. Dan GR 174109 Dec 24, 2008;
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Indigent parties – Sps Algura v. LGU GR 150135 Oct 30, 2006
Rule 14 Summons
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Rule 14 Summons
Kinds of actions - Gomez v. CA GR 127692 March 10, 2004; San Pedro v. Ong GR 17758
Oct 17, 2008;
Personal vs. substituted service of summons - Guiguinto Credit Coop v. Torres, GR No.
170926, Sep 15, 2006; Guanzon v Arrandoza Dec 6, 2006 GR 155392; Potenciano v. Barnes
GR 159421 Aug 20, 2008
Substituted service – Clarita Garcia v SB and Republic GR 170122 Oct 12, 2009
Extraterritorial service – Montefalcon et al v. Vasquez GR 165016 Jun 17, 2008; Elmer v.
Dakila Trading GR 172242 Aug 14, 2007;
Temporarily out – PCIB v Alejando GR 175587 Sep 21, 2007; Sps Torres v. Amparo Medina
GR166730 Maar 10 2010
Domestic juridical entity – BPI v. Spouses Santiago Mar 28, 2007; Paramount v. Ordonez GR
175109, Aug 6, 2008
Substantial compliance - Mason v. CA 413 SCRA 303; Millenium v. Tan GR 131724 Feb 28,
2000
Rule 15 Motions
Notice of hearing - KKK Foundation Inc. v. Hon. Bargas, et al GR 163785 Dec 27, 2007;
Camarines Corp v. Aquino GR 167691 Sept 23, 2008;
Motion for extension – Sarmiento v. Zaratan Feb 5, 2007
Proof of service – Romulo et al v. Peralta, GR 165665 Jan 31, 2007
Rule 18 Pre-Trial
AM No. 03-1-09-SC Rule on Guidelines to be Observed by Trial Court Judges and Clerks of
Court in the Conduct of Pre-Trial and Use of Deposition-Discovery Measures
Effect of failure to appear - Saguid v. CA 403 SCRA 678; Jazmin Espiritu v. Vladimir Lazaro,
GR 181020, Nov 25, 2009
Admissions at pre-trial - Biesterbos v. CA 411 SCRA 396
Other pre-trial requirements - Advance Textile Mills v. Tan GR 154040 Jul 28, 2005; Anatalia
Ramos v. Dominga Dizon, GR No. 137247, Aug. 7, 2006
Rule 19 Intervention
Requirements - Nordic Asia v. CA 403 SCRA 390
When to intervene - Salandanan v Sps Mendoza GR 160280 (2009)
Who may intervene – GSIS v Nocom GR 175989 Feb 4, 2008; Asia‘s Emerging Dragon v
DOTC GR 169914; Rep v CA GR 174166 Mar 24, 2008; Office of Ombudsman v. Maximo
D. Sison GR 185954 Feb 16, 2010
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Rule 20 Calendar of Cases
Rule 21 Subpoena
Macaspac v. Flores AM No. P-05-2072 Aug 13, 2008; Re Subpoena of Dir Amante AM No.
10-1-13-SC Mar 2, 2010
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Construction v. PCI Bank, GR No. 153827, Aug 25, 2006; Jose Feliciano Loy v. SMC GR
164886 Nov 24, 2009
Not applicable – Carlos v. Sandoval GR 179922 Dec 16, 2008
Appeals
In General
Payment of docket fee – Camposagrado v. Camposagrado GR 143195 Sept 13, 2005
No appeal period - Republic v. Bermudez-Lorino, GR No. 160258, Jan 19, 2005
Mode of appeal from special courts - Land Bank of the Philippines v. De Leon 399 SCRA 376
Appeal from ―amended‖ judgment – De Grano v. Lacaba GR 158877 Jun 16, 2009
Rule 40
Appeal from Municipal Trial Courts to the Regional Trial Courts
Non-payment of appeal fee - Badillo v. Tayag GR 143976 Apr 3, 2003
AM No. 07-7-12-SC Amendments to Rules 41, 45, 58 and 65 Dec 27, 2007
Filing of appeal memo – Estate of Macadangdang v. Gaviola GR 156809 Mar 4, 2009
Sec 7 (b) – Mejillano v. Lucillo GR 154717 Jun 19, 2009
Rule 41
Appeal from RTC
Sec 1 – Simeon Valdez v. Financiera Manila, GR 183387, Sept 29, 2009; Palma v Galvez GR
165273 Mar 10, 2010
Period of time to appeal - Neypes v. CA GR 141524 Sep 14, 2005; First Aqua Sugar v. BPI
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Period of time to appeal - Neypes v. CA GR 141524 Sep 14, 2005; First Aqua Sugar v. BPI
Feb 5, 2007
Appeal from dismissal - Philexport v. Phil Infrastructures GR 120384 Jan 13, 2004; Lullete S
Ko v. PNB GR 169131-32 Jan 20, 2006
Period to appeal - Eda v. CA, GR No. 155251, Dec 8, 2004
Presence of grave abuse – Benedicta Samson v. Hon. Judge Macaraig, GR 166356, Feb 2,
2010
Record on appeal – Rovia v Heirs of Deleste, et al GR 160825 Mar 26, 2010
Rule 42
Petition for Review from RTC to CA
Form & contents – Sps Lanaria v. Planta GR 172891 Nov 22, 2007; Perez v. Falcatan, GR
139536 Sept 26, 2005; Elsie Ang v. Dr. Grageda GR 166239 Jun 8, 2006
Period to appeal - Balgami v. CA, GR 131287, Dec 9, 2004
Rule 43
Appeals from the Court of Tax Appeals and Quasi-Judicial Agencies to the Court of
Appeals
Formal requirements - Dalton-Reyes v. CA, et al, GR 149580, Mar 16, 2005
Quasi judicial bodies - Jose Luis Angelo Orosa v. Alberto Roa, GR No. 140423, July 14,
2006; Villorente et al v. Aplaya Laiya GR 145013 Mar 13, 2005; Ruvivar v. Ombudsman GR
165012 Sept 16, 2008; Phillips Seafood v BOI GR 175787 Feb 4, 2009
Impleading the lower court or agency - Basmayor v. Atencio GR 160573 Oct 19, 2005
Attaching copy of judgment – CocaCola v. Cabalo, GR 144180 Jan 30, 2006
Supporting papers – BE San Diego Inc. v. Alzul 524 SCRA 402
Appeal from CSC – DECS v Cuanan GR 169013 Dec 16, 2008
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Non-filing of brief – Gov‘t v. CA et al GR 164150 Apr 14, 2008; Bachrach v. PPA GR
159915 Mar12, 2009
Rule 51 Judgment
Multiple proceedings - Crystal vs. CA, 160 SCRA 79
Provisional Remedies
Rule 57 Preliminary Attachment
Grounds – PCL Industries v. CA GR 147970 March 31, 2006; Magaling v. Peter Ong GR
173333 Aug 13, 2008; Professional Video V Tesda GR 155504 Jun 26, 2009; Metro Inc. et al
v. Lara‘s Gifts, GR 171741, Nov 27, 2009
Ex Parte issuance - Davao Light and Power Co., Inc. vs. CA, 204 SCRA 343; Onate v.
Abrogar, 241 SCRA 659
Provisional/ancillary – Silangan Textile v. Judge Mar 12, 2007
Discharge of an attachment – Security Pacific Assurance v. Hon. Judge Tria-Infante GR
144740 Aug 31, 2005; Insular Savings v. CA 460 SCRA 122; Sofia Torres v. Nicanor
Satsatin, GR 166759, Nov 25, 2009
Rule 59 Receivership
No receivership of property in custodia legis - Dolar v. Sundiam 38 SCRA 616
Vivares v. Jose Reyes GR 155408 Feb 13, 2008
Rule 60 Replevin- -
Applicant must be owner of property - Servicewide Specialists v. CA 318 SCRA 493
No replevin of property in custodia legis - Vda de Danao v. Ginete 395 SCRA 542
Distinguished from labor case – Smart v. Astorga GR 148132 Jan 28 2008 542 SCRA 434
Improperly served – Rivera v. Vargas GR 165895 Jun 5, 2009
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Republic v Mangotara, GR 170375 July 7, 2010
Who may file – SJS v. Lina GR 160031 Dec 18, 2008
When to file – Tambunting v. Spouses Sumabat GR 144101 Sept 16, 2005; Hon. Exec
Secretary v. Southwing Heavy Industries, etc. GR 164171-72, 168741 Feb 20, 2006;
Martelino et al v. NHMFC GR 160208 Jun 30, 2008
Rule 64 Review of Judgments and Final Orders and Resolutions of the Commission on
Elections and the Commission on Audit – Benguet State University v. COA, 524 SCRA 437
Rule 65
Certiorari
Grave abuse of discretion – Phil Rabbit Bus Lines v. Goimco GR 135507 Nov 29, 2005 ;
Preferred Home Specialties, Inc. v. CA, GR No. 163593, Dec 16, 2005, 478 SCRA 387
Plain speedy adequate remedy – Cervantes v. CA GR 166755 Nov 18, 2005 ; Davao Merchant
Marine v. CA GR 144075 April 19, 2006
Service of petition – New Ever Marketing v. CA GR 140555. July 14, 2005
Who are the parties - Flores v. Joven 394 SCRA 339
Where to file – Sps Colmenares v. Vda de Gonzales GR 155454 Dec 10, 2008
Other requirements - Eagle Ridge Golf v. CA, GR 178989, Mar 18, 2010
Constitutional commission – Comoporo v. COMELEC GR 178624 Jun 30, 2009
Distinguished from Rule 45 – Ang Biat Huan Sons v. CA Mar 22, 2007 ; DOLE v. Ruben
Maceda, GR 185112, Jan 18, 2010
Sec 6 – Jimmy Areno v. Skycable, GR 180302, Feb 5, 2010
Prohibition
Holy Spirit Homeowners v. Defensor, GR No. 163980, Aug. 3, 2006 ; Tan v. CA 524 SCRA
306 ; Estandarte v. PP GR 156851 Feb 18, 2008
Mandamus
Calim v. Guerrero Mar 5, 2007
Sec 7 – AM 07-7-12 SC
Uy Kiao Eng v. Nixon Lee, GR 176831, Jan 15, 2010 (mandamus will not lie if no public
interest)
Rule 67 Expropriati on
Multiple appeals allowed - NPC v. Aguirre-Paderanga, 464 SCRA 481, Jul 28, 2005
Two stages in action for expropriation - National Housing v. Heirs Guivelondo 404 SCRA
389; Sps Curata v PPA GR 154251 Jun 22, 2009
Public Use – Masikip v. City of Pasig GR 136349 Jan 23, 2006
Reckoning date – City of Iloilo v Contreras-Besama GR 168967 Feb 12, 2010
Commissioners – Napocor v. Purefoods GR 160725 Sep 12, 2008
Rule 68 Foreclosure of Real Estate Mortgage- BPI Family v. Coscuella GR 167724 Jun 27,
2006; Teresita Monzon v. Sps Relova GR 171827 Sep 17, 2008
Rule 69 Partition
Object of partition - Sepulveda v. Pelaez GR 152195 Jan 31, 2005; Balo v. CA GR 129704
Sep 30, 2005; Panganiban et al v. Oamil GR 149313 Jan 22, 2008
Two stages – Marasigan v. Marasigan GR 156078 Mar 14, 2008; Figuracion-Gerilla v. Vda de
Figuracion GR 154322 Aug 22, 2006
Publication – Reillo v. San Jose GR 166393 Jun 18, 2009
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Jurisdictional requirements for forcible entry – Leonardo David v. Cordova GR 152992 July
27, 2005; Domalsin v. Spouses Valenciano GR 158687 Jan 25, 2006; Bunyi v Factor GR
172547 Jun 30, 2009
Stay of judgment – Bugarin v. Palisoc GR 157985 Dec 2, 2005; PNB v. DKS International
GR 179161, Jan 22, 2010
Rule 71 Contempt
Distinction ―direct‖ and ―indirect‖ contempt - Heirs of Vda De Roxas v. CA GR 138660 5
Feb 2004 ; Nunez v Ibay AM RTJ 06-1984 Jun 30, 2009
Modes of filing (re indirect contempt) Regalado v. Go GR 167988 Feb 6, 2007
Contempt against quasi-judicial entities - LBP v. Listana 408 SCRA 328
Penalty – Canada v. Judge Suerte AM No. RTJ-04-1875
SPECIAL PROCEEDINGS
Rule 72 Subject Matter and Applicability of General Rules
Distinction between ―civil action‖ and ―special proceeding‖ - Natcher v. CA 366 SCRA 385
Determination of heirship – Portugal v. Portugal-Beltran GR 155555 Aug 16, 2005
Termination of proceeding – Tabuada v. Ruiz GR 168799 Jun 27, 2008
Sec 2 – Hilado v. CA GR 164108 May 8, 2009
Rule 78 Letters Testamentary and of Administrati on, When and to Whom Issued
Failure to attend hearings of applicant - Silverio v. CA, 304 SCRA 541
Intestate estate of Cristina suntay v Isabel Cojuangco GR 183053 June 16, 2010
Rule 79 Opposing Issuance of Letters Testamentary. Petition and Contest for Letters of
Administration
Justification for appointment of an administrator - Avelino v CA, GR 115181, 31 Mar 2000
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Provisional inclusion in inventory - Heirs of Miguel Franco v. CA, 418 SCRA 60; Chua v.
Absolute Management Corp. 413 SCRA 547
Guardianship of Minors
AM 03-02-05 SC Rule on Guardianship of Minors
Rule 98 Trustees
Express trust vs. implied trust – Richard Lopez Trustee v. CA GR 157784 Dec 16, 2008;
Heirs of Lorenzo Yap v. CA 312 SCRA 603;
Saltiga de Romero v. CA 319 SCRA 180 ; Richard Lopez v CA GR 157784 Dec 16, 2008
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Special Proceedings Invol vi ng Family Code Provisions
AM 02-11-10-SC Rules on Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages
AM 02-11-11 SC Rule on Legal Separation
AM 02-11-12 SC Rule on Provisional Orders
CRIMINAL PROCEDURE
Rule 110 Prosecution of Offenses - -
Venue of libel cases - Macasaet v. People, 452 SCRA 255
Venue of BP 22 cases - Rigor v. People, GR No. 144887, Nov. 17, 2004
AM No. 02-2-07, Sec 5
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AM No. 02-2-07, Sec 5
Filing - Del Rosario v. Vda De Mercado 29 SCRA 116; SEC v Interport GR 135808 Oct 6,
2008
Reinvestigation - Crespo v. Mogul 151 SCRA 462; ; Harold Tamargo v. Romulo Awingan
GR 177727, Jan 19, 2010
Amendment – Pp v. Casey 103 SCRA 21; Fronda –Baggao v. Pp GR 151785 Dec 10, 2007;
PP v. Hon Cajigal GR 157472 Sep 20, 2007
Sec 5 (affidavit of desistance) – People v. De la Cerna GR 136899 – 904 Oct 9, 2002
Sec 6 – Lasoy et al v. Zenarosa GR 129472; People v. Puig GR 173654 – 765 Aug 28, 2009
Sec 15 – Isip v. People GR 170298 Jun 26, 2007; Sony Corp v. Supergreen GR 161823 Mar
22, 2007
Relationship – People v. Ceredon GR 167179 Jan 28, 2008
Date/time of commission – People v. Almendral GR 126025 Jul 6, 2004
Qualifying circumstances – Pp v. Buayaban GR No. 112459 Mar 28, 2003 ; Pp v. Masapol
417 SCRA 371; PP v. Coredon GR 167179 Jan 28, 2008
Sec 13 (duplicity of offenses) – People v. Soriano GR 178325 Feb 22, 2008
Complaint-affidavit – Hilario P. Soriano v. People, GR 162336, Feb 1, 2010
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GR 182348 Nov 20, 2008;
Hot pursuit – People v. Recepcion et al GR 141943-45 Nov 13, 2002
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Sec 5 – Suero v People GR 156408 Jan 31, 2005
Determination of penalty – People v. Temporada GR 173473 Dec 17, 2008
Sec 2 – Lumanog v. People GR 182555 Sep 7, 2010
EVIDENCE
Rule 128 General Provisions - -
Competence – Ramirez v. CA 248 SCRA 590
Electronic Evidence
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Electronic Evidence
RA 8792 Electronic Commerce Act Secs. 5, 6-15
AM 01-7-01-SC New Rules on Electronic Evidence, Rule 2, Sec 1; Rule 3, Rule 4
MCC v Ssangyong GR 170633 Oct 17, 2007
Aznar v. Citibank Mar 28, 2007; NPC v. Codilla GR 170491 Apr 3, 2007
Ang v CA et al GR 182835 Apr 20, 2010
Interpretation of Documents
Testimonial Evidence: Qualification of Witnesses/Testimonial Privilege/Admissions and
Confessions/Previous Conduct as Evi dence
Qualification of witnesses
Mental incapacity Rule 130 Sec 20, 21 - Pp v. Mendoza GR 113791 Feb 2, 1996
Marital disqualification Rule 130 Sec 22 – Pp v. Castaneda 88 SCRA 562
Deadman‘s Statute Rule 130 Sec 23 – Razon v. IAC 207 SCRA 234
Privileged Communications
Marital communications Rule 130 Sec 24 (a) – Pp v. Carlos Mar 1975
Attorney-client Rule 130 Sec. 24 (b) – Pp v. Sandiganbayan 275 SCRA 505; Regala v.
Sandiganbayan 262 SCRA 124
Physician-patient Rule 130 Sec. 24 - Lim v. CA 214 SCRA 273 (1992); Krohn v. CA 233
SCRA 146
State secrets Rule 130 Sec 24 (e) – BF v. Monetary Board 142 SCRA 523 (1986)
Parental and filial privilege Rule 130 Sec 25
Newsman‘s privilege RA 53, as amended by RA 1477
Confessions
Rule 130 Sec 33 – Pp v. Yip Wai Ming 264 SCRA 224; Pp v. Wong Chuen Ming 256 SCRA
135
Corpus delicti – Pp v. Romulo Tuniaco, GR 185710, Jan 19, 2010
Prior testimony
Rule 130 Sec 47 – Tan v. CA 20 SCRA 54
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Opinion Rule Rule 130 Secs 48 -50
Expert witnesses – Milagors Ilao Quianay v. Mapile GR 154087 Oct 25, 2005; Pp v. Adoviso
309 SCRA 1; Bacalso v. Padigos GR 173192 Apr 18, 2008
Character Evidence
Rule 130 Secs 34-35; Rule 132 Sec 14 – PP v. Soliman 53 OG 8083
Rule 134
Sec. 6 – Go v. Looyuko GR 147923 537 SCRA 445 26 Oct 2007
Chain of custody in drugs cases – Bonifacio Tejada v. Pp GR 180693, Sep 4, 2009
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Hasegawa et al v. Kitamura GR 149177 Nov 23, 2007
Sunday, November 14, 2010
11:16 PM
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of
Court assailing the April 18, 2001 Decision [1] of the Court of Appeals (CA) in CA-G.R.
SP No. 60827, and the July 25, 2001 Resolution [2] denying the motion for
reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a
Japanese consultancy firm providing technical and management support in the
infrastructure projects of foreign governments, [3] entered into an Independent
Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national
permanently residing in the Philippines. [4] The agreement provides that respondent
was to extend professional services to Nippon for a year starting on April 1, 1999. [5]
Nippon then assigned respondent to work as the project manager of the Southern
Tagalog Access Road (STAR) Project in the Philippines, following the company's
consultancy contract with the Philippine Government. [6]
When the STAR Project was near completion, the Department of Public Works and
Highways (DPWH) engaged the consultancy services of Nippon, on January 28, 2000,
this time for the detailed engineering and construction supervision of the Bongabon-
Baler Road Improvement (BBRI) Project. [7] Respondent was named as the project
manager in the contract's Appendix 3.1. [8]
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for
its International Division, informed respondent that the company had no more
intention of automatically renewing his ICA. His services would be engaged by the
company only up to the substantial completion of the STAR Project on March 31,
2000, just in time for the ICA's expiry. [9]
As he was not able to generate a positive response from the petitioners, respondent
consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific
performance and damages with the Regional Trial Court of Lipa City. [11]
For their part, petitioners, contending that the ICA had been perfected in Japan and
executed by and between Japanese nationals, moved to dismiss the complaint for
lack of jurisdiction. They asserted that the claim for improper pre -termination of
respondent's ICA could only be heard and ventilated in the proper courts of Japan
following the principles of lex loci celebrationis and lex contractus.[12]
In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the
replacement of Kitamura by a certain Y. Kotake as project manager of the BBRI
Project.[13]
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Project.[13]
On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank [14] that
matters connected with the performance of contracts are regulated by the law
prevailing at the place of performance, [15] denied the motion to dismiss. [16] The trial
court subsequently denied petitioners' motion for reconsideration, [17] prompting
them to file with the appellate court, on August 14, 2000, their first Petition for
Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].[18] On August 23, 2000,
the CA resolved to dismiss the petition on procedural grounds—for lack of
statement of material dates and for insufficient verification and certification against
forum shopping. [19] An Entry of Judgment was later issued by the appellate court on
September 20, 2000.[20]
Aggrieved by this development, petitioners filed with the CA, on September 19,
2000, still within the reglementary period, a second Petition for Certiorari under
Rule 65 already stating therein the material dates and attaching thereto the proper
verification and certification. This second petition, which substantially raised the
same issues as those in the first, was docketed as CA-G.R. SP No. 60827.[21]
Ruling on the merits of the second petition, the appellate court rendered the
assailed April 18, 2001 Decision [22] finding no grave abuse of discretion in the trial
court's denial of the motion to dismiss. The CA ruled, among others, that the
principle of lex loci celebrationis was not applicable to the case, because nowhere in
the pleadings was the validity of the written agreement put in issue. The CA thus
declared that the trial court was correct in applying instead the principle of lex loci
solutionis.[23]
However, before ruling on this issue, we must first dispose of the procedural
matters raised by the respondent.
Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP
No. 60205 has already barred the filing of the second petition docketed as CA -G.R.
SP No. 60827 (fundamentally raising the same issues as those in the first one) and
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the instant petition for review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the
petition's defective certification of non-forum shopping, it was a dismissal without
prejudice.[27] The same holds true in the CA's dismissal of the said case due to
defects in the formal requirement of verification [28] and in the other requirement in
Rule 46 of the Rules of Court on the statement of the material dates. [29] The
dismissal being without prejudice, petitioners can re-file the petition, or file a
second petition attaching thereto the appropriate verification and certification—as
they, in fact did—and stating therein the material dates, within the prescribed
period[30] in Section 4, Rule 65 of the said Rules. [31]
The dismissal of a case without prejudice signifies the absence of a decision on the
merits and leaves the parties free to litigate the matter in a subsequent action as
though the dismissed action had not been commenced. In other words, the
termination of a case not on the merits does not bar another action involving the
same parties, on the same subject matter and theory. [32]
Necessarily, because the said dismissal is without prejudice and has no res judicata
effect, and even if petitioners still indicated in the verification and certification of
the second certiorari petition that the first had already been dismissed on
procedural grounds, [33] petitioners are no longer required by the Rules to indicate in
their certification of non-forum shopping in the instant petition for review of the
second certiorari petition, the status of the aforesaid first petition before the CA. In
any case, an omission in the certificate of non-forum shopping about any event that
will not constitute res judicata and litis pendentia, as in the present case, is not a
fatal defect. It will not warrant the dismissal and nullification of the entire
proceedings, considering that the evils sought to be prevented by the said certificate
are no longer present. [34]
The Court also finds no merit in respondent's contention that petitioner Hasegawa is
only authorized to verify and certify, on behalf of Nippon, the certiorari petition filed
with the CA and not the instant petition. True, the Authorization [35] dated
September 4, 2000, which is attached to the second certiorari petition and which is
also attached to the instant petition for review, is limited in scope—its wordings
indicate that Hasegawa is given the authority to sign for and act on behalf of the
company only in the petition filed with the appellate court, and that authority
cannot extend to the instant petition for review. [36] In a plethora of cases, however,
this Court has liberally applied the Rules or even suspended its application whenever
a satisfactory explanation and a subsequent fulfillment of the requirements have
been made.[37] Given that petitioners herein sufficiently explained their misgivings
on this point and appended to their Reply [38] an updated Authorization [39] for
Hasegawa to act on behalf of the company in the instant petition, the Court finds
the same as sufficient compliance with the Rules.
However, the Court cannot extend the same liberal treatment to the defect in the
verification and certification. As respondent pointed out, and to which we agree,
Hasegawa is truly not authorized to act on behalf of Nippon in this case. The
aforesaid September 4, 2000 Authorization and even the subsequent August 17,
2001 Authorization were issued only by Nippon's president and chief executive
officer, not by the company's board of directors. In not a few cases, we have ruled
that corporate powers are exercised by the board of directors; thus, no person, not
even its officers, can bind the corporation, in the absence of authority from the
board.[40] Considering that Hasegawa verified and certified the petition only on his
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board.[40] Considering that Hasegawa verified and certified the petition only on his
behalf and not on behalf of the other petitioner, the petition has to be denied
pursuant to Loquias v. Office of the Ombudsman. [41] Substantial compliance will not
suffice in a matter that demands strict observance of the Rules. [42] While technical
rules of procedure are designed not to frustrate the ends of justice, nonetheless,
they are intended to effect the proper and orderly disposition of cases and
effectively prevent the clogging of court dockets. [43]
Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition
to question the trial court's denial of their motion to dismiss. It is a well -established
rule that an order denying a motion to dismiss is interlocutory, and cannot be the
subject of the extraordinary petition for certiorari or mandamus. The appropriate
recourse is to file an answer and to interpose as defenses the objections raised in
the motion, to proceed to trial, and, in case of an adverse decision, to elevate the
entire case by appeal in due course. [44] While there are recognized exceptions to this
rule,[45] petitioners' case does not fall among them.
Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its
jurisdiction to hear and resolve the civil case for specific performance and damages filed
by the respondent. The ICA subject of the litigation was entered into and perfected in
Tokyo, Japan, by Japanese nationals, and written wholly in the Japanese language. Thus,
petitioners posit that local courts have no substantial relationship to the parties [46]
following the [state of the] most significant relationship rule in Private International
Law. [47]
The Court notes that petitioners adopted an additional but different theory when they
elevated the case to the appellate court. In the Motion to Dismiss[48] filed with the trial
court, petitioners never contended that the RTC is an inconvenient forum. They merely
argued that the applicable law which will determine the validity or invalidity of
respondent's claim is that of Japan, following the principles of lex loci celebrationis and
lex contractus. [49] While not abandoning this stance in their petition before the appellate
court, petitioners on certiorari significantly invoked the defense of forum non
conveniens. [50] On petition for review before this Court, petitioners dropped their other
arguments, maintained the forum non conveniens defense, and introduced their new
argument that the applicable principle is the [state of the] most significant relationship
rule. [51]
Be that as it may, this Court is not inclined to deny this petition merely on the basis of
the change in theory, as explained in Philippine Ports Authority v. City of Iloilo. [52] We
only pointed out petitioners' inconstancy in their arguments to emphasize their
incorrect assertion of conflict of laws principles.
Analytically, jurisdiction and choice of law are two distinct concepts. [54] Jurisdiction
considers whether it is fair to cause a defendant to travel to this state; choice of law asks
the further question whether the application of a substantive law which will determine
the merits of the case is fair to both parties. The power to exercise jurisdiction does not
automatically give a state constitutional authority to apply forum law. While jurisdiction
and the choice of the lex fori will often coincide, the “minimum contacts― for one
REMLAW Page 21
and the choice of the lex fori will often coincide, the “minimum contacts― for one
do not always provide the necessary “significant contacts― for the other. [55] The
question of whether the law of a state can be applied to a transaction is different from
the question of whether the courts of that state have jurisdiction to enter a judgment. [56]
In this case, only the first phase is at issue—jurisdiction. Jurisdiction, however, has
various aspects. For a court to validly exercise its power to adjudicate a controversy, it
must have jurisdiction over the plaintiff or the petitioner, over the defendant or the
respondent, over the subject matter, over the issues of the case and, in cases involving
property, over the res or the thing which is the subject of the litigation. [57] In assailing
the trial court's jurisdiction herein, petitioners are actually referring to subject matter
jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign
authority which establishes and organizes the court. It is given only by law and in the
manner prescribed by law. [58] It is further determined by the allegations of the complaint
irrespective of whether the plaintiff is entitled to all or some of the claims asserted
therein. [59] To succeed in its motion for the dismissal of an action for lack of jurisdiction
over the subject matter of the claim, [60] the movant must show that the court or tribunal
cannot act on the matter submitted to it because no law grants it the power to
adjudicate the claims. [61]
In the instant case, petitioners, in their motion to dismiss, do not claim that the trial
court is not properly vested by law with jurisdiction to hear the subject controversy for,
indeed, Civil Case No. 00-0264 for specific performance and damages is one not capable
of pecuniary estimation and is properly cognizable by the RTC of Lipa City. [62] What they
rather raise as grounds to question subject matter jurisdiction are the principles of lex
loci celebrationis and lex contractus, and the “state of the most significant
relationship rule.―
Lex loci celebrationis relates to the “law of the place of the ceremony―[63] or the
law of the place where a contract is made. [64] The doctrine of lex contractus or lex loci
contractus means the “law of the place where a contract is executed or to be
performed.―[65] It controls the nature, construction, and validity of the contract [66]
and it may pertain to the law voluntarily agreed upon by the parties or the law intended
by them either expressly or implicitly. [67] Under the “state of the most significant
relationship rule,― to ascertain what state law to apply to a dispute, the court should
determine which state has the most substantial connection to the occurrence and the
parties. In a case involving a contract, the court should consider where the contract was
made, was negotiated, was to be performed, and the domicile, place of business, or
place of incorporation of the parties. [68] This rule takes into account several contacts and
evaluates them according to their relative importance with respect to the particular
issue to be resolved. [69]
Since these three principles in conflict of laws make reference to the law applicable to a
dispute, they are rules proper for the second phase, the choice of law. [70] They
determine which state's law is to be applied in resolving the substantive issues of a
conflicts problem. [71] Necessarily, as the only issue in this case is that of jurisdiction,
choice-of-law rules are not only inapplicable but also not yet called for.
REMLAW Page 22
situation requiring the application of the conflict of laws rules. [72] Also, when the law of a
foreign country is invoked to provide the proper rules for the solution of a case, the
existence of such law must be pleaded and proved. [73]
It should be noted that when a conflicts case, one involving a foreign element, is brought
before a court or administrative agency, there are three alternatives open to the latter
in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal to
assume jurisdiction over the case; (2) assume jurisdiction over the case and apply the
internal law of the forum; or (3) assume jurisdiction over the case and take into account
or apply the law of some other State or States. [74] The court’s power to hear cases
and controversies is derived from the Constitution and the laws. While it may choose to
recognize laws of foreign nations, the court is not limited by foreign sovereign law short
of treaties or other formal agreements, even in matters regarding rights provided by
foreign sovereigns. [75]
Neither can the other ground raised, forum non conveniens, [76] be used to deprive the
trial court of its jurisdiction herein. First, it is not a proper basis for a motion to dismiss
because Section 1, Rule 16 of the Rules of Court does not include it as a ground. [77]
Second, whether a suit should be entertained or dismissed on the basis of the said
doctrine depends largely upon the facts of the particular case and is addressed to the
sound discretion of the trial court. [78] In this case, the RTC decided to assume
jurisdiction. Third, the propriety of dismissing a case based on this principle requires a
factual determination; hence, this conflicts principle is more properly considered a
matter of defense. [79]
Accordingly, since the RTC is vested by law with the power to entertain and hear the civil
case filed by respondent and the grounds raised by petitioners to assail that jurisdiction
are inappropriate, the trial and appellate courts correctly denied the petitioners’
motion to dismiss.
REMLAW Page 23
Figueroa v. People, GR 147407, Jul 14, 2008
Sunday, November 14, 2010
11:18 PM
FACTS: Petitioner was charged with the crime of reckless imprudence resulting in homicide. The RTC
found him guilty. In his appeal before the CA, the petitioner, for the first time, questioned RTCs
jurisdiction on the case.
The CA in affirming the decision of the RTC, ruled that the principle of estoppel by laches has already
precluded the petitioner from questioning the jurisdiction of the RTC—the trial went on for 4 years with
the petitioner actively participating therein and without him ever raising the jurisdictional infirmity.
The petitioner, for his part, counters that the lack of jurisdiction of a court over the subject matter may
be raised at any time even for the first time on appeal. As undue delay is further absent herein, the
principle of laches will not be applicable. Hence, this petition.
ISSUE: WON petitioner’s failure to raise the issue of jurisdiction during the trial of this case,
constitute laches in relation to the doctrine laid down in Tijam v. Sibonghanoy, notwithstanding the
fact that said issue was immediately raised in petitioner’s appeal to the CA
HELD:No .
RATIO: Citing the ruling in Calimlim vs. Ramirez, the Court held that as a general rule, the issue of
jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by waiver or
by estoppel. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in
which the factual milieu is analogous to that of Tijam v. Sibonghanoy. Laches should be clearly present
for the Sibonghanoy doctrine to be applicable, that is, lack of jurisdiction must have been raised so
belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined
to assert it.
In Sibonghanoy, the party invoking lack of jurisdiction did so only after fifteen years and at a stage when
the proceedings had already been elevated to the CA. Sibonghanoy is an exceptional case because of the
presence of laches.
In the case at bar, the factual settings attendant in Sibonghanoy are not present. Petitioner Atty.
Regalado, after the receipt of the Court of Appeals resolution finding her guilty of contempt, promptly
filed a Motion for Reconsideration assailing the said court’s jurisdiction based on procedural infirmity in
initiating the action. Her compliance with the appellate court’s directive to show cause why she should
not be cited for contempt and filing a single piece of pleading to that effect could not be considered as
an active participation in the judicial proceedings so as to take the case within the milieu of
Sibonghanoy. Rather, it is the natural fear to disobey the mandate of the court that could lead to dire
consequences that impelled her to comply.
The petitioner is in no way estopped by laches in assailing the jurisdiction of the RTC, considering that he
raised the lack thereof in his appeal before the appellate court. At that time, no considerable period had
yet elapsed for laches to attach.
REMLAW Page 24
yet elapsed for laches to attach.
REMLAW Page 25
Ruby Shelter v. Hon. Formaran GR 174914 Feb 10, 2009
Sunday, November 14, 2010
11:19 PM
DE C I SI O N
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court seeking the reversal of the Decision[1 ] dated 22 November 2006 of the Court
of Appeals in CA-G.R. SP No. 94800. The Court of Appeals, in its assailed Decision,
affirmed the Order[2 ] dated 24 March 2006 of the Regional Trial Court (RTC), Branch
22, of Naga City, in Civil Case No. RTC-2006-0030, ordering petitioner Ruby Shelter
Builders and Realty Development Corporation to pay additional docket/filing fees,
computed based on Section 7(a) of Rule 141 of the Rules of Court, as amended.
chanroblesvirtuallawlibrary
REMLAW Page 26
that petitioner sold to respondents Tan and Obiedo the parcels of land for
the following purchase prices: chanroblesvirtuallawlibrary
Petitioner could choose to pay off its indebtedness with individual or all five
parcels of land; or it could redeem said properties by paying respondents
Tan and Obiedo the following prices for the same, inclusive of interest and
penalties: chanroblesvirtuallawlibrary
REMLAW Page 27
petitioner, the latters monetary obligation to respondent Tan and Obiedo.
chanroblesvirtuallawlibrary
Respondent Atty. Tomas A. Reyes (Reyes) was the Notary Public who
notarized the Memorandum of Agreement dated 17 March 2005 between
respondent Tan and Obiedo, on one hand, and petitioner, on the other.
chanroblesvirtuallawlibrary
On the basis of the facts already recounted above, petitioner raised two
causes of action in its Complaint. chanroblesvirtuallawlibrary
Asserting that the Deeds of Absolute Sale over the five parcels of land were
executed merely as security for the payment of its loan to respondents Tan
REMLAW Page 28
executed merely as security for the payment of its loan to respondents Tan
and Obiedo; that the Deeds of Absolute Sale, executed in accordance with
the Memorandum of Agreement, constituted pactum commisorium and as
such, were null and void; and that the acknowledgment in the Deeds of
Absolute Sale were falsified, petitioner averred: chanroblesvirtuallawlibrary
REMLAW Page 29
the mortgaged properties cancelled and changed/registered in
[respondents] Tans and Obiedos names, and/or released to them;
chanroblesvirtuallawlibrary
3. Annulling the Deed[s] of Sale for TCT Nos. 29918, 38374, 38376,
39225 and 39232, all dated January 3, 2006, the same being in
contravention of law; chanroblesvirtuallawlibrary
[Petitioner] further prays for such other reliefs as may be proper, just and equitable under the premises. [14]
chanroblesvirtuallawlibrary
Upon filing its C omplaint with the RTC on 16 March 2006, petitioner paid the sum of P13,644.25 for docket and
other legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court initially considered Civil Case
No. 2006-0030 as an action incapable of pecuniary estimation and computed the docket and other legal fees due
thereon according to Section 7(b)(1), Rule 141 of the Rules of Court. chanroblesvirtuallawlibrary
Only respondent Tan filed an Answer[15] to the C omplaint of petitioner. Respondent Tan did admit that meetings
were held with Mr. Sia, as the representative of petitioner, to thresh out Mr. Sias charge that the computation by
respondents Tan and Obiedo of the interests, surcharges and penalties accruing on the loan of petitioner was
replete with errors and uncertainties. However, Mr. Sia failed to back up his accusation of errors and uncertainties
and to present his own final computation of the amount due. Disappointed and exasperated, respondents Tan and
Obiedo informed Mr. Sia that they had already asked respondent Atty. Reyes to come over to notarize the Deeds of
Absolute Sale. Respondent Atty. Reyes asked Mr. Sia whether it was his signature appearing above his printed
REMLAW Page 30
Absolute Sale. Respondent Atty. Reyes asked Mr. Sia whether it was his signature appearing above his printed
name on the Deeds of Absolute Sale, to which Mr. Sia replied yes. On 4 January 2006, Mr. Sia still failed to
establish his claim of errors and uncertainties in the computation of the total amount which petitioner must pay
respondent Tan and Obiedo. Mr. Sia, instead, sought a nine-month extension for paying the loan obligation of
petitioner and the reduction of the interest rate thereon to only one percent (1%) per month. Respondents Tan and
Obiedo rejected both demands. chanroblesvirtuallawlibrary
Respondent Tan maintained that the Deeds of Absolute Sale were not executed merely as securities for the loan of
petitioner. The Deeds of Absolute Sale over the five parcels of land were the consideration for the payment of the
total indebtedness of petitioner to respondents Tan and Obiedo, and the condonation of the 15-month interest
which already accrued on the loan, while providing petitioner with the golden opportunity to still redeem all or even
portions of the properties covered by said Deeds. Unfortunately, petitioner failed to exercise its right to redeem any
of the said properties. chanroblesvirtuallawlibrary
Belying that they forcibly took possession of the five parcels of land, respondent Tan alleged that it was Mr. Sia
who, with the aid of armed men, on board a Sports Utility Vehicle and a truck, rammed into the personnel of
respondents Tan and Obiedo causing melee and disturbance. Moreover, by the execution of the Deeds of Absolute
Sale, the properties subject thereof were, ipso jure, delivered to respondents Tan and Obiedo. The demolition of
the existing structures on the properties was nothing but an exercise of dominion by respondents Tan and Obiedo.
chanroblesvirtuallawlibrary
Respondent Tan, thus, sought not just the dismissal of the C omplaint of petitioner, but also the grant of his
counterclaim. The prayer in his Answer is faithfully reproduced below: chanroblesvirtuallawlibrary
Wherefore, premises considered, it is most respectfully prayed that, after due hearing, judgment be
rendered dismissing the complaint, and on the counterclaim, [herein petitioner] and Ruben Sia, be ordered
to indemnify, jointly and severally [herein respondents Tan and Obiedo] the amounts of not less than
P10,000,000.00 as liquidated damages and the further sum of not less than P500,000.00 as attorneys fees.
In the alternative, and should it become necessary, it is hereby prayed that [petitioner] be ordered to pay
herein [respondents Tan and Obiedo] the entire principal loan of P95,700,620.00, plus interests, surcharges
and penalties computed from March 17, 2005 until the entire sum is fully paid, including the amount of
P74,678,647.00 foregone interest covering the period from October 1, 2004 to December 31, 2005 or for a
total of fifteen (15) months, plus incidental expenses as may be proved in court, in the event that Annexes
G to L be nullified. Other relief and remedies as are just and equitable under the premises are hereby prayed
for.[1 6] chanroblesvirtuallawlibrary
Thereafter, respondent Tan filed before the RTC an Omnibus Motion in which he contended that Civil Case No.
2006-0030 involved real properties, the docket fees for which should be computed in accordance with Section 7(a),
not Section 7(b)(1), of Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC which took effect on
16 August 2004. Since petitioner did not pay the appropriate docket fees for Civil Case No. 2006-0030, the RTC did
not acquire jurisdiction over the said case. Hence, respondent Tan asked the RTC to issue an order requiring
petitioner to pay the correct and accurate docket fees pursuant to Section 7(a), Rule 141 of the Rules of Court, as
amended; and should petitioner fail to do so, to deny and dismiss the prayer of petitioner for the annulment of the
Deeds of Absolute Sale for having been executed in contravention of the law or of the Memorandum of Agreement
as pactum commisorium. chanroblesvirtuallawlibrary
REMLAW Page 31
As required by the RTC, the parties submitted their Position Papers on the matter. On 24 March 2006, the RTC
issued an Order[17] granting respondent Tans Omnibus Motion. In holding that both petitioner and respondent Tan
must pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended, the RTC
reasoned: chanroblesvirtuallawlibrary
It must be noted that under paragraph (b) 2. of the said Section 7, it is provided that QUIETING OF
TITLE which is an action classified as beyond pecuniary estimation shall be governed by paragraph (a).
Hence, the filing fee in an action for Declaration of Nullity of Deed which is also classified as beyond
pecuniary estimation, must be computed based on the provision of Section 7(A) herein-above, in part,
quoted. chanroblesvirtuallawlibrary
Since [herein respondent], Romeo Tan in his Answer has a counterclaim against the plaintiff, the former
must likewise pay the necessary filling (sic) fees as provided for under Section 7 (A) of Amended
Administrative Circular No. 35-2004 issued by the Supreme Court.[18] chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the [herein petitioner] is hereby ordered to pay additional filing fee and
the [herein respondent], Romeo Tan is also ordered to pay docket and filing fees on his counterclaim, both
computed based on Section 7(a) of the Supreme C ourt Amended Administrative Circular No. 35-2004 within
fifteen (15) days from receipt of this Order to the C lerk of Court, Regional Trial Court, Naga C ity and for the
latter to compute and to collect the said fees accordingly.[19] chanroblesvirtuallawlibrary
Petitioner moved[20] for the partial reconsideration of the 24 March 2006 Order of the RTC, arguing that C ivil Case
No. 2006-0030 was principally for the annulment of the Deeds of Absolute Sale and, as such, incapable of
pecuniary estimation. Petitioner submitted that the RTC erred in applying Section 7(a), Rule 141 of the Rules of
C ourt, as amended, to petitioners first cause of action in its C omplaint in C ivil Case No. 2006-0030. chanroblesvirtuallawlibrary
In its Order[21] dated 29 March 2006, the RTC refused to reconsider its 24 March 2006 Order, based on the
following ratiocination: chanroblesvirtuallawlibrary
Analyzing, the action herein pertains to real property, for as admitted by the [herein petitioner], the deeds
of sale in question pertain to real property x x x. The Deeds of Sale subject of the instant case have already
been transferred in the name of the [herein respondents Tan and Obiedo]. chanroblesvirtuallawlibrary
C ompared with Quieting of Title, the latter action is brought when there is cloud on the title to real property
or any interest therein or to prevent a cloud from being cast upon title to the real property (Art. 476, Civil
Code of the Philippines) and the plaintiff must have legal or equitable title to or interest in the real
property which is the subject matter of the action (Art. 447, ibid.), and yet plaintiff in QUIETING OF TITLE
is required to pay the fees in accordance with paragraph (a) of Section 7 of the said Amended Administrative
REMLAW Page 32
is required to pay the fees in accordance with paragraph (a) of Section 7 of the said Amended Administrative
C ircular No. 35-2004, hence, with more reason that the [petitioner] who no longer has title to the real
properties subject of the instant case must be required to pay the required fees in accordance with Section
7(a) of the Amended Administrative Circular No. 35-2004 afore-mentioned. chanroblesvirtuallawlibrary
Furthermore, while [petitioner] claims that the action for declaration of nullity of deed of sale and
memorandum of agreement is one incapable of pecuniary estimation, however, as argued by the
[respondent Tan], the issue as to how much filing and docket fees should be paid was never raised as an
issue in the case of Russell vs. Vestil, 304 SCRA 738. chanroblesvirtuallawlibrary
xxxx chanroblesvirtuallawlibrary
WHEREFORE, the Motion for Partial Reconsideration is hereby DENIED. [22] chanroblesvirtuallawlibrary
In a letter dated 19 April 2006, the RTC Clerk of C ourt computed, upon the request of counsel for the petitioner,
the additional docket fees petitioner must pay for in Civil Case No. 2006-0030 as directed in the afore-mentioned
RTC Orders. Per the computation of the RTC Clerk of C ourt, after excluding the amount petitioner previously paid
on 16 March 2006, petitioner must still pay the amount of P720,392.60 as docket fees.[23] chanroblesvirtuallawlibrary
Petitioner, however, had not yet conceded, and it filed a Petition for Certiorari with the C ourt of Appeals; the
petition was docketed as CA-G.R. SP No. 94800. According to petitioner, the RTC[24] acted with grave abuse of
discretion, amounting to lack or excess of jurisdiction, when it issued its Orders dated 24 March 2006 and 29 March
2006 mandating that the docket/filing fees for Civil Case No. 2006-0030, an action for annulment of deeds of sale,
be assessed under Section 7(a), Rule 141 of the Rules of C ourt, as amended. If the Orders would not be revoked,
corrected, or rectified, petitioner would suffer grave injustice and irreparable damage. chanroblesvirtuallawlibrary
On 22 November 2006, the Court of Appeals promulgated its Decision wherein it held that: chanroblesvirtuallawlibrary
C learly, the petitioners complaint involves not only the annulment of the deeds of sale, but also the recovery
of the real properties identified in the said documents. In other words, the objectives of the petitioner in
filing the complaint were to cancel the deeds of sale and ultimately, to recover possession of the same. It is
therefore a real action. chanroblesvirtuallawlibrary
C onsequently, the additional docket fees that must be paid cannot be assessed in accordance with Section
7(b). As a real action, Section 7(a) must be applied in the assessment and payment of the proper docket
fee. chanroblesvirtuallawlibrary
Resultantly, there is no grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
the court a quo. By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, and mere abuse of discretion is not enough it must be grave. The abuse
must be grave and patent, and it must be shown that the discretion was exercised arbitrarily and
REMLAW Page 33
despotically. chanroblesvirtuallawlibrary
Such a situation does not exist in this particular case. The evidence is insufficient to prove that the court a
quo acted despotically in rendering the assailed orders. It acted properly and in accordance with law. Hence,
error cannot be attributed to it. [25] chanroblesvirtuallawlibrary
Hence, the fallo of the Decision of the appellate court reads: chanroblesvirtuallawlibrary
WHEREFORE, the petition for certiorari is DENIED. The assailed Orders of the court a quo are
AFFIRMED.[2 6 ] chanroblesvirtuallawlibrary
Without seeking reconsideration of the foregoing Decision with the Court of Appeals, petitioner filed its Petition for
Review on Certiorari before this Court, with a lone assignment of error, to wit: chanroblesvirtuallawlibrary
18.The herein petitioner most respectfully submits that the C ourt of Appeals committed a grave and serious
reversible error in affirming the assailed Orders of the Regional Trial Court which are clearly contrary to
the pronouncement of this Honorable Court in the case of Spouses De Leon v. Court of Appeals,
G.R. No. 104796, March 6, 1998, not to mention the fact that if the said judgment is allowed to stand and
not rectified, the same would result in grave injustice and irreparable damage to herein petitioner in view of
the prohibitive amount assessed as a consequence of said Orders. [27] chanroblesvirtuallawlibrary
In Manchester Development Corporation v. Court of Appeals,[28] the Court explicitly pronounced that [t]he court
acquires jurisdiction over any case only upon the payment of the prescribed docket fee. Hence, the payment of
docket fees is not only mandatory, but also jurisdictional. chanroblesvirtuallawlibrary
In Sun Insurance Office, Ltd. (SIOL) v. Asuncion,[29] the Court laid down guidelines for the implementation of its
previous pronouncement in Manchester under particular circumstances, to wit: chanroblesvirtuallawlibrary
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court
may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or
reglementary period. chanroblesvirtuallawlibrary
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall
not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or
reglementary period. chanroblesvirtuallawlibrary
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
REMLAW Page 34
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee
therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of C ourt or his duly
authorized deputy to enforce said lien and assess and collect the additional fee. chanroblesvirtuallawlibrary
In the Petition at bar, the RTC found, and the Court of Appeals affirmed, that petitioner did not pay the correct
amount of docket fees for C ivil Case No. 2006-0030. According to both the trial and appellate courts, petitioner
should pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended. Consistent
with the liberal tenor of Sun Insurance, the RTC, instead of dismissing outright petitioners Complaint in Civil C ase
No. 2006-0030, granted petitioner time to pay the additional docket fees. Despite the seeming munificence of the
RTC , petitioner refused to pay the additional docket fees assessed against it, believing that it had already paid the
correct amount before, pursuant to Section 7(b)(1), Rule 141 of the Rules of Court, as amended. chanroblesvirtuallawlibrary
Relevant to the present controversy are the following provisions under Rule 141 of the Rules of C ourt, as amended
by A.M. No. 04-2-04-SC [30] and Supreme Court Amended Administrative Circular No. 35-2004[31]: chanroblesvirtuallawlibrary
If the action involves both a money claim and relief pertaining to property, then THE fees will be charged on
both the amounts claimed and value of property based on the formula prescribed in this paragraph a.
chanroblesvirtuallawlibrary
1.Actions where the value of the subject matter cannot be estimated chanroblesvirtuallawlibrary
REMLAW Page 35
3. All other actions not involving property chanroblesvirtuallawlibrary
The docket fees under Section 7(a), Rule 141, in cases involving real property depend on the fair market value of
the same: the higher the value of the real property, the higher the docket fees due. In contrast, Section 7(b)(1),
Rule 141 imposes a fixed or flat rate of docket fees on actions incapable of pecuniary estimation. chanroblesvirtuallawlibrary
In order to resolve the issue of whether petitioner paid the correct amount of docket fees, it is necessary to
determine the true nature of its Complaint. The dictum adhered to in this jurisdiction is that the nature of an action
is determined by the allegations in the body of the pleading or Complaint itself, rather than by its title or
heading.[32] However, the Court finds it necessary, in ascertaining the true nature of Civil Case No. 2006-0030, to
take into account significant facts and circumstances beyond the Complaint of petitioner, facts and circumstances
which petitioner failed to state in its C omplaint but were disclosed in the preliminary proceedings before the court a
quo. chanroblesvirtuallawlibrary
Petitioner persistently avers that its C omplaint in Civil Case No. 2006-0030 is primarily for the annulment of the
Deeds of Absolute Sale. Based on the allegations and reliefs in the Complaint alone, one would get the impression
that the titles to the subject real properties still rest with petitioner; and that the interest of respondents Tan and
Obiedo in the same lies only in the Deeds of Absolute Sale sought to be annulled. chanroblesvirtuallawlibrary
What petitioner failed to mention in its C omplaint was that respondents Tan and Obiedo already had the
Memorandum of Agreement, which clearly provided for the execution of the Deeds of Absolute Sale, registered on
the TC Ts over the five parcels of land, then still in the name of petitioner. After respondents Tan and Obiedo had
the Deeds of Absolute Sale notarized on 3 January 2006 and presented the same to Register of Deeds for Naga
C ity on 8 March 2006, they were already issued TCTs over the real properties in question, in their own names.
Respondents Tan and Obiedo have also acquired possession of the said properties, enabling them, by petitioners
own admission, to demolish the improvements thereon. chanroblesvirtuallawlibrary
It is, thus, suspect that petitioner kept mum about the afore-mentioned facts and circumstances when they had
already taken place before it filed its C omplaint before the RTC on 16 March 2006. Petitioner never expressed
surprise when such facts and circumstances were established before the RTC, nor moved to amend its C omplaint
accordingly. Even though the Memorandum of Agreement was supposed to have long been registered on its TCTs
over the five parcels of land, petitioner did not pray for the removal of the same as a cloud on its title. In the same
vein, although petitioner alleged that respondents Tan and Obiedo forcibly took physical possession of the subject
real properties, petitioner did not seek the restoration of such possession to itself. And despite learning that
respondents Tan and Obiedo already secured TCTs over the subject properties in their names, petitioner did not
ask for the cancellation of said titles. The only logical and reasonable explanation is that petitioner is reluctant to
bring to the attention of the C ourt certain facts and circumstances, keeping its C omplaint safely worded, so as to
institute only an action for annulment of Deeds of Absolute Sale. Petitioner deliberately avoided raising issues on
the title and possession of the real properties that may lead the Court to classify its case as a real action.
chanroblesvirtuallawlibrary
No matter how fastidiously petitioner attempts to conceal them, the allegations and reliefs it sought in its
REMLAW Page 36
No matter how fastidiously petitioner attempts to conceal them, the allegations and reliefs it sought in its
C omplaint in C ivil Case No. 2006-0030 appears to be ultimately a real action, involving as they do the recovery by
petitioner of its title to and possession of the five parcels of land from respondents Tan and Obiedo. chanroblesvirtuallawlibrary
A real action is one in which the plaintiff seeks the recovery of real property; or, as indicated in what is now
Section 1, Rule 4 of the Rules of C ourt, a real action is an action affecting title to or recovery of possession of real
property.[33] chanroblesvirtuallawlibrary
Section 7, Rule 141 of the Rules of Court, prior to its amendment by A.M. No. 04-2-04-SC, had a specific
paragraph governing the assessment of the docket fees for real action, to wit: chanroblesvirtuallawlibrary
In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be
alleged by the claimant and shall be the basis in computing the fees. chanroblesvirtuallawlibrary
It was in accordance with the afore-quoted provision that the Court, in Gochan v. Gochan,[34] held that although
the caption of the complaint filed by therein respondents Mercedes Gochan, et al. with the RTC was denominated
as one for specific performance and damages, the relief sought was the conveyance or transfer of real property, or
ultimately, the execution of deeds of conveyance in their favor of the real properties enumerated in the provisional
memorandum of agreement. Under these circumstances, the case before the RTC was actually a real action,
affecting as it did title to or possession of real property. C onsequently, the basis for determining the correct docket
fees shall be the assessed value of the property, or the estimated value thereof as alleged in the complaint. But
since Mercedes Gochan failed to allege in their complaint the value of the real properties, the Court found that the
RTC did not acquire jurisdiction over the same for non-payment of the correct docket fees. chanroblesvirtuallawlibrary
Likewise, in Siapno v. Manalo,[35] the C ourt disregarded the title/denomination of therein plaintiff Manalos
amended petition as one for Mandamus with Revocation of Title and Damages; and adjudged the same to be a real
action, the filing fees for which should have been computed based on the assessed value of the subject property
or, if there was none, the estimated value thereof. The Court expounded in Siapno that: chanroblesvirtuallawlibrary
In his amended petition, respondent Manalo prayed that NTAs sale of the property in dispute to Standford
East Realty Corporation and the title issued to the latter on the basis thereof, be declared null and void. In a
very real sense, albeit the amended petition is styled as one for Mandamus with Revocation of Title and
Damages, it is, at bottom, a suit to recover from Standford the realty in question and to vest in respondent
the ownership and possession thereof. In short, the amended petition is in reality an action in res or a real
action. Our pronouncement in Fortune Motors (Phils.), Inc. vs. Court of Appeals is instructive. There, we
said: chanroblesvirtuallawlibrary
chanroblesvirtuallawlibrary
A prayer for annulment or rescission of contract does not operate to efface the true
objectives and nature of the action which is to recover real property. (Inton, et al., v.
Quintan, 81 Phil. 97, 1948) chanroblesvirtuallawlibrary
An action for the annulment or rescission of a sale of real property is a real action. Its
prime objective is to recover said real property. (Gavieres v. Sanchez, 94 Phil. 760, 1954)
REMLAW Page 37
prime objective is to recover said real property. (Gavieres v. Sanchez, 94 Phil. 760, 1954)
chanroblesvirtuallawlibrary
An action to annul a real estate mortgage foreclosure sale is no different from an action to annul a
private sale of real property. (Muoz v. Llamas, 87 Phil. 737, 1950). chanroblesvirtuallawlibrary
While it is true that petitioner does not directly seek the recovery of title or possession of
the property in question, his action for annulment of sale and his claim for damages are
closely intertwined with the issue of ownership of the building which, under the law, is
considered immovable property, the recovery of which is petitioner's primary objective.
The prevalent doctrine is that an action for the annulment or rescission of a sale of real
property does not operate to efface the fundamental and prime objective and nature of the
case, which is to recover said real property. It is a real action.
chanroblesvirtuallawlibrary
Unfortunately, and evidently to evade payment of the correct amount of filing fee, respondent Manalo never
alleged in the body of his amended petition, much less in the prayer portion thereof, the assessed value of
the subject res, or, if there is none, the estimated value thereof, to serve as basis for the receiving clerk in
computing and arriving at the proper amount of filing fee due thereon, as required under Section 7 of this
C ourts en banc resolution of 04 September 1990 (Re: Proposed Amendments to Rule 141 on Legal Fees).
chanroblesvirtuallawlibrary
Even the amended petition, therefore, should have been expunged from the records. chanroblesvirtuallawlibrary
In fine, we rule and so hold that the trial court never acquired jurisdiction over its C ivil Case No.
Q-95-24791.[36] chanroblesvirtuallawlibrary
It was in Serrano v. Delica,[37] however, that the C ourt dealt with a complaint that bore the most similarity to the
one at bar. Therein respondent Delica averred that undue influence, coercion, and intimidation were exerted upon
him by therein petitioners Serrano, et al. to effect transfer of his properties. Thus, Delica filed a complaint before
the RTC against Serrano, et al., praying that the special power of attorney, the affidavit, the new titles issued in
the names of Serrano, et al., and the contracts of sale of the disputed properties be cancelled; that Serrano, et al.
be ordered to pay Delica, jointly and severally, actual, moral and exemplary damages in the amount of
P200,000.00, as well as attorneys fee of P200,000.00 and costs of litigation; that a TRO and a writ of preliminary
injunction be issued ordering Serrano, et al. to immediately restore him to his possession of the parcels of land in
question; and that after trial, the writ of injunction be made permanent. The Court dismissed Delicas complaint for
the following reasons: chanroblesvirtuallawlibrary
chanroblesvirtuallawlibrary
A careful examination of respondents complaint is that it is a real action. In Paderanga vs. Buissan, we
held that in a real action, the plaintiff seeks the recovery of real property, or, as stated in Section 2(a), Rule
4 of the Revised Rules of Court, a real action is one affecting title to real property or for the recovery of
possession of, or for partition or condemnation of, or foreclosure of a mortgage on a real property.
chanroblesvirtuallawlibrary
REMLAW Page 38
Obviously, respondents complaint is a real action involving not only the recovery of real properties, but
likewise the cancellation of the titles thereto. chanroblesvirtuallawlibrary
C onsidering that respondents complaint is a real action, the Rule requires that the assessed value of the
property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the
basis in computing the fees. chanroblesvirtuallawlibrary
We note, however, that neither the assessed value nor the estimated value of the questioned parcels of land
were alleged by respondent in both his original and amended complaint. What he stated in his amended
complaint is that the disputed realties have a BIR zonal valuation of P1,200.00 per square meter. However,
the alleged BIR zonal valuation is not the kind of valuation required by the Rule. It is the assessed value of
the realty. Having utterly failed to comply with the requirement of the Rule that he shall allege in his
complaint the assessed value of his real properties in controversy, the correct docket fee cannot be
computed. As such, his complaint should not have been accepted by the trial court. We thus rule that it has
not acquired jurisdiction over the present case for failure of herein respondent to pay the required docket
fee. On this ground alone, respondents complaint is vulnerable to dismissal. [38] chanroblesvirtuallawlibrary
Brushing aside the significance of Serrano, petitioner argues that said decision, rendered by the Third Division of
the C ourt, and not by the Court en banc, cannot modify or reverse the doctrine laid down in Spouses De Leon v.
Court of Appeals.[39] Petitioner relies heavily on the declaration of this C ourt in Spouses De Leon that an action for
annulment or rescission of a contract of sale of real property is incapable of pecuniary estimation. chanroblesvirtuallawlibrary
The C ourt, however, does not perceive a contradiction between Serrano and the Spouses De Leon. The Court calls
attention to the following statement in Spouses De Leon: A review of the jurisprudence of this C ourt indicates that
in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, this
C ourt has adopted the criterion of first ascertaining the nature of the principal action or remedy sought.
Necessarily, the determination must be done on a case-to-case basis, depending on the facts and circumstances of
each. What petitioner conveniently ignores is that in Spouses De Leon, the action therein that private respondents
instituted before the RTC was solely for annulment or rescission of the contract of sale over a real property.[40]
There appeared to be no transfer of title or possession to the adverse party. Their complaint simply prayed for:
chanroblesvirtuallawlibrary
1. Ordering the nullification or rescission of the Contract of C onditional Sale (Supplementary Agreement) for
having violated the rights of plaintiffs (private respondents) guaranteed to them under Article 886 of the
C ivil C ode and/or violation of the terms and conditions of the said contract. chanroblesvirtuallawlibrary
2. Declaring void ab initio the Deed of Absolute Sale for being absolutely simulated; and chanroblesvirtuallawlibrary
3. Ordering defendants (petitioners) to pay plaintiffs (private respondents) attorney's fees in the amount of
P100,000.00.[41] chanroblesvirtuallawlibrary
As this C ourt has previously discussed herein, the nature of Civil Case No. 2006-0030 instituted by petitioner
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As this C ourt has previously discussed herein, the nature of Civil Case No. 2006-0030 instituted by petitioner
before the RTC is closer to that of Serrano, rather than of Spouses De Leon, hence, calling for the application of the
ruling of the C ourt in the former, rather than in the latter. chanroblesvirtuallawlibrary
chanroblesvirtuallawlibrary
It is also important to note that, with the amendments introduced by A.M. No. 04-2-04-SC, which became effective
on 16 August 2004, the paragraph in Section 7, Rule 141 of the Rules of Court, pertaining specifically to the basis
for computation of docket fees for real actions was deleted. Instead, Section 7(1) of Rule 141, as amended,
provides that in cases involving real property, the FAIR MARKET value of the REAL property in litigation
STATED IN THE CURRENT TAX DECLARATION OR CURRENT ZONAL VALUATION OF THE BUREAU OF INTERNAL
REVENUE, WHICH IS HIGHER, OR IF THERE IS NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION x x x
shall be the basis for the computation of the docket fees. Would such an amendment have an impact on Gochan,
Siapno, and Serrano? The Court rules in the negative. chanroblesvirtuallawlibrary
A real action indisputably involves real property. The docket fees for a real action would still be determined in
accordance with the value of the real property involved therein; the only difference is in what constitutes the
acceptable value. In computing the docket fees for cases involving real properties, the courts, instead of relying on
the assessed or estimated value, would now be using the fair market value of the real properties (as stated in
the Tax Declaration or the Zonal Valuation of the Bureau of Internal Revenue, whichever is higher) or, in the
absence thereof, the stated value of the same. chanroblesvirtuallawlibrary
In sum, the C ourt finds that the true nature of the action instituted by petitioner against respondents is the
recovery of title to and possession of real property. It is a real action necessarily involving real property, the docket
fees for which must be computed in accordance with Section 7(1), Rule 141 of the Rules of Court, as amended. The
C ourt of Appeals, therefore, did not commit any error in affirming the RTC Orders requiring petitioner to pay
additional docket fees for its Complaint in C ivil Case No. 2006-0030. chanroblesvirtuallawlibrary
chanroblesvirtuallawlibrary
The C ourt does not give much credence to the allegation of petitioner that if the judgment of the Court of Appeals
is allowed to stand and not rectified, it would result in grave injustice and irreparable injury to petitioner in view of
the prohibitive amount assessed against it. It is a sweeping assertion which lacks evidentiary support. Undeniably,
before the Court can conclude that the amount of docket fees is indeed prohibitive for a party, it would have to
look into the financial capacity of said party. It baffles this Court that herein petitioner, having the capacity to enter
into multi-million transactions, now stalls at paying P720,392.60 additional docket fees so it could champion before
the courts its rights over the disputed real properties. Moreover, even though the C ourt exempts individuals, as
indigent or pauper litigants, from paying docket fees, it has never extended such an exemption to a corporate
entity. chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED. The Decision, dated 22 November
2006, of the Court of Appeals in CA-G.R. SP No. 94800, which affirmed the Orders dated 24 March 2006 and 29 March 2006 of
the R TC, Branch 22, of Naga City, in Civil Case No. RTC-2006-0030, ordering petitioner Ruby Shelter Builders and Realty
De ve lopment Corporation to pay additional docket/filing fees, computed based on Section 7(a), Rule 141 of the Rules of
Court, as amended, is hereby AFFIRMED. Costs against the petitioner.
REMLAW Page 40
Chavez v. CA GR 125813 Feb 6, 2007
Sunday, November 14, 2010
11:20 PM
REMLAW Page 41
published and in case one of the offended parties is a private individual, the action shall be filed
in the Court of First Instance of the province or city where he actually resides at the time of the
commission of the offense or where the libelous matter is printed and first published x x x.
(Emphasis supplied.)
Referring to the fact that the Information against private respondents states that the libelous
matter was "caused to be published in Smart File, a magazine of general circulation in Manila,"
the Court of Appeals deemed the cases of Agbayani v. Sayo3 and Soriano v. IAC4 as controlling.
Based on the doctrines pronounced in said cases, the appellate court held that the Information
failed to allege where the written defamation was "printed and first published," an allegation sine
qua non "if the circumstances as to where the libel was printed and first published is used as the
basis of the venue of the publication."5 It was observed that "venue of libel cases where the
complainant is a private person is either in any of only two places, namely: (1) where the subject
article was printed and first published; and (2) where complainant of the commission actually
resides at the time of the commission of the offense." The Information, it was noted, did not
indicate that the libelous articles were printed or first published in Manila, or that petitioner
resided in Manila at the time of the publication of the articles.
The Court of Appeals further observed that even during the preliminary investigation, private
respondents had already interposed that Smart File was actually printed and first published in the
City of Makati, and that the address of the publisher Animal Farms Publication as indicated in
the editorial page of the publication itself was a post office box with the Makati Central Post
Office. Even as this observation was disputed by petitioner, who insisted the place of private
respondent‘s printing and publishing business was actually in Manila, the Court of Appeals noted
that he should have been alerted enough by private respondents' adverse insistence and that a due
investigation would have inevitably revealed that private respondents had transferred from their
previous Manila address to Makati by the time the subject articles were published.6
Before this Court, petitioner attacks the reliance placed on Agbayani and Soriano, primarily by
pointing out that in both cases, the complainants were public officers, and not private officials.
Petitioner submits that the 1965 amendments to Article 360 of the Revised Penal Code which
imposed the present venue requisites were introduced in order to preclude the harassment of
members of the press through libel suits filed in remote and distant places by public officers.
Petitioner also assails the conclusion of the Court of Appeals that the place of printing and first
publication of Smart File was in Makati, saying that this was derived out of hearsay evidence.
Does the subject information sufficiently vest jurisdiction in the Manila trial courts to hear the
libel charge, in consonance with Article 360 of the Revised Penal Code? Jurisprudence applying
the provision has established that it does not.
Agbayani supplies a comprehensive restatement of the rules of venue in actions for criminal
libel, following the amendment by Rep. Act No. 4363 of the Revised Penal Code:
Article 360 in its original form provided that the venue of the criminal and civil actions for
written defamations is the province wherein the libel was published, displayed or exhibited,
regardless of the place where the same was written, printed or composed. Article 360 originally
did not specify the public officers and the courts that may conduct the preliminary investigation
of complaints for libel.
Before article 360 was amended, the rule was that a criminal action for libel may be instituted in
any jurisdiction where the libelous article was published or circulated, irrespective of where it
was written or printed (People v. Borja, 43 Phil. 618). Under that rule, the criminal action is
transitory and the injured party has a choice of venue.
Experience had shown that under that old rule the offended party could harass the accused in a
libel case by laying the venue of the criminal action in a remote or distant place.
Thus, in connection with an article published in the Daily Mirror and the Philippine Free Press,
Pio Pedrosa, Manuel V. Villareal and Joaquin Roces were charged with libel in the justice of the
peace court of San Fabian, Pangasinan (Amansec v. De Guzman, 93 Phil. 933).
To forestall such harassment, Republic Act No. 4363 was enacted. It lays down specific rules as
to the venue of the criminal action so as to prevent the offended party in written defamation
cases from inconveniencing the accused by means of out-of-town libel suits, meaning complaints
filed in remote municipal courts (Explanatory Note for the bill which became Republic Act No.
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filed in remote municipal courts (Explanatory Note for the bill which became Republic Act No.
4363, Congressional Record of May 20, 1965, pp. 424-5; Time, Inc. v. Reyes, L-28882, May 31,
1971, 39 SCRA 303, 311).
The rules on venue in article 360 may be restated thus:
1. Whether the offended party is a public official or a private person, the criminal
action may be filed in the Court of First Instance of the province or city where the
libelous article is printed and first published.
2. If the offended party is a private individual, the criminal action may also be filed in the
Court of First Instance of the province where he actually resided at the time of the
commission of the offense.
3. If the offended party is a public officer whose office is in Manila at the time of the
commission of the offense, the action may be filed in the Court of First Instance of Manila.
4. If the offended party is a public officer holding office outside of Manila, the action may
be filed in the Court of First Instance of the province or city where he held office at the
time of the commission of the offense.7 (Emphasis supplied.)
The rules, as restated in Agbayani, do not lay a distinction that only those actions for criminal
libel lodged by public officers need be filed in the place of printing and first publication. In fact,
the rule is quite clear that such place of printing and first publication stands as one of only two
venues where a private person may file the complaint for libel, the other venue being the place of
residence of the offended party at the time the offense was committed. The very language itself
of Article 360, as amended, does not support petitioner's thesis that where the complainant is a
private person, a more liberal interpretation of the phrase "printed and first published" is
warranted than when a public officer is the offended party. To wit:
Article 360. Persons responsible.―x x x The criminal and civil action for damages in cases of
written defamations as provided for in this chapter, shall be filed simultaneously or separately
with the Court of First Instance of the province or city where the libelous article is printed and
first published or where any of the offended parties actually resides at the time of the
commission of the offense. x x x
Where the law does not distinguish, we should not distinguish.8
Petitioner faults the Court of Appeals for relying on Agbayani and Soriano, two cases wherein
the complainant was a public officer. Yet the Court has since had the opportunity to reiterate the
Agbayani doctrine even in cases where the complainants were private persons.
Most telling of the recent precedents is Agustin v. Pamintuan,9 which involved a criminal action
for libel filed by a private person, the acting general manager of the Baguio Country Club, with
the RTC of Baguio City. The relevant portion of the Information is quoted below:
That on or about the 17th day of March 2000, in the City of Baguio, Philippines, and within the
jurisdiction of this Honorable Court, the said accused, with deliberate intent and malicious intent
and evil motive of attacking, injuring and impeaching the character, honesty, integrity, virtue and
reputation of one Anthony De Leon the acting general manager of the Baguio Country Club, and
as a private citizen of good standing and reputation in the community and with malicious intent
of exposing the (sic) Anthony De Leon to public hatred, contempt, ridicule, discredit and
dishonor, without any justifiable motive, did then and there willfully, maliciously and criminally
prepare or cause to prepare, write in his column "Cocktails" and publish in the Philippine Daily
Inquirer, a newspaper of general circulation in the City of Baguio and in the entire
Philippines x x x.10 (Emphasis supplied.)
The phrase "the Philippine Daily Inquirer, a newspaper of general circulation in the City of
Baguio and in the entire Philippines" bears obvious similarity to the reference in the Information
in this case to the publication involved as "‗Smart File,‘ a magazine of general circulation in
Manila," and both private complainants in Agustin and the case at bar were private citizens at the
time of the filing of the complaint. Yet the Court in Agustin ruled that the failure to allege that
Baguio was the venue of printing and first publication, or that the complainant therein was a
resident of Baguio, constituted a substantial defect that could not even be cured by mere
amendment. The rules on venue as laid down in Agbayani were restated in Agustin,11 retaining
no distinction as to venue whether the offended party is a public official or a private person. In
fact, the Court considered the phrase "a newspaper of general circulation in the city of Baguio"
REMLAW Page 43
fact, the Court considered the phrase "a newspaper of general circulation in the city of Baguio"
as so utterly incapable of establishing Baguio as venue that the bulk of the discussion instead
centered on whether the allegation that the complainant was the acting general manager of the
Baguio Country Club sufficiently established that he was a resident of Baguio City. On that
point, the Court ruled that it did not.
In Macasaet v. People,12 the complainant was again a private person.13 The Information for libel
against a gossip columnist and the editors of the tabloid which published the column was filed
with the RTC of Quezon City, but it failed to state at all where the tabloid was printed and first
published, or where the complainant resided. Even as evidence was presented during trial that
complainant was a resident of Quezon City, the Court ultimately held that the allegations
contained in the Information "[were] utterly insufficient to vest jurisdiction on the RTC of
Quezon City."14 Again, the rules laid down in Agbayani were cited as controlling.15 The Court
further held that the evidence establishing the complainant's place of residence as Quezon City
could not cure the defect of the Information, noting that "it is settled that jurisdiction of a court
over a criminal case is determined by the allegations of the complaint or information."16
Macasaet resolutely stated that since the place of printing and first publication or the place of
residence at the time are "matters deal[ing] with the fundamental issue of the court's jurisdiction,
Article 360 of the Revised Penal Code, as amended, mandates that either one of these statements
must be alleged in the information itself and the absence of both from the very face of the
information renders the latter fatally defective."17 We affirm that proposition, which is fatal to
this petition. There is no question that the Information fails to allege that the City of Manila was
the place where the offending articles were printed and first published, or that petitioner was a
resident of Manila at the time the articles were published.
Petitioner does submit that there is no need to employ the clause "printed and first published" in
indicating where the crime of libel was committed, as the term "publish" is "generic and within
the general context of the term 'print' in so far as the latter term is utilized to refer to the physical
act of producing the publication."18 Certainly, that argument flies in the face of our holding in
Agustin, which involved a similarly worded Information, and which stands as a precedent we
have no inclination to disturb. Still, a perusal of the Information in this case reveals that the word
"published" is utilized in the precise context of noting that the defendants "cause[d] to be
published in 'Smart File', a magazine of general circulation in Manila." The Information states
that the libelous articles were published in Smart File, and not that they were published in
Manila. The place "Manila" is in turn employed to situate where Smart File was in general
circulation, and not where the libel was published or first printed. The fact that Smart File was in
general circulation in Manila does not necessarily establish that it was published and first printed
in Manila, in the same way that while leading national dailies such as the Philippine Daily
Inquirer or the Philippine Star are in general circulation in Cebu, it does not mean that these
newspapers are published and first printed in Cebu.
Indeed, if we hold that the Information at hand sufficiently vests jurisdiction in Manila courts
since the publication is in general circulation in Manila, there would be no impediment to the
filing of the libel action in other locations where Smart File is in general circulation. Using the
example of the Inquirer or the Star, the granting of this petition would allow a resident of Aparri
to file a criminal case for libel against a reporter or editor in Jolo, simply because these
newspapers are in general circulation in Jolo. Such a consequence is precisely what Rep. Act No.
4363 sought to avoid.
Our ruling in Banal III v. Panganiban19 might tend to support petitioner's argument that the
phrase "printed and first published" need not be necessarily employed in the Information. The
Information in that case filed by private persons before the Makati City RTC read that the
libelous matter was found in a newspaper column "of the Philippine Daily Inquirer which is
published in English in the City of Makati, Metro Manila, Philippines and of general circulation
in the Philippines and abroad x x x x."20 The Court did observe that this information was
"sufficient in form"21 as it clearly stated "that the newspaper is published in Makati City but
circulated throughout the country, which allegation accordingly vests jurisdiction over the
offense charged in the RTC of Makati City."22 Yet even notwithstanding the fact that the
information in Banal III did not use the phrase "printed and first published," it still categorically
REMLAW Page 44
information in Banal III did not use the phrase "printed and first published," it still categorically
stated, at the very least, that the libelous matter was "published in English in the City of Makati."
In contrast, what the Information at bar categorically states is that the libelous matter was
"published in Smart File," not "published in Manila."23 The fact that the present Information
further alleges that Smart File was "of general circulation in Manila" does not necessarily mean
that the magazine was printed and first published in Manila. In any event, as the language in the
present information hews closer to that in Agustin rather than Banal III, we find the former as the
appropriate precedent to apply in this case.
For us to grant the present petition, it would be necessary to abandon the Agbayani rule
providing that a private person must file the complaint for libel either in the place of printing and
first publication, or at the complainant's place of residence. We would also have to abandon the
subsequent cases that reiterate this rule in Agbayani, such as Soriano, Agustin, and Macasaet.
There is no convincing reason to resort to such a radical action. These limitations imposed on
libel actions filed by private persons are hardly onerous,
especially as they still allow such persons to file the civil or criminal complaint in their
respective places of residence, in which situation there is no need to embark on a quest to
determine with precision where the libelous matter was printed and first published.1awphi1.net
If this disquisition impresses an unduly formalistic reading of the Information at hand, it should
be reiterated that the flaws in the Information strike at the very heart of the jurisdiction of the
Manila RTC. It is settled that jurisdiction of a court over a criminal case is determined by the
allegations of the complaint or information,24 and the offense must have been committed or any
one of its essential ingredients took place within the territorial jurisdiction of the court.25 Article
360 states, in as unequivocal a manner as possible, that the criminal and civil action for libel
shall be filed with the court of the province or city "where the libelous article is printed and first
published, or where any of the offended parties actually resides at the time of the commission of
the offense." If the Information for libel does not establish with particularity any of these two
venue requirements, the trial court would have no jurisdiction to hear the criminal case.
Another point bears to be added. We are unable to share petitioner's insistence that since the
protection of members of the mass media from frivolous libel suits filed by public officers in far-
flung
places appears to have been a motivating force behind the amendments to Article 360, a more
liberal interpretation of the provision should obtain if the complainant is a private person.
Without the venue requirements under Article 360, a private person induced by a motive to
harass could, similarly as a public officer, coerce a journalist to defend against a libel suit filed in
the most remote of places. While Rep. Act No. 4363 does attribute value to the right to comment
on the performance of public officials of their duties, it actually extends its protection to the right
of any person to free expression, by assuring a reasonable venue requirement even if the subject
of comment is not a public officer. Libel stands as an exception to one of the most cherished
constitutional rights, that of free expression. While libel laws ensure a modicum of responsibility
in one's own speech or expression, a prescribed legal standard that conveniences the easy
proliferation of libel suits fosters an atmosphere that inhibits the right to speak freely. When such
a prescribed standard is submitted for affirmation before this Court, as is done in this petition, it
must receive the highest possible scrutiny, as it may interfere with the most basic of democratic
rights.
Finally, we decline to resolve the other issues raised in the petition, as the Information by itself is
defective on its face, for the reasons we have stated, that there is no need to evaluate whether
Smart File was actually printed and first published in Manila or Makati City. The plain fact is
that the Information failed to make the sufficient allegation in that regard, and even any
ascertainment that the articles were printed and first published in Manila does not cure the
jurisdictional defect of the Information.
WHEREFORE, the petition is DENIED.
REMLAW Page 45
REMLAW Page 46
Springfield v. RTC Judge GR 142626 Feb 6, 2007
Sunday, November 14, 2010
11:20 PM
REMLAW Page 47
On July 2, 1997, petitioners filed with the Court of Appeals (CA) a special civil action for
certiorari, mandamus, and prohibition with prayer for the issuance of writ of preliminary
injunction and/or temporary restraining order, docketed as CA-G.R. SP No. 44563.11 Petitioners
alleged that the RTC committed grave abuse of discretion when it ruled that the annulment of
judgment filed before it is actually an action for certiorari in a different color. According to
petitioners, what it sought before the RTC is an annulment of the DARAB Decision and not
certiorari, as the DARAB Decision is void ab initio for having been rendered without due
process of law.12
In the assailed Decision13 dated July 16, 1998, the CA dismissed the petition for lack of merit,
ruling that the RTC does not have jurisdiction to annul the DARAB Decision because it is a co-
equal body.14
However, on January 12, 1999, the CA ordered the elevation of the DARAB records before it,
declaring that it "overlooked the fact that petitioners likewise applied for a writ of prohibition
against the enforcement of the DARAB decision which they claim to be patently void."15
Forwarded to the CA were the records of the original case filed with the DARAB-Region X, and
it appearing that the petition for relief from judgment and its pertinent records were forwarded to
the DARAB Central Office, the CA issued another Resolution on December 20, 1999,16
requiring the DARAB Central Office to forward the records of the case. But after receipt of the
records, the CA simply denied petitioners' motion for reconsideration per Resolution17 dated
February 23, 2000 without specifically resolving the issues raised concerning the prayer for a
writ of prohibition.
Hence, the present petition on the following grounds:
I
THE COURT OF APPEALS COMMITTED A CLEAR ERROR OF LAW IN APPLYING
THE PRINCIPLE OF JUDICIAL STABILITY TO JUSTIFY ITS CONCLUSION
DIVESTING THE REGIONAL TRIAL COURT OF ITS JURISDICTION VESTED BY
LAW OVER CASES WHERE THE EXCLUSIVE JURISDICTION WAS NOT
EXPRESSLY GRANTED TO ANY OTHER COURTS [SIC] OR TRIBUNAL, IN
EFFECT, MODIFYING THE APPLICABLE LAW ON THE MATTER.
II
THE COURT OF APPEALS IRREGULARLY DISMISSED PETITIONERS' MOTION
FOR RECONSIDERATION AFTER IT HAD RESOLVED TO ENTERTAIN
PETITIONERS' PETITION FOR PROHIBITION AND TO REVIEW THE DARAB
PROCEEDINGS, THEREBY DEPARTING FROM THE USUAL COURSE OF
JUDICIAL PROCEEDINGS.
III
THE HONORABLE SUPREME COURT, BEING THE HIGHEST TEMPLE OF
RIGHTS, AND TO AVOID SERIOUS MISCARRIAGE OF JUSTICE AND NEEDLESS
DELAYS, IS MOST RESPECTFULLY URGED TO TAKE COGNIZANCE OF THE
PETITION FILED IN CA-G.R. SP No. 44563 IN THE EXERCISE OF ITS
CONCURRENT JURISDICTION, AS IF THE PETITION WAS ORIGINALLY
LODGED BEFORE IT.18
Petitioners argue that under Batas Pambansa (B.P.) Blg. 129, there is no provision that vests with
the CA jurisdiction over actions for annulment of DARAB judgments. Petitioners, however,
contend that the RTC may take cognizance of the annulment case since Section 19 of B.P. Blg.
129 vests the RTC with general jurisdiction and an action for annulment is covered under such
general jurisdiction. According to petitioners, "this is but a logical consequence of the fact that
no other courts were expressly given the jurisdiction over such actions."19 Petitioners further
argue that the CA was in error when it summarily ignored their application for a writ of
prohibition, as it was necessary to restrain the DARAB from enforcing its void decision; and
even if the DARAB decision was valid, the writ of prohibition could have enjoined the execution
of the DARAB decision since there have been changes which will make the execution unjust and
inequitable.
In their Joint-Comments, the farmer-beneficiaries and the DARAB (respondents) refute
REMLAW Page 48
petitioners' allegation that they were not afforded due process in the DARAB proceedings,
stating that petitioners were impleaded as a party thereto, and in fact, they attended some of the
hearings although their counsel was absent. Respondents also adopt the CA's ruling that the RTC
is not vested with any jurisdiction to annul the DARAB decision.
As stated at the outset, the main issue in this case is whether the RTC has jurisdiction to annul a
final judgment of the DARAB.
Note must be made that the petition for annulment of the DARAB decision was filed with the
RTC on June 13, 1997, before the advent of the 1997 Rules of Civil Procedure, which took effect
on July 1, 1997. Thus, the applicable law is B.P. Blg. 129 or the Judiciary Reorganization Act of
1980, enacted on August 10, 1981.
It is also worthy of note that before the effectivity of B.P. Blg. 129, a court of first instance has
the authority to annul a final and executory judgment rendered by another court of first instance
or by another branch of the same court. This was the Court's ruling in Dulap v. Court of
Appeals.20 Yet, in subsequent cases,21 the Court held that the better policy, as a matter of comity
or courteous interaction between courts of first instance and the branches thereof, is for the
annulment cases to be tried by the same court or branch which heard the main action.
The foregoing doctrines were modified in Ngo Bun Tiong v. Sayo,22 where the Court expressed
that pursuant to the policy of judicial stability, the doctrine of non-interference between
concurrent and coordinate courts should be regarded as highly important in the administration of
justice whereby the judgment of a court of competent jurisdiction may not be opened, modified
or vacated by any court of concurrent jurisdiction.
With the introduction of B.P. Blg. 129,23 the rule on annulment of judgments was specifically
provided in Section 9(2), which vested in the then Intermediate Appellate Court (now the CA)
the exclusive original jurisdiction over actions for annulment of judgments of RTCs. Sec. 9(3) of
B.P. Blg. 129 also vested the CA with "exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, except those falling within the appellate jurisdiction of
the Supreme Court in accordance with the Constitution, the provisions of this Act, and of sub-
paragraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17
of the Judiciary Act of 1948." As provided in paragraph 16 of the Interim Rules and Guidelines
implementing B.P. Blg. 129, the quasi-judicial bodies whose decisions are exclusively
appealable to the CA are those, which under the law, R.A. No. 5434,24 or its enabling acts, are
specifically appealable to the CA.
Significantly, B.P. Blg. 129 does not specifically provide for any power of the RTC to annul
judgments of quasi-judicial bodies. However, in BF Northwest Homeowners Association, Inc. v.
Intermediate Appellate Court,25 the Court ruled that the RTCs have jurisdiction over actions for
annulment of the decisions of the National Water Resources Council, which is a quasi-judicial
body ranked with inferior courts, pursuant to its original jurisdiction to issue writs of certiorari,
prohibition, and mandamus, under Sec. 21(1) of B.P. Blg. 129, in relation to acts or omissions of
an inferior court. This led to the conclusion that despite the absence of any provision in B.P. Blg.
129, the RTC had the power to entertain petitions for annulment of judgments of inferior courts
and administrative or quasi-judicial bodies of equal ranking. This is also in harmony with the
"pre-B.P. Blg. 129" rulings of the Court recognizing the power of a trial court (court of first
instance) to annul final judgments.26 Hence, while it is true, as petitioners contend, that the RTC
had the authority to annul final judgments, such authority pertained only to final judgments
rendered by inferior courts and quasi-judicial bodies of equal ranking with such inferior
courts.
The foregoing statements beg the next question, i.e., whether the DARAB is a quasi-judicial
body with the rank of an inferior court such that the RTC may take cognizance of an action for
the annulments of its judgments. The answer is no.
The DARAB is a quasi-judicial body created by Executive Order Nos. 229 and 129-A. R.A. No.
6657 delineated its adjudicatory powers and functions. The DARAB Revised Rules of Procedure
adopted on December 26, 198827 specifically provides for the manner of judicial review of its
decisions, orders, rulings, or awards. Rule XIV, Section 1 states:
SECTION 1. Certiorari to the Court of Appeals. Any decision, order, award or ruling by the
REMLAW Page 49
SECTION 1. Certiorari to the Court of Appeals. Any decision, order, award or ruling by the
Board or its Adjudicators on any agrarian dispute or on any matter pertaining to the application,
implementation, enforcement or interpretation of agrarian reform laws or rules and regulations
promulgated thereunder, may be brought within fifteen (15) days from receipt of a copy thereof,
to the Court of Appeals by certiorari, except as provided in the next succeeding section.
Notwithstanding an appeal to the Court of Appeals the decision of the Board or Adjudicator
appealed from, shall be immediately executory.
Further, the prevailing 1997 Rules of Civil Procedure, as amended, expressly provides for an
appeal from the DARAB decisions to the CA.28
The rule is that where legislation provides for an appeal from decisions of certain administrative
bodies to the CA, it means that such bodies are co-equal with the RTC, in terms of rank and
stature, and logically, beyond the control of the latter.29
Given that DARAB decisions are appealable to the CA, the inevitable conclusion is that the
DARAB is a co-equal body with the RTC and its decisions are beyond the RTC's control.
The CA was therefore correct in sustaining the RTC's dismissal of the petition for annulment of
the DARAB Decision dated October 5, 1995, as the RTC does not have any jurisdiction to
entertain the same.
This brings to fore the issue of whether the petition for annulment of the DARAB judgment
could be brought to the CA. As previously noted, Section 9(2) of B.P. Blg. 129 vested in the CA
the exclusive original jurisdiction over actions for annulment of judgments, but only those
rendered by the RTCs. It does not expressly give the CA the power to annul judgments of quasi-
judicial bodies. Thus, in Elcee Farms, Inc. v. Semillano,30 the Court affirmed the ruling of the
CA that it has no jurisdiction to entertain a petition for annulment of a final and executory
judgment of the NLRC, citing Section 9 of B.P. Blg. 129, as amended, which only vests in the
CA "exclusive jurisdiction over actions for annulment of judgments of Regional Trial Courts."
This was reiterated in Galang v. Court of Appeals,31 where the Court ruled that that the CA is
without jurisdiction to entertain a petition for annulment of judgment of a final decision of the
Securities and Exchange Commission.
Recent rulings on similar cases involving annulments of judgments of quasi-judicial bodies are
also quite instructive on this matter.
In Cole v. Court of Appeals,32 involving an annulment of the judgment of the HLURB Arbiter
and the Office of the President (OP), filed with the CA, the Court stated that, "(U)nder Rule 47
of the Rules of Court, the remedy of annulment of judgment is confined to decisions of the
Regional Trial Court on the ground of extrinsic fraud and lack of jurisdiction x x x." The Court
further ruled, viz.:
Although the grounds set forth in the petition for annulment of judgment are fraud and lack of
jurisdiction, said petition cannot prosper for the simple reason that the decision sought to be
annulled was not rendered by the Regional Trial Court but by an administrative agency
(HLU Arbiter and Office of the President), hence, not within the jurisdiction of the Court
of Appeals. There is no such remedy as annulment of judgment of the HLURB or the
Office of the President. Assuming arguendo that the annulment petition can be treated as a
petition for review under Rule 43 of the 1997 Rules of Civil Procedure, the same should have
been dismissed by the Court of Appeals, because no error of judgment was imputed to the
HLURB and the Office of the President. Fraud and lack of jurisdiction are beyond the province
of petitions under Rule 43 of the Rules of Court, as it covers only errors of judgment. A petition
for annulment of judgment is an initiatory remedy, hence no error of judgment can be the subject
thereof. Besides, the Arbiter and the Office of the President indisputably have jurisdiction over
the cases brought before them in line with our ruling in Francisco Sycip, Jr. vs. Court of Appeals,
promulgated on March 17, 2000, where the aggrieved townhouse buyers may seek protection
from the HLURB under Presidential Decree No. 957, otherwise known as "Subdivision and
Condominium Buyers' Protective Decree."33 (Emphasis supplied)
In Macalalag v. Ombudsman,34 the Court ruled that Rule 47 of the 1997 Rules of Civil Procedure
on annulment of judgments or final orders and resolutions covers "annulment by the Court of
Appeals of judgments or final orders and resolutions in civil actions of Regional Trial Courts for
which the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies
REMLAW Page 50
which the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies
could no longer be availed of through no fault of the petitioner." Thus, the Court concluded that
judgments or final orders and resolutions of the Ombudsman in administrative cases cannot be
annulled by the CA, more so, since The Ombudsman Act specifically deals with the remedy of
an aggrieved party from orders, directives and decisions of the Ombudsman in administrative
disciplinary cases only, and the right to appeal is not to be considered granted to parties
aggrieved by orders and decisions of the Ombudsman in criminal or non-administrative cases.
While these cases involve annulments of judgments under the 1997 Rules of Civil Procedure, as
amended, still, they still find application in the present case, as the provisions of B.P. Blg. 129
and the 1997 Rules of Civil Procedure, as amended, on annulment of judgments are identical.
Consequently, the silence of B.P. Blg. 129 on the jurisdiction of the CA to annul judgments or
final orders and resolutions of quasi-judicial bodies like the DARAB indicates its lack of such
authority.
Further, petitioners are also asking the Court to take cognizance of their prayer for the issuance
of a writ of prohibition, which they claim was not acted upon by the CA, citing the Court's action
in Fortich v. Corona35 where the Court took cognizance of the petition previously filed with the
CA due to compelling reasons. The Court is not persuaded to do so.
Fortich involved a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by the
Norberto Quisumbing, Sr. Management and Development Corporation (NQSRMDC), which was
leased as a pineapple plantation to Del Monte Philippines, Inc. for a period of 10 years. During
the existence of the lease, the DAR placed the entire 144-hectare property under compulsory
acquisition and assessed the land value at P2.38 million. When the NQSRMDC/BAIDA
(Bukidnon Agro-Industrial Development Association) filed an application for conversion due to
the passage of Resolution No. 6 by the Provincial Development Council of Bukidnon and
Ordinance No. 24 by the Sangguniang Bayan of Sumilao, Bukidnon, reclassifying the area from
agricultural to industrial/institutional, the same was disapproved by the DAR Secretary and
instead, the property was placed under the compulsory coverage of Comprehensive Agrarian
Reform Program for distribution to all qualified beneficiaries. This prompted Governor Carlos O.
Fortich of Bukidnon to file an appeal with the OP, while NQSRMDC filed with the CA a petition
for certiorari, and prohibition with preliminary injunction.
The OP then issued a Decision dated March 29, 1996 reversing the DAR Secretary's decision
and approving the application for conversion. Executive Secretary Ruben D. Torres denied the
DAR's motion for reconsideration for having been filed beyond the reglementary period of 15
days, and it was also declared that the OP Decision dated March 29, 1996 had already become
final and executory.
Because of this, the farmer-beneficiaries staged a hunger strike on October 9, 1997, protesting
the OP's decision. In order to resolve the strike, the OP issued a so-called "Win/Win" resolution
on November 7, 1997, modifying the decision in that NQSRMDC's application for conversion is
approved only with respect to the approximately 44-hectare portion of the land adjacent to the
highway, as recommended by the Department of Agriculture, while the remaining approximately
100 hectares traversed by an irrigation canal and found to be suitable for agriculture shall be
distributed to qualified farmer-beneficiaries.1awphi1.net
A petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court36 was then
filed with the Court, which was contested by the Office of the Solicitor General on the ground
that the proper remedy should have been to file a petition for review directly with the CA in
accordance with Rule 43 of the Revised Rules of Court.
In resolving the issue, the Court recognized the rule that the Supreme Court, CA and RTC have
original concurrent jurisdiction to issue a writ of certiorari, prohibition, and mandamus.
However, due to compelling reasons and in the interest of speedy justice, the Court resolved to
take primary jurisdiction over the petition in the interest of speedy justice, after which the Court
nullified the act of the OP in re-opening the case and substantially modifying its March 29, 1996
Decision which had already become final and executory, as it was in gross disregard of the rules
and basic legal precept that accord finality to administrative determinations.
It must be stressed at this point that the Court, as a rule, will not entertain direct resort to it unless
REMLAW Page 51
the redress desired cannot be obtained in the appropriate courts, and exceptional and compelling
circumstances, such as cases of national interest and of serious implications, justify the availment
of the extraordinary remedy of writ of certiorari, prohibition, or mandamus calling for the
exercise of its primary jurisdiction.37 The Court finds no compelling circumstances in this case to
warrant a relaxation of the foregoing rule. The Fortich case is not analogous with the present
case such that the Court is not bound to abandon all rules, take primary jurisdiction, and resolve
the merits of petitioners' application for a writ of prohibition.
In the present case, the assailed DARAB Decision dated October 5, 1995 granting the petition
for relief from judgment and giving due course to the Notice of Coverage was made pursuant to
a petition for relief from judgment filed by the DAR, albeit petitioners are contesting the validity
of the proceedings held thereon. On the other hand, in Fortich, the OP's "Win/Win" resolution
dated November 7, 1997 was made motu proprio, as a result of the hunger strike staged by the
farmer-beneficiaries.
Further, the OP's "Win/Win" Resolution dated November 7, 1997 in the Fortich case is a patently
void judgment since it was evident that there was already an existing final and executory OP
Decision dated March 29, 1996. In this case, the assailed DARAB Decision dated October 5,
1995 appears to be regular on its face, and for its alleged nullity to be resolved, the Court must
delve into the records of the case in order to determine the validity of petitioners' argument of
lack of due process, absent notice and hearing.
Moreover, the principle of hierarchy of courts applies generally to cases involving factual
questions. As it is not a trier of facts, the Court cannot entertain cases involving factual issues.38
The question of whether the DARAB Decision dated October 5, 1995 is null and void and
enforceable against petitioners for having been rendered without affording petitioners due
process is a factual question which requires a review of the records of this case for it to be
judiciously resolved.
The Court notes that the CA, indeed, failed to resolve petitioners' prayer for the issuance of the
writ of prohibition, which, significantly, focuses on the alleged nullity of the DARAB Decision
dated October 5, 1995. On this score, the CA found that the application for the issuance of the
writ of prohibition was actually a collateral attack on the validity of the DARAB decision. But, a
final and executory judgment may be set aside in three ways;39 and a collateral attack, whereby
in an action to obtain a different relief, an attack on the judgment is nevertheless made as an
incident thereof,40 is one of these. This tenet is based upon a court's inherent authority to
expunge void acts from its records.41 Despite recognizing the need to resolve petitioners'
application for the writ of prohibition in its Resolution dated January 12, 1999, the CA
nonetheless summarily denied petitioners' motion for reconsideration in its Resolution dated
February 23, 2000,42 leaving the matter hanging and unresolved.
At first, the Court considered resolving the merits of petitioners' motion for reconsideration
concerning their application for a writ of prohibition against enforcing the DARAB Decision
dated October 5, 1995. Thus, in a Resolution dated June 5, 2006, the Court directed the CA to
transmit the records of DARAB Case No. 0555, which was previously required by the CA to be
forwarded to it per Resolution dated December 20, 1999.43 However, as of even date, the CA has
not complied with the Court's Resolution. Withal, upon re-examination of the issues involved in
this case, the Court deems it more judicious to remand this case to the CA for immediate
resolution of petitioners' motion for reconsideration, re: their application for the writ of
prohibition.
Moreover, the radical conflict in the findings of the Provincial Adjudicator and the DARAB as
regards the nature of the subject property necessitates a review of the present case. In this regard,
the CA is in a better position to fully adjudicate the case for it can delve into the records to
determine the probative value of the evidence supporting the findings of the Provincial
Adjudicator and of the DARAB. In addition, the CA is empowered by its internal rules to require
parties to submit additional documents, as it may find necessary to promote the ends of
substantial justice, and further order the transmittal of the proper records for it to fully adjudicate
the case. After all, it is an avowed policy of the courts that cases should be determined on the
merits, after full opportunity to all parties for ventilation of their causes and defenses, rather than
on technicality or some procedural imperfections. In that way, the ends of justice would be
REMLAW Page 52
on technicality or some procedural imperfections. In that way, the ends of justice would be
served better.44
WHEREFORE, the petition is PARTLY GRANTED. This case is REMANDED to the Court
of Appeals which is DIRECTED to resolve petitioners' prayer for the issuance of the writ of
prohibition in their Motion for Reconsideration.
Upon finality of this Decision, let the records be remanded forthwith to the Court of Appeals.
REMLAW Page 53
Sta. Ana v. Carpo GR 164340 Nov 28, 2008
Sunday, November 14, 2010
11:20 PM
OTILIA STA. ANA vs. SPOUSES LEON G. CARPO and AURORA CARPO G.R. No. 164340 November
28, 2008
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure
seeking the reversal of the Court of Appeals (CA) Decision2 dated March 5, 2004 which reversed and set
aside the Decision3 of the Department of Agrarian Reform Adjudication Board (DARAB) dated June 24,
1998 and reinstated the Decision4 of the Provincial Agrarian Reform Adjudicator (PARAD) of Laguna
dated October 12, 1993.
The Facts
Respondent Leon Carpo5 (Leon) and his brother Francisco G. Carpo are the registered co-owners of a
parcel of land designated as Lot No. 2175 of the Santa Rosa Estate Subdivision, situated at Sta. Rosa,
Laguna, covered by Transfer Certificate of Title (TCT) No. T-172726 of the Register of Deeds of Laguna,
with an area of 91,337 square meters, more or less. A portion thereof, consisting of 3.5 hectares,
pertained to Leon and his wife, respondent Aurora Carpo. It was devoted to rice and corn production
(subject land) and was tenanted by one Domingo Pastolero (Domingo), husband of Adoracion Pastolero
(Adoracion).7 When Domingo passed away, Adoracion together with her son Elpidio Pastolero, assumed
the tenancy rights of Domingo over the subject land.
However, on December 29, 1983, Adoracion, by executing a notarized Pinanumpaang Salaysay8 with the
conformity of Leon, and for a consideration of P72,500.00, transferred her rights in favor of petitioner
Otilia Sta. Ana9 (petitioner) who, together with her husband, Marciano de la Cruz (Marciano), became
the new tenants of the subject land.
At the outset, the parties had a harmonious tenancy relationship.10 Unfortunately, circumstances
transpired which abraded the relationship. The Department of Agrarian Reform (DAR) mediated in order
to amicably settle the controversy, but no settlement was reached by the parties. Thus, the instant case.
In their Complaint for Ejectment due to Non-Payment of Lease Rentals11 dated December 1, 1989,
respondents alleged that it was their agreement with petitioner and Marciano to increase the existing
rentals from 36 cavans to 45 cavans, and that, if respondents wanted to repossess the property, they
only had to pay the petitioner the amount of P72,500.00, the same amount paid by the latter to
Adoracion. Respondents further averred that despite repeated demands, petitioner refused to pay the
actual rentals from July 1985 to September 1989, in violation of Presidential Decree (P.D.) No. 817; and
that the subject land had been declared, upon the recommendation of the Human Settlements
Committee, suitable for commercial and industrial purposes, per Zoning Ordinance of 1981 of the
Municipality of Sta. Rosa, Laguna. Respondents prayed that petitioner be ejected from the subject land
and be directed to pay P75,016.00 as unpaid rentals.
In their Answer12 dated January 26, 1990, petitioner and Marciano denied that there was an agreement
to increase the existing rental which was already fixed at 36 cavans of palay, once or twice a year
depending on the availability of irrigation water; that neither was there an agreement as to the future
surrender of the land in favor of the respondents; that they did not refuse to pay the rentals because
they even sent verbal and written notices to the respondents, advising them to accept the same; and
that in view of the latter’s failure to respond, petitioner and Marciano were compelled to sell the
harvest and to deposit the proceeds thereof in Savings Account No. 9166 with the Universal Savings
Bank at Sta. Rosa, Laguna under the names of Leon and Marciano. As their special affirmative defense,
petitioner and Marciano claimed that Marciano is a farmer-beneficiary of the subject land pursuant to
P.D. 27. Petitioner and Marciano prayed for the outright dismissal of the complaint and for the
declaration of Marciano as full owner of the subject land.
Thereafter, trial on the merits ensued.
The PARAD’s Ruling
On October 12, 1993, the PARAD ruled that petitioner and Marciano deliberately defaulted in the
payment of the rentals due the respondents. The PARAD found that the deposit made with Republic
Planters Bank was actually in the names of petitioner and Marciano, hence, personal to them. The
PARAD also found that it was only during the hearing that petitioner and Marciano deposited the
REMLAW Page 54
PARAD also found that it was only during the hearing that petitioner and Marciano deposited the
amount of P40,000.00 with the Universal Savings Bank for the unpaid rentals. As such the PARAD
considered the deposits as late payments and as implied admission that indeed petitioner and Marciano
did not pay the past rentals when they fell due. The PARAD further held and disposed thus:
The intent of the defendant to subject the said area under PD 27 should pass the criteria set. Foremost
is the determination of the aggregate riceland of plaintiff. He must have more than seven (7) hectares of
land principally devoted to the planting of palay. Area over seven (7) hectares shall be the one to be
covered by PD 27 on Operation Land Transfer (OLT). In the case at bar, defendants failed to prove that
plaintiff has more than the required riceland. In fact the subject 3.5 hectares are jointly owned by two.
Hence, coverage for OLT is remote.
Defendant claimed that plaintiff is covered by LOI 474, and therefore, he is zero retention of area. In
reference to said law, wherein it provides landowner with other agricultural land of more than 7
hectares, or have other industrial lands from where he and his family derived resources, then, the owner
cannot retain any riceland. However, this is not applicable in the instant case, as the defendant failed to
prove that plaintiff has other source of income from where they will derive their sustenance.
WHEREFORE, in view of the foregoing, Judgment is hereby rendered:
a) Ordering the ejectment of defendant from the subject landholding for non-payment of lease rentals;
b) Ordering the defendant Marciano de la Cruz to surrender the possession and cultivation of the
subject land to herein plaintiffs;
c) Ordering the defendant to pay as actual damage the amount of P75,016.00 corresponding to the
unpaid rentals from July 18, 1985 up to September 16, 1989[; and]
d) [D]eclaring the subject land not covered by Presidential Decree No. 27, Republic Act [No.] 6657, and
Executive Order No. 228.
SO ORDERED.
Petitioner and Marciano sought relief from the DARAB.13
The DARAB’s Ruling
On June 24, 1998, the DARAB held:
It is a fundamental rule in this jurisdiction that for non-payment of lease rentals to warrant the
dispossession and ejectment of a tenant, the same must be made in a willful and deliberate manner
(Cabero v. Caturna, et al., CA-G.R. 05886-R, March 10, 1977). For a valid ouster or ejectment of a farmer-
tenant, the willful and deliberate intent not to pay lease rentals and/or share can be ascertained when
there is a determination of will not to do a certain act.
Considering the circumstances obtaining in this case, it cannot be concluded that the defendants-
appellants deliberately failed or refused to pay their lease rentals. It was not the fault of defendants-
appellants herein that the rentals did not reach the plaintiffs-appellees because the latter choose to
lend a deaf ear to the notices sent to them. Clearly, therefore plaintiffs-appellees failed to show by
substantial evidence that the defendants-appellants deliberately failed or refused to pay their lease
rentals. It has been held that the mere failure of a tenant to pay the landowner’s share does not
necessarily give the latter the right to eject the former when there is lack of deliberate intent on the part
of the tenant to pay (Roxas y Cia v. Cabatuando, 1 SCRA 1106).
Thus:
WHEREFORE, finding the appeal interposed by the defendants-appellants to be meritorious, the
Decision appealed from is hereby SET ASIDE and another judgment issued as follows:
1. Enjoining plaintiffs-appellees to respect the peaceful possession and cultivation of the land in suit by
the defendants-appellants; and
2. Directing the MARO of Sta. Rosa, Laguna to assist the parties in the proper accounting of lease rentals
to be paid by the defendants-appellants to the plaintiffs-appellees.
No costs.
SO ORDERED.
Aggrieved, respondents appealed to the CA. On April 16, 2003, Marciano passed away.14
The CA’s Ruling
On March 5, 2004, the CA affirmed the factual findings of the PARAD that petitioner and Marciano failed
to pay the rentals and that there was no valid tender of payment. The CA added that this failure to pay
was tainted with bad faith and deliberate intent. Thus, petitioner and Marciano did not legally comply
with their duties as tenants. Moreover, the CA held that the subject land was not covered by P.D. 27,
REMLAW Page 55
with their duties as tenants. Moreover, the CA held that the subject land was not covered by P.D. 27,
Republic Act (R.A.) No. 6657 and Executive Order (E.O.) No. 228, since the same had become a
residential, commercial and industrial land, to wit:
In the case at bar, We opted to give more weight to the petitioners contention that the "subject
landholding is for residential, commercial, and industrial purposes as declared by zoning ordinance of
1981 of the town of Sta. Rosa, Laguna upon recommendation of the Human Settlement Committee xxx."
The vicinity map of the subject landholding shows that it is almost beside Nissan Motors Technopa[r]k
and surrounded by the South Expressway and several companies such as the Coca-Cola Bottlers
Philippines, Inc. and Toyota Motors Philippines along the Pulong Santa Cruz, National Road. The vicinity
map shows therefore that the subject landholding is a residential, commercial, and industrial area
exempted from the coverage of P.D. No. 27, Republic Act. No. 6657 and Executive Order No. 228.
The CA ruled in favor of the respondents in this wise:
WHEREFORE, premises considered and pursuant to applicable law and jurisprudence on the matter, the
present Petition is hereby GRANTED. Accordingly, the decision of the Department of Agrarian Reform
Adjudication Board-Central Office, Elliptical Road, Diliman, Quezon City (promulgated on June 24, 1998)
is hereby REVERSED and SET ASIDE and a new one entered- REINSTATING the decision of the
Department of Agrarian Reform Adjudication Board-Region IV, Office of the Provincial Adjudicator, Sta.
Cruz, Laguna (dated October 12, 1993). No pronouncement as to costs.
SO ORDERED.
Petitioner filed a Motion for Reconsideration15 assailing the aforementioned Decision which the CA,
however, denied in its Resolution16 dated June 28, 2004.
Hence, this Petition based on the following grounds:
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ARROGATING UPON ITSELF WHAT IS
OTHERWISE DAR’S POWER TO DETERMINE WHETHER THE SUBJECT AGRICULTURAL LAND HAS BECOME
RESIDENTIAL/INDUSTRIAL/COMMERCIAL.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT EQUATED "LAND RECLASSIFICATION"
WITH "LAND CONVERSION" FOR PURPOSES OF DETERMINING THE PROPRIETY OF EJECTMENT OF AN
AGRICULTURAL LESSEE.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT FAILED TO NOTE THAT AN EJECTMENT
SUIT BASED ON A CLAIM OF NON-PAYMENT OF LEASE RENTAL IS DIAMETRICALLY ANTITHETICAL TO THE
CLAIM THAT THE SUBJECT LAND IS NO LONGER AGRICULTURAL BUT "A RESIDENTIAL, COMMERCIAL AND
INDUSTRIAL AREA EXEMPTED FROM THE COVERAGE OF P.D. NO. 27, REPUBLIC ACT NO. 6657 AND
EXECUTIVE ORDER NO. 228.
THE DECISION DATED MARCH 5, 2004--INSOFAR AS IT ADOPTED THE FINDING OF DARAB-REGION IV,
OFFICE OF THE PROVINCIAL ADJUDICATOR, STA. CRUZ, LAGUNA INSTEAD OF THAT OF THE DARAB-
CENTRAL--IS VIOLATIVE OF SEC. 14, ART. VIII OF THE 1987 CONSTITUTION FOR HAVING DECIDED
WITHOUT EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH SAID
DECISION IS BASED.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN RESORTING TO SURMISES AND
CONJECTURES WHEN IT RULED THAT THE FAILURE OF THE HEREIN PETITIONER AND HER DECEASED
HUSBAND TO DELIVER THE LEASE RENTALS TO HEREIN RESPONDENTS, WAS DONE SO IN BAD FAITH AND
WITH DELIBERATE INTENT TO DEPRIVE THE LAND OWNERS THEREOF.
Petitioner asseverates that there is no evidence to support respondents' claim that the failure to pay the
lease rentals was tainted with malevolence, as the records are replete with acts indicative of good faith
on the part of the petitioner and Marciano and bad faith on the part of respondents.
Moreover, petitioner claimed that the power to determine whether or not the subject land is non-
agricultural, hence, exempt from the coverage of the Comprehensive Agrarian Reform Law (CARL), lies
with the DAR, and not with the courts; that mere reclassification by way of a zoning ordinance does not
warrant the dispossession of a tenant but conversion does, and entitles the tenant to payment of
disturbance compensation; the legal concepts of reclassification and conversion are separate and
distinct from each other; that respondents' complaint before the PARAD alleged and established the fact
that the subject land is a riceland, therefore, agricultural; that the CA failed to explain why it upheld the
findings of the PARAD on the issue of non-payment of lease rentals; and that though the issue of non-
payment of lease rentals is a question of fact, due to the conflict of the factual findings of the PARAD
and CA with those of the DARAB, petitioner asks that this Court review the evidence on record, and
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and CA with those of the DARAB, petitioner asks that this Court review the evidence on record, and
pursuant to the CA decision in Cabero v. Caturna, et al.,17 rule on whether petitioner willfully and
deliberately refused to pay lease rentals as to warrant her dispossession from the subject land.18
On the other hand, respondents aver that petitioner and her family are wealthy, as they own numerous
properties in Sta. Rosa, Laguna including a luxurious house;19 that, as such, petitioner cannot be
considered as a landless tenant deserving the protection of agrarian reform laws; that the DARAB
negated the highest degree of respect the factual findings of the PARAD deserved; that petitioner's
claims that Marciano repeatedly made verbal and written notices20 for Leon to accept their lease rentals
were fraudulent designs to disguise the deliberate intent of petitioner not to pay the lease rentals; that
when Leon went to petitioner's residence, petitioner did not pay the P10,000.00 due as lease rentals;
that during the hearing before the PARAD, when respondents' counsel requested that they be furnished
a bank certificate as to the existence of said bank deposits in Republic Planters Bank as of April 20, 1987
and October 1, 1987, petitioner herself commented, "Nagdeposito ho talaga kami sa pangalan
namin";21 that the statement of petitioner is an admission that bank deposits, if any, were made, not in
the name of Leon as contained in the written notices, but rather in the names of petitioner and
Marciano; that such certificate was not introduced in evidence and that upon inquiry, said deposits do
not actually exist; that per recent inquiry, the bank deposit in Universal Savings Bank only contains
P1,020.19 due to previous withdrawals made by Marciano; that the foregoing circumstances indicate a
pattern of fraudulent misrepresentations by the petitioner to mislead the DARAB into believing that
petitioner and Marciano did not deliberately refuse to pay the lease rentals; that from July 18, 1985 up
to the present, petitioner failed to pay the lease rentals showing again, the deliberate refusal to pay;
that this default on the part of the petitioner has been recurring for several years already, thus depriving
the respondents as landowners of their share of the subject land in violation of the principle of social
justice; that as raised in respondents Omnibus Supplemental Motion for Reconsideration22 before the
DARAB and as found by the CA based on its vicinity map,23 the subject land is of a residential,
commercial and industrial character, exempted from agrarian reform coverage; and that the DARAB
erred in not finding the sale of the tenancy rights of Adoracion to petitioner and Marciano for
P72,500.00 violative of P.D. 27 even if the same was with Leon's consent. The sale, respondents contend
was therefore, null and void ab initio, not susceptible of any ratification.24
Our Ruling
Before we resolve this case on the merits, a procedural issue must be disposed of.
Respondents strongly argue that the instant Petition was filed out of time because, while petitioner
originally claimed to have received her copy of the CA Resolution25 dated June 28, 2004, denying her
Motion for Reconsideration,26 on July 12, 2004, petitioner eventually admitted, after respondents
showed proof to the contrary, that she actually received the said Resolution on July 7, 2004.27 Thus,
petitioner had only up to July 22, 2004 to appeal the CA's ruling to this Court. In this case, petitioner
filed her Motion28 for Extension of Time to File Petition for Review on Certiorari (Motion) on July 23,
2004. As such, there was no more period to extend. Further, the instant Petition was filed on August 27,
2004, or three (3) days beyond the thirty-day extended period. Hence, respondents submit that the CA
decision had already become final and executory.29
Petitioner alleges that on July 15, 2004, she met with her counsel to engage the latter's legal services.
During said meeting, counsel asked petitioner about the date of receipt of the assailed CA Resolution.
Petitioner replied that she received her copy on July 12, 2004. On July 20, 2004, counsel filed an Entry of
Appearance with the CA.30 On July 23, 2004, petitioner through counsel filed the Motion for Extension of
Time to File Petition for Review. On August 11, 2004, petitioner received a copy of respondents'
Opposition to the Motion. Thereafter, upon verification, petitioner admitted that she received the copy
of the CA Resolution on July 7, 2004. Thus, her Motion was admittedly filed one day late. Petitioner begs
the indulgence of this Court for her oversight and mistake, attributing the same to her lack of education
and old age.
Rules of procedure are merely tools designed to facilitate the attainment of justice. If the application of
the Rules would tend to frustrate rather than to promote justice, it is always within our power to
suspend the rules or except a particular case from their operation. Law and jurisprudence grant to
courts the prerogative to relax compliance with the procedural rules, even the most mandatory in
character, mindful of the duty to reconcile the need to put an end to litigation speedily and the parties'
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right to an opportunity to be heard.31
Our recent ruling in Tanenglian v. Lorenzo32 is instructive:
We have not been oblivious to or unmindful of the extraordinary situations that merit liberal application
of the Rules, allowing us, depending on the circumstances, to set aside technical infirmities and give due
course to the appeal. In cases where we dispense with the technicalities, we do not mean to undermine
the force and effectivity of the periods set by law. In those rare cases where we did not stringently apply
the procedural rules, there always existed a clear need to prevent the commission of a grave injustice.
Our judicial system and the courts have always tried to maintain a healthy balance between the strict
enforcement of procedural laws and the guarantee that every litigant be given the full opportunity for
the just and proper disposition of his cause.
In this case, petitioner was one day late in filing her Motion for Extension. To deny the Petition on this
ground alone is too harsh a penalty for a day’s delay, taking into consideration the time, resources and
effort spent by petitioner and even by the respondents, in order to pursue this case all the way to this
Court. Thus, we dispense with the apparent procedural defect and resolve this case on the merits. The
ends of justice are better served when cases are determined on the merits – with all parties given full
opportunity to ventilate their causes and defenses – rather than on technicality or some procedural
imperfections.33
The Petition is impressed with merit.
In sum, there are two (2) ultimate issues that require resolution in this case:
1) Whether the CA erred in ruling that the subject land had already become residential, commercial
and/or industrial, thus, excluded from the coverage of our laws on agrarian reform; and
2) Whether the petitioner, as an agricultural tenant, failed to pay her lease rentals when the same fell
due as to warrant her dispossession of the subject land.
On the first issue, we rule in the affirmative.
To recapitulate, the instant case sprang from a Complaint for Ejectment based on Non-Payment of lease
rentals. Though an allegation was made by the respondents that the land had been declared, upon the
recommendation of the Human Settlements Committee, suitable for commercial and industrial
purposes, per Zoning Ordinance of 1981 of the Municipality of Sta. Rosa, no argument was advanced by
respondents to support such allegation, in the same way that no prayer for the ejectment of the tenants
was raised based on that allegation. The PARAD held that petitioner should be ejected for non-payment
of lease rentals. It also ruled that the subject land is not covered by P.D. No. 27, R.A. No. 6657, and E.O.
No. 228, not on the basis of the allegation in the complaint, but on the respondents' right of retention.
On appeal, the DARAB concentrated on the issue of petitioner’s failure to pay lease rentals. When the
DARAB ruled that petitioner and Marciano did not deliberately fail to pay said rentals, respondents
raised a new issue in their Omnibus Motion that the transaction between Adoracion and petitioner was
void in violation of P.D. No. 27, despite the conformity of Leon. This issue was not resolved by the
DARAB.
Finally, when the case reached the CA, the appellate court affirmed the findings of the PARAD that
petitioner and Marciano deliberately and in bad faith did not pay the lease rentals. The CA, however,
also held that the subject land had already become a residential, commercial and industrial area based
on the vicinity map showing that the land was surrounded by commercial and industrial establishments.
Without doubt, the PARAD acted without jurisdiction when it held that the subject land was no longer
covered by our agrarian laws because of the retention rights of the respondents. The CA likewise acted
without jurisdiction when it ruled that the land had become non-agricultural based on a zoning
ordinance of 1981– on the strength of a mere vicinity map. These rulings violated the doctrine of
primary jurisdiction.
The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which
jurisdiction has initially been lodged in an administrative body of special competence. For agrarian
reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically, in the
Department of Agrarian Reform Adjudication Board (DARAB). Executive Order 229 vested the DAR with
(1) quasi-judicial powers to determine and adjudicate agrarian reform matters; and (2) jurisdiction over
all matters involving the implementation of agrarian reform, except those falling under the exclusive
original jurisdiction of the Department of Agriculture and the Department of Environment and Natural
Resources.34
In Department of Agrarian Reform v. Abdulwahid,35 we held:
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In Department of Agrarian Reform v. Abdulwahid,35 we held:
As held by this Court in Centeno v. Centeno [343 SCRA 153], "the DAR is vested with the primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive
jurisdiction over all matters involving the implementation of the agrarian reform program." The DARAB
has primary, original and appellate jurisdiction "to determine and adjudicate all agrarian disputes, cases,
controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian
Reform Program under R.A. No. 6657, E.O. Nos. 229, 228 and 129-A, R.A. No. 3844 as amended by R.A.
No. 6389, P.D. No. 27 and other agrarian laws and their implementing rules and regulations."
Under Section 3 (d) of R.A. No. 6657 (CARP Law), "agrarian dispute" is defined to include "(d) . . . any
controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise
over lands devoted to agriculture, including disputes concerning farmworkers associations or
representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or
conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands
acquired under this Act and other terms and conditions of transfer of ownership from landowners to
farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the
proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee."
Simply put, agrarian disputes, as defined by law and settled in jurisprudence, are within the primary and
exclusive original jurisdiction of the PARAD and the DARAB, while issues of retention and non-coverage
of a land under agrarian reform, among others, are within the domain of the DAR Secretary.
Thus, Section 3, Rule II of the 2003 DARAB Rules of Procedure provides:
SECTION 3. Agrarian Law Implementation Cases. – The Adjudicator or the Board shall have no
jurisdiction over matters involving the administrative implementation of RA No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as enunciated by
pertinent rules and administrative orders, which shall be under the exclusive prerogative of and
cognizable by the Office of the Secretary of the DAR in accordance with his issuances, to wit:
3.1 Classification and identification of landholdings for coverage under the agrarian reform program and
the initial issuance of CLOAs and EPs, including protests or oppositions thereto and petitions for lifting of
such coverage;
3.2 Classification, identification, inclusion, exclusion, qualification, or disqualification of potential/actual
farmer-beneficiaries;
3.3 Subdivision surveys of land under CARP;
3.4 Recall, or cancellation of provisional lease rentals, Certificates of Land Transfers (CLTs) and CARP
Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (PD) No. 816,
including the issuance, recall, or cancellation of EPs or CLOAs not yet registered with the Register of
Deeds;
3.5 Exercise of the right of retention by the landowner;
3.6 Application for exemption from coverage under Section 10 of RA 6657;
3.7 Application for exemption pursuant to Department of Justice (DOJ) Opinion No. 44 (1990);
3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising;
3.9 Cases of exemption/exclusion of fish pond and prawn farms from the coverage of CARP pursuant to
RA 7881;
3.10 Issuance of Certificate of Exemption for land subject of Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) found unsuitable for agricultural purposes;
3.11 Application for conversion of agricultural land to residential, commercial, industrial, or other non-
agricultural uses and purposes including protests or oppositions thereto;
3.12 Determination of the rights of agrarian reform beneficiaries to homelots;
3.13 Disposition of excess area of the tenants/farmer-beneficiary's landholdings;
3.14 Increase in area of tillage of a tenant/farmer-beneficiary;
3.15 Conflict of claims in landed estates administered by DAR and its predecessors; or
3.16 Such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR.
Verily, there is an established tenancy relationship between petitioner and respondents in this case. An
action for Ejectment for Non-Payment of lease rentals is clearly an agrarian dispute, cognizable at the
initial stage by
the PARAD and thereafter by the DARAB.36 But issues with respect to the retention rights of the
respondents as landowners and the exclusion/exemption of the subject land from the coverage of
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respondents as landowners and the exclusion/exemption of the subject land from the coverage of
agrarian reform are issues not cognizable by the PARAD and the DARAB, but by the DAR Secretary
because, as aforementioned, the same are Agrarian Law Implementation (ALI) Cases.
It has not escaped our notice that, as this case progressed and reached a higher level in the hierarchy of
tribunals, the respondents would, invariably, proffer an additional theory or defense, in order to effect
petitioner’s eviction from the land. As a consequence, the simple issue of ejectment based on non-
payment of rentals has been muddled.
Proof necessary for the resolution of the issue of the land being covered by, or excluded/exempted
from, P.D. No. 27, R.A. No. 6657, and other pertinent agrarian laws, as well as of the issue of the right of
retention of the respondents, was not offered in evidence. Worse, the PARAD resolved the issue of
retention even if it was not raised by the respondents at that level, and even if the PARAD had no
jurisdiction over the same.
Likewise, the CA ruled that the land had ceased being agricultural on the basis of a mere vicinity map, in
open disregard of the Doctrine of Primary Jurisdiction, since the issue was within the province of the
Secretary of DAR.
We take this opportunity to remind the PARAD and the CA that "courts of justice have no power to
decide a question not in issue." A judgment that goes beyond the issues, and purports to adjudicate
something on which the parties were not heard, is extra-judicial, irregular and invalid. This norm applies
not only to courts of justice, but also to quasi-judicial
bodies such as the PARAD. Accordingly, premature and irregular were the PARAD ruling on the retention
rights of the respondents, and the CA decision on the non-agricultural character of the land subject of
this controversy -- these issues not having passed the scrutiny of the DAR Secretary -- are premature and
irregular.37
Thus, we cannot allow ourselves to fall into the same error as that committed by the PARAD and the CA,
and resolve the issue of the non-agricultural nature of the subject land by receiving, at this stage, pieces
of evidence and evaluating the same, without the respondents having first introduced them in the
proper forum. The Office of the DAR Secretary is in a better position to resolve the issues on retention
and exclusion/exemption from agrarian reform coverage, being the agency lodged with such authority
inasmuch it possesses the necessary expertise on the matter.38
Likewise, we refrain from entertaining the issue raised by respondents that petitioner and her family are
not landless tenants and are therefore not deserving of any protection under our laws on agrarian
reform, because fairness and due process dictate that issues not raised in the proceedings below should
not be raised for the first time on appeal.39
On the second issue, we rule in the negative.
Under Section 37 of Republic Act No. 3844,40 as amended, coupled with the fact that the respondents
are the complainants themselves, the burden of proof to show the existence of a lawful cause for the
ejectment of the petitioner as an agricultural lessee rests upon the respondents as agricultural lessors.41
This proceeds from the principle that a tenancy relationship, once established, entitles the tenant to
security of tenure. Petitioner can only be ejected from the agricultural landholding on grounds provided
by law.42 Section 36 of the same law pertinently provides:
Sec. 36. Possession of Landholding; Exceptions. – Notwithstanding any agreement as to the period or
future surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession of
his landholding except when his dispossession has been authorized by the Court in a judgment that is
final and executory if after due hearing it is shown that:
xxx x
(6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-
payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of
a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to
pay the rental due that particular crop is not thereby extinguished;
xxx x
Respondents failed to discharge such burden. The agricultural tenant's failure to pay the lease rentals
must be willful and deliberate in order to warrant his dispossession of the land that he tills.
Petitioner's counsel opines that there appears to be no decision by this Court on the matter; he thus
submits that we should use the CA decision in Cabero v. Caturna. This is not correct. In an En Banc
Decision by this Court in Roxas y Cia v. Cabatuando, et al.,43 we held that under our law and
REMLAW Page 60
Decision by this Court in Roxas y Cia v. Cabatuando, et al.,43 we held that under our law and
jurisprudence, mere failure of a tenant to pay the landholder's share does not necessarily give the latter
the right to eject the former when there is lack of deliberate intent on the part of the tenant to pay. This
ruling has not been overturned.
The term "deliberate" is characterized by or results from slow, careful, thorough calculation and
consideration of effects and consequences.44 The term "willful," on the other hand, is defined as one
governed by will without yielding to reason or without regard to reason.45
We agree with the findings of the DARAB that it was not the fault of petitioner that the lease rentals did
not reach the respondents because the latter chose to ignore the notices sent to them. To note, as early
as November 10, 1986, Marciano executed an Affidavit46 stating that Leon refused to receive the
respective lease rentals consisting of 37 cavans for November 1985 and July 1986. For 1987, Marciano
wrote Leon two letters47 informing him of the availability of the lease rentals for April and October of
the same year. On April 27, 1988, Marciano sought DAR intervention and mediation with respect to the
execution of a leasehold contract and the fixing of the leasehold rentals.48 Meetings were set but
respondents failed to attend.49 The dispute was referred to the barangay but the parties failed to
amicably settle.50
These factual circumstances negate the PARAD findings of Marciano’s and petitioner's deliberate and
willful intent not to pay lease rentals. Good faith was clearly demonstrated by Marciano and petitioner
when, because respondents refused to accept the proffered payment, they even went to the point of
seeking government intervention in order to address their problems with respondents. Absent such
deliberate and willful refusal to pay lease rentals, petitioner's ejectment from the subject land is not
justified.
WHEREFORE, the instant Petition is GRANTED. The assailed Decision of the Court of Appeals in CA-G.R.
SP No. 60640 is hereby REVERSED and SET ASIDE. The Decision of the Department of Agrarian Reform
Adjudication Board (DARAB) dated June 24, 1998 in DARAB Case No. 2203 is REINSTATED without
prejudice to the rights of respondent-spouses Leon and Aurora Carpo to seek recourse from the Office
of the Department of Agrarian Reform (DAR) Secretary on the other issues they raised. No costs.
REMLAW Page 61
Garcillano v. House GR 170338 Dec 23, 2008
Sunday, November 14, 2010
11:20 PM
REMLAW Page 62
Committee on National Defense and Security, chaired by Senator Rodolfo Biazon, who had previously
filed two bills6 seeking to regulate the sale, purchase and use of wiretapping equipment and to prohibit
the Armed Forces of the Philippines (AFP) from performing electoral duties. 7
In the Senate’s plenary session the following day, a lengthy debate ensued when Senator Richard
Gordon aired his concern on the possible transgression of Republic Act (R.A.) No. 42008 if the body were
to conduct a legislative inquiry on the matter. On August 28, 2007, Senator Miriam Defensor-Santiago
delivered a privilege speech, articulating her considered view that the Constitution absolutely bans the
use, possession, replay or communication of the contents of the "Hello Garci" tapes. However, she
recommended a legislative investigation into the role of the Intelligence Service of the AFP (ISAFP), the
Philippine National Police or other government entities in the alleged illegal wiretapping of public
officials.9
On September 6, 2007, petitioners Santiago Ranada and Oswaldo Agcaoili, retired justices of the Court
of Appeals, filed before this Court a Petition for Prohibition with Prayer for the Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction,10 docketed as G.R. No. 179275, seeking to bar
the Senate from conducting its scheduled legislative inquiry. They argued in the main that the intended
legislative inquiry violates R.A. No. 4200 and Section 3, Article III of the Constitution.11
As the Court did not issue an injunctive writ, the Senate proceeded with its public hearings on the "Hello
Garci" tapes on September 7,12 1713 and October 1,14 2007.
Intervening as respondents,15 Senators Aquilino Q. Pimentel, Jr., Benigno Noynoy C. Aquino, Rodolfo G.
Biazon, Panfilo M. Lacson, Loren B. Legarda, M.A. Jamby A.S. Madrigal and Antonio F. Trillanes filed their
Comment16 on the petition on September 25, 2007.
The Court subsequently heard the case on oral argument.17
On October 26, 2007, Maj. Lindsay Rex Sagge, a member of the ISAFP and one of the resource persons
summoned by the Senate to appear and testify at its hearings, moved to intervene as petitioner in G.R.
No. 179275.18
On November 20, 2007, the Court resolved to consolidate G.R. Nos. 170338 and 179275.19
It may be noted that while both petitions involve the "Hello Garci" recordings, they have different
objectives–the first is poised at preventing the playing of the tapes in the House and their subsequent
inclusion in the committee reports, and the second seeks to prohibit and stop the conduct of the Senate
inquiry on the wiretapped conversation.
The Court dismisses the first petition, G.R. No. 170338, and grants the second, G.R. No. 179275.
-I -
Before delving into the merits of the case, the Court shall first resolve the issue on the parties’ standing,
argued at length in their pleadings.
In Tolentino v. COMELEC,20 we explained that "‘*l+egal standing’ or locus standi refers to a personal and
substantial interest in a case such that the party has sustained or will sustain direct injury because of the
challenged governmental act x x x," thus,
generally, a party will be allowed to litigate only when (1) he can show that he has personally suffered
some actual or threatened injury because of the allegedly illegal conduct of the government; (2) the
injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a
favorable action.21
The gist of the question of standing is whether a party has "alleged such a personal stake in the outcome
of the controversy as to assure that concrete adverseness which sharpens the presentation of issues
upon which the court so largely depends for illumination of difficult constitutional questions."22
However, considering that locus standi is a mere procedural technicality, the Court, in recent cases, has
relaxed the stringent direct injury test. David v. Macapagal-Arroyo23 articulates that a "liberal policy has
been observed, allowing ordinary citizens, members of Congress, and civic organizations to prosecute
actions involving the constitutionality or validity of laws, regulations and rulings."24 The fairly recent
Chavez v. Gonzales25 even permitted a non-member of the broadcast media, who failed to allege a
personal stake in the outcome of the controversy, to challenge the acts of the Secretary of Justice and
the National Telecommunications Commission. The majority, in the said case, echoed the current policy
that "this Court has repeatedly and consistently refused to wield procedural barriers as impediments to
its addressing and resolving serious legal questions that greatly impact on public interest, in keeping
with the Court’s duty under the 1987 Constitution to determine whether or not other branches of
government have kept themselves within the limits of the Constitution and the laws, and that they have
REMLAW Page 63
government have kept themselves within the limits of the Constitution and the laws, and that they have
not abused the discretion given to them."26
In G.R. No. 170338, petitioner Garcillano justifies his standing to initiate the petition by alleging that he
is the person alluded to in the "Hello Garci" tapes. Further, his was publicly identified by the members of
the respondent committees as one of the voices in the recordings.27 Obviously, therefore, petitioner
Garcillano stands to be directly injured by the House committees’ actions and charges of electoral fraud.
The Court recognizes his standing to institute the petition for prohibition.
In G.R. No. 179275, petitioners Ranada and Agcaoili justify their standing by alleging that they are
concerned citizens, taxpayers, and members of the IBP. They are of the firm conviction that any attempt
to use the "Hello Garci" tapes will further divide the country. They wish to see the legal and proper use
of public funds that will necessarily be defrayed in the ensuing public hearings. They are worried by the
continuous violation of the laws and individual rights, and the blatant attempt to abuse constitutional
processes through the conduct of legislative inquiries purportedly in aid of legislation.28
Intervenor Sagge alleges violation of his right to due process considering that he is summoned to attend
the Senate hearings without being apprised not only of his rights therein through the publication of the
Senate Rules of Procedure Governing Inquiries in Aid of Legislation, but also of the intended legislation
which underpins the investigation. He further intervenes as a taxpayer bewailing the useless and
wasteful expenditure of public funds involved in the conduct of the questioned hearings.29
Given that petitioners Ranada and Agcaoili allege an interest in the execution of the laws and that
intervenor Sagge asserts his constitutional right to due process,30 they satisfy the requisite personal
stake in the outcome of the controversy by merely being citizens of the Republic.
Following the Court’s ruling in Francisco, Jr. v. The House of Representatives,31 we find sufficient
petitioners Ranada’s and Agcaoili’s and intervenor Sagge’s allegation that the continuous conduct by the
Senate of the questioned legislative inquiry will necessarily involve the expenditure of public funds.32 It
should be noted that in Francisco, rights personal to then Chief Justice Hilario G. Davide, Jr. had been
injured by the alleged unconstitutional acts of the House of Representatives, yet the Court granted
standing to the petitioners therein for, as in this case, they invariably invoked the vindication of their
own rights–as taxpayers, members of Congress, citizens, individually or in a class suit, and members of
the bar and of the legal profession–which were also supposedly violated by the therein assailed
unconstitutional acts.33
Likewise, a reading of the petition in G.R. No. 179275 shows that the petitioners and intervenor Sagge
advance constitutional issues which deserve the attention of this Court in view of their seriousness,
novelty and weight as precedents. The issues are of transcendental and paramount importance not only
to the public but also to the Bench and the Bar, and should be resolved for the guidance of all.34
Thus, in the exercise of its sound discretion and given the liberal attitude it has shown in prior cases
climaxing in the more recent case of Chavez, the Court recognizes the legal standing of petitioners
Ranada and Agcaoili and intervenor Sagge.
- II -
The Court, however, dismisses G.R. No. 170338 for being moot and academic. Repeatedly stressed in
our prior decisions is the principle that the exercise by this Court of judicial power is limited to the
determination and resolution of actual cases and controversies.35 By actual cases, we mean existing
conflicts appropriate or ripe for judicial determination, not conjectural or anticipatory, for otherwise the
decision of the Court will amount to an advisory opinion. The power of judicial inquiry does not extend
to hypothetical questions because any attempt at abstraction could only lead to dialectics and barren
legal questions and to sterile conclusions unrelated to actualities.36 Neither will the Court determine a
moot question in a case in which no practical relief can be granted. A case becomes moot when its
purpose has become stale.37 It is unnecessary to indulge in academic discussion of a case presenting a
moot question as a judgment thereon cannot have any practical legal effect or, in the nature of things,
cannot be enforced.38
In G.R. No. 170338, petitioner Garcillano implores from the Court, as aforementioned, the issuance of an
injunctive writ to prohibit the respondent House Committees from playing the tape recordings and from
including the same in their committee report. He likewise prays that the said tapes be stricken off the
records of the House proceedings. But the Court notes that the recordings were already played in the
House and heard by its members.39 There is also the widely publicized fact that the committee reports
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on the "Hello Garci" inquiry were completed and submitted to the House in plenary by the respondent
committees.40 Having been overtaken by these events, the Garcillano petition has to be dismissed for
being moot and academic. After all, prohibition is a preventive remedy to restrain the doing of an act
about to be done, and not intended to provide a remedy for an act already accomplished.41
- III -
As to the petition in G.R. No. 179275, the Court grants the same. The Senate cannot be allowed to
continue with the conduct of the questioned legislative inquiry without duly published rules of
procedure, in clear derogation of the constitutional requirement.
Section 21, Article VI of the 1987 Constitution explicitly provides that "[t]he Senate or the House of
Representatives, or any of its respective committees may conduct inquiries in aid of legislation in
accordance with its duly published rules of procedure." The requisite of publication of the rules is
intended to satisfy the basic requirements of due process.42 Publication is indeed imperative, for it will
be the height of injustice to punish or otherwise burden a citizen for the transgression of a law or rule of
which he had no notice whatsoever, not even a constructive one.43 What constitutes publication is set
forth in Article 2 of the Civil Code, which provides that "[l]aws shall take effect after 15 days following
the completion of their publication either in the Official Gazette, or in a newspaper of general circulation
in the Philippines."44
The respondents in G.R. No. 179275 admit in their pleadings and even on oral argument that the Senate
Rules of Procedure Governing Inquiries in Aid of Legislation had been published in newspapers of
general circulation only in 1995 and in 2006.45 With respect to the present Senate of the 14th Congress,
however, of which the term of half of its members commenced on June 30, 2007, no effort was
undertaken for the publication of these rules when they first opened their session.
Recently, the Court had occasion to rule on this very same question. In Neri v. Senate Committee on
Accountability of Public Officers and Investigations,46 we said:
Fourth, we find merit in the argument of the OSG that respondent Committees likewise violated Section
21 of Article VI of the Constitution, requiring that the inquiry be in accordance with the "duly published
rules of procedure." We quote the OSG’s explanation:
The phrase "duly published rules of procedure" requires the Senate of every Congress to publish its rules
of procedure governing inquiries in aid of legislation because every Senate is distinct from the one
before it or after it. Since Senatorial elections are held every three (3) years for one-half of the Senate’s
membership, the composition of the Senate also changes by the end of each term. Each Senate may
thus enact a different set of rules as it may deem fit. Not having published its Rules of Procedure, the
subject hearings in aid of legislation conducted by the 14th Senate, are therefore, procedurally infirm.
Justice Antonio T. Carpio, in his Dissenting and Concurring Opinion, reinforces this ruling with the
following rationalization:
The present Senate under the 1987 Constitution is no longer a continuing legislative body. The present
Senate has twenty-four members, twelve of whom are elected every three years for a term of six years
each. Thus, the term of twelve Senators expires every three years, leaving less than a majority of
Senators to continue into the next Congress. The 1987 Constitution, like the 1935 Constitution, requires
a majority of Senators to "constitute a quorum to do business." Applying the same reasoning in Arnault
v. Nazareno, the Senate under the 1987 Constitution is not a continuing body because less than majority
of the Senators continue into the next Congress. The consequence is that the Rules of Procedure must
be republished by the Senate after every expiry of the term of twelve Senators.47
The subject was explained with greater lucidity in our Resolution48 (On the Motion for Reconsideration)
in the same case, viz.:
On the nature of the Senate as a "continuing body," this Court sees fit to issue a clarification. Certainly,
there is no debate that the Senate as an institution is "continuing," as it is not dissolved as an entity
with each national election or change in the composition of its members. However, in the conduct of its
day-to-day business the Senate of each Congress acts separately and independently of the Senate of the
Congress before it. The Rules of the Senate itself confirms this when it states:
RULE XLIV UNFINISHED BUSINESS
SEC. 123. Unfinished business at the end of the session shall be taken up at the next session in the same
status.
All pending matters and proceedings shall terminate upon the expiration of one (1) Congress, but may
be taken by the succeeding Congress as if present for the first time.
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be taken by the succeeding Congress as if present for the first time.
Undeniably from the foregoing, all pending matters and proceedings, i.e., unpassed bills and even
legislative investigations, of the Senate of a particular Congress are considered terminated upon the
expiration of that Congress and it is merely optional on the Senate of the succeeding Congress to take
up such unfinished matters, not in the same status, but as if presented for the first time. The logic and
practicality of such a rule is readily apparent considering that the Senate of the succeeding Congress
(which will typically have a different composition as that of the previous Congress) should not be bound
by the acts and deliberations of the Senate of which they had no part. If the Senate is a continuing body
even with respect to the conduct of its business, then pending matters will not be deemed terminated
with the expiration of one Congress but will, as a matter of course, continue into the next Congress with
the same status.
This dichotomy of the continuity of the Senate as an institution and of the opposite nature of the
conduct of its business is reflected in its Rules. The Rules of the Senate (i.e. the Senate’s main rules of
procedure) states:
RULE LI AMENDMENTS TO, OR REVISIONS OF, THE RULES
SEC. 136. At the start of each session in which the Senators elected in the preceding elections shall begin
their term of office, the President may endorse the Rules to the appropriate committee for amendment
or revision.
The Rules may also be amended by means of a motion which should be presented at least one day
before its consideration, and the vote of the majority of the Senators present in the session shall be
required for its approval.
RULE LII DATE OF TAKING EFFECT
SEC. 137. These Rules shall take effect on the date of their adoption and shall remain in force until they
are amended or repealed.
Section 136 of the Senate Rules quoted above takes into account the new composition of the Senate
after an election and the possibility of the amendment or revision of the Rules at the start of each
session in which the newly elected Senators shall begin their term.
However, it is evident that the Senate has determined that its main rules are intended to be valid from
the date of their adoption until they are amended or repealed. Such language is conspicuously absent
from the Rules. The Rules simply state "(t)hese Rules shall take effect seven (7) days after publication in
two (2) newspapers of general circulation." The latter does not explicitly provide for the continued
effectivity of such rules until they are amended or repealed. In view of the difference in the language of
the two sets of Senate rules, it cannot be presumed that the Rules (on legislative inquiries) would
continue into the next Congress. The Senate of the next Congress may easily adopt different rules for its
legislative inquiries which come within the rule on unfinished business.
The language of Section 21, Article VI of the Constitution requiring that the inquiry be conducted in
accordance with the duly published rules of procedure is categorical. It is incumbent upon the Senate to
publish the rules for its legislative inquiries in each Congress or otherwise make the published rules
clearly state that the same shall be effective in subsequent Congresses or until they are amended or
repealed to sufficiently put public on notice.
If it was the intention of the Senate for its present rules on legislative inquiries to be effective even in
the next Congress, it could have easily adopted the same language it had used in its main rules regarding
effectivity.
Respondents justify their non-observance of the constitutionally mandated publication by arguing that
the rules have never been amended since 1995 and, despite that, they are published in booklet form
available to anyone for free, and accessible to the public at the Senate’s internet web page.49
The Court does not agree. The absence of any amendment to the rules cannot justify the Senate’s
defiance of the clear and unambiguous language of Section 21, Article VI of the Constitution. The organic
law instructs, without more, that the Senate or its committees may conduct inquiries in aid of legislation
only in accordance with duly published rules of procedure, and does not make any distinction whether or
not these rules have undergone amendments or revision. The constitutional mandate to publish the said
rules prevails over any custom, practice or tradition followed by the Senate.
Justice Carpio’s response to the same argument raised by the respondents is illuminating:
The publication of the Rules of Procedure in the website of the Senate, or in pamphlet form available at
the Senate, is not sufficient under the Tañada v. Tuvera ruling which requires publication either in the
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the Senate, is not sufficient under the Tañada v. Tuvera ruling which requires publication either in the
Official Gazette or in a newspaper of general circulation. The Rules of Procedure even provide that the
rules "shall take effect seven (7) days after publication in two (2) newspapers of general circulation,"
precluding any other form of publication. Publication in accordance with Tañada is mandatory to comply
with the due process requirement because the Rules of Procedure put a person’s liberty at risk. A person
who violates the Rules of Procedure could be arrested and detained by the Senate.
The invocation by the respondents of the provisions of R.A. No. 8792,50 otherwise known as the
Electronic Commerce Act of 2000, to support their claim of valid publication through the internet is all
the more incorrect. R.A. 8792 considers an electronic data message or an electronic document as the
functional equivalent of a written document only for evidentiary purposes.51 In other words, the law
merely recognizes the admissibility in evidence (for their being the original) of electronic data messages
and/or electronic documents.52 It does not make the internet a medium for publishing laws, rules and
regulations.
Given this discussion, the respondent Senate Committees, therefore, could not, in violation of the
Constitution, use its unpublished rules in the legislative inquiry subject of these consolidated cases. The
conduct of inquiries in aid of legislation by the Senate has to be deferred until it shall have caused the
publication of the rules, because it can do so only "in accordance with its duly published rules of
procedure."
Very recently, the Senate caused the publication of the Senate Rules of Procedure Governing Inquiries in
Aid of Legislation in the October 31, 2008 issues of Manila Bulletin and Malaya. While we take judicial
notice of this fact, the recent publication does not cure the infirmity of the inquiry sought to be
prohibited by the instant petitions. Insofar as the consolidated cases are concerned, the legislative
investigation subject thereof still could not be undertaken by the respondent Senate Committees,
because no published rules governed it, in clear contravention of the Constitution.
With the foregoing disquisition, the Court finds it unnecessary to discuss the other issues raised in the
consolidated petitions.
WHEREFORE, the petition in G.R. No. 170338 is DISMISSED, and the petition in G.R. No. 179275 is
GRANTED. Let a writ of prohibition be issued enjoining the Senate of the Republic of the Philippines
and/or any of its committees from conducting any inquiry in aid of legislation centered on the "Hello
Garci" tapes.
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Lazatin v. Desierto GR 147097 June 5, 2009
Sunday, November 14, 2010
11:20 PM
REMLAW Page 68
(formerly the Tanodbayan), which was intended by the framers to be a separate and distinct entity
from the Office of the Ombudsman. Petitioners conclude that, as provided by the Constitution, the
OSP being a separate and distinct entity, the Ombudsman should have no power and authority over
the OSP. Thus, petitioners maintain that R.A. No. 6770 (The Ombudsman Act of 1989), which made
the OSP an organic component of the Office of the Ombudsman, should be struck down for being
unconstitutional.
Next, petitioners insist that they should be absolved from any liability because the checks were
issued to petitioner Lazatin allegedly as reimbursement for the advances he made from his personal
funds for expenses incurred to ensure the immediate implementation of projects that are badly
needed by the Pinatubo victims.
The Court finds the petition unmeritorious.
Petitioners' attack against the constitutionality of R.A. No. 6770 is stale. It has long been settled that
the provisions of R.A. No. 6770 granting the Office of the Ombudsman prosecutorial powers and
placing the OSP under said office have no constitutional infirmity. The issue of whether said
provisions of R.A. No. 6770 violated the Constitution had been fully dissected as far back as 1995 in
Acop v. Office of the Ombudsman.6
Therein, the Court held that giving prosecutorial powers to the Ombudsman is in accordance with
the Constitution as paragraph 8, Section 13, Article XI provides that the Ombudsman shall "exercise
such other functions or duties as may be provided by law." Elucidating on this matter, the Court
stated:
x x x While the intention to withhold prosecutorial powers from the Ombudsman was indeed present,
the Commission [referring to the Constitutional Commission of 1986] did not hesitate to recommend
that the Legislature could, through statute, prescribe such other powers, functions, and duties to the
Ombudsman. x x x As finally approved by the Commission after several amendments, this is now
embodied in paragraph 8, Section 13, Article XI (Accountability of Public Officers) of the Constitution,
which provides:
Sec.13. The Office of the Ombudsman shall have the following powers, functions, and duties:
xx x x
Promulgate its rules and procedure and exercise such other functions or duties as may be provided
by law.
Expounding on this power of Congress to prescribe other powers, functions, and duties to the
Ombudsman, we quote Commissioners Colayco and Monsod during interpellation by Commissioner
Rodrigo:
xx x x
MR. RODRIGO:
Precisely, I am coming to that. The last of the enumerated functions of the Ombudsman is: "to
exercise such powers or perform such functions or duties as may be provided by law." So, the
legislature may vest him with powers taken away from the Tanodbayan, may it not?
MR. COLAYCO:
Yes.
MR. MONSOD:
Yes.
xx x x
MR. RODRIGO:
Madam President. Section 5 reads: "The Tanodbayan shall continue to function and exercise
its powers as provided by law."
MR. COLAYCO:
That is correct, because it is under P.D. No. 1630.
MR. RODRIGO:
So, if it is provided by law, it can be taken away by law, I suppose.
MR. COLAYCO:
That is correct.
MR. RODRIGO:
And precisely, Section 12(6) says that among the functions that can be performed by the
Ombudsman are "such functions or duties as may be provided by law." The sponsors admitted
that the legislature later on might remove some powers from the Tanodbayan and transfer
these to the Ombudsman.
MR. COLAYCO:
Madam President, that is correct.
xx x x
MR. RODRIGO:
Madam President, what I am worried about is, if we create a constitutional body which has
neither punitive nor prosecutory powers but only persuasive powers, we might be raising the
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neither punitive nor prosecutory powers but only persuasive powers, we might be raising the
hopes of our people too much and then disappoint them.
MR. MONSOD:
I agree with the Commissioner.
MR. RODRIGO:
Anyway, since we state that the powers of the Ombudsman can later on be implemented by
the legislature, why not leave this to the legislature?
xx x x
MR. MONSOD: (reacting to statements of Commissioner Blas Ople):
xx x x
With respect to the argument that he is a toothless animal, we would like to say that we are
promoting the concept in its form at the present, but we are also saying that he can exercise such
powers and functions as may be provided by law in accordance with the direction of the thinking of
Commissioner Rodrigo. We do not think that at this time we should prescribe this, but we leave it up
to Congress at some future time if it feels that it may need to designate what powers the
Ombudsman need in order that he be more effective. This is not foreclosed.
1awphi 1
So, this is a reversible disability, unlike that of a eunuch; it is not an irreversible disability. 7
The constitutionality of Section 3 of R.A. No. 6770, which subsumed the OSP under the Office of the
Ombudsman, was likewise upheld by the Court in Acop. It was explained, thus:
x x x the petitioners conclude that the inclusion of the Office of the Special Prosecutor as among the
offices under the Office of the Ombudsman in Section 3 of R.A. No. 6770 ("An Act Providing for the
Functional and Structural Organization of the Office of the Ombudsman and for Other Purposes") is
unconstitutional and void.
The contention is not impressed with merit. x x x
xx x x
x x x Section 7 of Article XI expressly provides that the then existing Tanodbayan, to be henceforth
known as the Office of the Special Prosecutor, "shall continue to function and exercise its powers as
now or hereafter may be provided by law, except those conferred on the Office of the Ombudsman
created under this Constitution." The underscored phrase evidently refers to the Tanodbayan's
powers under P.D. No. 1630 or subsequent amendatory legislation. It follows then that Congress
may remove any of the Tanodbayan's/Special Prosecutor's powers under P.D. No. 1630 or grant it
other powers, except those powers conferred by the Constitution on the Office of the Ombudsman.
Pursuing the present line of reasoning, when one considers that by express mandate of paragraph
8, Section 13, Article XI of the Constitution, the Ombudsman may "exercise such other powers or
perform functions or duties as may be provided by law," it is indubitable then that Congress has the
power to place the Office of the Special Prosecutor under the Office of the Ombudsman. In the same
vein, Congress may remove some of the powers granted to the Tanodbayan by P.D. No. 1630 and
transfer them to the Ombudsman; or grant the Office of the Special Prosecutor such other powers
and functions and duties as Congress may deem fit and wise. This Congress did through the
passage of R.A. No. 6770.8
The foregoing ruling of the Court has been reiterated in Camanag v. Guerrero.9 More recently, in
Office of the Ombudsman v. Valera,10 the Court, basing its ratio decidendi on its ruling in Acop and
Camanag, declared that the OSP is "merely a component of the Office of the Ombudsman and may
only act under the supervision and control, and upon authority of the Ombudsman" and ruled that
under R.A. No. 6770, the power to preventively suspend is lodged only with the Ombudsman and
Deputy Ombudsman.11 The Court's ruling in Acop that the authority of the Ombudsman to prosecute
based on R.A. No. 6770 was authorized by the Constitution was also made the foundation for the
decision in Perez v. Sandiganbayan,12 where it was held that the power to prosecute carries with it
the power to authorize the filing of informations, which power had not been delegated to the OSP. It
is, therefore, beyond cavil that under the Constitution, Congress was not proscribed from legislating
the grant of additional powers to the Ombudsman or placing the OSP under the Office of the
Ombudsman.
Petitioners now assert that the Court's ruling on the constitutionality of the provisions of R.A. No.
6770 should be revisited and the principle of stare decisis set aside. Again, this contention deserves
scant consideration.
The doctrine of stare decisis et non quieta movere (to adhere to precedents and not to unsettle
things which are established) is embodied in Article 8 of the Civil Code of the Philippines which
provides, thus:
ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the
legal system of the Philippines.
It was further explained in Fermin v. People13 as follows:
The doctrine of stare decisis enjoins adherence to judicial precedents. It requires courts in a
country to follow the rule established in a decision of the Supreme Court thereof. That
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country to follow the rule established in a decision of the Supreme Court thereof. That
decision becomes a judicial precedent to be followed in subsequent cases by all courts in the land.
The doctrine of stare decisis is based on the principle that once a question of law has been
examined and decided, it should be deemed settled and closed to further argument. 14 1avvphi 1
In Chinese Young Men's Christian Association of the Philippine Islands v. Remington Steel
Corporation,15 the Court expounded on the importance of the foregoing doctrine, stating that:
The doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and
stability of judicial decisions, thus:
Time and again, the court has held that it is a very desirable and necessary judicial practice that
when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to
that principle and apply it to all future cases in which the facts are substantially the same. Stare
decisis et non quieta movere. Stand by the decisions and disturb not what is settled. Stare decisis
simply means that for the sake of certainty, a conclusion reached in one case should be
applied to those that follow if the facts are substantially the same , even though the parties may
be different. It proceeds from the first principle of justice that, absent any powerful countervailing
considerations, like cases ought to be decided alike. Thus, where the same questions relating to
the same event have been put forward by the parties similarly situated as in a previous case litigated
and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate
the same issue.16
The doctrine has assumed such value in our judicial system that the Court has ruled that "[a]
bandonment thereof must be based only on strong and compelling reasons, otherwise, the
becoming virtue of predictability which is expected from this Court would be immeasurably affected
and the public's confidence in the stability of the solemn pronouncements diminished." 17 Verily, only
upon showing that circumstances attendant in a particular case override the great benefits derived
by our judicial system from the doctrine of stare decisis, can the courts be justified in setting aside
the same.
In this case, petitioners have not shown any strong, compelling reason to convince the Court that the
doctrine of stare decisis should not be applied to this case. They have not successfully
demonstrated how or why it would be grave abuse of discretion for the Ombudsman, who has been
validly conferred by law with the power of control and supervision over the OSP, to disapprove or
overturn any resolution issued by the latter.
The second issue advanced by petitioners is that the Ombudsman's disapproval of the OSP
Resolution recommending dismissal of the cases is based on misapprehension of facts,
speculations, surmises and conjectures. The question is really whether the Ombudsman correctly
ruled that there was enough evidence to support a finding of probable cause. That issue, however,
pertains to a mere error of judgment. It must be stressed that certiorari is a remedy meant to correct
only errors of jurisdiction, not errors of judgment. This has been emphasized in First Corporation v.
Former Sixth Division of the Court of Appeals, 18 to wit:
It is a fundamental aphorism in law that a review of facts and evidence is not the province of the
extraordinary remedy of certiorari, which is extra ordinem - beyond the ambit of appeal. In certiorari
proceedings, judicial review does not go as far as to examine and assess the evidence of the
parties and to weigh the probative value thereof. It does not include an inquiry as to the
correctness of the evaluation of evidence. Any error committed in the evaluation of evidence
is merely an error of judgment that cannot be remedied by certiorari. An error of judgment is
one which the court may commit in the exercise of its jurisdiction. An error of jurisdiction is one
where the act complained of was issued by the court without or in excess of jurisdiction, or with
grave abuse of discretion, which is tantamount to lack or in excess of jurisdiction and which error is
correctible only by the extraordinary writ of certiorari. Certiorari will not be issued to cure errors
of the trial court in its appreciation of the evidence of the parties, or its conclusions anchored
on the said findings and its conclusions of law. It is not for this Court to re -examine
conflicting evidence, re-evaluate the credibility of the witnesses or substitute the findings of
fact of the court a quo.19
Evidently, the issue of whether the evidence indeed supports a finding of probable cause would
necessitate an examination and re-evaluation of the evidence upon which the Ombudsman based its
disapproval of the OSP Resolution. Hence, the Petition for Certiorari should not be given due
course.
Likewise noteworthy is the holding of the Court in Presidential Ad Hoc Fact-Finding Committee on
Behest Loans v. Desierto,20 imparting the value of the Ombudsman's independence, stating thus:
Under Sections 12 and 13, Article XI of the 1987 Constitution and RA 6770 (The Ombudsman Act of
1989), the Ombudsman has the power to investigate and prosecute any act or omission of a public
officer or employee when such act or omission appears to be illegal, unjust, improper or inefficient. It
has been the consistent ruling of the Court not to interfere with the Ombudsman's exercise of
his investigatory and prosecutory powers as long as his rulings are supported by substantial
REMLAW Page 71
his investigatory and prosecutory powers as long as his rulings are supported by substantial
evidence. Envisioned as the champion of the people and preserver of the integrity of public service,
he has wide latitude in exercising his powers and is free from intervention from the three
branches of government. This is to ensure that his Office is insulated from any outside
pressure and improper influence.21
Indeed, for the Court to overturn the Ombudsman's finding of probable cause, it is imperative for
petitioners to clearly prove that said public official acted with grave abuse of discretion. In
Presidential Commission on Good Government v. Desierto,22 the Court elaborated on what
constitutes such abuse, to wit:
Grave abuse of discretion implies a capricious and whimsical exercise of judgment tantamount to
lack of jurisdiction. The Ombudsman's exercise of power must have been done in an arbitrary or
despotic manner which must be so patent and gross as to amount to an evasion of a positive duty or
a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. x x x23
In this case, petitioners failed to demonstrate that the Ombudsman acted in a manner described
above. Clearly, the Ombudsman was acting in accordance with R.A. No. 6770 and properly
exercised its power of control and supervision over the OSP when it disapproved the Resolution
dated September 18, 2000.
It should also be noted that the petition does not question any order or action of the Sandiganbayan
Third Division; hence, it should not have been included as a respondent in this petition.
IN VIEW OF THE FOREGOING, the petition is DISMISSED for lack of merit.
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Ferdinand Cruz v. Priscilla Mijares et al GR 154404 Sep 11, 2008
Sunday, November 14, 2010
11:20 PM
FERDINAND A. CRUZ, VS. JUDGE PRISCILLA MIJARES, PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 108,
PASAY CITY, METRO MANILA, PUBLIC RESPONDENT
BENJAMIN MINA, PRIVATE RESPONDENT.
NACHURA, J.:
This is a Petition for Certiorari, Prohibition and Mandamus, with prayer for the issuance of a writ of
preliminary injunction under Rule 65 of the Rules of Court. It was directly filed with this Court assailing
the Resolutions dated May 10, 2002[1] and July 31, 2002[2] of the Regional Trial Court (RTC), Branch 108,
Pasay City, which denied the appearance of the plaintiff Ferdinand A. Cruz, herein petitioner, as party
litigant, and the refusal of the public respondent, Judge Priscilla Mijares, to voluntarily inhibit herself
from trying the case. No writ of preliminary injunction was issued by this Court.
The antecedents:
On March 5, 2002, Ferdinand A. Cruz (petitioner) sought permission to enter his appearance for and on
his behalf, before the RTC, Branch 108, Pasay City, as the plaintiff in Civil Case No. 01-0410, for
Abatement of Nuisance. Petitioner, a fourth year law student, anchors his claim on Section 34 of Rule
138 of the Rules of Court[3] that a non-lawyer may appear before any court and conduct his litigation
personally.
During the pre-trial, Judge Priscilla Mijares required the petitioner to secure a written permission from
the Court Administrator before he could be allowed to appear as counsel for himself, a party-litigant.
Atty. Stanley Cabrera, counsel for Benjamin Mina, Jr., filed a Motion to Dismiss instead of a pre-trial
brief to which petitioner Cruz vehemently objected alleging that a Motion to Dismiss is not allowed after
the Answer had been filed. Judge Mijares then remarked, "Hay naku, masama `yung marunong pa sa
Huwes. Ok?" and proceeded to hear the pending Motion to Dismiss and calendared the next hearing on
May 2, 2002.
On March 6, 2002, petitioner Cruz filed a Manifestation and Motion to Inhibit,[4] praying for the
voluntary inhibition of Judge Mijares. The Motion alleged that expected partiality on the part of the
respondent judge in the conduct of the trial could be inferred from the contumacious remarks of Judge
Mijares during the pre-trial. It asserts that the judge, in uttering an uncalled for remark, reflects a
negative frame of mind, which engenders the belief that justice will not be served.[5]
In an Order[6] dated April 19, 2002, Judge Mijares denied the motion for inhibition stating that throwing
tenuous allegations of partiality based on the said remark is not enough to warrant her voluntary
inhibition, considering that it was said even prior to the start of pre-trial. Petitioner filed a motion for
reconsideration[7] of the said order.
On May 10, 2002, Judge Mijares denied the motion with finality.[8] In the same Order, the trial court held
that for the failure of petitioner Cruz to submit the promised document and jurisprudence, and for his
failure to satisfy the requirements or conditions under Rule 138-A of the Rules of Court, his appearance
was denied.
In a motion for reconsideration,[9] petitioner reiterated that the basis of his appearance was not Rule
138-A, but Section 34 of Rule 138. He contended that the two Rules were distinct and are applicable to
different circumstances, but the respondent judge denied the same, still invoking Rule 138-A, in an
REMLAW Page 73
different circumstances, but the respondent judge denied the same, still invoking Rule 138-A, in an
Order[10] dated July 31, 2002.
On August 16, 2002, the petitioner directly filed with this Court, the instant petition and assigns the
following errors:
I.
The respondent regional trial court gravely erred and abused its discretion when it denied the
appearance of the petitioner, for and in the latter's behalf, in civil case no. 01-0401 [sic] contrary to rule
138, section 34 of the rules of court, providing for the appearance of non-lawyers as a party litigant;
II.
the respondent court gravely erred and abused its discretion when it did not voluntarily inhibit despite
the advent of jurisprudence [sic] that such an inhibition is proper to preserve the people's faith and
confidence to the courts.
The core issues raised before the Court are: (1) whether the extraordinary writs of certiorari, prohibition
and mandamus under Rule 65 of the 1997 Rules of Court may issue; and (2) whether the respondent
court acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it denied the
appearance of the petitioner as party litigant and when the judge refused to inhibit herself from trying
the case.
This Court's jurisdiction to issue writs of certiorari, prohibition, mandamus and injunction is not
exclusive; it has concurrent jurisdiction with the RTCs and the Court of Appeals. This concurrence of
jurisdiction is not, however, to be taken as an absolute, unrestrained freedom to choose the court
where the application therefor will be directed.[11] A becoming regard of the judicial hierarchy most
certainly indicates that petitions for the issuance of extraordinary writs against the RTCs should be filed
with the Court of Appeals.[12] The hierarchy of courts is determinative of the appropriate forum for
petitions for the extraordinary writs; and only in exceptional cases and for compelling reasons, or if
warranted by the nature of the issues reviewed, may this Court take cognizance of petitions filed directly
before it.[13]
Considering, however, that this case involves the interpretation of Section 34, Rule 138 and Rule 138-A
of the Rules of Court, the Court takes cognizance of herein petition. Nonetheless, the petitioner is
cautioned not to continue his practice of filing directly before this Court petitions under Rule 65 when
the issue raised can be resolved with dispatch by the Court of Appeals. We will not tolerate litigants who
make a mockery of the judicial hierarchy as it necessarily delays more important concerns before us.
In resolving the second issue, a comparative reading of Rule 138, Section 34 and Rule 138-A is necessary.
Section 1. Conditions for Student Practice. - A law student who has successfully completed his 3rd year
of the regular four-year prescribed law curriculum and is enrolled in a recognized law school's clinical
legal education program approved by the Supreme Court, may appear without compensation in any
civil, criminal or administrative case before any trial court, tribunal, board or officer, to represent
indigent clients accepted by the legal clinic of the law school.
Sec. 2. Appearance. - The appearance of the law student authorized by this rule, shall be under the
direct supervision and control of a member of the Integrated Bar of the Philippines duly accredited by
the law school. Any and all pleadings, motions, briefs, memoranda or other papers to be filed, must be
signed by the supervising attorney for and in behalf of the legal clinic.
REMLAW Page 74
signed by the supervising attorney for and in behalf of the legal clinic.
The respondent court held that the petitioner could not appear for himself and on his behalf because of
his failure to comply with Rule 138-A. In denying petitioner's appearance, the court a quo tersely finds
refuge in the fact that, on December 18, 1986, this Court issued Circular No. 19, which eventually
became Rule 138-A, and the failure of Cruz to prove on record that he is enrolled in a recognized
school's clinical legal education program and is under supervision of an attorney duly accredited by the
law school.
However, the petitioner insisted that the basis of his appearance was Section 34 of Rule 138, which
provides:
Sec. 34. By whom litigation is conducted. - In the court of a justice of the peace, a party may conduct his
litigation in person, with the aid of an agent or friend appointed by him for that purpose, or with the aid
of an attorney. In any other court, a party may conduct his litigation personally or by aid of an
attorney, and his appearance must be either personal or by a duly authorized member of the bar.
and is a rule distinct from Rule 138-A.
From the clear language of this provision of the Rules, it will have to be conceded that the contention of
the petitioner has merit. It recognizes the right of an individual to represent himself in any case to which
he is a party. The Rules state that a party may conduct his litigation personally or with the aid of an
attorney, and that his appearance must either be personal or by a duly authorized member of the Bar.
The individual litigant may personally do everything in the course of proceedings from commencement
to the termination of the litigation.[14] Considering that a party personally conducting his litigation is
restricted to the same rules of evidence and procedure as those qualified to practice law,[15] petitioner,
not being a lawyer himself, runs the risk of falling into the snares and hazards of his own ignorance.
Therefore, Cruz as plaintiff, at his own instance, can personally conduct the litigation of Civil Case No.
01-0410. He would then be acting not as a counsel or lawyer, but as a party exercising his right to
represent himself.
The trial court must have been misled by the fact that the petitioner is a law student and must,
therefore, be subject to the conditions of the Law Student Practice Rule. It erred in applying Rule 138-A,
when the basis of the petitioner's claim is Section 34 of Rule 138. The former rule provides for
conditions when a law student may appear in courts, while the latter rule allows the appearance of a
non-lawyer as a party representing himself.
The conclusion of the trial court that Rule 138-A superseded Rule 138 by virtue of Circular No. 19 is
misplaced. The Court never intended to repeal Rule 138 when it released the guidelines for limited law
student practice. In fact, it was intended as an addendum to the instances when a non-lawyer may
appear in courts and was incorporated to the Rules of Court through Rule 138-A.
It may be relevant to recall that, in respect to the constitutional right of an accused to be heard by
himself and counsel,[16] this Court has held that during the trial, the right to counsel cannot be
waived.[17] The rationale for this ruling was articulated in People v. Holgado,[18] where we declared that
"even the most intelligent or educated man may have no skill in the science of law, particularly in the
rules of procedure, and without counsel, he may be convicted not because he is guilty but because he
does not know how to establish his innocence."
The case at bar involves a civil case, with the petitioner as plaintiff therein. The solicitous concern that
the Constitution accords the accused in a criminal prosecution obviously does not obtain in a civil case.
Thus, a party litigant in a civil case, who insists that he can, without a lawyer's assistance, effectively
undertake the successful pursuit of his claim, may be given the chance to do so. In this case, petitioner
alleges that he is a law student and impliedly asserts that he has the competence to litigate the case
himself. Evidently, he is aware of the perils incident to this decision.
In addition, it was subsequently clarified in Bar Matter 730, that by virtue of Section 34, Rule 138, a law
student may appear as an agent or a friend of a party litigant, without need of the supervision of a
REMLAW Page 75
student may appear as an agent or a friend of a party litigant, without need of the supervision of a
lawyer, before inferior courts. Here, we have a law student who, as party litigant, wishes to represent
himself in court. We should grant his wish.
Additionally, however, petitioner contends that the respondent judge committed manifest bias and
partiality by ruling that there is no valid ground for her voluntary inhibition despite her alleged negative
demeanor during the pre-trial when she said: "Hay naku, masama `yung marunong pa sa Huwes. Ok?"
Petitioner avers that by denying his motion, the respondent judge already manifested conduct indicative
of arbitrariness and prejudice, causing petitioner's and his co-plaintiff's loss of faith and confidence in
the respondent's impartiality.
We do not agree.
It must be noted that because of this incident, the petitioner filed an administrative case [19] against the
respondent for violation of the Canons of Judicial Ethics, which we dismissed for lack of merit on
September 15, 2002. We now adopt the Court's findings of fact in the administrative case and rule that
there was no grave abuse of discretion on the part of Judge Mijares when she did not inhibit herself
from the trial of the case.
In a Motion for Inhibition, the movant must prove the ground for bias and prejudice by clear and
convincing evidence to disqualify a judge from participating in a particular trial,[20] as voluntary inhibition
is primarily a matter of conscience and addressed to the sound discretion of the judge. The decision on
whether she should inhibit herself must be based on her rational and logical assessment of the
circumstances prevailing in the case before her.[21] Absent clear and convincing proof of grave abuse of
discretion on the part of the judge, this Court will rule in favor of the presumption that official duty has
been regularly performed.
WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed Resolution and Order of the Regional
Trial Court, Branch 108, Pasay City are MODIFIED. Regional Trial Court, Branch 108, Pasay City is
DIRECTED to ADMIT the Entry of Appearance of petitioner in Civil Case No. 01-0410 as a party litigant.
No pronouncement as to costs.
REMLAW Page 76
First United v. Poro Point GR 178799 Jan 19, 2009
Sunday, November 14, 2010
11:20 PM
REMLAW Page 77
bidding of the project on May 8, 2007 and awarded the project to SCCI as the lowest qualified bidder.8
The Contract9 for the project was signed, and a notice to proceed10 was served on SCCI on May 29, 2007.
FUCC filed an amended petition with the RTC to enjoin the implementation of the project. The Office of
the Government Corporate Counsel (OGCC) moved to dismiss the petition for lack of jurisdiction.
Pending resolution of OGCC’s motion to dismiss, FUCC moved for the dismissal of its amended petition,
which was granted by the RTC on July 4, 2007, to wit:
Acting on the above-stated notice of dismissal, this Court hereby confirms the dismissal of the amended
petition, in effect the dismissal of the whole action, without prejudice, pursuant to Sec. 1, Rule 17 of the
Rules of Court.
WHEREFORE, this case is hereby DISMISSED.
SO ORDERED.11
Claiming that there is no appeal, or any speedy and adequate remedy in the ordinary course of law,
FUCC comes to us via this petition. It also asks for the issuance of a TRO to enjoin the implementation of
the project, asserting that SCCI is not qualified to undertake the project and the award clearly poses a
real threat to the public welfare and safety. In its November 12, 2007 Resolution, this Court denied
FUCC’s application for the issuance of a TRO for lack of merit.
FUCC filed this petition praying for the following relief, viz.:
(a) That upon receipt of this Petition, a Temporary Restraining Order (TRO) be issued enjoining the
implementation of the contract for the Upgrading of the San Fernando Airport Project, Phase I
with respondent [SCCI] as the contractor;
(b) That after proper proceeding, judgment be rendered: (1) permanently enjoining the
implementation of the contract for the Upgrading of the San Fernando Airport Project, Phase I
with respondent [SCCI] as the contractor; (2) declaring the re-bidding of the contract for the
Upgrading of the San Fernando Airport Project, Phase I on 08 May 2007 illegal and nullifying the
results thereof; (3) annulling the Notice of Award dated 23 May 2007, the Contract for the
Upgrading of the San Fernando Airport, Phase I entered into, by and between respondent PPMC
and respondent [SCCI] on 29 May 2007, and the Notice to Proceed dated 29 May 2007; and (4)
directing respondent SBAC and/or respondent PPMC and/or respondent Atty. Recadio to
reconsider the "Failed" rating of the bid of FUCC, open the Financial Proposal Envelope submitted
by FUCC during the original bidding, declare FUCC as the winning bidder, and forthwith award the
contract to FUCC, as the winning bidder and being the only qualified contractor for the project. 12
It asserts that SBAC and PPMC committed grave abuse of discretion in disqualifying its bid, in denying its
protest, in conducting a re-bidding and in awarding the project to SCCI. It insists that it is the only
qualified contractor for the project and prays that it be declared the winning bidder.
We dismiss the petition.
Republic Act (RA) No. 9184, or the Government Procurement Reform Act, outlines the procedure to
assail decisions of the SBAC in this wise:
SEC. 55. Protests on Decisions of the BAC. – Decisions of BAC in all stages of procurement may be
protested to the head of the procuring entity and shall be in writing. Decisions of the BAC may be
protested by filing a verified position paper and paying a nonrefundable protest fee. The amount of
protest fee and the periods during which the protests may be filed and resolved shall be specified in the
IRR.
SEC. 56. Resolution of Protests. - The protests shall be resolved strictly on the basis of records of the
BAC. Up to a certain amount specified in the IRR, the decisions of the Head of the Procuring Entity shall
be final.
SEC. 57. Non-interruption of the Bidding Process. – In no case shall any protest taken from any decision
treated in this Article stay or delay the bidding process. Protests must first be resolved before any award
is made.
SEC. 58. Resort to Regular Courts; Certiorari. – Court action may be resorted only after the protest
contemplated in this Article shall have been completed. Cases that are filed in violation of the process
specified in this Article shall be dismissed for lack of jurisdiction. The regional trial court shall have
jurisdiction over final decisions of the head of the procuring entity. Court actions shall be governed by
Rule 65 of the 1997 Rules of Civil Procedure.
This provision is without prejudice to any law conferring on the Supreme Court the sole jurisdiction to
issue temporary restraining orders and injunctions relating to Infrastructure Projects of Government.
FUCC challenged the decision of SBAC in a protest filed with Atty. Racadio of the PPMC who affirmed the
REMLAW Page 78
issue temporary restraining orders and injunctions relating to Infrastructure Projects of Government.
FUCC challenged the decision of SBAC in a protest filed with Atty. Racadio of the PPMC who affirmed the
SBAC decision. Instead of filing a petition for certiorari, as provided in Section 58, FUCC filed a petition
for injunction with prayer for the issuance of a temporary restraining order and/or preliminary
injunction with the RTC. FUCC, however, later moved for its dismissal theorizing that the RTC had no
jurisdiction over petitions for injunction. Thereafter, it filed this petition for certiorari with this Court.
Section 4, Rule 65 of the 1997 Rules of Civil Procedure provides that a special civil action for certiorari
shall be filed not later than sixty (60) days from the notice of the judgment, order or resolution.13 FUCC
admitted that it received the PPMC decision on March 27, 2007.14 However, it filed this petition assailing
the said decision only on July 30, 2007. It is, therefore, too late in the day for FUCC, via this petition, to
assail the PPMC decision which rated its bid as failed.
Besides, FUCC violated the doctrine of judicial hierarchy in filing this petition for certiorari directly with
this Court. Section 58 is clear that petitions for the issuance of a writ of certiorari against the decision of
the head of the procuring agency, like PPMC, should be filed with the Regional Trial Court. Indeed, the
jurisdiction of the RTC over petitions for certiorari is concurrent with this Court. However, such
concurrence does not allow unrestricted freedom of choice of the court forum. A direct invocation of
the Supreme Court’s original jurisdiction to issue this writ should be allowed only when there are special
and important reasons, clearly and specifically set out in the petition.15
In the present case, FUCC adduced no special and important reason why direct recourse to this Court
should be allowed. Thus, we reaffirm the judicial policy that this Court will not entertain a direct
invocation of its jurisdiction unless the redress desired cannot be obtained in the appropriate lower
courts, and exceptional and compelling circumstances justify the resort to the extraordinary remedy of a
writ of certiorari.
Similarly, the RTC is the proper venue to hear FUCC’s prayer for permanent injunction. Unquestionably,
RA No. 897516 enjoins all courts, except the Supreme Court, from issuing any temporary restraining
order, preliminary injunction, or preliminary mandatory injunction against the government, or any of its
subdivisions, officials or any person or entity to restrain, prohibit or compel the bidding or awarding of a
contract or project of the national government. The proscription, however, covers only temporary
restraining orders or writs but not decisions on the merits granting permanent injunction. Therefore,
while courts below are prohibited by RA No. 8795 from issuing TROs or preliminary restraining orders
pending the adjudication of the case, said statute, however, does not explicitly proscribe the issuance of
a permanent injunction granted by a court of law arising from an adjudication of a case on the merits.17
As we explained in Alvarez v. PICOP Resources, Inc.:18
x x x Republic Act No. 8975 merely proscribes the issuance of temporary restraining orders and writs of
preliminary injunction and preliminary mandatory injunction. [It] cannot, under pain of violating the
Constitution, deprive the courts of authority to take cognizance of the issues raised in the principal
action, as long as such action and the relief sought are within their jurisdiction.
Clearly, except for the prayer for the issuance of a TRO or preliminary injunction, the issues raised by
FUCC and the relief it sought are within the jurisdiction of the RTC. It is a procedural faux pas for FUCC to
invoke the original jurisdiction of this Court over the issuance of a writ of certiorari and permanent
injunction.
In any event, the invitation to bid contains a reservation for PPMC to reject any bid. It has been held that
where the right to reject is so reserved, the lowest bid, or any bid for that matter, may be rejected on a
mere technicality.19 The discretion to accept or reject bid and award contracts is vested in the
government agencies entrusted with that function. This discretion is of such wide latitude that the
Courts will not interfere therewith or direct the committee on bids to do a particular act or to enjoin
such act within its prerogatives unless it is apparent that it is used as a shield to a fraudulent award;20 or
an unfairness or injustice is shown;21 or when in the exercise of its authority, it gravely abuses or
exceeds its jurisdiction. Thus, where PPMC as advertiser, availing itself of that right, opts to reject any or
all bids, the losing bidder has no cause to complain or right to dispute that choice, unless fraudulent
acts, injustice, unfairness or grave abuse of discretion is shown.
FUCC alleges that SBAC and PPMC, along with the SCCI and five (5) other bidders, colluded to rig the
results of the re-bidding so that SCCI would emerge as the so-called lowest bidder. The record, however,
is bereft of any proof to substantiate the allegation. Neither is there any evidence offered to establish
unfairness, injustice, caprice or arbitrariness on the part of the SBAC or the PPMC in awarding the
contract to SCCI, the lowest bidder. The presumption of regularity of the bidding must thus be upheld.
REMLAW Page 79
contract to SCCI, the lowest bidder. The presumption of regularity of the bidding must thus be upheld.
As we explained in JG Summit Holdings, Inc. v. Court of Appeals:22
The discretion to accept or reject a bid and award contracts is vested in the Government agencies
entrusted with that function. The discretion given to the authorities on this matter is of such wide
latitude that the Courts will not interfere therewith, unless it is apparent that it is used as a shield to a
fraudulent award (Jalandoni v. NARRA, 108 Phil. 486 [1960]). x x x The exercise of this discretion is a
policy decision that necessitates prior inquiry, investigation, comparison, evaluation, and deliberation.
This task can best be discharged by the Government agencies concerned, not by the Courts. The role of
the Courts is to ascertain whether a branch or instrumentality of the Government has transgressed its
constitutional boundaries. But the Courts will not interfere with executive or legislative discretion
exercised within those boundaries. Otherwise, it strays into the realm of policy decision-making.
It is only upon a clear showing of grave abuse of discretion that the Courts will set aside the award of a
contract made by a government entity. Grave abuse of discretion implies a capricious, arbitrary and
whimsical exercise of power (Filinvest Credit Corp. v. Intermediate Appellate Court, No. 65935, 30
September 1988, 166 SCRA 155). The abuse of discretion must be so patent and gross as to amount to
an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law, as to act at all in
contemplation of law, where the power is exercised in an arbitrary and despotic manner by reason of
passion or hostility (Litton Mills, Inc. v. Galleon Trader, Inc., et al[.], L-40867, 26 July 1988, 163 SCRA
489).
Accordingly, there being no showing of grave abuse of discretion, FUCC has no valid ground to demand
annulment of the contract between PPMC and SCCI.
WHEREFORE, the petition is DISMISSED. The assailed Decision of the PPMC is AFFIRMED.
SO ORDERED.
REMLAW Page 80
First Lepanto Ceramics, Inc. v. CA, GR 110571, Mar 10, 1994
Sunday, November 14, 2010
11:21 PM
REMLAW Page 82
so as to include the writ of quo warranto, and also (2) empowering it to issue all said extraordinary writs
"whether or not in aid of its appellate jurisdiction." Its appellate jurisdiction was also extended to cover
not only final judgments of Regional Trial Courts, but also "all final judgments, decisions, resolutions,
orders or awards of . . . quasi-judicial agencies, instrumentalities, boards or commissions, except those
falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
provisions of this Act, and of sub-paragraph (1) of the third paragraph and subparagraph (4) of the
fourth paragraph of Section 17 of the Judiciary Act of 1948," it being noteworthy in this connection that
the text of the law is broad and comprehensive, and the explicitly stated exceptions have no reference
whatever to the Court of Tax Appeals. Indeed, the intention to expand the original and appellate
jurisdiction of the Court of Appeals over quasi-judicial agencies, instrumentalities, boards, or
commissions, is further stressed by the last paragraph of Section 9 which excludes from its provisions,
only the "decisions and interlocutory orders issued under the Labor Code of the Philippines and by the
Central Board of Assessment Appeals." 6
However, it cannot be denied that the lawmaking system of the country is far from perfect. During the
transitional period after the country emerged from the Marcos regime, the lawmaking power was
lodged on the Executive Department. The obvious lack of deliberation in the drafting of our laws could
perhaps explain the deviation of some of our laws from the goal of uniform procedure which B.P. 129
sought to promote.
In exempli gratia, Executive Order No. 226 or the Omnibus Investments Code of 1987 provides that all
appeals shall be filed directly with the Supreme Court within thirty (30) days from receipt of the order or
decision.
Noteworthy is the fact that presently, the Supreme Court entertains ordinary appeals only from
decisions of the Regional Trial Courts in criminal cases where the penalty imposed is reclusion perpetua
or higher. Judgments of regional trial courts may be appealed to the Supreme Court only by petition for
review on certiorari within fifteen (15) days from notice of judgment in accordance with Rule 45 of the
Rules of Court in relation to Section 17 of the Judiciary Act of 1948, as amended, this being the clear
intendment of the provision of the Interim Rules that "(a)ppeals to the Supreme Court shall be taken by
petition for certiorari which shall be governed by Rule 45 of the Rules of Court." Thus, the right of appeal
provided in E.O. 226 within thirty (30) days from receipt of the order or decision is clearly not in
consonance with the present procedure before this Court. Only decisions, orders or rulings of a
Constitutional Commission (Civil Service Commission, Commission on Elections or Commission on Audit),
may be brought to the Supreme Court on original petitions for certiorari under Rule 65 by the aggrieved
party within thirty (30) days form receipt of a copy thereof. 7
Under this contextual backdrop, this Court, pursuant to its Constitutional power under Section 5(5),
Article VIII of the 1987 Constitution to promulgate rules concerning pleading, practice and procedure in
all courts, and by way of implementation of B.P. 129, issued Circular 1-91 prescribing the rules governing
appeals to the Court of Appeals from final orders or decisions of the Court of Tax Appeals and quasi-
judicial agencies to eliminate unnecessary contradictions and confusing rules of procedure.
Contrary to petitioner's contention, although a circular is not strictly a statute or law, it has, however,
the force and effect of law according to settled jurisprudence. 8 In Inciong v. de Guia, 9 a circular of this
Court was treated as law. In adopting the recommendation of the Investigating Judge to impose a
sanction on a judge who violated Circular No. 7 of this Court dated
September 23, 1974, as amended by Circular No. 3 dated April 24, 1975 and Circular No. 20 dated
October 4, 1979, requiring raffling of cases, this Court quoted the ratiocination of the Investigating
Judge, brushing aside the contention of respondent judge that assigning cases instead of raffling is a
common practice and holding that respondent could not go against the circular of this Court until it is
repealed or otherwise modified, as "(L)aws are repealed only by subsequent ones, and their violation or
non-observance shall not be excused by disuse, or customs or practice to the contrary." 10
The argument that Article 82 of E.O. 226 cannot be validly repealed by Circular 1-91 because the former
grants a substantive right which, under the Constitution cannot be modified, diminished or increased by
this Court in the exercise of its rule-making powers is not entirely defensible as it seems. Respondent
correctly argued that Article 82 of E.O. 226 grants the right of appeal from decisions or final orders of
the BOI and in granting such right, it also provided where and in what manner such appeal can be
brought. These latter portions simply deal with procedural aspects which this Court has the power to
regulate by virtue of its constitutional rule-making powers.
REMLAW Page 83
regulate by virtue of its constitutional rule-making powers.
The case of Bustos v. Lucero 11 distinguished between rights created by a substantive law and those
arising from procedural law:
Substantive law creates substantive rights . . . . Substantive rights is a term which includes those rights
which one enjoys under the legal system prior to the disturbance of normal relations (60 C.J., 980).
Substantive law is that part of the law which creates, defines and regulates rights, or which regulates
rights and duties which give rise to a cause of action, as oppossed to adjective or remedial law, which
prescribes the method of enforcing rights or obtains a redress for their invasion. 12
Indeed, the question of where and in what manner appeals from decisions of the BOI should be brought
pertains only to procedure or the method of enforcing the substantive right to appeal granted by E.O.
226. In other words, the right to appeal from decisions or final orders of the BOI under E.O. 226 remains
and continues to be respected. Circular 1-91 simply transferred the venue of appeals from decisions of
this agency to respondent Court of Appeals and provided a different period of appeal, i.e., fifteen (15)
days from notice. It did not make an incursion into the substantive right to appeal.
The fact that BOI is not expressly included in the list of quasi-judicial agencies found in the third
sentence of Section 1 of Circular 1-91 does not mean that said circular does not apply to appeals from
final orders or decision of the BOI. The second sentence of Section 1 thereof expressly states that "(T)
hey shall also apply to appeals from final orders or decisions of any quasi-judicial agency from which an
appeal is now allowed by statute to the Court of Appeals or the Supreme Court." E.O. 266 is one such
statute. Besides, the enumeration is preceded by the words "(A)mong these agencies are . . . ," strongly
implying that there are other quasi-judicial agencies which are covered by the Circular but which have
not been expressly listed therein. More importantly, BOI does not fall within the purview of the
exclusions listed in Section 2 of the circular. Only the following final decisions and interlocutory orders
are expressly excluded from the circular, namely, those of: (1) the National Labor Relations Commission;
(2) the Secretary of Labor and Employment; (3) the Central Board of Assessment Appeals and (4) other
quasi-judicial agencies from which no appeal to the courts is prescribed or allowed by statute. Since in
DBP v. CA 13 we upheld the appellate jurisdiction of the Court of Appeals over the Court of Tax Appeals
despite the fact that the same is not among the agencies reorganized by B.P. 129, on the ground that
B.P. 129 is broad and comprehensive, there is no reason why BOI should be excluded from
Circular 1-91, which is but implementary of said law.
Clearly, Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226 insofar as the manner and
method of enforcing the right to appeal from decisions of the BOI are concerned. Appeals from
decisions of the BOI, which by statute was previously allowed to be filed directly with the Supreme
Court, should now be brought to the Court of Appeals.
WHEREFORE, in view of the foregoing reasons, the instant petition for certiorari and prohibition with
application for temporary restraining order and preliminary injunction is hereby DISMISSED for lack of
merit. The Temporary Restraining Order issued on July 19, 1993 is hereby LIFTED.
REMLAW Page 84
Sarah Ampong v. CSC GR 167916 Aug 26, 2008
Sunday, November 14, 2010
11:21 PM
SARAH P. AMPONG VS. CIVIL SERVICE COMMISSION, CSC-REGIONAL OFFICE NO. 11, RESPONDENT.
CAN the Civil Service Commission (CSC) properly assume jurisdiction over administrative proceedings
against a judicial employee involving acts of dishonesty as a teacher, committed prior to her
appointment to the judiciary?
Before Us is a petition for review on certiorari assailing the Decision[1] of the Court of Appeals (CA)
affirming the CSC's exercise of administrative jurisdiction over petitioner.
The Facts
The following facts are uncontroverted:
On November 10, 1991, a Professional Board Examination for Teachers (PBET)[2] was held in Davao
City. A certain Evelyn Junio-Decir[3] applied for and took the examination at Room 16, Kapitan Tomas
Monteverde Elementary School. She passed with a rating of 74.27%.[4]
At the time of the PBET examinations, petitioner Sarah P. Ampong (nee Navarra) and Decir were public
school teachers under the supervision of the Department of Education, Culture and Sports
(DECS).[5] Later, on August 3, 1993, Ampong transferred to the Regional Trial Court (RTC) in Alabel,
Sarangani Province, where she was appointed as Court Interpreter III.
On July 5, 1994, a woman representing herself as Evelyn Decir went to the Civil Service Regional Office
(CSRO) No. XI, Davao City, to claim a copy of her PBET Certificate of Eligibility. During the course of the
transaction, the CSRO personnel noticed that the woman did not resemble the picture of the examinee
in the Picture Seat Plan (PSP). Upon further probing, it was confirmed that the person claiming the
eligibility was different from the one who took the examinations. It was petitioner Ampong who took
and passed the examinations under the name Evelyn Decir.
The CSRO conducted a preliminary investigation and determined the existence of a prima facie case
against Decir and Ampong for Dishonesty, Grave Misconduct and Conduct Prejudicial to the Best
Interest of the Service. On August 23, 1994, they were formally charged and required to file answers
under oath. The formal charge reads:
That sometime before the conduct of the November 10, 1991 Professional Board Examination for
Teachers (PBET), a certain Ms. Evelyn B. Junio (now Decir) took the said examination at Rm. 16 Kapitan
Tomas Monteverde Elementary School, Davao City, with a passing rate of 74.27%; That on July 5, 1994
she appeared before the CSC Region XI Office to get her Guro Certificate; That upon verification, it was
found out that the picture attached in the Picture Seat Plan, marked as Annex "A" and "A-1,"
respectively, were not the same compared to the picture attached in the CSC Form 212 of Evelyn Junio-
Decir marked herein as annex "B," "B-1," respectively. There was also a marked difference in the
signatures affixed in the said annexes; That further investigations revealed that it was the pictures of Ms.
Sarah Navarra, wife of her husband's first cousin, who took the said examination in behalf of Ms. Evelyn
Junio-Decir, a provisional teacher; That the said act of Mesdames Decir and Navarra are acts of
dishonesty and conduct prejudicial to the best interest of the service; that in (sic) taking the CS
examination for and in behalf of another undermines the sanctity of the CS examinations; All these
contrary to existing civil service laws and regulations. (Emphasis supplied)
In her sworn statement dated November 3, 1994, Decir denied the charges against her. She reasoned
out that it must have been the examination proctor who pasted the wrong picture on the PSP and that
her signatures were different because she was still signing her maiden name at the time of the
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her signatures were different because she was still signing her maiden name at the time of the
examination. In her Answer, Decir contended that:
2. The same accusation is denied, the truth being:
a. When I took the Professional Board Examination for Teachers (PBET) in the year 1991, I
handed my 1x1 I.D. picture to the proctor assigned in the examination room who might
have inadvertently pasted in the Seat Plan [the] wrong picture instead [of] my own picture;
b. With respect to the marked difference in my signature both appearing in the aforesaid Seat
Plan and also with the Form 212, the disparity lies in that in the year 1991, when I took the
afroresaid examination, I was still sporting my maiden name Evelyn B. Junio in order to
coincide with all my pertinent supporting papers, like the special order (s.o.), appointment
and among others, purposely to take said communications. However, immediately after
taking the PBET Examination in 1991, I started using the full name of Evelyn Junio-Decir.[6]
Even before filing an Answer, petitioner Ampong voluntarily appeared at the CSRO on February 2, 1995
and admitted to the wrongdoing. When reminded that she may avail herself of the services of counsel,
petitioner voluntarily waived said right.
On March 13, 1995, petitioner gave another admission in the following tenor:
Q: Now, what is then your intention in coming to this Region inasmuch as you are still intending
to file an answer to the formal charge?
A: I came here because I want to admit personally. So that I will not be coming here anymore. I
will submit my case for Resolution.
Q: So, you intend to waive your right for the formal hearing and you also admit orally on the guilt
of the charge on the Formal Charge dated August 24, 1994?
A: Yes, Ma'am.
xxx x
Q: Now inasmuch as you have declared that you have admitted the guilt that you took the
examination for and in behalf of Evelyn Junio Decir, are you telling this to the Commission
without the assistance of the counsel or waiver of your right to be assisted by counsel.
A: Yes, Ma'am. I am waiving my right. [7] (Emphasis supplied)
Petitioner reiterated her admission in her sworn Answer dated March 16, 1995:
3. That, during the commission of the act, I was still under the Department of Education, Culture and
Sports, as Teacher in-charge of San Miguel Primary School, Malungon North District, way back in
1991, when the husband of Evelyn Junio-Decir, my husband's cousin came to me and persuaded
me to take the examination in behalf of his wife to which I disagreed but he earnestly begged so
that I was convinced to agree because I pity his wife considering that she is an immediate relative,
and there was no monetary consideration involved in this neither a compensatory reward for me,
as I was overcome by their persuasion;
4. That, despite the fact that I was a teacher, I was not aware that the acts I was charged, is a ground
for disciplinary action and punishable by dismissal;
5. That I should not have conformed to this anomalous transaction considering that I was born in a
Christian family, and was brought up in the fear of Lord, and had been a consistent officer of the
Church Board, had been a religious leader for so many years, and had been the organizer of the
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Church Board, had been a religious leader for so many years, and had been the organizer of the
Music Festival of the Association of Evangelical Churches of Malungon, Sarangani Province, thus I
was devoted to church work and was known to be of good conduct; and that my friends and
acquaintances can vouch to that, but I was just forced by circumstances to agree to the spouses
Godfre and Evelyn Decir.[8] (Emphasis added)
CSC Finding and Penalty
On March 21, 1996, the CSC found petitioner Ampong and Decir guilty of dishonesty, dismissing them
from the service. The dispositive part of the CSC resolution states:
WHEREFORE, the Commission hereby finds Evelyn J. Decir and Sarah P. Navarra guilty of
Dishonesty. Accordingly, they are meted the penalty of dismissal with all its accessory penalties. The
PBET rating of Decir is revoked.[9]
Petitioner moved for reconsideration, raising for the first time the issue of jurisdiction.[10] She argued
that the exclusive authority to discipline employees of the judiciary lies with the Supreme Court; that
the CSC acted with abuse of discretion when it continued to exercise jurisdiction despite her assumption
of duty as a judicial employee. She contended that at the time the case was instituted on August 23,
1994, the CSC already lost jurisdiction over her. She was appointed as Interpreter III of the RTC, Branch
38, Alabel, Sarangani Province on August 3, 1993.
The CSC denied the motion for reconsideration.[11] According to the Commission, to allow petitioner to
evade administrative liability would be a mockery of the country's administrative disciplinary system. It
will open the floodgates for others to escape prosecution by the mere expedient of joining another
branch of government. In upholding its jurisdiction over petitioner, the CSC differentiated between
administrative supervision exercised by the Supreme Court and administrative jurisdiction granted to
the Commission over all civil service employees:
Moreover, it must be pointed out that administrative supervision is distinct from administrative
jurisdiction. While it is true that this Commission does not have administrative supervision over
employees in the judiciary, it definitely has concurrent jurisdiction over them. Such jurisdiction was
conferred upon the Civil Service Commission pursuant to existing law specifically Section 12(11), Chapter
3, Book V of the Administrative Code of 1987 (Executive Order No. 292) which provides as follows:
"(11) Hear and decide administrative cases instituted by or through it directly or on appeal, including
contested appointment, and review decisions and actions of its offices and of the agencies attached to it
x x x."
The fact that court personnel are under the administrative supervision of the Supreme Court does not
totally isolate them from the operations of the Civil Service Law. Appointments of all officials and
employees in the judiciary is governed by the Civil Service Law (Section 5(6), Article VIII, 1987
Constitution). (Emphasis supplied)
CA Disposition
Via petition for review under Rule 43, petitioner elevated the matter to the CA.[12] She insisted that as a
judicial employee, it is the Supreme Court and not the CSC that has disciplinary jurisdiction over her.
In a Decision dated November 30, 2004,[13] the CA denied the petition for lack of merit.
The CA noted that petitioner never raised the issue of jurisdiction until after the CSC ruled against
her. Rather, she willingly appeared before the commission, freely admitted her wrongdoing, and even
requested for clemency. Thus, she was estopped from questioning the Commission's jurisdiction. The
appellate court opined that while lack of jurisdiction may be assailed at any stage, a party's active
participation in the proceedings before a court, tribunal or body will estop such party from assailing its
jurisdiction.
The CA further ruled that a member of the judiciary may be under the jurisdiction of two different
bodies. As a public school teacher or a court interpreter, petitioner was part of the civil service, subject
to its rules and regulations. When she committed acts in violation of the Civil Service Law, the CSC was
clothed with administrative jurisdiction over her.
Issue
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clothed with administrative jurisdiction over her.
Issue
The answer to the question at the outset is in the negative but We rule against the petition on the
ground of estoppel.
It is true that the CSC has administrative jurisdiction over the civil service. As defined under the
Constitution and the Administrative Code, the civil service embraces every branch, agency, subdivision,
and instrumentality of the government, and government-owned or controlled corporations.[15] Pursuant
to its administrative authority, the CSC is granted the power to "control, supervise, and coordinate the
Civil Service examinations."[16] This authority grants to the CSC the right to take cognizance of any
irregularity or anomaly connected with the examinations.[17]
However, the Constitution provides that the Supreme Court is given exclusive administrative
supervision over all courts and judicial personnel.[18] By virtue of this power, it is only the Supreme
Court that can oversee the judges' and court personnel's compliance with all laws, rules and
regulations. It may take the proper administrative action against them if they commit any violation. No
other branch of government may intrude into this power, without running afoul of the doctrine of
separation of powers.[19] Thus, this Court ruled that the Ombudsman cannot justify its investigation of a
judge on the powers granted to it by the Constitution. It violates the specific mandate of the
Constitution granting to the Supreme Court supervisory powers over all courts and their personnel; it
undermines the independence of the judiciary.[20]
In Civil Service Commission v. Sta. Ana,[21] this Court held that impersonating an examinee of a civil
service examination is an act of dishonesty. But because the offender involved a judicial employee
under the administrative supervision of the Supreme Court, the CSC filed the necessary charges before
the Office of the Court Administrator (OCA), a procedure which this Court validated.
A similar fate befell judicial personnel in Bartolata v. Julaton,[22] involving judicial employees who also
impersonated civil service examinees. As in Sta. Ana, the CSC likewise filed the necessary charges
before the OCA because respondents were judicial employees. Finding respondents guilty of dishonesty
and meting the penalty of dismissal, this Court held that "respondents' machinations reflect their
dishonesty and lack of integrity, rendering them unfit to maintain their positions as public servants and
employees of the judiciary."[23]
Compared to Sta. Ana and Bartolata, the present case involves a similar violation of the Civil Service Law
by a judicial employee. But this case is slightly different in that petitioner committed the offense before
her appointment to the judicial branch. At the time of commission, petitioner was a public school
teacher under the administrative supervision of the DECS and, in taking the civil service examinations,
under the CSC. Petitioner surreptitiously took the CSC-supervised PBET exam in place of another
person. When she did that, she became a party to cheating or dishonesty in a civil service-supervised
examination.
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It is well settled that the jurisdiction to try a case is to be determined by the law in force at the time of
the institution of the action, not at the time of the commission of the offense.[24] Consonant with this
principle, the time of commission is not material to determining which court has jurisdiction. It stands
to reason that administrative jurisdiction over petitioner belongs to the Supreme Court, the action
having been instituted by the CSC at the time when petitioner was already a judicial employee.
Indeed, the standard procedure is for the CSC to bring its complaint against petitioner, a judicial
employee, before the OCA. Records show that the CSC did not adhere to this procedure in the present
case.
However, we are constrained to uphold the ruling of the CSC based on the principle of estoppel. The
previous actions of petitioner have estopped her from attacking the jurisdiction of the CSC. A party who
has affirmed and invoked the jurisdiction of a court or tribunal exercising quasi-judicial functions to
secure an affirmative relief may not afterwards deny that same jurisdiction to escape a penalty.[25] As
this Court declared in Aquino v. Court of Appeals:[26]
In the interest of sound administration of justice, such practice cannot be tolerated. If we are to sanction
this argument, then all the proceedings had before the lower court and the Court of Appeals while valid
in all other respects would simply become useless.[27]
Under the principle of estoppel, a party may not be permitted to adopt a different theory on appeal to
impugn the court's jurisdiction.[28] In Emin v. De Leon,[29] this Court sustained the exercise of jurisdiction
by the CSC, while recognizing at the same time that original disciplinary jurisdiction over public school
teachers belongs to the appropriate committee created for the purpose as provided for under the
Magna Carta for Public School Teachers.[30] It was there held that a party who fully participated in the
proceedings before the CSC and was accorded due process is estopped from subsequently attacking its
jurisdiction.
Petitioner was given ample opportunity to present her side and adduce evidence in her defense before
the CSC. She filed with it her answer to the charges leveled against her. When the CSC found her guilty,
she moved for a reconsideration of the ruling. These circumstances all too clearly show that due
process was accorded to petitioner.
Petitioner's admission of guilt stands. Apart from her full participation in the proceedings before the
CSC, petitioner admitted to the offense charged - that she impersonated Decir and took the PBET exam
in the latter's place. We note that even before petitioner filed a written answer, she voluntarily went to
the CSC Regional Office and admitted to the charges against her. In the same breath, she waived her
right to the assistance of counsel. Her admission, among others, led the CSC to find her guilty of
dishonesty, meting out to her the penalty of dismissal.
Now, she assails said confession, arguing that it was given without aid of counsel. In police custodial
investigations, the assistance of counsel is necessary in order for an extra-judicial confession to be made
admissible in evidence against the accused in a criminal complaint. If assistance was waived, the waiver
should have been made with the assistance of counsel.[31]
But while a party's right to the assistance of counsel is sacred in proceedings criminal in nature, there is
no such requirement in administrative proceedings. In Lumiqued v. Exevea,[32] this Court ruled that a
party in an administrative inquiry may or may not be assisted by counsel. Moreover, the administrative
body is under no duty to provide the person with counsel because assistance of counsel is not an
absolute requirement.[33]
Petitioner's admission was given freely. There was no compulsion, threat or intimidation. As found by
the CSC, petitioner's admission was substantial enough to support a finding of guilt.
The CSC found petitioner guilty of dishonesty. It is categorized as "an act which includes the
procurement and/or use of fake/spurious civil service eligibility, the giving of assistance to ensure the
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procurement and/or use of fake/spurious civil service eligibility, the giving of assistance to ensure the
commission or procurement of the same, cheating, collusion, impersonation, or any other anomalous
act which amounts to any violation of the Civil Service examination."[34] Petitioner impersonated Decir
in the PBET exam, to ensure that the latter would obtain a passing mark. By intentionally practicing a
deception to secure a passing mark, their acts undeniably involve dishonesty.[35]
This Court has defined dishonesty as the "(d)isposition to lie, cheat, deceive, or defraud;
untrustworthiness; lack of integrity; lack of honesty, probity or integrity in principle; lack of fairness and
straightforwardness; disposition to defraud, deceive or betray."[36] Petitioner's dishonest act as a civil
servant renders her unfit to be a judicial employee. Indeed, We take note that petitioner should not
have been appointed as a judicial employee had this Court been made aware of the cheating that she
committed in the civil service examinations. Be that as it may, petitioner's present status as a judicial
employee is not a hindrance to her getting the penalty she deserves.
The conduct and behavior of everyone connected with an office charged with the dispensation of justice
is circumscribed with a heavy burden or responsibility. The image of a court, as a true temple of justice,
is mirrored in the conduct, official or otherwise, of the men and women who work thereat, from the
judge to the least and lowest of its personnel.[37] As the Court held in another administrative case for
dishonesty:
x x x Any act which diminishes or tends to diminish the faith of the people in the judiciary shall not be
countenanced. We have not hesitated to impose the utmost penalty of dismissal for even the slightest
breach of duty by, and the slightest irregularity in the conduct of, said officers and employees, if so
warranted. Such breach and irregularity detract from the dignity of the highest court of the land and
erode the faith of the people in the judiciary.
xxx x
As a final point, we take this opportunity to emphasize that no quibbling, much less hesitation or
circumvention, on the part of any employee to follow and conform to the rules and regulations
enunciated by this Court and the Commission on Civil Service, should be tolerated. The Court, therefore,
will not hesitate to rid its ranks of undesirables who undermine its efforts toward an effective and
efficient system of justice.[38] (Emphasis added)
We will not tolerate dishonesty for the Judiciary expects the best from all its employees.[39] Hindi namin
papayagan ang pandaraya sapagkat inaasahan ng Hudikatura ang pinakamabuti sa lahat nitong
kawani.
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BP 129, as amended by RA 7902
Sunday, November 14, 2010
11:21 PM
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RA 8246
Sunday, November 14, 2010
11:21 PM
REPUBLIC ACT NO. 8246 AN ACT CREATING ADDITIONAL DIVISIONS IN THE COURT OF APPEALS, INCREASING
THE NUMBER OF COURT OF APPEALS JUSTICES FROM FIFTY-ONE (51) TO SIXTY-NINE (69), AMENDING FOR THE
PURPOSE BATAS PAMBANSA BILANG 129, AS AMENDED OTHERWISE KNOWN AS THE JUDICIARY
REORGANIZATION ACT OF 1980, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES.
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
Section 1. Sec. 3, Chapter 1 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as
follows:
"Sec. 3. Organization. - There is hereby created a Court of Appeals which shall consist of a Presiding
Justice and sixty-eight (68) Associate Justices who shall be appointed by the President of the Philippines.
The Presiding Justice shall be so designated in his appointment, and the Associate Justices shall have
precedence according to the dates of their respective appointments, or when the appointments of two
or more of them shall bear the same date, according to the order in which their appointments were
issued by the President. Any member who is reappointed to the Court after rendering service in any other
position in the government shall retain the precedence to which he was entitled under his original
appointment, and his service in the court shall, for all intents and purposes, be considered as continuous
and uninterrupted."
Sec. 2. Sec. 4 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as follows:
"Sec. 4. Exercise of Powers and Functions. - The Court of Appeals shall exercise its powers, functions, and
duties through twenty-three (23) divisions, each composed of three (3) members. The Court may sit en
banc for the purpose of exercising administrative, ceremonial or other non-adjudicatory functions."
Sec. 3. Sec. 10 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as follows:
"Sec. 10. Place of Holding Sessions. - The Court of Appeals shall have its permanent stations as follows:
the first seventeen (17) divisions shall be stationed in the City of Manila for cases coming from the First to
the Fifth Judicial Regions; the Eighteenth, Nineteenth, and Twentieth Divisions shall be in Cebu City for
cases coming from the Sixth, Seventh and Eighth Judicial Regions; the Twenty-first, Twenty-second and
Twenty-third Divisions shall be in Cagayan de Oro City for cases coming from the Ninth, Tenth, Eleventh,
and Twelfth Judicial Regions. Whenever demanded by public interest, or whenever justified by an
increase in case load, the Supreme Court, upon its own initiative or upon recommendation of the
Presiding Justice of the Court of Appeals, may authorize any division of the Court to hold sessions
periodically, or for such periods and at such places as the Supreme Court may determine, for the purpose
of hearing and deciding cases. Trials or hearings in the Court of Appeals must be continuous and must be
completed within three (3) months unless extended by the Chief Justice of the Supreme Court."
Sec. 4. The amount necessary to carry out the provisions of this Act shall be included in the General
Appropriations Act of the year following its enactment into law and thereafter.
Sec. 5. Upon the effectivity of this Act, all pending cases, except those which have been submitted for
resolution, shall be referred to the proper division of the Court of Appeals.
Sec. 6. Nothing in this Act shall be construed to allow the transfer, except in cases of temporary assignment, of
any member of the Court of Appeals to any place or station without his or her written consent, or to undermine
the security of tenure of its members as provided in the Constitution, or alter the seniority in said Court in
accordance with existing laws.
Sec. 7. The Supreme Court is hereby authorized and empowered to constitute a Study Committee composed of a
member of the Judiciary, the prosecution, the Integrated Bar of the Philippines (IBP), a representative of the
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member of the Judiciary, the prosecution, the Integrated Bar of the Philippines (IBP), a representative of the
association of law colleges and law professors, and a member of the public at large.
The Committee shall undertake a serious study as to the feasibility and desirability of setting up a Regional
Circuit Courts of Appeals in lieu and in place of the present Court of Appeals System.
The Supreme Court shall submit the findings and recommendations of this Committee to Congress one (1) year
after the effectivity of this Act.
Sec. 8. Separability Clause. - If any portion or provision of this Act is declared unconstitutional, the remainder of
this Act or any provision not affected thereby shall remain in force and effect.
Sec. 9. Repealing Clause. - All laws, presidential decrees, letters of instruction, executive orders, rules
and regulations, or any part thereof inconsistent with the provisions of this Act are hereby repealed or modified
accordingly.
Sec. 10. Effectivity. - This Act shall take effect after fifteen (15) days following its publication in two (2)
newspapers of general circulation.
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CGP Transport v. PU Leasing GR 164547 Mar 28, 2007
Sunday, November 14, 2010
11:21 PM
REMLAW Page 95
EXCESS OF JURISDICTION, WHEN IT REINSTATED IN THE CASE A QUO THE PRELIMINARY INJUNCTION
WHICH WAS ISSUED IN ANOTHER CASE (CIVIL CASE NO. 99-234).
3. THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR IN
EXCESS OF JURISDICTION, WHEN IT SET ASIDE IN THE CASE A QUO THE ORDER DATED 20 OCTOBER 2000
WHICH WAS ISSUED IN CIVIL CASE NO. 99-234.
4. THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR IN
EXCESS OF JURISDICTION, WHEN IT SUSPENDED THE PROCEEDINGS A QUO UNTIL THE APPEAL IN CIVIL
CASE NO. 99-234 IS RESOLVED.13
The petition (G.R. No. 150483) was, however, referred to the Court of Appeals by this Court for
appropriate action in a Resolution,14 dated 3 December 2001, pursuant to Section 6, Rule 56 of the 1997
Revised Rules of Civil Procedure, factual issues being involved.
In response to the referral, the Court of Appeals docketed the petition as CA G.R. SP No. 68528.
In its Decision promulgated on 26 March 2004, the Court of Appeals granted herein respondent PCI’s
petition and set aside the RTC Order dated 30 August 2001. The dispositive portion reads:
WHEREFORE, the instant petition is hereby GRANTED. The orders dated March 27, 2001 and August 28
(sic), 2001 of the Regional Trial Court, Branch 256, Muntinlupa City, in LRC Case No. 99-020 are SET
ASIDE. Further, the public respondent judge is ordered to continue with the proceedings and to decide
the case with dispatch.15
The appellate court found public respondent RTC Judge to have gravely abused his discretion amounting
to lack or excess of jurisdiction in suspending the proceedings in LRC Case No. 99-020 relating to the writ
of possession asked for by herein respondent PCI. The Court of Appeals did not favor the RTC Judge
who, "in effect took cognizance of the proceedings in Civil Case No. 99-234, an action for annulment of
foreclosure proceedings filed by"16 herein petitioner CGP – one that is entirely separate from the case
earlier filed. Moreover, "[w]ith the dismissal of the main case, (an) injunction (issued therein) is
automatically lifted and the dissolution thereof is not appealable." The Court of Appeals then clarified
that though the preceding principle is the general rule, the circumstances surrounding the
reinstatement of the subject writ of preliminary injunction do not necessarily entitle the application of
the exception stated in Section 4, Rule 39 of the 1997 Revised Rules of Civil Procedure, which states:
SEC. 4. Judgments not stayed by appeal. – Judgments in actions for injunction, receivership, accounting
and support, and such other judgments as are now or may hereafter be declared to be immediately
executory, shall be enforceable after their rendition and shall not be stayed by an appeal taken
therefrom, unless otherwise ordered by the trial court. On appeal therefrom, the appellate court in its
discretion may make an order suspending, modifying, restoring or granting the injunction, receivership,
accounting, or award of support.
The stay of execution shall be upon such terms as to bond or otherwise as may be considered proper for
the security or protection of the rights of the adverse party.
It likewise noted that the fact that there was no dispute vis-à-vis herein petitioner CGP’s failure to
redeem the foreclosed real properties within the period, herein respondent PCI’s right to possession
thereof is quite patent and absolute; and that "any question regarding the validity of the mortgage or its
foreclosure cannot be a legal ground for refusing the issuance of a writ of possession xxx."17
On 13 July 2004, the Court of Appeals denied the motion for reconsideration filed by herein petitioner
CGP.
Hence, this Petition for Review on Certiorari filed under Rule 45 of the 1997 Revised Rules of Civil
Procedure. Petitioner CGP does not question at all the substantive aspect of the decision of the Court of
Appeals. It’s petition is predicated solelyon the issue of "whether or not the Honorable Court of Appeals
gravely erred in giving due course to the petition for certiorari of respondent, there being already a final
finding by this Honorable Court in its Resolution dated December 3, 2001, in G.R. No. 150483, that the
said petition raised questions of facts and therefore not proper for petition for certiorari."18
In its one page argument, Petitioner CGP contends, in whole, that:
It is undisputed that this Honorable Court in its resolution dated December 3, 2001 in G.R. No. 150483
has found that issues of facts are raised in the petition filed therein. That these conclusion and finding of
this Honorable Court are final and therefore no court for that matter, including the Court of Appeals, can
disturb the same. [In fact and in truth, the factual issues are pending for resolution in the case before
the Court of Appeals, in the case entitled CGP TRANSPORTATION AND SERVICES CORPORATION,
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Plaintiff-appellant versus PCI LEASING AND FINANCE CORPORATION, defendant-appellee docketed as
C.A. G.R. No. 69466.] With this factual backdrop, petitioner honestly believes, that there can be no other
fate on the said petition [of respondent] but the dismissal, it being a settled jurisprudence that in a
petition for review, only questions of law can be raised. Even the Honorable Court of Appeals agree on
this point when it says in its aforequoted decision, citing the doctrine laid down by this Honorable Court
in BCI Employees & Workers Union v. Marcos, 39 SCRA 178, that "It is however basic that when facts are
disputed, certiorari is not an appropriate remedy".19
Respondent PCI, in contrast, maintains that in rendering its assailed Decision, the "… Honorable Court of
Appeals simply discharged the duty assigned to it by this Honorable Court," apropos the latter’s 3
December 2001 Resolution.
We sustain respondent PCI’s importunings and dismiss petitioner CGP’s petition.
Although the form or mode of the original petition filed by herein respondent PCI from the Order of the
RTC was a special civil action for certiorari, an incorrect mode of appeal there being questions of fact as
assigned errors, i.e., the existence and relevancy of specific surrounding circumstance, their relation to
each other and to the whole situation,20 this Court, in order to serve the demands of substantial justice,
considers and disposes of the case as an appeal by certiorari instead.
In an appeal by certiorari under Rule 45, only questions of law may be raised.21 In petitions such as the
one filed in G.R. No. 150483, questions of fact may not be the proper subject of appeal under Rule 45 as
this mode of appeal is generally confined to questions of law.22 Well entrenched is the rule that this
Court is not a trier of facts.23 The resolution of factual issues is the function of lower courts, whose
findings on these matters are received with respect and are in fact binding on us subject to certain
exceptions.24 Cases where an appeal involved questions of fact, of law, or both fall within the exclusive
appellate jurisdiction of the Court of Appeals.25 This is attested to by Section 15, Rule 44 of the 1997
Revised Rules of Civil Procedure. The section reads:
SEC. 15. Questions that may be raised on appeal. – x x x he may include in his assignment of errors any
question of law or fact that has been raised in the court below and which is within the issues framed by
the parties.
It was on this score that we referred the subject petition to the appellate court.
Under Section 5(f) of Rule 56 of the 1997 Revised Rules of Civil Procedure, an appeal may be dismissed
on the ground of erroneous choice or mode of appeal. Said section reads:
SEC. 5. Grounds for dismissal of appeal. – The appeal MAY be dismissed motu proprio or on motion of
the respondent on the following grounds:
xxx x
(f) Error in the choice or mode of appeal.
This notwithstanding, the Court may refer the case to the Court of Appeals under par. 2, Section 6 of the
same rule. Said section states:
SEC. 6. Disposition of improper appeal. – x x x
An appeal by certiorari taken to the Supreme Court from the Regional Trial Court submitting issues of
fact may be referred to the Court of Appeals for decision or appropriate action. The determination of
the Supreme Court on whether or not issues of fact are involved shall be final. [Emphasis supplied.]
This Court’s discretion to refer the case to the Court of Appeals is by reason of the term "may" in both
sections. Such term denotes discretion on our part in dismissing an appeal or referring one to the Court
of Appeals.
Besides, it must be borne in mind that procedural rules are intended to ensure proper administration of
law and justice. The rules of procedure ought not to be applied in a very rigid, technical sense, for they
are adopted to help secure, not override, substantial justice.26 A deviation from its rigid enforcement
may thus be allowed to attain its prime objective, for after all, the dispensation of justice is the core
reason for the existence of the courts.
In the case at bar, substantial ends of justice warranted the referral of the case to the appellate court for
further appropriate proceedings.
WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed 26 March 2004
Decision and 13 July 2004 Resolution, both of the Court of Appeals, in CA G.R. SP No. 68528 entitled "PCI
Leasing and Finances, Inc. v. Hon. Alberto L. Lerma, In His Capacity as Presiding Judge of Branch 256 of
the Regional Trial Court of Muntinlupa City and CGP Transportation and Services Corporation," are
AFFIRMED.
REMLAW Page 97
AFFIRMED.
No costs.
REMLAW Page 98
RA 9282
Sunday, November 14, 2010
11:21 PM
REMLAW Page 99
exercised and performed by the Clerk of Court and Division Clerks of Court of the Court of Appeals, in so
far as the same may be applicable or analogous; and in the exercise of those powers and the
performance of those duties they shall be under the direction of the Court. The Clerk of Court and the
Division Clerks of Court shall have the same rank, privileges, salary, emoluments, retirement and other
benefits as those provided for the Clerk of Court and Division Clerks of Court of the Court of Appeals,
respectively.'
Section 4. Section 4 of the same Act is hereby amended to read as follows:
"SEC. 4. Other Subordinate Employees. - The Supreme Court shall appoint all officials and employees of
the CTA, in accordance with the Civil Service Law. The Supreme Court shall fix their salaries and
prescribe their duties."
Section 5. Section 5 of the same Act is hereby amended to read as follows:
"SEC. 5. Disqualifications. - No Justice or other officer or employee of the CTA shall intervene, directly or
indirectly, in the management or control of any private enterprise which in any way may be affected by
the functions of the Court. Justices of the Court shall be disqualified from sitting in any case on the same
grounds provided under Rule one hundred thirty-seven of the Rules of Court for the disqualification of
judicial officers. No person who has once served in the Court in a permanent capacity, either as
Presiding Justice or as Associate Justice thereof, shall be qualified to practice as counsel before the Court
for a period of one (1) year from his retirement or resignation."
Section 6. Section 6 of the same Act is hereby amended to read as follows:
"SEC. 6. Place of Office. - The CTA shall have its principal office in Metro Manila and shall hold hearings
at such time and place as it may, by order in writing, designate."
Section 7. Section 7 of the same Act is hereby amended to read as follows:
"Sec. 7. Jurisdiction. - The CTA shall exercise:
"a. Exclusive appellate jurisdiction to review by appeal, as herein provided:
"1. Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds
of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising
under the National Internal Revenue or other laws administered by the Bureau of Internal Revenue;
"2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds
of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matters arising
under the National Internal Revenue Code or other laws administered by the Bureau of Internal
Revenue, where the National Internal Revenue Code provides a specific period of action, in which case
the inaction shall be deemed a denial;
"3. Decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally decided or
resolved by them in the exercise of their original or appellate jurisdiction;
"4. Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or
other money charges, seizure, detention or release of property affected, fines, forfeitures or other
penalties in relation thereto, or other matters arising under the Customs Law or other laws administered
by the Bureau of Customs;
"5. Decisions of the Central Board of Assessment Appeals in the exercise of its appellate jurisdiction over
cases involving the assessment and taxation of real property originally decided by the provincial or city
board of assessment appeals;
"6. Decisions of the Secretary of Finance on customs cases elevated to him automatically for review
from decisions of the Commissioner of Customs which are adverse to the Government under Section
2315 of the Tariff and Customs Code;
"7. Decisions of the Secretary of Trade and Industry, in the case of nonagricultural product, commodity
or article, and the Secretary of Agriculture in the case of agricultural product, commodity or article,
involving dumping and countervailing duties under Section 301 and 302, respectively, of the Tariff and
Customs Code, and safeguard measures under Republic Act No. 8800, where either party may appeal
the decision to impose or not to impose said duties.
"b. Jurisdiction over cases involving criminal offenses as herein provided:
"1. Exclusive original jurisdiction over all criminal offenses arising from violations of the National Internal
Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal
Revenue or the Bureau of Customs: Provided, however, That offenses or felonies mentioned in this
paragraph where the principal amount o taxes and fees, exclusive of charges and penalties, claimed is
less than One million pesos (P1,000,000.00) or where there is no specified amount claimed shall be tried
[G.R. No. 166006, March 14, 2008] PLANTERS PRODUCTS, INC. vs. FERTIPHIL CORPORATION,
FACTS:
Petitioner PPI and private respondent Fertiphil are private corporations incorporated under Philippine
laws.[3] They are both engaged in the importation and distribution of fertilizers, pesticides and agricultural
chemicals.
On June 3, 1985, then President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465
which provided, among others, for the imposition of a capital recovery component (CRC) on the domestic
sale of all grades of fertilizers in the Philippines.[4] The LOI provides:
3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital
contribution component of not less than P10 per bag. This capital contribution shall be collected until
adequate capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic
sales of fertilizers in the Philippines.[5]
Pursuant to the LOI, Fertiphil paid P10 for every bag of fertilizer it sold in the domestic market to the
Fertilizer and Pesticide Authority (FPA). FPA then remitted the amount collected to the Far East Bank and
Trust Company, the depositary bank of PPI. Fertiphil paid P6,689,144 to FPA from July 8, 1985 to January 24,
1986.
After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. With the return of
democracy, Fertiphil demanded from PPI a refund of the amounts it paid under LOI No. 1465, but PPI refused
to accede to the demand.[7]
Fertiphil filed a complaint for collection and damages[8] against FPA and PPI with the RTC in Makati. It
questioned the constitutionality of LOI No. 1465 for being unjust, unreasonable, oppressive, invalid and an
unlawful imposition that amounted to a denial of due process of law.[9] Fertiphil alleged that the LOI solely
favored PPI, a privately owned corporation, which used the proceeds to maintain its monopoly of the
fertilizer industry.
In its Answer,[10] FPA, through the Solicitor General, countered that the issuance of LOI No. 1465 was a valid
exercise of the police power of the State in ensuring the stability of the fertilizer industry in the country. It
also averred that Fertiphil did not sustain any damage from the LOI because the burden imposed by the levy
fell on the ultimate consumer, not the seller.
HELD:
On Locus Standi
Whether or not the complaint for collection is characterized as a private or public suit, Fertiphil has locus
standi to file it. Fertiphil suffered a direct injury from the enforcement of LOI No. 1465. It was required, and it
did pay, the P10 levy imposed for every bag of fertilizer sold on the domestic market. It may be true that
Fertiphil has passed some or all of the levy to the ultimate consumer, but that does not disqualify it from
attacking the constitutionality of the LOI or from seeking a refund. As seller, it bore the ultimate burden of
paying the levy. It faced the possibility of severe sanctions for failure to pay the levy. The fact of payment is
sufficient injury to Fertiphil.
(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law,
presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.
The P10 levy under LOI No. 1465 is
an exercise of the power of taxation.
We agree with the RTC that the imposition of the levy was an exercise by the State of its taxation power.
While it is true that the power of taxation can be used as an implement of police power,[41] the primary
purpose of the levy is revenue generation. If the purpose is primarily revenue, or if revenue is, at least, one of
the real and substantial purposes, then the exaction is properly called a tax.
The P10 levy under LOI No. 1465 is too excessive to serve a mere regulatory purpose. The levy, no doubt, was
a big burden on the seller or the ultimate consumer. It increased the price of a bag of fertilizer by as much as
five percent.[45] A plain reading of the LOI also supports the conclusion that the levy was for revenue
generation. The LOI expressly provided that the levy was imposed â¼ until adequate capital is raised to make
PPI viable.
Taxes are exacted only for a public purpose. The P10 levy is unconstitutional because it was not for a public
purpose. The levy was imposed to give undue benefit to PPI.
The purpose of a law is evident from its text or inferable from other secondary sources. Here, We agree with
the RTC and that CA that the levy imposed under LOI No. 1465 was not for a public purpose.
First, the LOI expressly provided that the levy be imposed to benefit PPI, a private company.
The purpose is explicit from Clause 3 of the law, thus: The Administrator of the Fertilizer Pesticide Authority
to include in its fertilizer pricing formula a capital contribution component of not less than P10 per bag. This
capital contribution shall be collected until adequate capital is raised to make PPI viable. Such capital
contribution shall be applied by FPA to all domestic sales of fertilizers in the Philippines. It is clear from the
Letter of Understanding that the levy was imposed precisely to pay the corporate debts of PPI. We cannot
agree with PPI that the levy was imposed to ensure the stability of the fertilizer industry in the country. The
letter of understanding and the plain text of the LOI clearly indicate that the levy was exacted for the benefit
of a private corporation.
The LOI is still unconstitutional even if enacted under the police power; it did not promote public interest.
Even if We consider LOI No. 1695 enacted under the police power of the State, it would still be invalid for
failing to comply with the test of â¼ lawful subjectsâ¼ and â¼ lawful means.â¼ Jurisprudence states the
test as follows: (1) the interest of the public generally, as distinguished from those of particular class, requires
its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose
and not unduly oppressive upon individuals.
THE Regional Trial Courts (RTC) have the authority and jurisdiction to consider the constitutionality of statutes,
executive orders, presidential decrees and other issuances. The Constitution vests that power not only in the
Supreme Court but in all Regional Trial Courts.
The principle is relevant in this petition for review on certiorari of the Decision[1] of the Court of Appeals (CA)
affirming with modification that of the RTC in Makati City,[2] finding petitioner Planters Products, Inc. (PPI) liable
to private respondent Fertiphil Corporation (Fertiphil) for the levies it paid under Letter of Instruction (LOI) No.
1465.
The Facts
Petitioner PPI and private respondent Fertiphil are private corporations incorporated under Philippine laws.[3]
They are both engaged in the importation and distribution of fertilizers, pesticides and agricultural chemicals.
On June 3, 1985, then President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465 which
provided, among others, for the imposition of a capital recovery component (CRC) on the domestic sale of all
grades of fertilizers in the Philippines.[4] The LOI provides:
3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital
contribution component of not less than P10 per bag. This capital contribution shall be collected until adequate
capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of
fertilizers in the Philippines.[5] (Underscoring supplied)
Pursuant to the LOI, Fertiphil paid P10 for every bag of fertilizer it sold in the domestic market to the Fertilizer and
Pesticide Authority (FPA). FPA then remitted the amount collected to the Far East Bank and Trust Company, the
depositary bank of PPI. Fertiphil paid P6,689,144 to FPA from July 8, 1985 to January 24, 1986.[6]
After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. With the return of
democracy, Fertiphil demanded from PPI a refund of the amounts it paid under LOI No. 1465, but PPI refused to
accede to the demand.[7]
Fertiphil filed a complaint for collection and damages[8] against FPA and PPI with the RTC in Makati. It questioned
the constitutionality of LOI No. 1465 for being unjust, unreasonable, oppressive, invalid and an unlawful imposition
that amounted to a denial of due process of law.[9] Fertiphil alleged that the LOI solely favored PPI, a privately
owned corporation, which used the proceeds to maintain its monopoly of the fertilizer industry.
In its Answer,[10] FPA, through the Solicitor General, countered that the issuance of LOI No. 1465 was a valid
exercise of the police power of the State in ensuring the stability of the fertilizer industry in the country. It also
averred that Fertiphil did not sustain any damage from the LOI because the burden imposed by the levy fell on the
ultimate consumer, not the seller.
On November 20, 1991, the RTC rendered judgment in favor of Fertiphil, disposing as follows:
WHEREFORE, in view of the foregoing, the Court hereby renders judgment in favor of the plaintiff and against the
defendant Planters Product, Inc., ordering the latter to pay the former:
1) the sum of P6,698,144.00 with interest at 12% from the time of judicial demand;
SO ORDERED.[11]
Ruling that the imposition of the P10 CRC was an exercise of the State’s inherent power of taxation, the RTC
invalidated the levy for violating the basic principle that taxes can only be levied for public purpose, viz.:
It is apparent that the imposition of P10 per fertilizer bag sold in the country by LOI 1465 is purportedly in the
exercise of the power of taxation. It is a settled principle that the power of taxation by the state is plenary.
Comprehensive and supreme, the principal check upon its abuse resting in the responsibility of the members of
the legislature to their constituents. However, there are two kinds of limitations on the power of taxation: the
inherent limitations and the constitutional limitations.
One of the inherent limitations is that a tax may be levied only for public purposes:
The power to tax can be resorted to only for a constitutionally valid public purpose. By the same token, taxes may
not be levied for purely private purposes, for building up of private fortunes, or for the redress of private wrongs.
They cannot be levied for the improvement of private property, or for the benefit, and promotion of private
enterprises, except where the aid is incident to the public benefit. It is well-settled principle of constitutional law
that no general tax can be levied except for the purpose of raising money which is to be expended for public use.
Funds cannot be exacted under the guise of taxation to promote a purpose that is not of public interest. Without
such limitation, the power to tax could be exercised or employed as an authority to destroy the economy of the
people. A tax, however, is not held void on the ground of want of public interest unless the want of such interest is
clear. (71 Am. Jur. pp. 371-372)
In the case at bar, the plaintiff paid the amount of P6,698,144.00 to the Fertilizer and Pesticide Authority pursuant
to the P10 per bag of fertilizer sold imposition under LOI 1465 which, in turn, remitted the amount to the
defendant Planters Products, Inc. thru the latter’s depository bank, Far East Bank and Trust Co. Thus, by virtue
of LOI 1465 the plaintiff, Fertiphil Corporation, which is a private domestic corporation, became poorer by the
amount of P6,698,144.00 and the defendant, Planters Product, Inc., another private domestic corporation, became
richer by the amount of P6,698,144.00.
Tested by the standards of constitutionality as set forth in the afore-quoted jurisprudence, it is quite evident that
LOI 1465 insofar as it imposes the amount of P10 per fertilizer bag sold in the country and orders that the said
amount should go to the defendant Planters Product, Inc. is unlawful because it violates the mandate that a tax
can be levied only for a public purpose and not to benefit, aid and promote a private enterprise such as Planters
Product, Inc.[12]
PPI moved for reconsideration but its motion was denied.[13] PPI then filed a notice of appeal with the RTC but it
failed to pay the requisite appeal docket fee. In a separate but related proceeding, this Court[14] allowed the
appeal of PPI and remanded the case to the CA for proper disposition.
CA Decision
On November 28, 2003, the CA handed down its decision affirming with modification that of the RTC, with the
following fallo:
IN VIEW OF ALL THE FOREGOING, the decision appealed from is hereby AFFIRMED, subject to the MODIFICATION
In affirming the RTC decision, the CA ruled that the lis mota of the complaint for collection was the
constitutionality of LOI No. 1465, thus:
The question then is whether it was proper for the trial court to exercise its power to judicially determine the
constitutionality of the subject statute in the instant case.
As a rule, where the controversy can be settled on other grounds, the courts will not resolve the constitutionality
of a law (Lim v. Pacquing, 240 SCRA 649 [1995]). The policy of the courts is to avoid ruling on constitutional
questions and to presume that the acts of political departments are valid, absent a clear and unmistakable
showing to the contrary.
However, the courts are not precluded from exercising such power when the following requisites are obtaining in a
controversy before it: First, there must be before the court an actual case calling for the exercise of judicial review.
Second, the question must be ripe for adjudication. Third, the person challenging the validity of the act must have
standing to challenge. Fourth, the question of constitutionality must have been raised at the earliest opportunity;
and lastly, the issue of constitutionality must be the very lis mota of the case (Integrated Bar of the Philippines v.
Zamora, 338 SCRA 81 [2000]).
Indisputably, the present case was primarily instituted for collection and damages. However, a perusal of the
complaint also reveals that the instant action is founded on the claim that the levy imposed was an unlawful and
unconstitutional special assessment. Consequently, the requisite that the constitutionality of the law in question
be the very lis mota of the case is present, making it proper for the trial court to rule on the constitutionality of LOI
1465.[16]
The CA held that even on the assumption that LOI No. 1465 was issued under the police power of the state, it is
still unconstitutional because it did not promote public welfare. The CA explained:
In declaring LOI 1465 unconstitutional, the trial court held that the levy imposed under the said law was an invalid
exercise of the State’s power of taxation inasmuch as it violated the inherent and constitutional prescription
that taxes be levied only for public purposes. It reasoned out that the amount collected under the levy was
remitted to the depository bank of PPI, which the latter used to advance its private interest.
On the other hand, appellant submits that the subject statute’s passage was a valid exercise of police power. In
addition, it disputes the court a quo’s findings arguing that the collections under LOI 1465 was for the benefit
of Planters Foundation, Incorporated (PFI), a foundation created by law to hold in trust for millions of farmers, the
stock ownership of PPI.
Of the three fundamental powers of the State, the exercise of police power has been characterized as the most
essential, insistent and the least limitable of powers, extending as it does to all the great public needs. It may be
exercised as long as the activity or the property sought to be regulated has some relevance to public welfare
(Constitutional Law, by Isagani A. Cruz, p. 38, 1995 Edition).
Vast as the power is, however, it must be exercised within the limits set by the Constitution, which requires the
concurrence of a lawful subject and a lawful method. Thus, our courts have laid down the test to determine the
validity of a police measure as follows: (1) the interests of the public generally, as distinguished from those of a
particular class, requires its exercise; and (2) the means employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals (National Development Company v.
Philippine Veterans Bank, 192 SCRA 257 [1990]).
It is upon applying this established tests that We sustain the trial court’s holding LOI 1465 unconstitutional. To
be sure, ensuring the continued supply and distribution of fertilizer in the country is an undertaking imbued with
public interest. However, the method by which LOI 1465 sought to achieve this is by no means a measure that will
promote the public welfare. The government’s commitment to support the successful rehabilitation and
continued viability of PPI, a private corporation, is an unmistakable attempt to mask the subject statute’s
impartiality. There is no way to treat the self-interest of a favored entity, like PPI, as identical with the general
interest of the country’s farmers or even the Filipino people in general. Well to stress, substantive due process
exacts fairness and equal protection disallows distinction where none is needed. When a statute’s public
The CA did not accept PPI’s claim that the levy imposed under LOI No. 1465 was for the benefit of Planters
Foundation, Inc., a foundation created to hold in trust the stock ownership of PPI. The CA stated:
Appellant next claims that the collections under LOI 1465 was for the benefit of Planters Foundation, Incorporated
(PFI), a foundation created by law to hold in trust for millions of farmers, the stock ownership of PFI on the
strength of Letter of Undertaking (LOU) issued by then Prime Minister Cesar Virata on April 18, 1985 and affirmed
by the Secretary of Justice in an Opinion dated October 12, 1987, to wit:
“2. Upon the effective date of this Letter of Undertaking, the Republic shall cause FPA to include in its fertilizer
pricing formula a capital recovery component, the proceeds of which will be used initially for the purpose of
funding the unpaid portion of the outstanding capital stock of Planters presently held in trust by Planters
Foundation, Inc. (Planters Foundation), which unpaid capital is estimated at approximately P206 million (subject to
validation by Planters and Planters Foundation) (such unpaid portion of the outstanding capital stock of Planters
being hereafter referred to as the ‘Unpaid Capital’), and subsequently for such capital increases as may be
required for the continuing viability of Planters.
The capital recovery component shall be in the minimum amount of P10 per bag, which will be added to the price
of all domestic sales of fertilizer in the Philippines by any importer and/or fertilizer mother company. In this
connection, the Republic hereby acknowledges that the advances by Planters to Planters Foundation which were
applied to the payment of the Planters shares now held in trust by Planters Foundation, have been assigned to,
among others, the Creditors. Accordingly, the Republic, through FPA, hereby agrees to deposit the proceeds of the
capital recovery component in the special trust account designated in the notice dated April 2, 1985, addressed by
counsel for the Creditors to Planters Foundation. Such proceeds shall be deposited by FPA on or before the 15th
day of each month.
The capital recovery component shall continue to be charged and collected until payment in full of (a) the Unpaid
Capital and/or (b) any shortfall in the payment of the Subsidy Receivables, (c) any carrying cost accruing from the
date hereof on the amounts which may be outstanding from time to time of the Unpaid Capital and/or the Subsidy
Receivables and (d) the capital increases contemplated in paragraph 2 hereof. For the purpose of the foregoing
clause (c), the ‘carrying cost’ shall be at such rate as will represent the full and reasonable cost to Planters of
servicing its debts, taking into account both its peso and foreign currency-denominated obligations.†(Records,
pp. 42-43)
Appellant’s proposition is open to question, to say the least. The LOU issued by then Prime Minister Virata
taken together with the Justice Secretary’s Opinion does not preponderantly demonstrate that the collections
made were held in trust in favor of millions of farmers. Unfortunately for appellant, in the absence of sufficient
evidence to establish its claims, this Court is constrained to rely on what is explicitly provided in LOI 1465 – that
one of the primary aims in imposing the levy is to support the successful rehabilitation and continued viability of
PPI.[18]
PPI moved for reconsideration but its motion was denied.[19] It then filed the present petition with this Court.
Issues
THE CONSTITUTIONALITY OF LOI 1465 CANNOT BE COLLATERALLY ATTACKED AND BE DECREED VIA A DEFAULT
JUDGMENT IN A CASE FILED FOR COLLECTION AND DAMAGES WHERE THE ISSUE OF CONSTITUTIONALITY IS NOT
THE VERY LIS MOTA OF THE CASE. NEITHER CAN LOI 1465 BE CHALLENGED BY ANY PERSON OR ENTITY WHICH HAS
NO STANDING TO DO SO.
II
LOI 1465, BEING A LAW IMPLEMENTED FOR THE PURPOSE OF ASSURING THE FERTILIZER SUPPLY AND
DISTRIBUTION IN THE COUNTRY, AND FOR BENEFITING A FOUNDATION CREATED BY LAW TO HOLD IN TRUST FOR
MILLIONS OF FARMERS THEIR STOCK OWNERSHIP IN PPI CONSTITUTES A VALID LEGISLATION PURSUANT TO THE
EXERCISE OF TAXATION AND POLICE POWER FOR PUBLIC PURPOSES.
III
THE AMOUNT COLLECTED UNDER THE CAPITAL RECOVERY COMPONENT WAS REMITTED TO THE GOVERNMENT,
AND BECAME GOVERNMENT FUNDS PURSUANT TO AN EFFECTIVE AND VALIDLY ENACTED LAW WHICH IMPOSED
DUTIES AND CONFERRED RIGHTS BY VIRTUE OF THE PRINCIPLE OF “OPERATIVE FACTâ€PRIOR TO ANY
DECLARATION OF UNCONSTITUTIONALITY OF LOI 1465.
IV
THE PRINCIPLE OF UNJUST VEXATION (SHOULD BE ENRICHMENT) FINDS NO APPLICATION IN THE INSTANT
CASE.[20] (Underscoring supplied)
Our Ruling
We shall first tackle the procedural issues of locus standi and the jurisdiction of the RTC to resolve constitutional
issues.
PPI argues that Fertiphil has no locus standi to question the constitutionality of LOI No. 1465 because it does not
have a “personal and substantial interest in the case or will sustain direct injury as a result of its enforcement.â
€*21+ It asserts that Fertiphil did not suffer any damage from the CRC imposition because †œincidence of the
levy fell on the ultimate consumer or the farmers themselves, not on the seller fertilizer company.â€*22+
We cannot agree. The doctrine of locus standi or the right of appearance in a court of justice has been adequately
discussed by this Court in a catena of cases. Succinctly put, the doctrine requires a litigant to have a material
interest in the outcome of a case. In private suits, locus standi requires a litigant to be a “real party in interest,â
€ which is defined as †œthe party who stands to be benefited or injured by the judgment in the suit or the party
entitled to the avails of the suit.â€*23+
In public suits, this Court recognizes the difficulty of applying the doctrine especially when plaintiff asserts a public
right on behalf of the general public because of conflicting public policy issues. [24] On one end, there is the right
of the ordinary citizen to petition the courts to be freed from unlawful government intrusion and illegal official
action. At the other end, there is the public policy precluding excessive judicial interference in official acts, which
may unnecessarily hinder the delivery of basic public services.
In this jurisdiction, We have adopted the “direct injury testâ€to determine locus standi in public suits. In
People v. Vera,*25+ it was held that a person who impugns the validity of a statute must have “a personal and
substantial interest in the case such that he has sustained, or will sustain direct injury as a result.†The â
€œdirect injury testâ€in public suits is similar to the “real party in interestâ€rule for private suits under
Section 2, Rule 3 of the 1997 Rules of Civil Procedure.[26]
Recognizing that a strict application of the “direct injuryâ€test may hamper public interest, this Court relaxed
the requirement in cases of “transcendental importanceâ€or with “far reaching implications.†Being a
mere procedural technicality, it has also been held that locus standi may be waived in the public interest.[27]
Whether or not the complaint for collection is characterized as a private or public suit, Fertiphil has locus standi to
file it. Fertiphil suffered a direct injury from the enforcement of LOI No. 1465. It was required, and it did pay, the
Moreover, Fertiphil suffered harm from the enforcement of the LOI because it was compelled to factor in its
product the levy. The levy certainly rendered the fertilizer products of Fertiphil and other domestic sellers much
more expensive. The harm to their business consists not only in fewer clients because of the increased price, but
also in adopting alternative corporate strategies to meet the demands of LOI No. 1465. Fertiphil and other fertilizer
sellers may have shouldered all or part of the levy just to be competitive in the market. The harm occasioned on
the business of Fertiphil is sufficient injury for purposes of locus standi.
Even assuming arguendo that there is no direct injury, We find that the liberal policy consistently adopted by this
Court on locus standi must apply. The issues raised by Fertiphil are of paramount public importance. It involves not
only the constitutionality of a tax law but, more importantly, the use of taxes for public purpose. Former President
Marcos issued LOI No. 1465 with the intention of rehabilitating an ailing private company. This is clear from the
text of the LOI. PPI is expressly named in the LOI as the direct beneficiary of the levy. Worse, the levy was made
dependent and conditional upon PPI becoming financially viable. The LOI provided that “the capital
contribution shall be collected until adequate capital is raised to make PPI viable.â€
The constitutionality of the levy is already in doubt on a plain reading of the statute. It is Our constitutional duty to
squarely resolve the issue as the final arbiter of all justiciable controversies. The doctrine of standing, being a mere
procedural technicality, should be waived, if at all, to adequately thresh out an important constitutional issue.
PPI insists that the RTC and the CA erred in ruling on the constitutionality of the LOI. It asserts that the
constitutionality of the LOI cannot be collaterally attacked in a complaint for collection.[28] Alternatively, the
resolution of the constitutional issue is not necessary for a determination of the complaint for collection.[29]
Fertiphil counters that the constitutionality of the LOI was adequately pleaded in its complaint. It claims that the
constitutionality of LOI No. 1465 is the very lis mota of the case because the trial court cannot determine its claim
without resolving the issue.[30]
It is settled that the RTC has jurisdiction to resolve the constitutionality of a statute, presidential decree or an
executive order. This is clear from Section 5, Article VIII of the 1987 Constitution, which provides:
xx xx
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may provide,
final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law,
presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Underscoring
supplied)
In Mirasol v. Court of Appeals,[31] this Court recognized the power of the RTC to resolve constitutional issues,
thus:
On the first issue. It is settled that Regional Trial Courts have the authority and jurisdiction to consider the
constitutionality of a statute, presidential decree, or executive order. The Constitution vests the power of judicial
review or the power to declare a law, treaty, international or executive agreement, presidential decree, order,
instruction, ordinance, or regulation not only in this Court, but in all Regional Trial Courts.[32]
There is no denying that regular courts have jurisdiction over cases involving the validity or constitutionality of a
rule or regulation issued by administrative agencies. Such jurisdiction, however, is not limited to the Court of
Appeals or to this Court alone for even the regional trial courts can take cognizance of actions assailing a specific
rule or set of rules promulgated by administrative bodies. Indeed, the Constitution vests the power of judicial
review or the power to declare a law, treaty, international or executive agreement, presidential decree, order,
instruction, ordinance, or regulation in the courts, including the regional trial courts.[34]
Judicial review of official acts on the ground of unconstitutionality may be sought or availed of through any of the
actions cognizable by courts of justice, not necessarily in a suit for declaratory relief. Such review may be had in
criminal actions, as in People v. Ferrer[35] involving the constitutionality of the now defunct Anti-Subversion law,
or in ordinary actions, as in Krivenko v. Register of Deeds[36] involving the constitutionality of laws prohibiting
aliens from acquiring public lands. The constitutional issue, however, (a) must be properly raised and presented in
the case, and (b) its resolution is necessary to a determination of the case, i.e., the issue of constitutionality must
be the very lis mota presented.[37]
Contrary to PPI’s claim, the constitutionality of LOI No. 1465 was properly and adequately raised in the
complaint for collection filed with the RTC. The pertinent portions of the complaint allege:
6. The CRC of P10 per bag levied under LOI 1465 on domestic sales of all grades of fertilizer in the Philippines, is
unlawful, unjust, uncalled for, unreasonable, inequitable and oppressive because:
xx xx
(c) It favors only one private domestic corporation, i.e., defendant PPPI, and imposed at the expense and
disadvantage of the other fertilizer importers/distributors who were themselves in tight business situation and
were then exerting all efforts and maximizing management and marketing skills to remain viable;
xx xx
(e) It was a glaring example of crony capitalism, a forced program through which the PPI, having been
presumptuously masqueraded as “theâ€fertilizer industry itself, was the sole and anointed beneficiary;
7. The CRC was an unlawful; and unconstitutional special assessment and its imposition is tantamount to illegal
exaction amounting to a denial of due process since the persons of entities which had to bear the burden of paying
the CRC derived no benefit therefrom; that on the contrary it was used by PPI in trying to regain its former
despicable monopoly of the fertilizer industry to the detriment of other distributors and importers.[38]
(Underscoring supplied)
The constitutionality of LOI No. 1465 is also the very lis mota of the complaint for collection. Fertiphil filed the
complaint to compel PPI to refund the levies paid under the statute on the ground that the law imposing the levy is
unconstitutional. The thesis is that an unconstitutional law is void. It has no legal effect. Being void, Fertiphil had
no legal obligation to pay the levy. Necessarily, all levies duly paid pursuant to an unconstitutional law should be
refunded under the civil code principle against unjust enrichment. The refund is a mere consequence of the law
being declared unconstitutional. The RTC surely cannot order PPI to refund Fertiphil if it does not declare the LOI
unconstitutional. It is the unconstitutionality of the LOI which triggers the refund. The issue of constitutionality is
the very lis mota of the complaint with the RTC.
At any rate, the Court holds that the RTC and the CA did not err in ruling against the constitutionality of the LOI.
PPI insists that LOI No. 1465 is a valid exercise either of the police power or the power of taxation. It claims that
the LOI was implemented for the purpose of assuring the fertilizer supply and distribution in the country and for
benefiting a foundation created by law to hold in trust for millions of farmers their stock ownership in PPI.
Fertiphil counters that the LOI is unconstitutional because it was enacted to give benefit to a private company. The
Police power and the power of taxation are inherent powers of the State. These powers are distinct and have
different tests for validity. Police power is the power of the State to enact legislation that may interfere with
personal liberty or property in order to promote the general welfare,[39] while the power of taxation is the power
to levy taxes to be used for public purpose. The main purpose of police power is the regulation of a behavior or
conduct, while taxation is revenue generation. The “lawful subjectsâ€and “lawful meansâ€tests are used
to determine the validity of a law enacted under the police power.[40] The power of taxation, on the other hand, is
circumscribed by inherent and constitutional limitations.
We agree with the RTC that the imposition of the levy was an exercise by the State of its taxation power. While it is
true that the power of taxation can be used as an implement of police power,[41] the primary purpose of the levy
is revenue generation. If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial
purposes, then the exaction is properly called a tax.[42]
In Philippine Airlines, Inc. v. Edu,[43] it was held that the imposition of a vehicle registration fee is not an exercise
by the State of its police power, but of its taxation power, thus:
It is clear from the provisions of Section 73 of Commonwealth Act 123 and Section 61 of the Land Transportation
and Traffic Code that the legislative intent and purpose behind the law requiring owners of vehicles to pay for their
registration is mainly to raise funds for the construction and maintenance of highways and to a much lesser
degree, pay for the operating expenses of the administering agency. x x x Fees may be properly regarded as taxes
even though they also serve as an instrument of regulation.
Taxation may be made the implement of the state's police power (Lutz v. Araneta, 98 Phil. 148). If the purpose is
primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly
called a tax. Such is the case of motor vehicle registration fees. The same provision appears as Section 59(b) in the
Land Transportation Code. It is patent therefrom that the legislators had in mind a regulatory tax as the law refers
to the imposition on the registration, operation or ownership of a motor vehicle as a “tax or fee.â€x x x
Simply put, if the exaction under Rep. Act 4136 were merely a regulatory fee, the imposition in Rep. Act 5448 need
not be an “additionalâ€tax. Rep. Act 4136 also speaks of other “feesâ€such as the special permit fees for
certain types of motor vehicles (Sec. 10) and additional fees for change of registration (Sec. 11). These are not to
be understood as taxes because such fees are very minimal to be revenue-raising. Thus, they are not mentioned by
Sec. 59(b) of the Code as taxes like the motor vehicle registration fee and chauffeurs’ license fee. Such fees are
to go into the expenditures of the Land Transportation Commission as provided for in the last proviso of Sec.
61.[44] (Underscoring supplied)
The P10 levy under LOI No. 1465 is too excessive to serve a mere regulatory purpose. The levy, no doubt, was a big
burden on the seller or the ultimate consumer. It increased the price of a bag of fertilizer by as much as five
percent.[45] A plain reading of the LOI also supports the conclusion that the levy was for revenue generation. The
LOI expressly provided that the levy was imposed “until adequate capital is raised to make PPI viable.â€
An inherent limitation on the power of taxation is public purpose. Taxes are exacted only for a public purpose.
They cannot be used for purely private purposes or for the exclusive benefit of private persons.[46] The reason for
this is simple. The power to tax exists for the general welfare; hence, implicit in its power is the limitation that it
should be used only for a public purpose. It would be a robbery for the State to tax its citizens and use the funds
generated for a private purpose. As an old United States case bluntly put it: “To lay with one hand, the power
of the government on the property of the citizen, and with the other to bestow it upon favored individuals to aid
private enterprises and build up private fortunes, is nonetheless a robbery because it is done under the forms of
law and is called taxation.â€*47+
While the categories of what may constitute a public purpose are continually expanding in light of the expansion of
government functions, the inherent requirement that taxes can only be exacted for a public purpose still stands.
Public purpose is the heart of a tax law. When a tax law is only a mask to exact funds from the public when its true
intent is to give undue benefit and advantage to a private enterprise, that law will not satisfy the requirement of â
€œpublic purpose.â€
The purpose of a law is evident from its text or inferable from other secondary sources. Here, We agree with the
RTC and that CA that the levy imposed under LOI No. 1465 was not for a public purpose.
First, the LOI expressly provided that the levy be imposed to benefit PPI, a private company. The purpose is explicit
from Clause 3 of the law, thus:
3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital
contribution component of not less than P10 per bag. This capital contribution shall be collected until adequate
capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of
fertilizers in the Philippines.[48] (Underscoring supplied)
It is a basic rule of statutory construction that the text of a statute should be given a literal meaning. In this case,
the text of the LOI is plain that the levy was imposed in order to raise capital for PPI. The framers of the LOI did not
even hide the insidious purpose of the law. They were cavalier enough to name PPI as the ultimate beneficiary of
the taxes levied under the LOI. We find it utterly repulsive that a tax law would expressly name a private company
as the ultimate beneficiary of the taxes to be levied from the public. This is a clear case of crony capitalism.
Second, the LOI provides that the imposition of the P10 levy was conditional and dependent upon PPI becoming
financially “viable.â€This suggests that the levy was actually imposed to benefit PPI. The LOI notably does not
fix a maximum amount when PPI is deemed financially “viable.†Worse, the liability of Fertiphil and other
domestic sellers of fertilizer to pay the levy is made indefinite. They are required to continuously pay the levy until
adequate capital is raised for PPI.
Third, the RTC and the CA held that the levies paid under the LOI were directly remitted and deposited by FPA to
Far East Bank and Trust Company, the depositary bank of PPI.[49] This proves that PPI benefited from the LOI. It is
also proves that the main purpose of the law was to give undue benefit and advantage to PPI.
Fourth, the levy was used to pay the corporate debts of PPI. A reading of the Letter of Understanding[50] dated
May 18, 1985 signed by then Prime Minister Cesar Virata reveals that PPI was in deep financial problem because of
its huge corporate debts. There were pending petitions for rehabilitation against PPI before the Securities and
Exchange Commission. The government guaranteed payment of PPI’s debts to its foreign creditors. To fund the
payment, President Marcos issued LOI No. 1465. The pertinent portions of the letter of understanding read:
LETTER OF UNDERTAKING
TO: THE BANKING AND FINANCIAL INSTITUTIONS LISTED IN ANNEX A HERETO WHICH ARE CREDITORS
(COLLECTIVELY, THE “CREDITORSâ€) OF PLANTERS PRODUCTS, INC. (“PLANTERSâ€)
Gentlemen:
In connection with the foregoing, the Republic of the Philippines (the “Republicâ€) confirms that it considers
and continues to consider Planters as a major fertilizer distributor. Accordingly, for and in consideration of your
expressed willingness to consider and participate in the effort to rehabilitate Planters, the Republic hereby
manifests its full and unqualified support of the successful rehabilitation and continuing viability of Planters, and to
that end, hereby binds and obligates itself to the creditors and Planters, as follows:
xx xx
2. Upon the effective date of this Letter of Undertaking, the Republic shall cause FPA to include in its fertilizer
pricing formula a capital recovery component, the proceeds of which will be used initially for the purpose of
funding the unpaid portion of the outstanding capital stock of Planters presently held in trust by Planters
Foundation, Inc. (“Planters Foundationâ€), which unpaid capital is estimated at approximately P206 million
(subject to validation by Planters and Planters Foundation) such unpaid portion of the outstanding capital stock of
Planters being hereafter referred to as the “Unpaid Capitalâ€), and subsequently for such capital increases as
may be required for the continuing viability of Planters.
xx xx
The capital recovery component shall continue to be charged and collected until payment in full of (a) the Unpaid
Capital and/or (b) any shortfall in the payment of the Subsidy Receivables, (c) any carrying cost accruing from the
date hereof on the amounts which may be outstanding from time to time of the Unpaid Capital and/or the Subsidy
Receivables, and (d) the capital increases contemplated in paragraph 2 hereof. For the purpose of the foregoing
clause (c), the “carrying costâ€shall be at such rate as will represent the full and reasonable cost to Planters
of servicing its debts, taking into account both its peso and foreign currency-denominated obligations.
(signed)
CESAR E. A. VIRATA
Prime Minister and Minister of Finance[51]
It is clear from the Letter of Understanding that the levy was imposed precisely to pay the corporate debts of PPI.
We cannot agree with PPI that the levy was imposed to ensure the stability of the fertilizer industry in the country.
The letter of understanding and the plain text of the LOI clearly indicate that the levy was exacted for the benefit
of a private corporation.
All told, the RTC and the CA did not err in holding that the levy imposed under LOI No. 1465 was not for a public
purpose. LOI No. 1465 failed to comply with the public purpose requirement for tax laws.
Even if We consider LOI No. 1695 enacted under the police power of the State, it would still be invalid for failing to
comply with the test of “lawful subjectsâ€and “lawful means.â€Jurisprudence states the test as follows:
(1) the interest of the public generally, as distinguished from those of particular class, requires its exercise; and (2)
the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive
upon individuals.[52]
For the same reasons as discussed, LOI No. 1695 is invalid because it did not promote public interest. The law was
enacted to give undue advantage to a private corporation. We quote with approval the CA ratiocination on this
point, thus:
It is upon applying this established tests that We sustain the trial court’s holding LOI 1465 unconstitutional. To
be sure, ensuring the continued supply and distribution of fertilizer in the country is an undertaking imbued with
public interest. However, the method by which LOI 1465 sought to achieve this is by no means a measure that will
promote the public welfare. The government’s commitment to support the successful rehabilitation and
continued viability of PPI, a private corporation, is an unmistakable attempt to mask the subject statute’s
impartiality. There is no way to treat the self-interest of a favored entity, like PPI, as identical with the general
interest of the country’s farmers or even the Filipino people in general. Well to stress, substantive due process
exacts fairness and equal protection disallows distinction where none is needed. When a statute’s public
purpose is spoiled by private interest, the use of police power becomes a travesty which must be struck down for
being an arbitrary exercise of government power. To rule in favor of appellant would contravene the general
principle that revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit
of private individuals. (Underscoring supplied)
PPI also argues that Fertiphil cannot seek a refund even if LOI No. 1465 is declared unconstitutional. It banks on the
doctrine of operative fact, which provides that an unconstitutional law has an effect before being declared
unconstitutional. PPI wants to retain the levies paid under LOI No. 1465 even if it is subsequently declared to be
unconstitutional.
We cannot agree. It is settled that no question, issue or argument will be entertained on appeal, unless it has been
raised in the court a quo.[53] PPI did not raise the applicability of the doctrine of operative fact with the RTC and
the CA. It cannot belatedly raise the issue with Us in order to extricate itself from the dire effects of an
unconstitutional law.
At any rate, We find the doctrine inapplicable. The general rule is that an unconstitutional law is void. It produces
no rights, imposes no duties and affords no protection. It has no legal effect. It is, in legal contemplation,
inoperative as if it has not been passed.[54] Being void, Fertiphil is not required to pay the levy. All levies paid
should be refunded in accordance with the general civil code principle against unjust enrichment. The general rule
is supported by Article 7 of the Civil Code, which provides:
ART. 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be excused by
disuse or custom or practice to the contrary.
When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter shall
govern.
The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity and fair
play.[55] It nullifies the effects of an unconstitutional law by recognizing that the existence of a statute prior to a
determination of unconstitutionality is an operative fact and may have consequences which cannot always be
ignored. The past cannot always be erased by a new judicial declaration.[56]
The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who
have relied on the invalid law. Thus, it was applied to a criminal case when a declaration of unconstitutionality
would put the accused in double jeopardy[57] or would put in limbo the acts done by a municipality in reliance
upon a law creating it.[58]
Here, We do not find anything iniquitous in ordering PPI to refund the amounts paid by Fertiphil under LOI No.
1465. It unduly benefited from the levy. It was proven during the trial that the levies paid were remitted and
deposited to its bank account. Quite the reverse, it would be inequitable and unjust not to order a refund. To do so
would unjustly enrich PPI at the expense of Fertiphil. Article 22 of the Civil Code explicitly provides that “every
person who, through an act of performance by another comes into possession of something at the expense of the
WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated November 28, 2003 is AFFIRMED.
OSCAR R. BADILLO, GIOVANNI C. ONG, EDGAR A. RAGASA REPRESENTED BY HEIRS CYNTHIA G. RAGASA, AND THEIR
CHILDREN JOSEPH, CATHERINE AND CHARMAINE ALL SURNAMED RAGASA, ROLANDO SANCADA, AND DIONISIO
UMBALIN VS. COURT OF APPEALS, REGISTER OF DEEDS OF QUEZON CITY, GOLDKEY DEVELOPMENT CORPORATION,
JOSEFA CONEJERO, IGNACIO D. SONORON, PEDRO DEL ROSARIO, AND DOWAL REALTY AND MANAGEMENT SYSTEM
COMPANY
CARPIO, J.:
The Case
This petition for certiorari[1] assails the 17 September 1997 Decision[2] of the Court of Appeals in CA-G.R. CV No. 50035.
The Court of Appeals dismissed the appeal filed by petitioners Oscar R. Badillo, Giovanni C. Ong, Edgar A. Ragasa,
Rolando Sancada, and Dionisio Umbalin (petitioners) questioning the 5 June 1995 Order[3] of Branch 222 of the Regional
Trial Court of Quezon City in Civil Case No. Q-91-10510 for Annulment of Documents with Prayer for Issuance of
Prohibitory and Mandatory Injunction and Damages.
The Facts
Petitioners alleged that they are the registered owners of several lots adjoining a road lot known as Lot 369-A-29 or
Apollo Street of subdivision plan Psd-37971 (road lot). The road lot is a short access road which connects petitioners'
properties to the main road known as Road 20. The road lot is covered by Transfer Certificate of Title (TCT) No. RT-20895
(22682) and registered in the name of respondent Pedro del Rosario (del Rosario). Annotated at the back of TCT No.
RT-20895 is a court-ordered Entry No. 605/T-22655 which reads as follows: "It is hereby made of record that as per order
of the Court, the street lot covered by this title shall not be closed or disposed of by the registered owner without
previous approval of the court."[4]
Petitioners alleged that in gross violation of the court order, del Rosario sold an unsegregated portion of the road lot to
his co-respondents Josefa Conejero (Conejero) and Ignacio Sonoron (Sonoron) without obtaining prior court approval.
Del Rosario, Conejero, and Sonoron then entered into a partition agreement to divide the road lot into four lots which
resulted in the partial cancellation of TCT No. RT-20895 and the subsequent issuance of TCT Nos. 35899 and 35100 in the
name of Conejero, TCT No. 35101 in the name of del Rosario, and TCT No. 35102 in the name of Sonoron.[5]
Petitioners stated that del Rosario sold TCT No. 35101 to Goldkey Development Corporation (Goldkey).[6]
Petitioners alleged that the Register of Deeds violated the court order when it allowed the registration of the sales and
the subsequent issuance of new titles without first obtaining judicial approval. Petitioners claimed that Goldkey had built
cement fences on the lot, thus blocking the ingress and egress of petitioners.[7]
Petitioners prayed that the sales made in favor of Conejero, Sonoron, and Goldkey and the partition of the road lot be
declared void.[8]
In its Comment, Goldkey alleged that the Housing and Land Use Regulatory Board (HLURB) has exclusive jurisdiction over
the cases mentioned in Section 1 of Presidential Decree No. (PD) 1344.[9] Goldkey argued that the Court of Appeals
correctly dismissed petitioners' appeal because petitioners merely assigned an error involving a pure question of
law. Goldkey added that petitioners are using the present petition as a substitute for an already lost appeal since
petitioners' counsel had received the decision on 17 October 1997 and the present petition was posted only on 16
December 1997.[10]
In May 1991, petitioners filed an initial complaint with the Office of the Building Official (building official) of Quezon City,
docketed as Building Case No. R-10-91-006 entitled Giovanni C. Ong, et al. v. Manuel Chua (building case).[11] Petitioners,
who initiated the building case when Goldkey started putting up fences in some portions of the property, claimed that
the parcel of land was a road lot.[12]
On 10 September 1991, the HLURB issued a Development Permit to Goldkey allowing it to develop the land into
residential townhouse units. The permit also mentioned that the project is classified as "Residential Townhouse
Subdivision" and, as evaluated, the same is "in accordance with the Zoning Ordinance of Quezon City."[13]
REMLAW Page 137
Subdivision" and, as evaluated, the same is "in accordance with the Zoning Ordinance of Quezon City."[13]
On 4 November 1991,[14] petitioners filed a case for Annulment of Title and Damages[15] with the Regional Trial Court of
Quezon City.
Subsequently, the building official of Quezon City resolved the building case against petitioners and this decision became
final and executory.[16] The ruling held that the property is not a road lot but a residential lot.[17]
On 5 June 1995, Branch 222 of the Regional Trial Court (trial court) of Quezon City issued an order dismissing the case
for lack of jurisdiction over the subject matter.
The Ruling of the Trial Court
The trial court dismissed petitioners' case for lack of jurisdiction over the subject matter. The trial court pointed out that
there was a decision rendered by the building official of Quezon City declaring the disputed property a residential lot and
not a road lot; hence, the building official issued a building permit. The HLURB also issued a permit for the development
of the land into a townhouse project. Petitioners did not appeal both rulings. The trial court stated that petitioners'
contention that the property is a road lot had been rendered moot by the finding of the building official which made the
contrary declaration. If petitioners had any objection to the ruling, they should have appealed the same to the Secretary
of Public Works and Highways as provided in Section 307 of Executive Order No. (EO) 1096. The findings of
administrative agencies which have expertise are generally accorded not only respect but even finality.
The trial court also stated that the property had been approved by the HLURB for development into a townhouse
project. The subject land was therefore removed from the jurisdiction of the regular courts. The HLURB's decision was
also not appealed to the Office of the President as provided in Section 4 of PD 1344 which gave the HLURB quasi-judicial
powers.
The Ruling of the Appellate Court
On 17 September 1997, the Court of Appeals dismissed the appeal on the ground that it has no jurisdiction to entertain
the same. The appellate court stated that the original and amended complaints filed by petitioners were both premised
on the claim that the subject parcels of land were subdivision road lots that were illegally converted into residential lots
and thereafter disposed by del Rosario, the subdivision developer. Therefore, petitioners' complaints were filed for the
purpose of enforcing a contractual and statutory obligation of del Rosario to preserve a subdivision road lot for street
purposes. As such, the agency with jurisdiction is the HLURB, pursuant to the provisions of PD 957, 1216, and 1344, EO
648 dated 7 February 1981 and EO 90 dated 17 December 1986.
Further, the appellate court ruled that the error assigned by petitioners involves the issue on what law will apply to
determine the jurisdiction of a tribunal over the subject matter of the complaints. Petitioners' assigned error involves a
pure question of law; hence, petitioners appealed to the wrong forum. Petitioners should have elevated their appeal to
the Supreme Court and not to the Court of Appeals by way of a simple appeal.
The HLURB is the sole regulatory body for housing and land development.[18] The extent to which an administrative
agency may exercise its powers depends on the provisions of the statute creating such agency.[19] Courts will not
determine a controversy where the issues for resolution demand the exercise of sound administrative discretion.[20]
Jurisdiction Lies with the HLURB
PD 957,[21] otherwise known as "The Subdivision and Condominium Buyers' Protective Decree," granted the National
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.(Emphasis supplied)
Under EO 648,[23] the NHA's functions were transferred to the Human Settlement Regulatory Commission. Section 8 of
EO 648 provides:
Section 8. Transfer of Functions. - The regulatory functions of the National Housing Authority pursuant to Presidential
Decrees No. 957, 1216, 1344 and other related laws are hereby transferred to the Commission, together with such
applicable personnel, appropriation, records, equipment and property necessary for the enforcement and
implementation of such functions. Among these regulatory functions are: (1) Regulation of the real estate trade and
business; (2) Registration of subdivision lots and condominium projects; (3) Issuance of license to sell subdivision lots and
condominium units in the registered units; (4) Approval of performance bond and the suspension of license to sell; (5)
Registration of dealers, brokers and salesmen engaged in the business of selling subdivision lots or condominium units;
(6) Revocation of registration of dealers, brokers and salesmen; (7) Approval or mortgage on any subdivision lot or
condominium unit made by the owner or developer; (8) Granting of permits for the alteration of plans and the extension
of period for completion of subdivision or condominium projects; (9) Approval of the conversion to other purposes of
roads and open spaces found within the project which have been donated to the city or municipality concerned; (10)
Regulation of the relationship between lessors and lessees; and (11) Hear and decide cases on unsound real estate
business practices; claims involving refund filed against project owners, developers, dealers, brokers or salesmen and
cases of specific performance. (Emphasis supplied)
EO 90 [24] renamed the Human Settlement Regulatory Commission the Housing and Land Use Regulatory Board. The
HLURB retained the regulatory and adjudicatory functions of the NHA.
Clearly, the scope and limitation of the HLURB's jurisdiction are well-defined. The HLURB's jurisdiction to hear and decide
cases is determined by the nature of the cause of action, the subject matter or property involved, and the parties.[25] In
the present case, petitioners are the registered owners of several lots adjoining a subdivision road lot connecting their
properties to the main road. Petitioners allege that the subdivision lot owners sold the road lot to a developer who is
now constructing cement fences, thus blocking the passageway from their lots to the main road. In sum, petitioners are
enforcing their statutory and contractual rights against the subdivision owners. This is a specific performance case which
falls under the HLURB's exclusive jurisdiction.
In Osea v. Ambrosio,[26] the Court held that the provisions of PD 957 were intended to encompass all questions relating
to subdivisions. This intention was aimed to provide for an appropriate government agency, which is the HLURB, to
which all parties aggrieved in the implementation of provisions and the enforcement of contractual rights with respect to
said category of real estate may take recourse.
Petitioners claim that respondents violated the annotation at the back of TCT No. RT-20895 by selling an unsegregated
portion of the lot without obtaining prior court approval. The date of entry of this annotation is 18 August 1953. When
PD 957, PD 1344, and EO 648 were enacted in 1976, 1978, and 1981, respectively, this annotation was impliedly
modified such that the conversion of the road lot in the subdivision plan would fall under the HLURB's jurisdiction
pursuant to these laws.
Petitioners argue that they can file a specific performance case to compel respondents to comply with their contractual
and statutory obligation to maintain the road lot. However, petitioners can only be granted complete relief if the subject
sales are declared void and the subsequent partition is declared illegal. Petitioners further contend that the HLURB,
having only the jurisdiction to hear and decide specific performance cases, can only compel petitioners to file a case for
annulment of title and prosecute the action. Petitioners insist that in the final analysis, a case for annulment of title
would still have to be filed with the ordinary courts.[27]
In Peña v. GSIS,[28] the Court ruled that when an administrative agency is conferred quasi-judicial functions, all
controversies relating to the subject matter pertaining to its specialization are deemed to be included within its
jurisdiction. Split jurisdiction is not favored.
In the Solid Homes case for example the Court affirmed the competence of the Housing and Land Use Regulatory Board
to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice. This
departure from the traditional allocation of governmental powers is justified by expediency, or the need of the
government to respond swiftly and competently to the pressing problems of the modern world.
Finally, in Cristobal v. Court of Appeals,[30] we held that "questions relating to non-compliance with the requisites for
conversion of subdivision lots are properly cognizable by the NHA, now the HLURB, pursuant to Section 22 of PD 957 and
not by the regular courts."
Appeal by Certiorari Involving Questions of Law
(a) Ordinary Appeal. - The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of
its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered the judgment or final
order appealed from and serving a copy thereof upon the adverse party. No record on appeal shall be required except in
special proceedings and other cases of multiple or separate appeals where the law or these Rules so require. In such
cases, the record on appeal shall be filed and served in like manner.
(b) Petition for Review. - The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of
its appellate jurisdiction shall be by petition for review in accordance with Rule 42.
(c) Appeal by certiorari. - In all cases where only questions of law are raised or involved, the appeal shall be to the
Supreme Court by petition for review on certiorari in accordance with Rule 45.(Emphasis supplied)
In Sevilleno v. Carilo,[31] citing Macawiwili Gold Mining and Development Co., Inc. v. Court of Appeals, this Court
summarized the rule on appeals:
(1) In all cases decided by the RTC in the exercise of its original jurisdiction, appeal may be made to the Court of Appeals
by mere notice of appeal where the appellant raises questions of fact or mixed questions of fact and law;
(2) In all cases decided by the RTC in the exercise of its original jurisdiction where the appellant raises only questions
of law, the appeal must be taken to the Supreme Court on a petition for review on certiorari under Rule 45.
(3) All appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction, regardless of whether the
appellant raises questions of fact, questions of law, or mixed questions of fact and law, shall be brought to the Court of
Appeals by filing a petition for review under Rule 42. (Emphasis supplied)
In First Bancorp, Inc. v. Court of Appeals,[32] this Court also explained the two modes of appeal from a final order of the
trial court in the exercise of its original jurisdiction:
(1) by writ of error under Section 2(a), Rule 41 of the Rules of Court if questions of fact or questions of fact and law are
raised or involved; or
(2) appeal by certiorari under Section 2(c), Rule 41, in relation to Rule 45, where only questions of law are raised or
involved. (Emphasis supplied)
In the present case, petitioners raised only one issue in their Appellants' Brief - whether "the Honorable Trial Court a quo
seriously erred in holding that it has no jurisdiction over the subject matter of the case when in fact it has already
The question on jurisdiction is undoubtedly one of law. We have held that "a question of law exists when the doubt or
controversy concerns the correct application of law or jurisprudence to a certain set of facts; or when the issue does not
call for an examination of the probative value of the evidence presented, the truth or falsehood of facts being
admitted."[33] Consequently, it is not disputed that the issue brought by petitioners to the Court of Appeals involves
solely the trial court's jurisdiction over the subject matter of the case. The appellate court can determine the issue
raised without reviewing or evaluating the evidence.
As petitioners' appeal solely involves a question of law, the appellate court did not err in dismissing the appeal on the
ground of lack of jurisdiction pursuant to Section 2, Rule 50 of the Rules of Court which provides:
Sec. 2. Dismissal of improper appeal to the Court of Appeals. - An appeal under Rule 41 taken from the Regional Trial
Court to the Court of Appeals raising only questions of law shall be dismissed, issues purely of law not being reviewable
by said court. Similarly, an appeal by notice of appeal instead of by petition for review from the appellate judgment of a
Regional Trial Court shall be dismissed.
An appeal erroneously taken to the Court of Appeals shall not be transferred to the appropriate court but shall be
dismissed outright. (Emphasis supplied)
Rule 65 is not a remedy for lost appeal.
Petitioners should have directly taken their appeal to this Court by filing a petition for review on certiorari under Rule 45
and not an ordinary appeal with the Court of Appeals under Rule 41 nor a petition for certiorari with this Court under
Rule 65.
As held in Balayan v. Acorda,[34] "the special civil action for certiorari is a limited form of review and is a remedy of last
recourse." It lies only where there is no appeal or plain, speedy, and adequate remedy in the ordinary course of law.
In the present case, petitioners chose the wrong mode of appeal. Hence, the instant petition cannot prevail since a
petition for certiorari is not a substitute for a lost appeal, especially if the loss or lapse was an error in petitioners' choice
of remedy. We have held in David v. Cordova[35] that:
A petition for certiorari cannot be a substitute for an appeal from a lower court decision. Where appeal is available to
the aggrieved party, the action for certiorari will not be entertained. The remedies of appeal (including petitions for
review) and certiorari are mutually exclusive, not alternate or successive. Hence, certiorari is not and cannot be a
substitute for an appeal, especially if one's own negligence or error in one's choice of remedy occasioned such loss or
lapse. One of the requisites of certiorari is that there be no available appeal or any plain, speedy and adequate remedy.
Where an appeal is available, certiorari will not prosper, even if the ground therefore is grave abuse of discretion.
(Emphasis supplied)
There were instances when the Court has relaxed the rule on the special civil action for certiorari as a substitute for
failure to file a timely petition for review on certiorari under Rule 45 such as where the application of this rule would
result in a manifest failure or miscarriage of justice.[36] Although the Court has the discretion to treat a petition for
certiorari as having been filed under Rule 45, there is nothing in the present case to warrant a liberal application of the
rules.
WHEREFORE, we DISMISS the petition. We AFFIRM the 17 September 1997 Decision of the Court of Appeals. Costs
against petitioners.
REPUBLIC ACT NO. 8369 AN ACT ESTABLISHING FAMILY COURTS, GRANTING THEM EXCLUSIVE
ORIGINAL JURISDICTION OVER CHILD AND FAMILY CASES, AMENDING BATAS PAMBANSA BILANG
129,AS AMENDED, OTHERWISE KNOWN AS ACT OF 1980, APPROPRIATING FUNDS THEREFOR AND
FOR OTHER PURPOSES.
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
Section 1. Title. - This Act shall be known as the "Family Courts Act of 1997".
Sec. 2. Statement of National Policies. - The State shall protect the rights and promote the welfare of
children in keeping with the mandate of the Constitution and the precepts of the United Nations
Convention on the rights of the Child. The State shall provide a system of adjudication for youthful
offenders which takes into account their peculiar circumstances.
The State recognizes the sanctity of family life and shall protect and strengthen the family as a basic
autonomous social institution. The courts shall preserve the solidarity of the family, provide
procedures for the reconciliation of spouses and the amicable settlement of family controversy.
Sec. 3. Establishment of Family Courts. - There shall be established a Family Court in every province
and city in the country. In case where the city is the capital of the province, the Family Court shall be
established in the municipality which has the highest population.
Sec. 4. Qualification and Training of Family Court Judges. - Sec. 15 of Batas Pambansa Blg. 129, as
amended, is hereby further amended to read as follows:
"Sec. 15. (a) Qualification. - No person shall be appointed Regional Trial Judge or Presiding Judge
of the Family Court unless he is a natural-born citizen of the Philippines, at least thirty-five (35)
years of age, and, for at least ten (10) years, has been engaged in the practice of law in the
Philippines or has held a public office in the Philippines requiring admission to the practice of
law as indispensable requisite.
"(b) Training of Family Court Judges. - The Presiding Judge, as well as the court personnel of the
Family Courts, shall undergo training and must have the experience and demonstrated ability in
dealing with child and family cases.
"The Supreme Court shall provide a continuing education program on child and family laws,
procedure and other related disciplines to judges and personnel of such courts."
Sec. 5. Jurisdiction offamily Courts. - The Family Courts shall have exclusive original jurisdiction to hear
and decide the following cases:
a) Criminal cases where one or more of the accused is below eighteen (18) years of age but not
less than nine (9) years of age but not less than nine (9) years of age or where one or more of
the victims is a minor at the time of the commission of the offense: Provided, That if the minor
is found guilty, the court shall promulgate sentence and ascertain any civil liability which the
accused may have incurred.
The sentence, however, shall be suspended without need of application pursuant to Ptesidential
Decree No. 603, otherwise known as the "Child and Youth Welfare Code";
b) Petitions for guardianship, custody of children, habeas corpus in relation to the latter;
c) Petitions for adoption of children and the revocation thereof;
d) Complaints for annulment of marriage, declaration of nullity of marriage and those relating to
marital status and property relations of husband and wife or those living together under
different status and agreements, and petitions for dissolution of conjugal partnership of gains;
REMLAW Page 160
different status and agreements, and petitions for dissolution of conjugal partnership of gains;
e) Petitions for support and/or acknowledgment;
f) Summary judicial proceedings brought under the provisions of Executive Order No. 209,
otherwise known as the "Family Code of the Philippines";
g) Petitions for declaration of status of children as abandoned, dependent o neglected children,
petitions for voluntary or involuntary commitment of children; the suspension, termination, or
restoration of parental authority and other cases cognizable under Presidential Decree No. 603,
Executive Order No. 56, (Series of 1986), and other related laws;
h) Petitions for the constitution of the family home;
i) Cases against minors cognizable under the Dangerous Drugs Act, as amended;
j) Violations of Republic Act No. 7610, otherwise known as the "Special Protection of Children
Against Child Abuse, Exploitation and Discrimination Act," as amended by Republic Act No.
7658; and
2) Children - which include the commission of all forms of abuse, neglect, cruelty,
exploitation, violence, and discrimination and all other conditions prejudicial to their
development.
If an act constitutes a criminal offense, the accused or batterer shall be subject to criminal
proceedings and the corresponding penalties.
If any question involving any of the above matters should arise as an incident in any case pending in
the regular courts, said incident shall be determined in that court.
Sec. 6. Use of Income. - All Family Courts shall be allowed the use of ten per cent (10%) of their income
derived from filing and other court fees under Rule 141 of the Rules of Court for research and other
operating expenses including capital outlay: Provided, That this benefit shall likewise be enjoyed by all
courts of justice.
The Supreme Court shall promulgate the necessary guidelines to effectively implement the provisions
of this Sec.
Sec. 7. Special Provisional Remedies. - In cases of violence among immediate family members living in
the same domicile or household, the Family Court may issue a restraining order against the accused of
defendant upon verified application by the complainant or the victim for relief from abuse.
The court may order the temporary custody of children in all civil actions for their custody. The court
may also order support pendente lite, including deduction from the salary and use of conjugal home
and other properties in all civil actions for support.
Sec. 8. Supervision of Youth Detention Homes. - The judge of the Family Court shall have direct
control and supervision of the youth detention home which the local government unit shall establish
to separate the youth offenders from adult criminals: Provided, however, That alternatives to
detention and institutional care shall be made available to the accused including counseling,
recognizance, bail, community continuum, or diversions from the justice system: Provided, further,
That the human rights of the accused are fully respected in a manner appropriate to their well-being.
Sec. 9. Social Services and Counseling Division. - Under the guidance ofthe Department of Social
Welfare and Development (DSWD), a Social Services and Counseling Division (SSCD) shall be
established in each judicial region as the Supreme Court shall deem necessary based on the number of
Sec. 10. Social Services and Counseling Division Staff. - The SSCD shall have a staff composed of
qualified social workers and other personnel with academic preparation in behavioral sciences to
carry out the duties'of conducting intake assessment, social case studies, casework and counseling,
and othersocial services that may be needed in connection with cases filed with the court: Provided,
however, That in adoption cases and in petitions for declaration of abandonment, the case studies
may be prepared by social workers of duly licensed child caring or child placement agencies, or the
DSWD. When warranted, the division shall recommend that the court avail itself of consultative
services of psychiatrists, psychologists, and other qualified specialists presently employed in other
departments of the government in connection with its cases.
The position of Social Work Adviser shall be created under the Office of the Court Administrator, who
shall monitor and supervise the SSCD ofthe Regional Trial Court.
Sec. 11. Alternative Social Services. - In accordance with Sec. 17 of this Act, in areas where no Family
Court has been established or no Regional Trial Court was designated by the Supreme Court due to
the limited number of cases, the DSWD shall designate and assign qualified, trained, and DSWD
accredited social workers of the local government units to handle juvenile and family cases filed in the
designated Regional Trial Court of the place.
Sec. 12. Privacy and Confidentiality of Proceedings. - All hearings and conciliation of the child and
family cases shall be treated in a manner consistent with the promotion of the child's and the family's
dignity and worth, and shall respect their privacy at all stages of the proceedings. Records of the cases
shall be dealt with utmost confidentiality and the identity of parties shall not be divulged unless
necessary and with authority of the judge.
Sec. 13. Special Rules of Procedure. - The Supreme Court shall promulgate special rules of procedure
for the transfer of cases to the new courts during the transition period and for the disposition of
family cases with the best interests of the child and the protection of the family as primary
consideration taking into account the United Nations Convention on the Rights of the Child.
Sec. 14. Appeals. - Decisions and orders of the court shall be appealed in the same manner and subject
to the same conditions as appeals from the ordinary Regional Trial Courts.
Sec. 15. Appropriations. - The amount necessary to carry out the provisions of this Act shall be
included in the General Appropriations Act of the year following in its enactment into law and
thereafter.
Sec. 16. Implementing Rules and Regulations. - The Supreme Court, in coordination with the DSWD,
shall formulate the necessary rules and regulations for the effective implementation of the social
aspects of this Act.
Sec. 17. Transitory Provisions. - Pending the establishment of such Family Courts, the Supreme Court
shall designate from among the branches ofthe Regional Trial Court at least one Family Court in each
of the cities of Manila, Quezon, Pasay, Caloocan, Makati, Pasig, Mandaluyong, Muntinlupa, Laoag,
Baguio, Santiago, Dagupan, Olongapo, Cabanatuan, San Jose, Angeles, Cavite, Batangas, Lucena, Naga,
Iriga, Legazpi, Roxas, Iloilo, Bacolod, Dumaguete, Tacloban, Cebu, Mandaue, Tagbilaran, Surigao,
Butuan, Cagayan de Oro, Davao, General Santos, Oroquieta, Ozamis, Dipolog, Zamboanga, Pagadian,
Iligan, and in such other places as the Supreme Court may deem necessary.
Additional cases other than those provided in Sec. 5 may be assigned to the Family Courts when their
In areas where there are no Family Courts, the cases referred to in Sec. 5 of this Act shall be
adjudicated by the Regional Trial Court.
Sec. 18. Separability Clause. - In case any provision of this Act is declared unconstitutional, the other
provisions shall remain in effect.
Sec. 19. Repealing Clause. - All other laws, decrees, executive orders, rules or regulations inconsistent
herewith are hereby repealed, amended or modified accordingly.
Sec. 20. Effectivity. - This Act shall take effect fifteen (15) days after its publication in at least two (2)
national newspapers of general circulation.
Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting for
this Court’s consideration and approval the Proposed Rule on Guardianship of Minors, the Court
Resolved to APPROVE the same.
The Rule shall take effect on May 1, 2003 following its publication in a newspaper of general circulation
not later than April 15, 2003.
April 1, 2003.
<>I>Davide, Jr. C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Ynares-Santiago,
Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Moralez,Callejo Sr., Azcuna, JJ., concur
Section 1. Applicability of the Rule. – This Rule shall apply to petitions for guardianship over the person
or property, or both, of a minor.
The father and the mother shall jointly exercise legal guardianship over the person and property of their
unemancipated common child without the necessity of a court appointment. In such case, this Rule shall
be suppletory to the provisions of the Family Code on guardianship.
Sec. 2. Who may petition for appointment of guardian. – On grounds authorized by law, any relative or
other person on behalf of a minor, or the minor himself if fourteen years of age or over, may petition
the Family Court for the appointment of a general guardian over the person or property, or both, of
such minor. The petition may also be filed by the Secretary of Social Welfare and Development and by
the Secretary of Health in the case of an insane minor who needs to be hospitalized.
Sec. 3. Where to file petition. – A petition for guardianship over the person or property, or both, of a
minor may be filed in the Family Court of the province or city where the minor actually resides. If he
resides in a foreign country, the petition shall be flied with the Family Court of the province or city
where his property or any part thereof is situated.
Sec. 4. Grounds of petition.-The grounds for the appointment of a guardian over the person or property,
or both, of a minor are the following:
(c) remarriage of his surviving parent, if the latter Is found unsuitable to exercise parental
authority; or
(e) availability to exercise the powers and duties of a guardian for the full period of the
guardianship;
Sec. 6. Who may be appointed guardian of the person or property, or both, of a minor. – In default of
parents or a court-appointed guardian, the court may appoint a guardian of the person or property, or
both, of a minor, observing as far as practicable, the following order of preference:
(a) the surviving grandparent and In case several grandparents survive, the court shall select any
of them taking Into account all relevant considerations;
(b) the oldest brother or sister of the minor over twenty-one years of age, unless unfit or
disqualified;
(c) the actual custodian of the minor over twenty-one years of age, unless unfit or disqualified;
and
(d) any other person, who in the sound discretion of the court, would serve the best interests of
the minor.
Sec. 7. Contents of petition. – A petition for the appointment of a general guardian must allege the
following:
(d) The death of the parents of the minor or the termination, deprivation or suspension of their
parental authority;
(f) The names, ages, and residences of relatives within the 4th civil degree of the minor, and of
persons having him in their care and custody;
(g) The probable value, character and location of the property of the minor; and
(h) The name, age and residence of the person for whom letters of guardianship are prayed.
Sec. 8. Time and notice of hearing. – When a petition for the appointment of a general guardian is filed,
the court shall fix a time and place for its hearing, and shall cause reasonable notice to be given to the
persons mentioned in the petition, including the minor if he is fourteen years of age or over, and may
direct other general or special notice to be given.
Sec. 9. Case study report. – The court shall order a social worker to conduct a case study of the minor
and all the prospective guardians and submit his report and recommendation to the court for its
guidance before the scheduled hearing. The social worker may intervene on behalf of the minor if he
finds that the petition for guardianship should be denied.
Sec. 10. Opposition to petition. – Any interested person may contest the petition by filing a written
opposition based on such grounds as the majority of the minor or the unsuitability of the person for
whom letters are prayed, and pray that the petition be denied, or that letters of guardianship issue to
himself, or to any suitable person named in the opposition.
Sec. 11. Hearing and order for letters to issue. – At the hearing of the petition, it must be shown that the
requirement of notice has been complied with. The prospective ward shall be presented to the court.
The court shall hear the evidence of the parties in support of their respective allegations. If warranted,
the court shall appoint a suitable guardian of the person or property, or both, of the minor.
At the discretion of the court, the hearing on guardianship may be closed to the public and the records
of the case shall not be released without its approval.
Sec. 12. When and how a guardian of the property for non-resident minor is appointed; notice. – When
the minor resides outside the Philippines but has property in the Philippines, any relative or friend of
such minor, or any one interested in his property, in expectancy or otherwise, may petition the Family
Court for the appointment of a guardian over the property.
Notice of hearing of the petition shall be given to the minor by publication or any other means as the
court may deem proper. The court may dispense with the presence of the non-resident minor.
If after hearing the court is satisfied that such non-resident is a minor and a guardian is necessary or
convenient, it may appoint a guardian over his property.
Sec. 13. Service of final and executory judgment or order. – The final and executory judgment or order
shall be served upon the Local Civil Registrar of the municipality or city where the minor resides and the
Register of Deeds of the place where his property or part thereof is situated shall annotate the same in
the corresponding title, and report to the court his compliance within fifteen days from receipt of the
order.
Sec. 14. Bond of guardian; amount; conditions.-Before he enters upon the execution of his trust, or
letters of guardianship issue, an appointed guardian may be required to post a bond in such sum as the
court shall determine and conditioned as follows:
(a) To make and return to the court, within three months after the issuance of his letters of
guardianship, a true and complete Inventory of all the property, real and personal, of his ward which
shall come to his possession or knowledge or to the possession or knowledge of any other person in his
behalf;
(b) To faithfully execute the duties of his trust, to manage and dispose of the property according to this
rule for the best interests of the ward, and to provide for his proper care, custody and education;
(c) To render a true and Just account of all the property of the ward in his hands, and of all proceeds or
interest derived therefrom, and of the management and disposition of the same, at the time designated
by this rule and such other times as the court directs; and at the expiration of his trust, to settle his
accounts with the court and deliver and pay over all the property, effects, and monies remaining in his
hands, or due from him on such settlement, to the person lawfully entitled thereto; and
(d) To perform all orders of the court and such other duties as may be required by law.
Sec. 15. Where to file the bond; action thereon. – The bond posted by a guardian shall be filed in the
Family Court and, In case of breach of any of its conditions, the guardian may be prosecuted in the same
proceeding for the benefit of the ward or of any other person legally interested in the property.
Whenever necessary, the court may require the guardian to post a new bond and may discharge from
further liability the sureties on the old bond after due notice to interested persons, if no injury may
result therefrom to those interested in the property.
Sec. 16. Bond of parents as guardians of property of minor. – lf the market value of the property or the
annual Income of the child exceeds P50,000.00, the parent concerned shall furnish a bond In such
amount as the court may determine, but in no case less than ten per centurn of the value of such
property or annual income, to guarantee the performance of the obligations prescribed for general
guardians.
A verified petition for approval of the bond shall be flied in the Family Court of the place where the child
resides or, if the child resides in a foreign country, in the Family Court of the place where the property or
any part thereof is situated.
The petition shall be docketed as a summary special proceeding In which all incidents and issues
regarding the performance of the obligations of a general guardian shall be heard and resolved.
Sec. 17. General duties of guardian. – A guardian shall have the care and custody of the person of his
ward and the management of his property, or only the management of his property. The guardian of the
property of a nonresident minor shall have the management of all his property within the Philippines.
(a) To pay the just debts of the ward out of the personal property and the income of the real
property of the ward, If the same is sufficient; otherwise, out of the real property of the ward
upon obtaining an order for its sale or encumbrance;
(b) To settle all accounts of his ward, and demand, sue for, receive all debts due him, or may, with
the approval of the court, compound for the same and give discharges to the debtor on receiving
a fair and just dividend of the property and effects; and to appear for and represent the ward in all
actions and special proceedings, unless another person is appointed for that purpose;
(c) To manage the property of the ward frugally and without waste, and apply the income and
profits thereon, insofar as may be necessary, to the comfortable and suitable maintenance of the
ward; and if such income and profits be insufficient for that purpose, to sell or encumber the real
or personal property, upon being authorized by the court to do so;
(d) To consent to a partition of real or personal property owned by the ward jointly or in common
with others upon authority granted by the court after hearing, notice to relatives of the ward, and
a careful investigation as to the necessity and propriety of the proposed action;
(f) To report to the court any property of the ward not included in the inventory which is
discovered, or succeeded to, or acquired by the ward within three months after such discovery,
succession, or acquisition; and
(g) To render to the court for its approval an accounting of the property one year from his
appointment, and every year thereafter or as often as may be required.
Sec. 18. Power and duty of the court – The court may:
(a) Request the assistance of one or more commissioners in the appraisal of the property of the
ward reported in the initial and subsequent inventories;
(b) Authorize reimbursement to the guardian, other than a parent, of reasonable expenses
incurred in the execution of his trust, and allow payment of compensation for his services as the
court may deem just, not exceeding ten per centum of the net income of the ward, if any;
otherwise, in such amount the court determines to be a reasonable compensation for his services;
and
(c) Upon complaint of the guardian or ward, or of any person having actual or prospective interest
in the property at the ward, require any person suspected of having embezzled, concealed, or
disposed of any money, goods or interest, or a written instrument belonging to the ward or his
property to appear for examination concerning any thereof and issue such orders as would secure
the property against such embezzlement, concealment or conveyance.
Sec. 19. Petition to sell or encumber property.-When the income of a property under guardianship is
insufficient to maintain and educate the ward, or when it is for his benefit that his personal or real
property or any part thereof be sold, mortgaged or otherwise encumbered, and the proceeds invested
in safe and productive security, or in the improvement or security of other real property, the guardian
may file a verified petition setting forth such facts, and praying that an order issue authorizing the sale
or encumbrance of the property.
Sec. 20. Order to show cause. – If the sale or encumbrance is necessary or would be beneficial to the
ward, the court shall order his next of kin and all person/s interested in the property to appear at a
reasonable time and place therein specified and show cause why the petition should not be granted.
Sec. 21. Hearing on return of order; costs. – At the time and place designated in the order to show cause,
the court shall hear the allegations and evidence of the petitioner and next of kin, and other persons
interested, together with their witnesses, and grant or deny the petition as the best interests of the
ward may require.
Sec. 22. Contents of order for sale or encumbrance and its duration; bond. – If, after full examination, it is
necessary, or would be beneficial to the ward, to sell or encumber the property, or some portion of it,
the court shall order such sale or encumbrance the proceeds of which shall be expended for the
maintenance or the education of the ward, or invested as the circumstances may require. The order
shall specify the grounds for the sale or encumbrance and may direct that the property ordered sold be
disposed of at public sale, subject to such conditions as to the time and manner of payment, and
security where a part of the payment is deferred. The original bond of the guardian shall stand as
security for the proper appropriation of the proceeds of the sale or encumbrance, but the court may, if
deemed expedient, require an additional bond as a condition for the sale or encumbrance. The authority
to sell or encumber shall not extend beyond one year, unless renewed by the court.
Sec. 23. Court may order investment of proceeds and direct management of property. – The court may
authorize and require the guardian to invest the proceeds of sales or encumbrances, and any other
money of his ward in his hands, in real or personal property, for the best interests of the ward, and may
make such other orders for the management, investment, and disposition of the property and effects, as
circumstances may warrant.
Sec. 24. Grounds for removal or resignation of guardian. – When a guardian becomes insane or
otherwise incapable of discharging his trust or is found thereafter to be unsuitable, or has wasted or
mismanaged the property of the ward, or has failed to render an account or make a return for thirty
days after it is due, the court may, upon reasonable notice to the guardian, remove him as such and
require him to surrender the property of the ward to the person found to be lawfully entitled thereto.
The court may allow the guardian to resign for justifiable causes.
Upon the removal or resignation of the guardian, the court shall appoint a new one.
No motion for removal or resignation shall be granted unless the guardian has submitted the proper
accounting of the property of the ward and the court has approved the same.
Sec. 25. Ground for termination of guardianship. – The court motu proprio or upon verified motion of
any person allowed to file a petition for guardianship may terminate the guardianship on the ground
that the ward has come of age or has died. The guardian shall notify the court of such fact within ten
days of its occurrence.
Sec. 26. Service of final and executory judgment or order. – The final and executory judgment or order
shall be served upon the Local Civil Registrar of the municipality or city where the minor resides and the
Register of Deeds of the province or city where his property or any part thereof is situated. Both the
Local Civil Registrar and’ the Register of Deeds shall enter the final and executory judgment or order in
the appropriate books in their offices.
Sec. 27. Effect of the rule. – This Rule amends Rules 92 to 97 inclusive of the Rules of Court on
guardianship of minors. Guardianship of incompetents who are not minors shall continue to be under
the jurisdiction of the regular courts and governed by the Rules of Court.
Sec. 28. Effectivity. - This Rule shall take effect on May 1, 2003 following its publication in a newspaper
of general circulation not later than April 15, 2003.
RULE ON ADOPTION
A. DOMESTIC ADOPTION
Section 1. Applicability of the Rule. – This Rule covers the domestic adoption of Filipino children.
Sec. 2. Objectives. – (a) The best interests of the child shall be the paramount consideration in all
matters relating to his care, custody and adoption, in accordance with Philippine laws, the United
Nations (UN) Convention on the Rights of the Child, UN Declaration on Social and Legal Principles
Relating to the Protection and Welfare of Children with Special Reference to Foster Placement and
Adoption, Nationally and Internationally, and the Hague Convention on the Protection of Children and
Cooperation in Respect of Inter-country Adoption.
(b) The State shall provide alternative protection and assistance through foster care or adoption for
every child who is a foundling, neglected, orphaned, or abandoned. To this end, the State shall:
(i) (i) ensure that every child remains under the care and custody of his parents and is provided
with love, care, understanding and security for the full and harmonious development of his
personality. Only when such efforts prove insufficient and no appropriate placement or adoption
within the child’s extended family is available shall adoption by an unrelated person be
considered.
(ii) safeguard the biological parents from making hasty decisions in relinquishing their parental
authority over their child;
(iii) (iii) prevent the child from unnecessary separation from his biological parents;
(iv) conduct public information and educational campaigns to promote a positive environment for
adoption;
(v) ensure that government and private sector agencies have the capacity to handle adoption
inquiries, process domestic adoption applications and offer adoption-related services including,
but not limited to, parent preparation and post-adoption education and counseling;
(vi) encourage domestic adoption so as to preserve the child’s identity and culture in his native
land, and only when this is not available shall inter-country adoption be considered as a last
resort; and
(vii) protect adoptive parents from attempts to disturb their parental authority and custody over
their adopted child.
(a) (a) “Child” is a person below eighteen (18) years of age at the time of the filing of the petition
for adoption.
(b) (b) “A child legally available for adoption” refers to a child who has been voluntarily or
involuntarily committed to the Department or to a duly licensed and accredited child-placing or
child-caring agency, freed of the parental authority of his biological parents, or in case of
rescission of adoption, his guardian or adopter(s).
(c) (c) “Voluntarily committed child” is one whose parents knowingly and willingly relinquish
parental authority over him in favor of the Department.
(d) (d) “Involuntarily committed child” is one whose parents, known or unknown, have been
permanently and judicially deprived of parental authority over him due to abandonment;
substantial, continuous or repeated neglect and abuse; or incompetence to discharge parental
responsibilities.
(e) (e) “Foundling” refers to a deserted or abandoned infant or child whose parents, guardian or
relatives are unknown; or a child committed to an orphanage or charitable or similar institution
with unknown facts of birth and parentage and registered in the Civil Register as a “foundling.”
(f) (f) “Abandoned child” refers to one who has no proper parental care or guardianship or whose
parents have deserted him for a period of at least six (6) continuous months and has been
judicially declared as such.
(g) (g) “Dependent child” refers to one who is without a parent, guardian or custodian or one
whose parents, guardian or other custodian for good cause desires to be relieved of his care and
custody and is dependent upon the public for support.
(h) (h) “Neglected child” is one whose basic needs have been deliberately not attended to or
inadequately attended to, physically or emotionally, by his parents or guardian.
(i) (i) “Physical neglect” occurs when the child is malnourished, ill-clad and without proper shelter.
(j) (j) “Emotional neglect” exists when a child is raped, seduced, maltreated, exploited,
overworked or made to work under conditions not conducive to good health or made to beg in
the streets or public places, or placed in moral danger, or exposed to drugs, alcohol, gambling,
prostitution and other vices.
(k) (k) “Child-placement agency” refers to an agency duly licensed and accredited by the
Department to provide comprehensive child welfare services including, but not limited to,
receiving applications for adoption, evaluating the prospective adoptive parents and preparing the
adoption home study report.
(l) (l) “Child-caring agency” refers to an agency duly licensed and accredited by the Department
that provides 24-hour residential care services for abandoned, orphaned, neglected or voluntarily
committed children.
(m) (m) “Department” refers to the Department of Social Welfare and Development.
(n) (n) “Deed of Voluntary Commitment” refers to the written and notarized instrument
relinquishing parental authority and committing the child to the care and custody of the
(o) (o) “Child Study Report” refers to a study made by the court social worker of the child’s legal
status, placement history, psychological, social, spiritual, medical, ethno-cultural background and
that of his biological family needed in determining the most appropriate placement for him.
(p) (p) “Home Study Report” refers to a study made by the court social worker of the motivation
and capacity of the prospective adoptive parents to provide a home that meets the needs of a
child.
(q) (q) “Supervised trial custody” refers to the period of time during which a social worker
oversees the adjustment and emotional readiness of both adopters and adoptee in stabilizing
their filial relationship.
(r) (r) “Licensed Social Worker” refers to one who possesses a degree in bachelor of science in
social work as a minimum educational requirement and who has passed the government licensure
examination for social workers as required by Republic Act No. 4373.
(s) (s) “Simulation of birth” is the tampering of the civil registry to make it appear in the birth
records that a certain child was born to a person who is not his biological mother, thus causing
such child to lose his true identity and status.
(t) (t) “Biological Parents” refer to the child’s mother and father by nature.
(v) (v) “Residence” means a person’s actual stay in the Philippines for three (3) continuous years
immediately prior to the filing of a petition for adoption and which is maintained until the
adoption decree is entered. Temporary absences for professional, business, health, or emergency
reasons not exceeding sixty (60) days in one (1) year does not break the continuity requirement.
(w) (w) “Alien” refers to any person, not a Filipino citizen, who enters and remains in the
Philippines and is in possession of a valid passport or travel documents and visa.
(1) Any Filipino citizen of legal age, in possession of full civil capacity and legal rights, of good
moral character, has not been convicted of any crime involving moral turpitude; who is
emotionally and psychologically capable of caring for children, at least sixteen (16) years older
than the adoptee, and who is in a position to support and care for his children in keeping with the
means of the family. The requirement of a 16-year difference between the age of the adopter and
adoptee may be waived when the adopter is the biological parent of the adoptee or is the spouse
of the adoptee’s parent;
(2) Any alien possessing the same qualifications as above-stated for Filipino nationals: Provided,
That his country has diplomatic relations with the Republic of the Philippines, that he has been
living in the Philippines for at least three (3) continuous years prior to the filing of the petition for
(i) a former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of
consanguinity or affinity; or
(ii) one who seeks to adopt the legitimate child of his Filipino spouse; or
(iii) one who is married to a Filipino citizen and seeks to adopt jointly with his spouse a
relative within the fourth (4th) degree of consanguinity or affinity of the Filipino spouse.
(3) The guardian with respect to the ward after the termination of the guardianship and clearance
of his financial accountabilities.
Husband and wife shall jointly adopt, except in the following cases:
(i) if one spouse seeks to adopt the legitimate child of one spouse by the other spouse; or
(ii) if one spouse seeks to adopt his own illegitimate child: Provided, however, That the
other spouse has signified his consent thereto; or
In case husband and wife jointly adopt or one spouse adopts the illegitimate child of the other, joint
parental authority shall be exercised by the spouses.
(1) (1) Any person below eighteen (18) years of age who has been voluntarily committed to the
Department under Articles 154, 155 and 156 of P.D. No. 603 or judicially declared available for
adoption;
(2) (2) The legitimate child of one spouse, by the other spouse;
(3) (3) An illegitimate child, by a qualified adopter to raise the status of the former to that of
legitimacy;
(4) (4) A person of legal age regardless of civil status, if, prior to the adoption, said person has
been consistently considered and treated by the adopters as their own child since minority;
(6) (6) A child whose biological or adoptive parents have died: Provided, That no proceedings shall
be initiated within six (6) months from the time of death of said parents.
Sec. 6. Venue. – The petition for adoption shall be filed with the Family Court of the province or city
Sec. 7. Contents of the Petition. – The petition shall be verified and specifically state at the heading of
the initiatory pleading whether the petition contains an application for change of name, rectification of
simulated birth, voluntary or involuntary commitment of children, or declaration of child as abandoned,
dependent or neglected.
1) 1) If the adopter is a Filipino citizen, the petition shall allege the following:
(b) (b) That the petitioner is of legal age, in possession of full civil capacity and legal rights; is
of good moral character; has not been convicted of any crime involving moral turpitude; is
emotionally and psychologically capable of caring for children; is at least sixteen (16) years
older than the adoptee, unless the adopter is the biological parent of the adoptee or is the
spouse of the adoptee’s parent; and is in a position to support and care for his children in
keeping with the means of the family and has undergone pre-adoption services as required
by Section 4 of Republic Act No. 8552.
(c) (c) That his country has diplomatic relations with the Republic of the Philippines;
(d) (d) That he has been certified by his diplomatic or consular office or any appropriate
government agency to have the legal capacity to adopt in his country and his government
allows the adoptee to enter his country as his adopted child and reside there permanently
as an adopted child; and
(e) (e) That he has been living in the Philippines for at least three (3) continuous years prior
to the filing of the petition and he maintains such residence until the adoption decree is
entered.
The requirements of certification of the alien’s qualification to adopt in his country and of residency may
be waived if the alien:
(i) is a former Filipino citizen who seeks to adopt a relative within the fourth degree of
consanguinity or affinity; or
(iii) is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative
within the fourth degree of consanguinity or affinity of the Filipino spouse.
3) 3) If the adopter is the legal guardian of the adoptee, the petition shall allege that guardianship
had been terminated and the guardian had cleared his financial accountabilities.
4) 4) If the adopter is married, the spouse shall be a co-petitioner for joint adoption except if:
(a) one spouse seeks to adopt the legitimate child of the other, or
(b) if one spouse seeks to adopt his own illegitimate child and the other spouse signified
written consent thereto, or
5) 5) If the adoptee is a foundling, the petition shall allege the entries which should appear in his
birth certificate, such as name of child, date of birth, place of birth, if known; sex, name and
citizenship of adoptive mother and father, and the date and place of their marriage.
6) 6) If the petition prays for a change of name, it shall also state the cause or reason for the
change of name.
(a) The first name, surname or names, age and residence of the adoptee as shown by his record of
birth, baptismal or foundling certificate and school records.
(c) The probable value and character of the estate of the adoptee.
(d) The first name, surname or names by which the adoptee is to be known and registered in the
Civil Registry.
A certification of non-forum shopping shall be included pursuant to Section 5, Rule 7 of the 1997 Rules
of Civil Procedure.
Sec. 8. Rectification of Simulated Birth. – In case the petition also seeks rectification of a simulated of
birth, it shall allege that:
(b) (b) The simulation of birth was made prior to the date of effectivity of Republic Act No. 8552
and the application for rectification of the birth registration and the petition for adoption were
filed within five years from said date;
(c) (c) The petitioner made the simulation of birth for the best interests of the adoptee; and
(d) (d) The adoptee has been consistently considered and treated by petitioner as his own child.
Sec. 9. Adoption of a foundling, an abandoned, dependent or neglected child. – In case the adoptee is a
foundling, an abandoned, dependent or neglected child, the petition shall allege:
(a) (a) The facts showing that the child is a foundling, abandoned, dependent or neglected;
(b) (b) The names of the parents, if known, and their residence. If the child has no known or living
parents, then the name and residence of the guardian, if any;
(c) (c) The name of the duly licensed child-placement agency or individual under whose care the
child is in custody; and
(d) (d) That the Department, child-placement or child-caring agency is authorized to give its
consent.
Sec. 10. Change of name. – In case the petition also prays for change of name, the title or caption must
contain:
(b) (b) Aliases or other names by which the child has been known; and
Sec. 11. Annexes to the Petition. – The following documents shall be attached to the petition:
A. Birth, baptismal or foundling certificate, as the case may be, and school records showing the
name, age and residence of the adoptee;
2. The biological parents of the child, if known, or the legal guardian, or the child-placement
agency, child-caring agency, or the proper government instrumentality which has legal
custody of the child;
3. The legitimate and adopted children of the adopter and of the adoptee, if any, who are
ten (10) years of age or over;
4. The illegitimate children of the adopter living with him who are ten (10) years of age or
over; and
D. If the petitioner is an alien, certification by his diplomatic or consular office or any appropriate
government agency that he has the legal capacity to adopt in his country and that his government
allows the adoptee to enter his country as his own adopted child unless exempted under Section
4(2);
E. Home study report on the adopters. If the adopter is an alien or residing abroad but qualified to
adopt, the home study report by a foreign adoption agency duly accredited by the Inter-Country
Adoption Board; and
F. Decree of annulment, nullity or legal separation of the adopter as well as that of the biological
parents of the adoptee, if any.
Sec. 12. Order of Hearing. – If the petition and attachments are sufficient in form and substance, the
court shall issue an order which shall contain the following:
(1) the registered name of the adoptee in the birth certificate and the names by which the
(3) the complete name which the adoptee will use if the petition is granted;
(4) the date and place of hearing which shall be set within six (6) months from the date of the
issuance of the order and shall direct that a copy thereof be published before the date of hearing
at least once a week for three successive weeks in a newspaper of general circulation in the
province or city where the court is situated; Provided, that in case of application for change of
name, the date set for hearing shall not be within four (4) months after the last publication of the
notice nor within thirty (30) days prior to an election.
The newspaper shall be selected by raffle under the supervision of the Executive Judge.
(5) a directive to the social worker of the court, the social service office of the local government
unit or any child-placing or child-caring agency, or the Department to prepare and submit child
and home study reports before the hearing if such reports had not been attached to the petition
due to unavailability at the time of the filing of the latter; and
(6) a directive to the social worker of the court to conduct counseling sessions with the biological
parents on the matter of adoption of the adoptee and submit her report before the date of
hearing.
At the discretion of the court, copies of the order of hearing shall also be furnished the Office of the
Solicitor General through the provincial or city prosecutor, the Department and the biological parents of
the adoptee, if known.
If a change in the name of the adoptee is prayed for in the petition, notice to the Solicitor General shall
be mandatory.
Sec. 13. Child and Home Study Reports. – In preparing the child study report on the adoptee, the
concerned social worker shall verify with the Civil Registry the real identity and registered name of the
adoptee. If the birth of the adoptee was not registered with the Civil Registry, it shall be the
responsibility of the social worker to register the adoptee and secure a certificate of foundling or late
registration, as the case may be.
The social worker shall establish that the child is legally available for adoption and the documents in
support thereof are valid and authentic, that the adopter has sincere intentions and that the adoption
shall inure to the best interests of the child.
In case the adopter is an alien, the home study report must show the legal capacity to adopt and that his
government allows the adoptee to enter his country as his adopted child in the absence of the
certification required under Section 7(b) of Republic Act No. 8552.
If after the conduct of the case studies, the social worker finds that there are grounds to deny the
petition, he shall make the proper recommendation to the court, furnishing a copy thereof to the
petitioner.
Sec. 14. Hearing. – Upon satisfactory proof that the order of hearing has been published and
jurisdictional requirements have been complied with, the court shall proceed to hear the petition. The
petitioner and the adoptee must personally appear and the former must testify before the presiding
The court shall verify from the social worker and determine whether the biological parent has been
properly counseled against making hasty decisions caused by strain or anxiety to give up the child;
ensure that all measures to strengthen the family have been exhausted; and ascertain if any prolonged
stay of the child in his own home will be inimical to his welfare and interest.
Sec. 15. Supervised Trial Custody. – Before issuance of the decree of adoption, the court shall give the
adopter trial custody of the adoptee for a period of at least six (6) months within which the parties are
expected to adjust psychologically and emotionally to each other and establish a bonding relationship.
The trial custody shall be monitored by the social worker of the court, the Department, or the social
service of the local government unit, or the child-placement or child-caring agency which submitted and
prepared the case studies. During said period, temporary parental authority shall be vested in the
adopter.
The court may, motu proprio or upon motion of any party, reduce the period or exempt the parties if it
finds that the same shall be for the best interests of the adoptee, stating the reasons therefor.
An alien adopter however must complete the 6-month trial custody except the following:
a) a former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of
consanguinity or affinity; or
b) one who seeks to adopt the legitimate child of his Filipino spouse; or
c) one who is married to a Filipino citizen and seeks to adopt jointly with his or her spouse the
latter’s relative within the fourth (4th) degree of consanguinity or affinity.
If the child is below seven (7) years of age and is placed with the prospective adopter through a pre-
adoption placement authority issued by the Department, the court shall order that the prospective
adopter shall enjoy all the benefits to which the biological parent is entitled from the date the adoptee
is placed with him.
The social worker shall submit to the court a report on the result of the trial custody within two weeks
after its termination.
Sec. 16. Decree of Adoption. – If the supervised trial custody is satisfactory to the parties and the court is
convinced from the trial custody report and the evidence adduced that the adoption shall redound to
the best interests of the adoptee, a decree of adoption shall be issued which shall take effect as of the
date the original petition was filed even if the petitioners die before its issuance.
B. Order:
1) the Clerk of Court to issue to the adopter a certificate of finality upon expiration of the 15-day
reglementary period within which to appeal;
2) the adopter to submit a certified true copy of the decree of adoption and the certificate of
finality to the Civil Registrar where the child was originally registered within thirty (30) days from
3) 3) the Civil Registrar of the place where the adoptee was registered:
a. to annotate on the adoptee’s original certificate of birth the decree of adoption within
thirty (30) days from receipt of the certificate of finality;
b. to issue a certificate of birth which shall not bear any notation that it is a new or amended
certificate and which shall show, among others, the following: registry number, date of
registration, name of child, sex, date of birth, place of birth, name and citizenship of
adoptive mother and father, and the date and place of their marriage, when applicable;
c. to seal the original certificate of birth in the civil registry records which can be opened
only upon order of the court which issued the decree of adoption; and
d. to submit to the court issuing the decree of adoption proof of compliance with all the
foregoing within thirty days from receipt of the decree.
If the adoptee is a foundling, the court shall order the Civil Registrar where the foundling was registered,
to annotate the decree of adoption on the foundling certificate and a new birth certificate shall be
ordered prepared by the Civil Registrar in accordance with the decree.
Sec. 17. Book of Adoptions. – The Clerk of Court shall keep a book of adoptions showing the date of
issuance of the decree in each case, compliance by the Civil Registrar with Section 16(B)(3) and all
incidents arising after the issuance of the decree.
Sec. 18. Confidential Nature of Proceedings and Records. –All hearings in adoption cases, after
compliance with the jurisdictional requirements shall be confidential and shall not be open to the public.
All records, books and papers relating to the adoption cases in the files of the court, the Department, or
any other agency or institution participating in the adoption proceedings shall be kept strictly
confidential.
If the court finds that the disclosure of the information to a third person is necessary for security
reasons or for purposes connected with or arising out of the adoption and will be for the best interests
of the adoptee, the court may, upon proper motion, order the necessary information to be released,
restricting the purposes for which it may be used.
Sec. 19. Rescission of Adoption of the Adoptee. – The petition shall be verified and filed by the adoptee
who is over eighteen (18) years of age, or with the assistance of the Department, if he is a minor, or if he
is over eighteen (18) years of age but is incapacitated, by his guardian or counsel.
The adoption may be rescinded based on any of the following grounds committed by the adopter:
1) repeated physical and verbal maltreatment by the adopter despite having undergone
counseling;
Adoption, being in the best interests of the child, shall not be subject to rescission by the adopter.
However, the adopter may disinherit the adoptee for causes provided in Article 919 of the Civil Code.
Sec. 20. Venue. – The petition shall be filed with the Family Court of the city or province where the
adoptee resides.
Sec. 21. Time within which to file petition. – The adoptee, if incapacitated, must file the petition for
rescission or revocation of adoption within five (5) years after he reaches the age of majority, or if he
was incompetent at the time of the adoption, within five (5) years after recovery from such
incompetency.
Sec. 22. Order to Answer. – The court shall issue an order requiring the adverse party to answer the
petition within fifteen (15) days from receipt of a copy thereof. The order and copy of the petition shall
be served on the adverse party in such manner as the court may direct.
Sec. 23. Judgment. – If the court finds that the allegations of the petition are true, it shall render
judgment ordering the rescission of adoption, with or without costs, as justice requires.
The court shall order that the parental authority of the biological parent of the adoptee, if known, or the
legal custody of the Department shall be restored if the adoptee is still a minor or incapacitated and
declare that the reciprocal rights and obligations of the adopter and the adoptee to each other shall be
extinguished.
The court shall further declare that successional rights shall revert to its status prior to adoption, as of
the date of judgment of judicial rescission. Vested rights acquired prior to judicial rescission shall be
respected.
It shall also order the adoptee to use the name stated in his original birth or foundling certificate.
The court shall further order the Civil Registrar where the adoption decree was registered to cancel the
new birth certificate of the adoptee and reinstate his original birth or foundling certificate.
Sec. 24. Service of Judgment. – A certified true copy of the judgment together with a certificate of
finality issued by the Branch Clerk of the Court which rendered the decision in accordance with the
preceding Section shall be served by the petitioner upon the Civil Registrar concerned within thirty (30)
days from receipt of the certificate of finality. The Civil Registrar shall forthwith enter the rescission
decree in the register and submit proof of compliance to the court issuing the decree and the Clerk of
Court within thirty (30) days from receipt of the decree.
The Clerk of Court shall enter the compliance in accordance with Section 17 hereof.
SEC. 25. Repeal. - This supersedes Rule 99 on Adoption and Rule 100 of the Rules of Court.
B. Inter-Country Adoption
Sec. 26. Applicability. – The following sections apply to inter-country adoption of Filipino children by
foreign nationals and Filipino citizens permanently residing abroad.
a) a) consider inter-country adoption as an alternative means of child care, if the child cannot be
placed in a foster or an adoptive family or cannot, in any suitable manner, be cared for in the
Philippines;
b) ensure that the child subject of inter-country adoption enjoys the same protection accorded to
children in domestic adoption; and
c) take all measures to ensure that the placement arising therefrom does not result in improper
financial gain for those involved.
Sec. 28. Where to File Petition. – A verified petition to adopt a Filipino child may be filed by a foreign
national or Filipino citizen permanently residing abroad with the Family Court having jurisdiction over
the place where the child resides or may be found.
Sec. 29. Who may be adopted. – Only a child legally available for domestic adoption may be the subject
of inter-country adoption.
a) a) his age and the age of the child to be adopted, showing that he is at least twenty-seven (27)
years of age and at least sixteen (16) years older than the child to be adopted at the time of
application, unless the petitioner is the parent by nature of the child to be adopted or the spouse
of such parent, in which case the age difference does not apply;
b) b) if married, the name of the spouse who must be joined as co-petitioner except when the
adoptee is a legitimate child of his spouse;
c) c) that he has the capacity to act and assume all rights and responsibilities of parental authority
under his national laws, and has undergone the appropriate counseling from an accredited
counselor in his country;
f) f) that he can provide the proper care and support and instill the necessary moral values and
example to all his children, including the child to be adopted;
g) g) that he agrees to uphold the basic rights of the child, as embodied under Philippine laws and
the U. N. Convention on the Rights of the Child, and to abide by the rules and regulations issued to
implement the provisions of Republic Act No. 8043;
h) h) that he comes from a country with which the Philippines has diplomatic relations and whose
i) i) that he possesses all the qualifications and none of the disqualifications provided in this Rule,
in Republic Act No. 8043 and in all other applicable Philippine laws.
Sec. 31. Annexes. - The petition for adoption shall contain the following annexes written and officially
translated in English:
b) b) Marriage contract, if married, and, if applicable, the divorce decree, or judgment dissolving
the marriage;
c) c) Sworn statement of consent of petitioner’s biological or adopted children above ten (10)
years of age;
d) d) Physical, medical and psychological evaluation of the petitioner certified by a duly licensed
physician and psychologist;
e) e) Income tax returns or any authentic document showing the current financial capability of the
petitioner;
f) f) Police clearance of petitioner issued within six (6) months before the filing of the petitioner;
g) g) Character reference from the local church/minister, the petitioner’s employer and a member
of the immediate community who have known the petitioner for at least five (5) years;
h) h) Full body postcard-size pictures of the petitioner and his immediate family taken at least six
(6) months before the filing of the petition.
Sec. 32. Duty of Court. – The court, after finding that the petition is sufficient in form and substance and
a proper case for inter-country adoption, shall immediately transmit the petition to the Inter-Country
Adoption Board for appropriate action.
SEC. 33. Effectivity. - This Rule shall take effect on August 22, 2002 following its publication in a
newspaper of general circulation.
TITLE XI
SUMMARY JUDICIAL PROCEEDINGS IN THE FAMILY LAW
Art. 41. A marriage contracted by any person during subsistence of a previous marriage shall be null and
void, unless before the celebration of the subsequent marriage, the prior spouse had been absent for
four consecutive years and the spouse present has a well-founded belief that the absent spouse was
already dead. In case of disappearance where there is danger of death under the circumstances set forth
in the provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient.
For the purpose of contracting the subsequent marriage under the preceding paragraph the spouse
present must institute a summary proceeding as provided in this Code for the declaration of
presumptive death of the absentee, without prejudice to the effect of reappearance of the absent
spouse. (83a)
Art. 51. In said partition, the value of the presumptive legitimes of all common children, computed as of
the date of the final judgment of the trial court, shall be delivered in cash, property or sound securities,
unless the parties, by mutual agreement judicially approved, had already provided for such matters.
The children or their guardian or the trustee of their property may ask for the enforcement of the
judgment.
The delivery of the presumptive legitimes herein prescribed shall in no way prejudice the ultimate
successional rights of the children accruing upon the death of either of both of the parents; but the
value of the properties already received under the decree of annulment or absolute nullity shall be
considered as advances on their legitime. (n)
Art. 69. The husband and wife shall fix the family domicile. In case of disagreement, the court shall
decide.
The court may exempt one spouse from living with the other if the latter should live abroad or there are
other valid and compelling reasons for the exemption. However, such exemption shall not apply if the
same is not compatible with the solidarity of the family. (110a)
Art. 73. Either spouse may exercise any legitimate profession, occupation, business or activity without
the consent of the other. The latter may object only on valid, serious, and moral grounds.
In case of disagreement, the court shall decide whether or not:
(1) The objection is proper, and
(2) Benefit has occurred to the family prior to the objection or thereafter. If the benefit accrued prior to
the objection, the resulting obligation shall be enforced against the separate property of the spouse who
has not obtained consent.
The foregoing provisions shall not prejudice the rights of creditors who acted in good faith. (117a)
Art. 217. In case of foundlings, abandoned neglected or abused children and other children similarly
situated, parental authority shall be entrusted in summary judicial proceedings to heads of children's
homes, orphanages and similar institutions duly accredited by the proper government agency. (314a)
- v e r s u s - CORONA,
AZCUNA and
GARCIA,** JJ.
FRANCISCA R. MADRIÑAN,
Respondent. Promulgated:
July 12, 2007
x-- - - - -- - - - -- - - - -- - - - -- - - - -- - - - - -- - - - -- - - - - x
DE C I S I O N
CORONA, J.:
When a family breaks up, the children are always the victims. The ensuing battle for custody of the
minor children is not only a thorny issue but also a highly sensitive and heart-rending affair. Such is the
case here. Even the usually technical subject of jurisdiction became emotionally charged.
Petitioner Felipe N. Madriñan and respondent Francisca R. Madriñan were married on July 7, 1993 in
Parañaque City. They resided in San Agustin Village, Brgy. Moonwalk, Parañaque City.
Their union was blessed with three sons and a daughter: Ronnick, born on January 30, 1994; Phillip, born
on November 19, 1996; Francis Angelo, born on May 12, 1998 and Krizia Ann, born on December 12,
2000.
After a bitter quarrel on May 18, 2002, petitioner allegedly left their conjugal abode and took their three
sons with him to Ligao City, Albay and subsequently to Sta. Rosa, Laguna. Respondent sought the help of
her parents and parents-in-law to patch things up between her and petitioner to no avail. She then
brought the matter to the Lupong Tagapamayapa in their barangay but this too proved futile.
Thus respondent filed a petition for habeas corpus of Ronnick, Phillip and Francis Angelo in the Court of
Appeals, alleging that petitioner’s act of leaving the conjugal dwelling and going to Albay and then to
Laguna disrupted the education of their children and deprived them of their mother’s care. She prayed
that petitioner be ordered to appear and produce their sons before the court and to explain why they
should not be returned to her custody.
Petitioner and respondent appeared at the hearing on September 17, 2002. They initially agreed that
petitioner would return the custody of their three sons to respondent. Petitioner, however, had a
change of heart[1] and decided to file a memorandum.
On September 3, 2002, petitioner filed his memorandum[2] alleging that respondent was unfit to take
custody of their three sons because she was habitually drunk, frequently went home late at night or in
the wee hours of the morning, spent much of her time at a beer house and neglected her duties as a
mother. He claimed that, after their squabble on May 18, 2002, it was respondent who left, taking their
daughter with her. It was only then that he went to Sta. Rosa, Laguna where he worked as a tricycle
driver. He submitted a certification from the principal of the Dila Elementary School in Sta. Rosa, Laguna
that Ronnick and Phillip were enrolled there. He also questioned the jurisdiction of the Court of Appeals
claiming that under Section 5(b) of RA 8369 (otherwise known as the “Family Courts Act of 1997”) family
REMLAW Page 205
claiming that under Section 5(b) of RA 8369 (otherwise known as the “Family Courts Act of 1997”) family
courts have exclusive original jurisdiction to hear and decide the petition for habeas corpus filed by
respondent.[3]
For her part, respondent averred that she did not leave their home on May 18, 2002 but was driven out
by petitioner. She alleged that it was petitioner who was an alcoholic, gambler and drug addict.
Petitioner’s alcoholism and drug addiction impaired his mental faculties, causing him to commit acts of
violence against her and their children. The situation was aggravated by the fact that their home was
adjacent to that of her in-laws who frequently meddled in their personal problems.[4]
On October 21, 2002, the Court of Appeals[5] rendered a decision[6] asserting its authority to take
cognizance of the petition and ruling that, under Article 213 of the Family Code, respondent was entitled
to the custody of Phillip and Francis Angelo who were at that time aged six and four, respectively,
subject to the visitation rights of petitioner. With respect to Ronnick who was then eight years old, the
court ruled that his custody should be determined by the proper family court in a special proceeding on
custody of minors under Rule 99 of the Rules of Court.
Petitioner moved for reconsideration of the Court of Appeals decision but it was denied. Hence, this
recourse.
Petitioner challenges the jurisdiction of the Court of Appeals over the petition for habeas corpus and
insists that jurisdiction over the case is lodged in the family courts under RA 8369. He invokes Section
5(b) of RA 8369:
Section 5. Jurisdiction of Family Courts. – The Family Courts shall have exclusive original jurisdiction to
hear and decide the following cases:
xxx x xx x xx
b) Petitions for guardianship, custody of children, habeas corpus in relation to the latter;
xxx x xx x xx
Petitioner is wrong.
In Thornton v. Thornton,*7+ this Court resolved the issue of the Court of Appeals’ jurisdiction to issue
writs of habeas corpus in cases involving custody of minors in the light of the provision in RA 8369 giving
family courts exclusive original jurisdiction over such petitions:
The Court of Appeals should take cognizance of the case since there is nothing in RA 8369 that revoked
its jurisdiction to issue writs of habeas corpus involving the custody of minors.
xxx x xx x xx
We rule therefore that RA 8369 did not divest the Court of Appeals and the Supreme Court of their
jurisdiction over habeas corpus cases involving the custody of minors.
xxx x xx x xx
The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals
and Supreme Court to issue writs of habeas corpus relating to the custody of minors. Further, it cannot
be said that the provisions of RA 8369, RA 7092 [An Act Expanding the Jurisdiction of the Court of
Appeals] and BP 129 [The Judiciary Reorganization Act of 1980] are absolutely incompatible since RA
8369 does not prohibit the Court of Appeals and the Supreme Court from issuing writs of habeas corpus
in cases involving the custody of minors. Thus, the provisions of RA 8369 must be read in harmony with
RA 7029 and BP 129 – that family courts have concurrent jurisdiction with the Court of Appeals and the
Supreme Court in petitions for habeas corpus where the custody of minors is at issue.[8] (emphases
supplied)
The jurisdiction of the Court of Appeals over petitions for habeas corpus was further affirmed by A.M.
No. 03-03-04-SC (April 22, 2004) in Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation
to Custody of Minors:
In any case, whatever uncertainty there was has been settled with the adoption of A.M. No. 03-03-04-SC
Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors. Section 20 of
the rule provides that:
Section 20. Petition for writ of habeas corpus. – A verified petition for a writ of habeas corpus involving
custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial
region to which the Family Court belongs.
xxx x xx x xx
The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its members
and, if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be made
returnable to a Family Court or to any regular court within the region where the petitioner resides or
where the minor may be found for hearing and decision on the merits.
From the foregoing, there is no doubt that the Court of Appeals and Supreme Court have concurrent
jurisdiction with family courts in habeas corpus cases where the custody of minors is involved.[9]
(emphases supplied)
We note that after petitioner moved out of their Parañaque residence on May 18, 2002, he twice
transferred his sons to provinces covered by different judicial regions. This situation is what the
Thornton interpretation of RA 8369’s provision on jurisdiction precisely addressed:
[The reasoning that by giving family courts exclusive jurisdiction over habeas corpus cases, the
lawmakers intended them to be the sole courts which can issue writs of habeas corpus] will result in an
iniquitous situation, leaving individuals like [respondent] without legal recourse in obtaining custody of
their children. Individuals who do not know the whereabouts of minors they are looking for would be
helpless since they cannot seek redress from family courts whose writs are enforceable only in their
respective territorial jurisdictions. Thus, if a minor is being transferred from one place to another, which
seems to be the case here, the petitioner in a habeas corpus case will be left without legal remedy. This
lack of recourse could not have been the intention of the lawmakers when they passed [RA 8369].[10]
Moreover, a careful reading of Section 5(b) of RA 8369 reveals that family courts are vested with original
exclusive jurisdiction in custody cases, not in habeas corpus cases. Writs of habeas corpus which may be
issued exclusively by family courts under Section 5(b) of RA 8369 pertain to the ancillary remedy that
may be availed of in conjunction with a petition for custody of minors under Rule 99 of the Rules of
Court. In other words, the issuance of the writ is merely ancillary to the custody case pending before the
family court. The writ must be issued by the same court to avoid splitting of jurisdiction, conflicting
decisions, interference by a co-equal court and judicial instability.
The rule therefore is: when by law jurisdiction is conferred on a court or judicial officer, all auxiliary
writs, processes and other means necessary to carry it into effect may be employed by such court or
officer.[11] Once a court acquires jurisdiction over the subject matter of a case, it does so to the
exclusion of all other courts, including related incidents and ancillary matters.
Section 5. Powers and Functions of the Commission.– 5.2. The Commission’s jurisdiction over all cases
enumerated under section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of
general jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme Court in the
exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction
over the cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate
disputes submitted for final resolution which should be resolved within one (1) year from the enactment
of this Code. The Commission shall retain jurisdiction over pending suspension of
payment/rehabilitation cases filed as of 30 June 2000 until finally disposed.
RULE 1
GENERAL PROVISIONS
SECTION 1. (a) Cases covered. – These Rules shall govern the procedure to be observed in civil cases
involving the following:
1. Devices or schemes employed by, or any act of, the board of directors, business associates,
officers or partners, amounting to fraud or misrepresentation which may be detrimental to
the interest of the public and/or of the stockholders, partners, or members of any
corporation, partnership, or association;
2. Controversies arising out of intra-corporate, partnership, or association relations, between
and among stockholders, members, or associates; and between, any or all of them and the
corporation, partnership, or association of which they are stockholders, members, or
associates, respectively;
3. Controversies in the election or appointment of directors, trustees, officers, or managers of
corporations, partnerships, or associations;
4. Derivative suits; and
5. Inspection of corporate books.
(b) prohibition against nuisance and harassment suits. - Nuisance and harassment suits are prohibited.
In determining whether a suit is a nuisance or harassment suit, the court shall consider, among others,
the following:
1. The extent of the shareholding or interest of the initiating stockholder or member;
2. Subject matter of the suit;
3. Legal and factual basis of the complaint;
4. Availability of appraisal rights for the act or acts complained of; and
5. Prejudice or damage to the corporation, partnership, or association in relation to the relief
sought.
In case of nuisance or harassment suits, the court may, moto proprio or upon motion, forthwith dismiss
the case.
SEC. 2. Suppletory application of the Rules of Court. – The Rules of Court, in so far as they may be
applicable and are not inconsistent with these Rules, are hereby adopted to form an integral part of
these Rules.
SEC. 3. Construction. – These Rules shall be liberally construed in order to promote their objective of
securing a just, summary, speedy and inexpensive determination of every action or proceeding.
SEC. 4. Executory nature of decisions and orders. – All decisions and orders issued under these Rules
shall immediately be executory. No appeal or petition taken therefrom shall stay the enforcement or
implementation of the decision or order, unless restrained by an appellate court. Interlocutory orders
shall not be subject to appeal.
RULE 2
COMMENCEMENT OF ACTION AND PLEADINGS
SECTION 1. Commencement of action. – An action under these Rules is commenced by the filing of a
verified complaint with the proper Regional Trial Court.
SEC. 2. Pleadings allowed. – The only pleadings allowed to be filed under these Rules are the complaint,
answer, compulsory counterclaims or cross-claims pleaded in the answer, and the answer to the
counterclaims or cross-claims.
SEC. 3. Verification. – The complaint and the answer shall be verified by an affidavit stating that the
affiant has read the pleading and the allegations therein are true and correct based on his own personal
knowledge or on authentic records.
SEC. 4. Complaint. – The complaint shall state or contain:
1. the names, addresses, and other relevant personal or juridical circumstances of the parties;
2. all facts material and relevant to the plaintiff’s cause or causes of action, which shall be
supported by affidavits of the plaintiff or his witnesses and copies of documentary and other
evidence supportive of such cause or causes of action;
3. the law, rule, or regulation relied upon, violated, or sought to be enforced;
4. a certification that (a) the plaintiff 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 action or claim, a complete statement of the present status thereof; and (c) if he
RULE 3
RULE 4
PRE-TRIAL
SECTION 1. Pre-trial conference; mandatory nature. – Within five (5) days after the period for availment
of, and compliance with, the modes of discovery prescribed in Rule 3 hereof, whichever comes later, the
court shall issue and serve an order immediately setting the case for pre-trial conference and directing
the parties to submit their respective pre-trial briefs. The parties shall file with the court and furnish
each other copies of their respective pre-trial brief in such manner as to ensure its receipt by the court
and the other party at least five (5) days before the date set for the pre-trial.
The parties shall set forth in their pre-trial briefs, among other matters, the following:
1. Brief statement of the nature of the case, which shall summarize the theory or theories of
the party in clear and concise language;
2. Allegations expressly admitted by either or both parties;
3. Allegations deemed admitted by either or both parties;
4. Documents not specifically denied under oath by either or both parties;
5. Amendments to the pleadings;
6. Statement of the issues, which shall separately summarize the factual and legal issues
involved in the case;
7. Names of witnesses to be presented and the summary of their testimony as contained in
their affidavits supporting their positions on each of the issues;
8. All other pieces of evidence, whether documentary or otherwise and their respective
purposes;
9. Specific proposals for an amicable settlement;
10. Possibility of referral to mediation or other alternative modes of dispute resolution;
11. Proposed schedule of hearings; and
12. Such other matters as may aid in the just and speedy disposition of the case.
SEC. 2. Nature and purpose of pre-trial conference. – During the pre-trial conference, the court shall,
with its active participation, ensure that the parties consider in detail all of the following:
1. The possibility of an amicable settlement;
2. Referral of the dispute to mediation or other forms of dispute resolution;
3. Facts that need not be proven, either because they are matters of judicial notice or
expressly or deemed admitted;
4. Amendments to the pleadings;
5. The possibility of obtaining stipulations and admissions of facts and documents;
6. Objections to the admissibility of testimonial, documentary and other evidence;
7. Objections to the form or substance of any affidavit, or part thereof;
8. Simplification of the issues;
9. The possibility of submitting the case for decision on the basis of position papers, affidavits,
documentary and real evidence;
10. A complete schedule of hearing dates; and
RULE 5
TRIAL
SECTION 1. Witnesses. – If the court deems necessary to hold hearings to determine specific factual
matters before rendering judgment, it shall, in the pre-trial order, set the case for trial on the dates
agreed upon by the parties.
Only persons whose affidavits were submitted may be presented as witnesses, except in cases specified
in section 8, Rule 2 of these Rules. The affidavits of the witnesses shall serve as their direct testimonies,
subject to cross-examination in accordance with existing rules on evidence.
SEC. 2. Trial schedule. – Unless judgment is rendered pursuant to Rule 4 of these Rules, the initial
hearing shall be held not later than thirty (30) days from the date of the pre-trial order. The hearings
shall be completed not later than sixty (60) days from the date of the initial hearing, thirty (30) days of
which shall be allotted to the plaintiffs and thirty (30) days to the defendants in the manner prescribed
in the rep-trial order. The failure of a party to present a witness on a scheduled hearing date shall be
deemed a waiver of such hearing date. However, a party may present such witness or witnesses within
his remaining allotted hearing dates.
SEC. 3. Written offer of evidence. – Evidence not otherwise admitted by the parties or ruled upon by the
court during the pre-trial conference shall be offered in writing not later than five (5) days from the
completion of the presentation of evidence of the party concerned. The opposing party shall have five
(5) days from receipt of the offer to file his comments or objections. The court shall make its ruling on
the offer within five (5) days from the expiration of the period to file comments or objections.
SEC. 4. Memoranda. – Immediately after ruling on the last offer of evidence, the court shall order the
parties to simultaneously file, within thirty (30) days from receipt of the order, their respective
memoranda. The memoranda shall contain the following:
1. A "Statement of the Case," which is a clear and concise statement of the nature of the
action and a summary of the proceedings;
2. A "Statement of the Facts," which is a clear and concise statement in narrative form of the
established facts, with reference to the testimonial, documentary or other evidence in
support thereof;
3. A "Statement of the issues," which is a clear and concise statement of the issues presented
to the court for resolution;
4. The "Arguments," which is a clear and concise presentation of the argument in support of
each issue; and
RULE 6
ELECTION CONTESTS
SECTION 1. Cases covered. – The provisions of this rule shall apply to election contests in stock and non-
stock corporations.
SEC. 2. Definition. – An election contest refers to any controversy or dispute involving title or claim to
any elective office in a stock or non-stock corporation, the validation of proxies, the manner and validity
of elections, and the qualifications of candidates, including the proclamation of winners, to the office of
director, trustee or other officer directly elected by the stockholders in a close corporation or by
members of a non-stock corporation where the articles of incorporation or by-laws so provide.
SEC. 3. Complaint. –In addition to the requirements in section 4, Rule 2 of these Rules, the complaint in
an election contest must state the following:
1. The case was filed within fifteen (15) days from the date of the election if the by-laws of the
corporation do not provide for a procedure for resolution of the controversy, or within
fifteen (15) days from the resolution of the controversy by the corporation as provided in its
by-laws; and
2. The plaintiff has exhausted all intra-corporate remedies in election cases as provided for in
the by-laws of the corporation.
SEC. 4. Duty of the court upon the filing of the complaint. – Within two (2) days from the filing of the
complaint, the court, upon a consideration of the allegations thereof, may dismiss the complaint
outright if it is not sufficient in form and substance, or, if it is sufficient, order the issuance of summons
which shall be served, together with a copy of the complaint, on the defendant within two (2) days from
its issuance.
SEC. 5. Answer. – The defendant shall file his answer to the complaint, serving a copy thereof on the
plaintiff, within ten (10) days from service of summons and the complaint. The answer shall contain the
matters required in section 6, Rule 2 of these Rules.
SEC. 6. Affidavits, documentary and other evidence. – The parties shall attach to the complaint and
answer the affidavits of witnesses, documentary and other evidence in support thereof, if any.
Acting on the Memorandum of the Committee on SEC Cases submitting for this Court’s consideration
and approval the Proposed Interim Rules of Procedure for Intra-Corporate Controversies, the Court
Resolved to APPROVE the same.
The Interim Rules shall take effect on April 1, 2001 following its publication in two (2) newspapers of
general circulation.
March 13, 2001, Manila.
(Sgd.) HILARIO G. DAVIDE, JR., Chief Justice
(Sgd.) JOSUE N. BELLOSILLO, Associate Justice
(Sgd.) JOSE A. R. MELO, Associate Justice
(Sgd.) REYNATO S. PUNO, Associate Justice
(Sgd.) JOSE C. VITUG, Associate Justice
(Sgd.) SANTIAGO M. KAPUNAN, Associate Justice
(Sgd.) VICENTE V. MENDOZA, Associate Justice
(Sgd.) ARTEMIO V. PANGANIBAN, Associate Justice
(Sgd.) LEONARDO A. QUISUMBING, Associate Justice
(Sgd.) (Sgd.)
BERNARDO P. PARDO ARTURO B. BUENA
Associate Justice Associate Justice
(Sgd). (Sgd.)
SABINO R. DE LEON, JR. ANGELINA SANDOVAL-GUTIERREZ
Associate Justice Associate Justice
The Lawphil Project - Arellano Law Foundation
EN BANC
Agenda for December 2, 2008
Item No. 76
EN BANC
A.M. NO. 00-8-10-SC
RULES OF PROCEDURE ON CORPORATE REHABILITATION
RESOLUTION
Acting on the recommendation of The Subcommittee on Special Rules for Special Commercial Courts,
submitting for the consideration and approval of the Court the proposed “Rules of Procedure on
Corporate Rehabilitation (2008),” the Court Resolved to APPROVE the same.
The Rule shall take effect on January 16, 2009 following its publication in two (2) newspapers of general
circulation.
December 2, 2008.
———————
RULES OF PROCEDURE ON CORPORATE REHABILITATION (2008)
RULE 1
COVERAGE
SECTION 1. Scope.—These Rules shall apply to petitions for rehabilitation of corporations, partnerships
and associations pursuant to Presidential Decree No. 902-A, as amended.
SEC. 2. Applicability to Rehabilitation Cases Transferred from the Securities and Exchange
Commission. — Cases for rehabilitation transferred from the Securities and Exchange Commission to the
Regional Trial Courts pursuant to Republic Act No. 8799, otherwise known as The Securities Regulation
Code, shall likewise be governed by these Rules.
RULE 2
DEFINITION OF TERMS AND CONSTRUCTION
SEC. 1. Definition of Terms.—For purposes of these Rules:
“Administrative Expenses” shall refer to (a) reasonable and necessary expenses that are incurred in
connection with the filing of the petition; (b) expenses incurred in the ordinary course of business after
the issuance of the stay order, excluding interest payable to the creditors for loans and credit
accommodations existing at the time of the issuance of the stay order; and (c) other expenses that are
authorized under these Rules.
“Affidavit of General Financial Condition” shall refer to a verified statement on the general financial
condition of the debtor required in Section 2, Rule 4 of these Rules.
“Affiliate” is a corporation that directly or indirectly, through one or more intermediaries, is controlled
by, or is under the common control of another corporation, which thereby becomes its parent
corporation.
“Asset” is anything of value that can be in the form of money, such as cash at the bank or amounts
owed; fixed assets such as property or equipment; or intangibles including intellectual property, the
book value of which is shown in the last three audited financial statements immediately preceding the
filing of the petition. In case the debtor is less than three years in operation, it is sufficient that the book
value is based on the audited financial statement/s for the two years or year immediately preceding the
filing of the petition, as the case may be.
“Board of Directors” shall include the executive committee or the management of a partnership or
association.
“Claim” shall include all claims or demands of whatever nature or character against a debtor or its
property, whether for money or otherwise.
“Control” is the power of a parent corporation to direct or govern the financial and operating policies of
an enterprise so as to obtain benefits from its activities. Control is presumed to exist when the parent
OSCAR C. REYES, PETITIONER, VS. HON. REGIONAL TRIAL COURT OF MAKATI, BRANCH 142, ZENITH INSURANCE
CORPORATION, AND RODRIGO C. REYES, RESPONDENTS.
DE CI S I ON
BRION, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Decision of the Court of
Appeals (CA)[1] promulgated on May 26, 2004 in CA-G.R. SP No. 74970. The CA Decision affirmed the Order of the
Regional Trial Court (RTC), Branch 142, Makati City dated November 29, 2002[2] in Civil Case No. 00-1553 (entitled
"Accounting of All Corporate Funds and Assets, and Damages") which denied petitioner Oscar C. Reyes' (Oscar) Motion
to Declare Complaint as Nuisance or Harassment Suit.
BACKGROUND FACTS
Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of the spouses Pedro and Anastacia
Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith Insurance Corporation (Zenith), a
domestic corporation established by their family. Pedro died in 1964, while Anastacia died in 1993. Although Pedro's
estate was judicially partitioned among his heirs sometime in the 1970s, no similar settlement and partition appear to
have been made with Anastacia's estate, which included her shareholdings in Zenith. As of June 30, 1990, Anastacia
owned 136,598 shares of Zenith; Oscar and Rodrigo owned 8,715,637 and 4,250 shares, respectively.[3]
On May 9, 2000, Zenith and Rodrigo filed a complaint[4] with the Securities and Exchange Commission (SEC) against
Oscar, docketed as SEC Case No. 05-00-6615. The complaint stated that it is "a derivative suit initiated and filed by the
complainant Rodrigo C. Reyes to obtain an accounting of the funds and assets of ZENITH INSURANCE CORPORATION
which are now or formerly in the control, custody, and/or possession of respondent [herein petitioner Oscar] and to
determine the shares of stock of deceased spouses Pedro and Anastacia Reyes that were arbitrarily and fraudulently
appropriated [by Oscar] for himself [and] which were not collated and taken into account in the partition, distribution,
and/or settlement of the estate of the deceased spouses, for which he should be ordered to account for all the income
from the time he took these shares of stock, and should now deliver to his brothers and sisters their just and respective
shares."[5] [Emphasis supplied.]
In his Answer with Counterclaim,[6] Oscar denied the charge that he illegally acquired the shares of Anastacia Reyes. He
asserted, as a defense, that he purchased the subject shares with his own funds from the unissued stocks of Zenith, and
that the suit is not a bona fide derivative suit because the requisites therefor have not been complied with. He thus
questioned the SEC's jurisdiction to entertain the complaint because it pertains to the settlement of the estate of
Anastacia Reyes.
When Republic Act (R.A.) No. 8799[7] took effect, the SEC's exclusive and original jurisdiction over cases enumerated in
Section 5 of Presidential Decree (P.D.) No. 902-A was transferred to the RTC designated as a special commercial court.[8]
The records of Rodrigo's SEC case were thus turned over to the RTC, Branch 142, Makati, and docketed as Civil Case No.
00-1553.
On October 22, 2002, Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit.[9] He claimed that the
complaint is a mere nuisance or harassment suit and should, according to the Interim Rules of Procedure for Intra-
Corporate Controversies, be dismissed; and that it is not a bona fide derivative suit as it partakes of the nature of a
petition for the settlement of estate of the deceased Anastacia that is outside the jurisdiction of a special commercial
court. The RTC, in its Order dated November 29, 2002 (RTC Order), denied the motion in part and declared:
A close reading of the Complaint disclosed the presence of two (2) causes of action, namely: a) a derivative suit for
accounting of the funds and assets of the corporation which are in the control, custody, and/or possession of the
respondent [herein petitioner Oscar] with prayer to appoint a management committee; and b) an action for
determination of the shares of stock of deceased spouses Pedro and Anastacia Reyes allegedly taken by respondent, its
Oscar thereupon went to the CA on a petition for certiorari, prohibition, and mandamus[11] and prayed that the RTC
Order be annulled and set aside and that the trial court be prohibited from continuing with the proceedings. The
appellate court affirmed the RTC Order and denied the petition in its Decision dated May 26, 2004. It likewise denied
Oscar's motion for reconsideration in a Resolution dated October 21, 2004.
Petitioner now comes before us on appeal through a petition for review on certiorari under Rule 45 of the Rules of Court.
ASSIGNMENT OF ERRORS
Petitioner Oscar presents the following points as conclusions the CA should have made:
1. that the complaint is a mere nuisance or harassment suit that should be dismissed under the Interim Rules of
Procedure of Intra-Corporate Controversies; and
2. that the complaint is not a bona fide derivative suit but is in fact in the nature of a petition for settlement of
estate; hence, it is outside the jurisdiction of the RTC acting as a special commercial court.
Accordingly, he prays for the setting aside and annulment of the CA decision and resolution, and the dismissal of
Rodrigo's complaint before the RTC.
THE COURT'S RULING
The core question for our determination is whether the trial court, sitting as a special commercial court, has jurisdiction
over the subject matter of Rodrigo's complaint. To resolve it, we rely on the judicial principle that "jurisdiction over the
subject matter of a case 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."[12]
P.D. No. 902-A enumerates the cases over which the SEC (now the RTC acting as a special commercial court) exercises
exclusive jurisdiction:
SECTION 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over
corporations, partnership, and other forms of associations registered with it as expressly granted under existing laws and
decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving:
a) Devices or schemes employed by or any acts of the board of directors, business associates, its officers or partners,
amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the
stockholders, partners, members of associations or organizations registered with the Commission.
b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members, or
associates; between any or all of them and the corporation, partnership or association of which they are stockholders,
members, or associates, respectively; and between such corporation, partnership or association and the State insofar as
it concerns their individual franchise or right to exist as such entity; and
c) Controversies in the election or appointment of directors, trustees, officers, or managers of such corporations,
partnerships, or associations.
The allegations set forth in Rodrigo's complaint principally invoke Section 5, paragraphs (a) and (b) above as basis for the
exercise of the RTC's special court jurisdiction. Our focus in examining the allegations of the complaint shall therefore be
on these two provisions.
The rule is that a complaint must contain a plain, concise, and direct statement of the ultimate facts constituting the
plaintiff's cause of action and must specify the relief sought.[13] Section 5, Rule 8 of the Revised Rules of Court provides
that in all averments of fraud or mistake, the circumstances constituting fraud or mistake must be stated with
particularity.[14] These rules find specific application to Section 5(a) of P.D. No. 902-A which speaks of corporate devices
or schemes that amount to fraud or misrepresentation detrimental to the public and/or to the stockholders.
3.1. Respondent Oscar C. Reyes, through other schemes of fraud including misrepresentation, unilaterally, and for his
own benefit, capriciously transferred and took possession and control of the management of Zenith Insurance
Corporation which is considered as a family corporation, and other properties and businesses belonging to Spouses
Pedro and Anastacia Reyes.
xxxx
4.1. During the increase of capitalization of Zenith Insurance Corporation, sometime in 1968, the property covered by
TCT No. 225324 was illegally and fraudulently used by respondent as a collateral.
xxxx
5. The complainant Rodrigo C. Reyes discovered that by some manipulative scheme, the shareholdings of their
deceased mother, Doña Anastacia C. Reyes, shares of stocks and [sic] valued in the corporate books at
P7,699,934.28, more or less, excluding interest and/or dividends, had been transferred solely in the name of
respondent. By such fraudulent manipulations and misrepresentation, the shareholdings of said respondent Oscar C.
Reyes abruptly increased to P8,715,637.00 [sic] and becomes [sic] the majority stockholder of Zenith Insurance
Corporation, which portion of said shares must be distributed equally amongst the brothers and sisters of the
respondent Oscar C. Reyes including the complainant herein.
xxxx
9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C. Reyes valued at P7,099,934.28 were illegally
and fraudulently transferred solely to the respondent's [herein petitioner Oscar] name and installed himself as a
majority stockholder of Zenith Insurance Corporation [and] thereby deprived his brothers and sisters of their respective
equal shares thereof including complainant hereto.
xxxx
10.1 By refusal of the respondent to account of his [sic] shareholdings in the company, he illegally and fraudulently
transferred solely in his name wherein [sic] the shares of stock of the deceased Anastacia C. Reyes [which] must be
properly collated and/or distributed equally amongst the children, including the complainant Rodrigo C. Reyes herein,
to their damage and prejudice.
xxxx
11.1 By continuous refusal of the respondent to account of his [sic] shareholding with Zenith Insurance Corporation[,]
particularly the number of shares of stocks illegally and fraudulently transferred to him from their deceased parents Sps.
Pedro and Anastacia Reyes[,] which are all subject for collation and/or partition in equal shares among their children.
[Emphasis supplied.]
Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely conclusions of law that,
without supporting statements of the facts to which the allegations of fraud refer, do not sufficiently state an effective
cause of action.[15] The late Justice Jose Feria, a noted authority in Remedial Law, declared that fraud and mistake are
required to be averred with particularity in order to enable the opposing party to controvert the particular facts allegedly
constituting such fraud or mistake.[16]
Tested against these standards, we find that the charges of fraud against Oscar were not properly supported by the
required factual allegations. While the complaint contained allegations of fraud purportedly committed by him, these
allegations are not particular enough to bring the controversy within the special commercial court's jurisdiction; they are
not statements of ultimate facts, but are mere conclusions of law: how and why the alleged appropriation of shares can
Not every allegation of fraud done in a corporate setting or perpetrated by corporate officers will bring the case within
the special commercial court's jurisdiction. To fall within this jurisdiction, there must be sufficient nexus showing that the
corporation's nature, structure, or powers were used to facilitate the fraudulent device or scheme. Contrary to this
concept, the complaint presented a reverse situation. No corporate power or office was alleged to have facilitated the
transfer of the shares; rather, Oscar, as an individual and without reference to his corporate personality, was alleged to
have transferred the shares of Anastacia to his name, allowing him to become the majority and controlling stockholder
of Zenith, and eventually, the corporation's President. This is the essence of the complaint read as a whole and is
particularly demonstrated under the following allegations:
5. The complainant Rodrigo C. Reyes discovered that by some manipulative scheme, the shareholdings of their deceased
mother, Doña Anastacia C. Reyes, shares of stocks and *sic+ valued in the corporate books at P7,699,934.28, more or
less, excluding interest and/or dividends, had been transferred solely in the name of respondent. By such fraudulent
manipulations and misrepresentation, the shareholdings of said respondent Oscar C. Reyes abruptly increased to
P8,715,637.00 [sic] and becomes [sic] the majority stockholder of Zenith Insurance Corporation, which portion of said
shares must be distributed equally amongst the brothers and sisters of the respondent Oscar C. Reyes including the
complainant herein.
xxxx
9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C. Reyes valued at P7,099,934.28 were illegally
and fraudulently transferred solely to the respondent's [herein petitioner Oscar] name and installed himself as a
majority stockholder of Zenith Insurance Corporation [and] thereby deprived his brothers and sisters of their respective
equal shares thereof including complainant hereto. [Emphasis supplied.]
In ordinary cases, the failure to specifically allege the fraudulent acts does not constitute a ground for dismissal since
such defect can be cured by a bill of particulars. In cases governed by the Interim Rules of Procedure on Intra-Corporate
Controversies, however, a bill of particulars is a prohibited pleading.[17] It is essential, therefore, for the complaint to
show on its face what are claimed to be the fraudulent corporate acts if the complainant wishes to invoke the court's
special commercial jurisdiction.
We note that twice in the course of this case, Rodrigo had been given the opportunity to study the propriety of
amending or withdrawing the complaint, but he consistently refused. The court's function in resolving issues of
jurisdiction is limited to the review of the allegations of the complaint and, on the basis of these allegations, to the
determination of whether they are of such nature and subject that they fall within the terms of the law defining the
court's jurisdiction. Regretfully, we cannot read into the complaint any specifically alleged corporate fraud that will call
for the exercise of the court's special commercial jurisdiction. Thus, we cannot affirm the RTC's assumption of
jurisdiction over Rodrigo's complaint on the basis of Section 5(a) of P.D. No. 902-A.[18]
Intra-Corporate Controversy
A review of relevant jurisprudence shows a development in the Court's approach in classifying what constitutes an intra-
corporate controversy. Initially, the main consideration in determining whether a dispute constitutes an intra-corporate
controversy was limited to a consideration of the intra-corporate relationship existing between or among the parties.[19]
The types of relationships embraced under Section 5(b), as declared in the case of Union Glass & Container Corp. v.
SEC,[20] were as follows:
a) between the corporation, partnership, or association and the public;
b) between the corporation, partnership, or association and its stockholders, partners, members, or officers;
c) between the corporation, partnership, or association and the State as far as its franchise, permit or license to operate
is concerned; and
d) among the stockholders, partners, or associates themselves. [Emphasis supplied.]
The existence of any of the above intra-corporate relations was sufficient to confer jurisdiction to the SEC, regardless of
the subject matter of the dispute. This came to be known as the relationship test.
However, in the 1984 case of DMRC Enterprises v. Esta del Sol Mountain Reserve, Inc.,[21]the Court introduced the nature
of the controversy test. We declared in this case that it is not the mere existence of an intra-corporate relationship that
gives rise to an intra-corporate controversy; to rely on the relationship test alone will divest the regular courts of their
jurisdiction for the sole reason that the dispute involves a corporation, its directors, officers, or stockholders. We saw
that there is no legal sense in disregarding or minimizing the value of the nature of the transactions which gives rise to
the dispute.
Under the nature of the controversy test, the incidents of that relationship must also be considered for the purpose of
ascertaining whether the controversy itself is intra-corporate.[22] The controversy must not only be rooted in the
existence of an intra-corporate relationship, but must as well pertain to the enforcement of the parties' correlative rights
and obligations under the Corporation Code and the internal and intra-corporate regulatory rules of the corporation. If
the relationship and its incidents are merely incidental to the controversy or if there will still be conflict even if the
relationship does not exist, then no intra-corporate controversy exists.
The Court then combined the two tests and declared that jurisdiction should be determined by considering not only the
status or relationship of the parties, but also the nature of the question under controversy.[23] This two-tier test was
adopted in the recent case of Speed Distribution, Inc. v. Court of Appeals:[24]
To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the branches of
the RTC specifically designated by the Court to try and decide such cases, two elements must concur: (a) the status or
relationship of the parties; and (2) the nature of the question that is the subject of their controversy.
The first element requires that the controversy must arise out of intra-corporate or partnership relations between any or
all of the parties and the corporation, partnership, or association of which they are stockholders, members or associates;
between any or all of them and the corporation, partnership, or association of which they are stockholders, members, or
associates, respectively; and between such corporation, partnership, or association and the State insofar as it concerns
their individual franchises. The second element requires that the dispute among the parties be intrinsically connected
with the regulation of the corporation. If the nature of the controversy involves matters that are purely civil in character,
necessarily, the case does not involve an intra-corporate controversy.
Given these standards, we now tackle the question posed for our determination under the specific circumstances of this
case:
Is there an intra-corporate relationship between the parties that would characterize the case as an intra-corporate
dispute?
We point out at the outset that while Rodrigo holds shares of stock in Zenith, he holds them in two capacities: in his own
right with respect to the 4,250 shares registered in his name, and as one of the heirs of Anastacia Reyes with respect to
the 136,598 shares registered in her name. What is material in resolving the issues of this case under the allegations of
the complaint is Rodrigo's interest as an heir since the subject matter of the present controversy centers on the shares of
stocks belonging to Anastacia, not on Rodrigo's personally-owned shares nor on his personality as shareholder owning
these shares. In this light, all reference to shares of stocks in this case shall pertain to the shareholdings of the deceased
Anastacia and the parties' interest therein as her heirs.
Article 777 of the Civil Code declares that the successional rights are transmitted from the moment of death of the
decedent. Accordingly, upon Anastacia's death, her children acquired legal title to her estate (which title includes her
shareholdings in Zenith), and they are, prior to the estate's partition, deemed co-owners thereof.[25] This status as co-
owners, however, does not immediately and necessarily make them stockholders of the corporation. Unless and until
there is compliance with Section 63 of the Corporation Code on the manner of transferring shares, the heirs do not
become registered stockholders of the corporation. Section 63 provides:
Section 63. Certificate of stock and transfer of shares. - The capital stock of stock corporations shall be divided into
shares for which certificates signed by the president or vice-president, countersigned by the secretary or assistant
secretary, and sealed with the seal of the corporation shall be issued in accordance with the by-laws. Shares of stock so
issued are personal property and may be transferred by delivery of the certificate or certificates indorsed by the owner
or his attorney-in-fact or other person legally authorized to make the transfer. No transfer, however, shall be valid,
except as between the parties, until the transfer is recorded in the books of the corporation so as to show the names
of the parties to the transaction, the date of the transfer, the number of the certificate or certificates, and the number
of shares transferred. [Emphasis supplied.]
No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the
corporation.
Simply stated, the transfer of title by means of succession, though effective and valid between the parties involved (i.e.,
between the decedent's estate and her heirs), does not bind the corporation and third parties. The transfer must be
registered in the books of the corporation to make the transferee-heir a stockholder entitled to recognition as such both
by the corporation and by third parties.[26]
We note, in relation with the above statement, that in Abejo v. Dela Cruz[27] and TCL Sales Corporation v. Court of
In Abejo and TCL Sales, the transferees held definite and uncontested titles to a specific number of shares of the
corporation; after the transferee had established prima facie ownership over the shares of stocks in question,
registration became a mere formality in confirming their status as stockholders. In the present case, each of Anastacia's
heirs holds only an undivided interest in the shares. This interest, at this point, is still inchoate and subject to the
outcome of a settlement proceeding; the right of the heirs to specific, distributive shares of inheritance will not be
determined until all the debts of the estate of the decedent are paid. In short, the heirs are only entitled to what remains
after payment of the decedent's debts;[29] whether there will be residue remains to be seen. Justice Jurado aptly puts it
as follows:
No succession shall be declared unless and until a liquidation of the assets and debts left by the decedent shall have
been made and all his creditors are fully paid. Until a final liquidation is made and all the debts are paid, the right of the
heirs to inherit remains inchoate. This is so because under our rules of procedure, liquidation is necessary in order to
determine whether or not the decedent has left any liquid assets which may be transmitted to his heirs.[30] [Emphasis
supplied.]
Rodrigo must, therefore, hurdle two obstacles before he can be considered a stockholder of Zenith with respect to the
shareholdings originally belonging to Anastacia. First, he must prove that there are shareholdings that will be left to him
and his co-heirs, and this can be determined only in a settlement of the decedent's estate. No such proceeding has been
commenced to date. Second, he must register the transfer of the shares allotted to him to make it binding against the
corporation. He cannot demand that this be done unless and until he has established his specific allotment (and prima
facie ownership) of the shares. Without the settlement of Anastacia's estate, there can be no definite partition and
distribution of the estate to the heirs. Without the partition and distribution, there can be no registration of the transfer.
And without the registration, we cannot consider the transferee-heir a stockholder who may invoke the existence of an
intra-corporate relationship as premise for an intra-corporate controversy within the jurisdiction of a special commercial
court.
In sum, we find that - insofar as the subject shares of stock (i.e., Anastacia's shares) are concerned - Rodrigo cannot be
considered a stockholder of Zenith. Consequently, we cannot declare that an intra-corporate relationship exists that
would serve as basis to bring this case within the special commercial court's jurisdiction under Section 5(b) of PD 902-A,
as amended. Rodrigo's complaint, therefore, fails the relationship test.
The body rather than the title of the complaint determines the nature of an action.[31] Our examination of the complaint
yields the conclusion that, more than anything else, the complaint is about the protection and enforcement of
successional rights. The controversy it presents is purely civil rather than corporate, although it is denominated as a
"complaint for accounting of all corporate funds and assets."
Contrary to the findings of both the trial and appellate courts, we read only one cause of action alleged in the complaint.
The "derivative suit for accounting of the funds and assets of the corporation which are in the control, custody, and/or
possession of the respondent [herein petitioner Oscar]" does not constitute a separate cause of action but is, as correctly
claimed by Oscar, only an incident to the "action for determination of the shares of stock of deceased spouses Pedro and
Anastacia Reyes allegedly taken by respondent, its accounting and the corresponding delivery of these shares to the
parties' brothers and sisters." There can be no mistake of the relationship between the "accounting" mentioned in the
complaint and the objective of partition and distribution when Rodrigo claimed in paragraph 10.1 of the complaint that:
10.1 By refusal of the respondent to account of [sic] his shareholdings in the company, he illegally and fraudulently
transferred solely in his name wherein [sic] the shares of stock of the deceased Anastacia C. Reyes [which] must be
properly collated and/or distributed equally amongst the children including the complainant Rodrigo C. Reyes herein to
their damage and prejudice.
We particularly note that the complaint contained no sufficient allegation that justified the need for an accounting other
than to determine the extent of Anastacia's shareholdings for purposes of distribution.
Another significant indicator that points us to the real nature of the complaint are Rodrigo's repeated claims of illegal
and fraudulent transfers of Anastacia's shares by Oscar to the prejudice of the other heirs of the decedent; he cited these
allegedly fraudulent acts as basis for his demand for the collation and distribution of Anastacia's shares to the heirs.
These claims tell us unequivocally that the present controversy arose from the parties' relationship as heirs of Anastacia
and not as shareholders of Zenith. Rodrigo, in filing the complaint, is enforcing his rights as a co-heir and not as a
stockholder of Zenith. The injury he seeks to remedy is one suffered by an heir (for the impairment of his successional
rights) and not by the corporation nor by Rodrigo as a shareholder on record.
More than the matters of injury and redress, what Rodrigo clearly aims to accomplish through his allegations of illegal
acquisition by Oscar is the distribution of Anastacia's shareholdings without a prior settlement of her estate - an
objective that, by law and established jurisprudence, cannot be done. The RTC of Makati, acting as a special commercial
court, has no jurisdiction to settle, partition, and distribute the estate of a deceased. A relevant provision - Section 2 of
Rule 90 of the Revised Rules of Court - that contemplates properties of the decedent held by one of the heirs declares:
Questions as to advancement made or alleged to have been made by the deceased to any heir may be heard and
determined by the court having jurisdiction of the estate proceedings; and the final order of the court thereon shall be
binding on the person raising the questions and on the heir. [Emphasis supplied.]
Worth noting are this Court's statements in the case of Natcher v. Court of Appeals:[32]
Matters which involve settlement and distribution of the estate of the decedent fall within the exclusive province of
the probate court in the exercise of its limited jurisdiction.
xxxx
It is clear that trial courts trying an ordinary action cannot resolve to perform acts pertaining to a special proceeding
because it is subject to specific prescribed rules. [Emphasis supplied.]
That an accounting of the funds and assets of Zenith to determine the extent and value of Anastacia's shareholdings will
be undertaken by a probate court and not by a special commercial court is completely consistent with the probate
court's limited jurisdiction. It has the power to enforce an accounting as a necessary means to its authority to determine
the properties included in the inventory of the estate to be administered, divided up, and distributed. Beyond this, the
determination of title or ownership over the subject shares (whether belonging to Anastacia or Oscar) may be
conclusively settled by the probate court as a question of collation or advancement. We had occasion to recognize the
court's authority to act on questions of title or ownership in a collation or advancement situation in Coca v. Pangilinan[33]
where we ruled:
It should be clarified that whether a particular matter should be resolved by the Court of First Instance in the exercise of
its general jurisdiction or of its limited probate jurisdiction is in reality not a jurisdictional question. In essence, it is a
procedural question involving a mode of practice "which may be waived."
As a general rule, the question as to title to property should not be passed upon in the testate or intestate proceeding.
That question should be ventilated in a separate action. That general rule has qualifications or exceptions justified by
expediency and convenience.
Thus, the probate court may provisionally pass upon in an intestate or testate proceeding the question of inclusion in, or
exclusion from, the inventory of a piece of property without prejudice to its final determination in a separate action.
Although generally, a probate court may not decide a question of title or ownership, yet if the interested parties are all
heirs, or the question is one of collation or advancement, or the parties consent to the assumption of jurisdiction by the
probate court and the rights of third parties are not impaired, the probate court is competent to decide the question of
ownership. [Citations omitted. Emphasis supplied.]
In sum, we hold that the nature of the present controversy is not one which may be classified as an intra-corporate
dispute and is beyond the jurisdiction of the special commercial court to resolve. In short, Rodrigo's complaint also fails
the nature of the controversy test.
DERIVATIVE SUIT
Rodrigo's bare claim that the complaint is a derivative suit will not suffice to confer jurisdiction on the RTC (as a special
commercial court) if he cannot comply with the requisites for the existence of a derivative suit. These requisites are:
a. the party bringing suit should be a shareholder during the time of the act or transaction complained of, the
number of shares not being material;
b. the party has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of directors for the
appropriate relief, but the latter has failed or refused to heed his plea; and
c. the cause of action actually devolves on the corporation; the wrongdoing or harm having been or being caused to
the corporation and not to the particular stockholder bringing the suit. [34]
Based on these standards, we hold that the allegations of the present complaint do not amount to a derivative suit.
First, as already discussed above, Rodrigo is not a shareholder with respect to the shareholdings originally belonging to
Anastacia; he only stands as a transferee-heir whose rights to the share are inchoate and unrecorded. With respect to his
own individually-held shareholdings, Rodrigo has not alleged any individual cause or basis as a shareholder on record to
proceed against Oscar.
Second, in order that a stockholder may show a right to sue on behalf of the corporation, he must allege with some
In summary, whether as an individual or as a derivative suit, the RTC - sitting as special commercial court - has no
jurisdiction to hear Rodrigo's complaint since what is involved is the determination and distribution of successional rights
to the shareholdings of Anastacia Reyes. Rodrigo's proper remedy, under the circumstances, is to institute a special
proceeding for the settlement of the estate of the deceased Anastacia Reyes, a move that is not foreclosed by the
dismissal of his present complaint.
WHEREFORE, we hereby GRANT the petition and REVERSE the decision of the Court of Appeals dated May 26, 2004 in
CA-G.R. SP No. 74970. The complaint before the Regional Trial Court, Branch 142, Makati, docketed as Civil Case No.
00-1553, is ordered DISMISSED for lack of jurisdiction.
SO ORDERED.
DE C I SI O N
Under review before this Court is the July 31, 2006 Decision of the Court of Appeals, [1 ]
which affirmed that of the Regional Trial Court, Branch 16, of Tangub City in Civil Case No.
TC-97-001, ordering the defendants-petitioners herein, Fernanda Geonzon vda. de Barrera
and Johnny Oco. Jr. to return possession of the subject property to the plaintiffs-herein
respondents, Heirs of Vicente Legaspi.
On October 1, 1996, petitioner Johnny Oco Jr. (Oco), said to be a "peace officer connected
with the PNP," accompanied by "unidentified CAFGU members," forced his way into
respondents' 0.9504-hectare irrigated farmland located at Liloan, Bonifacio, Misamis
Occidental. After dispossessing respondents of the property, Oco and company used a
tractor to destroy the planted crops, took possession of the land, and had since tended it. [2 ]
Respondents thus filed on February 7, 1997 a complaint before the Regional Trial Court of
Tangub City for Reconveyance of Possession with Preliminary Mandatory Injunction and
Damages[3 ] against petitioners.
In their Answer, petitioners claimed that the subject land forms part of a three-hectare
property described in OCT No. P-447 issued on February 10, 1956 in the name of Andrea
Lacson who sold a 2-hectare portion thereof to Eleuterio Geonzon who, in turn, sold 1.1148
thereof to his sister petitioner Fernanda Geonzon vda. de Barrera (Fernanda). [4 ]
Respondents, on the other hand, asserted that the land was occupied, possessed and
cultivated by their predecessor-in-interest Vicente Legaspi and his wife Lorenza since
1935;[5 ] after a subdivision survey was conducted in November 30, 1976, it was found out
that the land formed part of the titled property of Andrea Lacson;[6 ] and despite this
discovery, they never filed any action to recover ownership thereof since they were left
undisturbed in their possession,[7 ] until October 1, 1996 when petitioners forced their way
into it.
By Decision of November 27, 1998, the trial court found for respondents, disposing as
follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs [herein respondents]
and against the defendants [-herein petitioners]:
1. Ordering the latter to return the possession of the land in question to the plaintiffs and
2. Ordering the latter to desist from further depriving and disturbing plaintiffs' peaceful
possession thereof, unless there be another court judgment to the contrary.
SO ORDERED.
xxx x
In [p]ar. 2 of plaintiffs' complaint, the land in question was described as a riceland "situated
at Liloan, Bonifacio, Misamis Occ. and declared under [T]ax [D]eclaration No. 7564 in the
name of Vicente Legaspi and bounded on the north by a creek, on the east Sec. 12, on the
south Lot No. 007 and on the west also by Lot No. 007 which tax declaration cancels former
[T]ax [D]eclaration No. 12933 under the name of Lorenza Bacul Legaspi which likewise
cancels [T]ax [D]eclaration No. 5454 covering the bigger portion of the land under which
the land described under [T]ax [D]eclaration No. 7565 is part and parcel thereof [sic]; the
present estimated value being P50,000."[1 1 ] (Emphasis and underscoring supplied)
Petitioners thereupon appealed to the Court of Appeals which affirmed the trial court's
disposition of the issue of jurisdiction over the subject matter.
On the merits, the appellate court affirmed too the trial court's decision, finding that "both
testimonial and documentary evidence on record established that appellees, through their
predecessors-in-interest, have been in peaceful, continuous, public and actual possession of
the property in dispute even before the year 1930."[1 2 ]
The appellate court emphasized that in an accion publiciana, the only issue involved is the
determination of possession de jure.[1 3 ]
Hence, the present petition for review which raises the following issues:
I. . . . WHETHER OWNERSHIP AND TITLE CANNOT BE AN ISSUE TO DETERMINE WHO HAS
A BETTER RIGHT [TO] THE PORTION LITIGATED; AND
II. WHETHER . . . THE NATURE OF THE ACTION AS WELL AS THE JURISDICTION OF THE
COURT DEPEND ON THE FACTS AS ALLEGED IN THE COMPLAINT.[1 4 ]
For obvious reasons, the issue of lack of jurisdiction over the subject matter shall be first
considered.
Section 33 of Batas Pambansa Bilang 129, (the Judiciary Reorganization Act of 1980), as
amended by Republic Act No. 7691 provides for the jurisdiction of metropolitan trial courts,
municipal trial courts and municipal circuit trial courts, to wit:
xxx x
(3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value of
the property or interest therein does not exceed Twenty thousand pesos
(P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not
exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses and costs: Provided, That in cases of land not declared
for taxation purposes, the value of such property shall be determined by the assessed value
of the adjacent lots. (Emphasis, italics and underscoring supplied)
Before the amendments introduced by Republic Act No. 7691, the plenary action of accion
publiciana was to be brought before the regional trial court. [1 5 ] With the modifications
introduced by R.A. No. 7691 in 1994, the jurisdiction of the first level courts has been
expanded to include jurisdiction over other real actions where the assessed value does not
exceed P20,000, P50,000 where the action is filed in Metro Manila. The first level courts
thus have exclusive original jurisdiction over accion publiciana and accion reivindicatoria
where the assessed value of the real property does not exceed the aforestated amounts.
Accordingly, the jurisdictional element is the assessed value of the property.
The subject land has an assessed value of P11,160 as reflected in Tax Declaration No. 7565,
a common exhibit of the parties. The bare claim of respondents that it has a value of
P50,000 thus fails. The case, therefore, falls within the exclusive original jurisdiction of the
municipal trial court.
It was error then for the RTC to take cognizance of the complaint based on the allegation
that "the present estimated value [of the land is] P50,000," which allegation is, oddly,
handwritten on the printed pleading. The estimated value, commonly referred to as fair
market value,[1 7 ] is entirely different from the assessed value of the property.
Lack of jurisdiction is one of those excepted grounds where the court may dismiss a claim or
a case at any time when it appears from the pleadings or the evidence on record that any of
those grounds exists, even if they were not raised in the answer or in a motion to
dismiss.[1 8 ] That the issue of lack of jurisdiction was raised by petitioners only in their
Memorandum filed before the trial court did not thus render them in estoppel.
En passant, the Court notes that respondents' cause of action - accion publiciana is a wrong
mode. The dispossession took place on October 1, 1996 and the complaint was filed four
months thereafter or on February 7, 1997. Respondents' exclusion from the property had
thus not lasted for more than one year to call for the remedy of accion publiciana.
In fine, since the RTC has no jurisdiction over the complaint filed by respondents, all the
proceedings therein as well as the Decision of November 27, 1998, are null and void. The
complaint should perforce be dismissed. This leaves it unnecessary to still dwell on the first
issue.
WHEREFORE, the petition is hereby GRANTED. The challenged July 31, 2006 Decision of
the Court of Appeals is SET ASIDE. The decision of Branch 16 of the Regional Trial Court of
Tangub City in Civil Case No. TC-97-001 is declared NULL and VOID for lack of jurisdiction.
CHAPTER VII
Katarungang Pambarangay
Section 399. Lupong Tagapamayapa. -
(a) There is hereby created in each barangay a lupong tagapamayapa, hereinafter referred to as the
lupon, composed of the punong barangay, as chairman and ten (10) to twenty (20) members. The lupon
shall be constituted every three (3) years in the manner provided herein.
(b) Any person actually residing or working, in the barangay, not otherwise expressly disqualified by law,
and possessing integrity, impartiality, independence of mind, sense of fairness, and reputation for
probity, may be appointed a member of the lupon.
(c) A notice to constitute the lupon, which shall include the names of proposed members who have
expressed their willingness to serve, shall be prepared by the punong barangay within the first fifteen
(15) days from the start of his term of office. Such notice shall be posted in three (3) conspicuous places
in the barangay continuously for a period of not less than three (3) weeks;
(d) The punong barangay, taking into consideration any opposition to the proposed appointment or any
recommendations for appointment as may have been made within the period of posting, shall within
ten (10) days thereafter, appoint as members those whom he determines to be suitable therefor.
Appointments shall be in writing, signed by the punong barangay, and attested to by the barangay
secretary.
(e) The list of appointed members shall be posted in three (3) conspicuous places in the barangay for the
entire duration of their term of office; and
(f) In barangays where majority of the inhabitants are members of indigenous cultural communities,
local systems of settling disputes through their councils of datus or elders shall be recognized without
prejudice to the applicable provisions of this Code.
Section 400. Oath and Term of Office. - Upon appointment, each lupon member shall take an oath of
office before the punong barangay. He shall hold office until a new lupon is constituted on the third year
following his appointment unless sooner terminated by resignation, transfer of residence or place of
work, or withdrawal of appointment by the punong barangay with the concurrence of the majority of all
the members of the lupon.
Section 401. Vacancies. - Should a vacancy occur in the lupon for any cause, the punong barangay shall
immediately appoint a qualified person who shall hold office only for the unexpired portion of the term.
Section 402. Functions of the Lupon. - The lupon shall:
(a) Exercise administrative supervision over the conciliation panels provided herein;
(b) Meet regularly once a month to provide a forum for exchange of ideas among its members and the
public on matters relevant to the amicable settlement of disputes, and to enable various conciliation
panel members to share with one another their observations and experiences in effecting speedy
resolution of disputes; and
(c) Exercise such other powers and perform such other duties and functions as may be prescribed by law
or ordinance.
Section 403. Secretary of the Lupon. - The barangay secretary shall concurrently serve as the secretary of
the lupon. He shall record the results of mediation proceedings before the punong barangay and shall
submit a report thereon to the proper city or municipal courts. He shall also receive and keep the
records of proceedings submitted to him by the various conciliation panels.
Section 404. Pangkat ng Tagapagkasundo. -
(a) There shall be constituted for each dispute brought before the lupon a conciliation panel to be
known as the pangkat ng tagapagkasundo, hereinafter referred to as the pangkat, consisting of three (3)
members who shall be chosen by the parties to the dispute from the list of members of the lupon.
Should the parties fail to agree on the pangkat membership, the same shall be determined by lots drawn
by the lupon chairman.
(b) The three (3) members constituting the pangkat shall elect from among themselves the chairman
and the secretary. The secretary shall prepare the minutes of the pangkat proceedings and submit a
copy duly attested to by the chairman to the lupon secretary and to the proper city or municipal court.
REMLAW Page 252
copy duly attested to by the chairman to the lupon secretary and to the proper city or municipal court.
He shall issue and cause to be served notices to the parties concerned.
The lupon secretary shall issue certified true copies of any public record in his custody that is not by law
otherwise declared confidential.
Section 405. Vacancies in the Pangkat. - Any vacancy in the pangkat shall be chosen by the parties to the
dispute from among the other lupon members. Should the parties fail to agree on a common choice, the
vacancy shall be filled by lot to be drawn by the lupon chairman.
Section 406. Character of Office and Service of Lupon Members. -
(a) The lupon members, while in the performance of their official duties or on the occasion thereof, shall
be deemed as persons in authority, as defined in the Revised Penal Code.
(b) The lupon or pangkat members shall serve without compensation, except as provided for in Section
393 and without prejudice to incentives as provided for in this Section and in Book IV of this Code. The
Department of the Interior and Local Government shall provide for a system of granting economic or
other incentives to the lupon or pangkat members who adequately demonstrate the ability to
judiciously and expeditiously resolve cases referred to them. While in the performance of their duties,
the lupon or pangkat members, whether in public or private employment, shall be deemed to be on
official time, and shall not suffer from any diminution in compensation or allowance from said
employment by reason thereof.
Section 407. Legal Advice on Matters Involving Questions of Law. - The provincial, city legal officer or
prosecutor or the municipal legal officer shall render legal advice on matters involving questions of law
to the punong barangay or any lupon or pangkat member whenever necessary in the exercise of his
functions in the administration of the katarungang pambarangay.
Section 408. Subject Matter for Amicable Settlement; Exception Thereto. - The lupon of each barangay
shall have authority to bring together the parties actually residing in the same city or municipality for
amicable settlement of all disputes except:
(a) Where one party is the government, or any subdivision or instrumentality thereof;
(b) Where one party is a public officer or employee, and the dispute relates to the performance of his
official functions;
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five thousand pesos
(P5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in different cities or municipalities unless the
parties thereto agree to submit their differences to amicable settlement by an appropriate lupon;
(f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except
where such barangay units adjoin each other and the parties thereto agree to submit their differences
to amicable settlement by an appropriate lupon;
(g) Such other classes of disputes which the President may determine in the interest of Justice or upon
the recommendation of the Secretary of Justice.
The court in which non-criminal cases not falling within the authority of the lupon under this Code are
filed may, at any time before trial motu propio refer the case to the lupon concerned for amicable
settlement.
Section 409. Venue. -
(a) Disputes between persons actually residing in the same barangay shall be brought for amicable
settlement before the lupon of said barangay.
(b) Those involving actual residents of different barangays within the same city or municipality shall be
brought in the barangay where the respondent or any of the respondents actually resides, at the
election of the complaint.
(c) All disputes involving real property or any interest therein shall be brought in the barangay where the
real property or the larger portion thereof is situated.
(d) Those arising at the workplace where the contending parties are employed or at the institution
where such parties are enrolled for study, shall be brought in the barangay where such workplace or
institution is located.
Objections to venue shall be raised in the mediation proceedings before the punong barangay;
otherwise, the same shall be deemed waived. Any legal question which may confront the punong
barangay in resolving objections to venue herein referred to may be submitted to the Secretary of
LEO WEE, PETITIONER, VS. GEORGE DE CASTRO (ON HIS BEHALF AND AS
ATTORNEY-IN-FACT OF ANNIE DE CASTRO AND FELOMINA UBAN) AND
MARTINIANA DE CASTRO, RESPONDENTS.
DE C I SI O N
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari[1 ] under Rule 45 of the Revised Rules
of Court filed by petitioner Leo Wee, seeking the reversal and setting aside of the Decision[2 ]
dated 19 September 2006 and the Resolution[3 ] dated 25 January 2007 of the Court of
Appeals in CA-G.R. SP No. 90906. The appellate court, in its assailed Decision, reversed the
dismissal of Civil Case. No. 1990, an action for ejectment instituted by respondent George
de Castro, on his own behalf and on behalf of Annie de Castro, Felomina de Castro Uban
and Jesus de Castro[4 ] against petitioner, by the Municipal Trial Court (MTC) of Alaminos
City, which was affirmed by the Regional Trial Court (RTC), Branch 54, Alaminos City,
Pangasinan; and, ruling in favor of the respondents, ordered the petitioner to vacate the
subject property. In its assailed Resolution dated 25 January 2007, the Court of Appeals
refused to reconsider its earlier Decision of 19 September 2006.
In their Complaint [5 ] filed on 1 July 2002 with the MTC of Alaminos City, docketed as Civil
Case No. 1990, respondents alleged that they are the registered owners of the subject
property, a two-storey building erected on a parcel of land registered under Transfer
Certificate of Title (TCT) No. 16193 in the Registry of Deeds of Pangasinan, described and
bounded as follows:
A parcel of land (Lot 13033-D-2, Psd-01550-022319, being a portion of Lot 13033-D,
Psd-018529, LRC Rec. No.____) situated in Pob., Alaminos City; bounded on the NW. along
line 1-2 by Lot 13035-D-1 of the subdivision plan; on the NE. along line 2-3 by Vericiano
St.; on the SE. along line 3-4 by Lot 13033-D-2 of the subdivision plan; on the SW. along
line 4-1 by Lot 575, Numeriano Rabago. It is coverd by TCT No. 16193 of the Register of
Deeds of Pangasinan (Alaminos City) and declared for taxation purposes per T.D. No. 2075,
and assessed in the sum of P93,400.00.[6 ]
Respondents rented out the subject property to petitioner on a month to month basis for
P9,000.00 per month.[7 ] Both parties agreed that effective 1 October 2001, the rental
payment shall be increased from P9,000.00 to P15,000.00. Petitioner, however, failed or
refused to pay the corresponding increase on rent when his rental obligation for the month
of 1 October 2001 became due. The rental dispute was brought to the Lupon
Tagapagpamayapa of Poblacion, Alaminos, Pangasinan, in an attempt to amicably settle the
matter but the parties failed to reach an agreement, resulting in the issuance by the
Barangay Lupon of a Certification to file action in court on 18 January 2002. On 10 June
2002, respondent George de Castro sent a letter to petitioner terminating their lease
agreement and demanding that the latter vacate and turn over the subject property to
respondents. Since petitioner stubbornly refused to comply with said demand letter,
respondent George de Castro, together with his siblings and co-respondents, Annie de
Castro, Felomina de Castro Uban and Jesus de Castro, filed the Complaint for ejectment
before the MTC.
It must be noted, at this point, that although the Complaint stated that it was being filed by
all of the respondents, the Verification and the Certificate of Non-Forum Shopping were
signed by respondent George de Castro alone. He would subsequently attach to his position
paper filed before the MTC on 28 October 2002 the Special Powers of Attorney (SPAs)
executed by his sisters Annie de Castro and Felomina de Castro Uban dated 7 February
Petitioner, on the other hand, countered that there was no agreement between the parties
to increase the monthly rentals and respondents' demand for an increase was exorbitant.
The agreed monthly rental was only for the amount of P9,000.00 and he was religiously
paying the same every month. Petitioner then argued that respondents failed to comply
with the jurisdictional requirement of conciliation before the Barangay Lupon prior to the
filing of Civil Case. No. 1990, meriting the dismissal of their Complaint therein. The
Certification to file action issued by the Barangay Lupon appended to the respondents'
Complaint merely referred to the issue of rental increase and not the matter of ejectment.
Petitioner asserted further that the MTC lacked jurisdiction over the ejectment suit, since
respondents' Complaint was devoid of any allegation that there was an "unlawful
withholding" of the subject property by the petitioner. [8 ]
During the Pre-Trial Conference[9 ] held before the MTC, the parties stipulated that in May
2002, petitioner tendered to respondents the sum of P9,000.00 as rental payment for the
month of January 2002; petitioner paid rentals for the months of October 2001 to January
2002 but only in the amount of P9,000.00 per month; respondents, thru counsel, sent a
letter to petitioner on 10 June 2002 terminating their lease agreement which petitioner
ignored; and the Barangay Lupon did issue a Certification to file action after the parties
failed to reach an agreement before it.
After the submission of the parties of their respective Position Papers, the MTC, on 21
November 2002, rendered a Decision[1 0 ] dismissing respondents' Complaint in Civil Case No.
1990 for failure to comply with the prior conciliation requirement before the Barangay
Lupon. The decretal portion of the MTC Decision reads:
WHEREFORE, premised considered, judgment is hereby rendered ordering the dismissal of
this case. Costs against the [herein respondents].
On appeal, docketed as Civil Case No. A-2835, the RTC of Alaminos, Pangasinan, Branch 54,
promulgated its Decision[1 1 ] dated 27 June 2005 affirming the dismissal of respondents'
Complaint for ejectment after finding that the appealed MTC Decision was based on facts
and law on the matter. The RTC declared that since the original agreement entered into by
the parties was for petitioner to pay only the sum of P9.000.00 per month for the rent of
the subject property, and no concession was reached by the parties to increase such
amount to P15.000.00, petitioner cannot be faulted for paying only the originally agreed
upon monthly rentals. Adopting petitioner's position, the RTC declared that respondents'
failure to refer the matter to the Barangay court for conciliation process barred the
ejectment case, conciliation before the Lupon being a condition sine qua non in the filing of
ejectment suits. The RTC likewise agreed with petitioner in ruling that the allegation in the
Complaint was flawed, since respondents failed to allege that there was an "unlawful
withholding" of possession of the subject property, taking out Civil Case No. 1990 from the
purview of an action for unlawful detainer. Finally, the RTC decreed that respondents'
Complaint failed to comply with the rule that a co-owner could not maintain an action
without joining all the other co-owners. Thus, according to the dispositive portion of the RTC
Decision:
WHEREFORE the appellate Court finds no cogent reason to disturb the findings of the court
a quo. The Decision dated November 21, 2002 appealed from is hereby AFFIRMED IN
TOTO.[1 2 ]
Undaunted, respondents filed a Petition for Review on Certiorari[1 3 ] with the Court of
Appeals where it was docketed as CA-G.R. SP No. 90906. Respondents argued in their
Petition that the RTC gravely erred in ruling that their failure to comply with the conciliation
process was fatal to their Complaint, since it is only respondent George de Castro who
resides in Alaminos City, Pangasinan, while respondent Annie de Castro resides in
Pennsylvania, United States of America (USA); respondent Felomina de Castro Uban, in
California, USA; and respondent Jesus de Castro, now substituted by his wife, Martiniana,
resides in Manila. Respondents further claimed that the MTC was not divested of jurisdiction
over their Complaint for ejectment because of the mere absence therein of the term
"unlawful withholding" of their subject property, considering that they had sufficiently
On 19 September 2006, the Court of Appeals rendered a Decision granting the respondents'
Petition and ordering petitioner to vacate the subject property and turn over the same to
respondents. The Court of Appeals decreed:
WHEREFORE, premises considered, the instant petition is GRANTED. The assailed Decision
dated June 27, 2005 issued by the RTC of Alaminos City, Pangasinan, Branch 54, is
REVERSED and SET ASIDE. A new one is hereby rendered ordering [herein petitioner] Leo
Wee to SURRENDER and VACATE the leased premises in question as well as to pay the sum
of P15,000.00 per month reckoned from March, 2002 until he shall have actually turned
over the possession thereof to petitioners plus the rental arrearages of P30,000.00
representing unpaid increase in rent for the period from October, 2001 to February, 2002,
with legal interest at 6% per annum to be computed from June 7, 2002 until finality of this
decision and 12% thereafter until full payment thereof. Respondent is likewise hereby
ordered to pay petitioners the amount of P20,000.00 as and for attorney's fees and the
costs of suit.[1 4 ]
In a Resolution dated 25 January 2007, the appellate court denied the Motion for
Reconsideration interposed by petitioner for lack of merit.
Petitioner is now before this Court via the Petition at bar, making the following assignment
of errors:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE FILING OF
THE COMPLAINT OF RESPONDENT GEORGE DE CASTRO WITHOUT JOINING ALL HIS OTHER
CO-OWNERS OVER THE SUBJECT PROPERTY IS PROPER;
IV.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING SUPREME COURT
CIRCULAR NO. 10 WHICH DIRECTS A PLEADER TO INDICATE IN HIS PLEADINGS HIS
OFFICIAL RECEIPT OF HIS PAYMENT OF HIS IBP DUES.[1 5 ]
Petitioner avers that respondents failed to go through the conciliation process before the
Barangay Lupon, a jurisdictional defect that bars the legal action for ejectment. The
Certification to file action dated 18 January 2002 issued by the Barangay Lupon, appended
by the respondents to their Complaint in Civil Case No. 1990, is of no moment, for it
attested only that there was confrontation between the parties on the matter of rental
increase but not on unlawful detainer of the subject property by the petitioner. If it was the
intention of the respondents from the very beginning to eject petitioner from the subject
property, they should have brought up the alleged unlawful stay of the petitioner on the
subject property for conciliation before the Barangay Lupon.
The barangay justice system was established primarily as a means of easing up the
congestion of cases in the judicial courts. This could be accomplished through a proceeding
before the barangay courts which, according to the one who conceived of the system, the
Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160 (The Local
Government Code), which took effect on 1 January 1992.
The pertinent provisions of the Local Government Code making conciliation a precondition to
the filing of complaints in court are reproduced below:
SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in court. - No complaint,
petition, action, or proceeding involving any matter within the authority of the lupon shall
be filed or instituted directly in court or any other government office for adjudication, unless
there has been a confrontation between the parties before the lupon chairman or the
pangkat, and that no conciliation or settlement has been reached as certified by the lupon
secretary or pangkat secretary as attested to by the lupon or pangkat chairman or unless
the settlement has been repudiated by the parties thereto.
(b) Where parties may go directly to court. - The parties may go directly to court in the
following instances:
(2) Where a person has otherwise been deprived of personal liberty calling for habeas
corpus proceedings;
(3) Where actions are coupled with provisional remedies such as preliminary injunction,
attachment, delivery of personal property, and support pendente lite; and
(4) Where the action may otherwise be barred by the statute of limitations.
(c) Conciliation among members of indigenous cultural communities. - The customs and
traditions of indigenous cultural communities shall be applied in settling disputes between
members of the cultural communities.
SEC. 408. Subject Matter for Amicable Settlement; Exception Thereto. - The lupon of each
barangay shall have authority to bring together the parties actually residing in the same city
or municipality for amicable settlement of all disputes except:
(a) Where one party is the government or any subdivision or instrumentality thereof;
(b) Where one party is a public officer or employee, and the dispute relates to the
performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five
thousand pesos (P5,000.00);
(e) Where the dispute involves real properties located in different cities or municipalities
unless the parties thereto agree to submit their differences to amicable settlement by an
appropriate lupon;
(f) Disputes involving parties who actually reside in barangays of different cities or
(g) Such other classes of disputes which the President may determine in the interest of
justice or upon the recommendation of the Secretary of Justice.
There is no question that the parties to this case appeared before the Barangay Lupon for
conciliation proceedings. There is also no dispute that the only matter referred to the
Barangay Lupon for conciliation was the rental increase, and not the ejectment of petitioner
from the subject property. This is apparent from a perusal of the Certification to file action
in court issued by the Barangay Lupon on 18 January 2002, to wit:
CERTIFICATION TO FILE COMPLAINTS
While it is true that the Certification to file action dated 18 January 2002 of the Barangay
Lupon refers only to rental increase and not to the ejectment of petitioner from the subject
property, the submission of the same for conciliation before the Barangay Lupon constitutes
sufficient compliance with the provisions of the Katarungang Pambarangay Law. Given the
particular circumstances of the case at bar, the conciliation proceedings for the amount of
monthly rental should logically and reasonably include also the matter of the possession of
the property subject of the rental, the lease agreement, and the violation of the terms
thereof.
The contract of lease between the parties did not stipulate a fixed period. Hence, the parties
agreed to the payment of rentals on a monthly basis. On this score, Article 1687 of the Civil
Code provides:
Art. 1687. If the period for the lease has not been fixed, it is understood to be from
year to year, if the rent agreed upon is annual; from month to month, if it is
monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be
paid daily. However, even though a monthly rent is paid, and no period for the lease has
been set, the courts may fix a longer term for the lease after the lessee has occupied the
premises for over one year. If the rent is weekly, the courts may likewise determine a
longer period after the lessee has been in possession for over six months. In case of daily
rent, the courts may also fix a longer period after the lessee has stayed in the place for over
one month. (Emphasis supplied.)
The rentals being paid monthly, the period of such lease is deemed terminated at the end of
each month. Thus, respondents have every right to demand the ejectment of petitioners at
the end of each month, the contract having expired by operation of law. Without a lease
contract, petitioner has no right of possession to the subject property and must vacate the
same. Respondents, thus, should be allowed to resort to an action for ejectment before the
MTC to recover possession of the subject property from petitioner.
Corollarily, petitioner's ejectment, in this case, is only the reasonable consequence of his
unrelenting refusal to comply with the respondents' demand for the payment of rental
increase agreed upon by both parties. Verily, the lessor's right to rescind the contract of
Payment of the rent is one of a lessee's statutory obligations, and, upon non-
payment by petitioners of the increased rental in September 1994, the lessor
acquired the right to avail of any of the three remedies outlined above. (Emphasis
supplied.)
Petitioner next argues that respondent George de Castro cannot maintain an action for
ejectment against petitioner, without joining all his co-owners.
Even then, the Court views the SPAs as mere surplusage, such that the lack thereof does
not in any way affect the validity of the action for ejectment instituted by respondent
George de Castro. This also disposes of petitioner's contention that respondent George de
Castro lacked the authority to sign the Verification and the Certificate of Non-Forum
Shopping. As the Court ruled in Mendoza v. Coronel[2 3 ]:
We likewise hold that the execution of the certification against forum shopping by
the attorney-in-fact in the case at bar is not a violation of the requirement that the
parties must personally sign the same. The attorney-in-fact, who has authority to file,
and who actually filed the complaint as the representative of the plaintiff co-owner,
pursuant to a Special Power of Attorney, is a party to the ejectment suit. In fact, Section 1,
Rule 70 of the Rules of Court includes the representative of the owner in an ejectment suit
In the same vein, this Court is not persuaded by petitioner's assertion that respondents'
failure to allege the jurisdictional fact that there was "unlawful withholding" of the subject
property was fatal to their cause of action.
It is apodictic that what determines the nature of an action as well as which court has
jurisdiction over it are the allegations in the complaint and the character of the relief
sought. In an unlawful detainer case, the defendant's possession was originally lawful but
ceased to be so upon the expiration of his right to possess. Hence, the phrase "unlawful
withholding" has been held to imply possession on the part of defendant, which was legal in
the beginning, having no other source than a contract, express or implied, and which later
expired as a right and is being withheld by defendant. [2 7 ]
In Barba v. Court of Appeals,[2 8 ] the Court held that although the phrase "unlawfully
withholding" was not actually used by therein petitioner in her complaint, the Court held
that her allegations, nonetheless, amounted to an unlawful withholding of the subject
property by therein private respondents, because they continuously refused to vacate the
premises even after notice and demand.
In the Petition at bar, respondents alleged in their Complaint that they are the registered
owners of the subject property;the subject property was being occupied by the petitioner
pursuant to a monthly lease contract; petitioner refused to accede to respondents' demand
for rental increase; the respondents sent petitioner a letter terminating the lease agreement
and demanding that petitioner vacate and turn over the possession of the subject property
to respondents; and despite such demand, petitioner failed to surrender the subject
property to respondents.[2 9 ] The Complaint sufficiently alleges the unlawful withholding of
the subject property by petitioner, constitutive of unlawful detainer, although the exact
words "unlawful withholding" were not used. In an action for unlawful detainer, an
allegation that the defendant is unlawfully withholding possession from the plaintiff is
deemed sufficient, without necessarily employing the terminology of the law. [3 0 ]
Petitioner's averment that the Court of Appeals should have dismissed respondents' Petition
in light of the failure of their counsel to attach the Official Receipt of his updated payment of
Integrated Bar of the Philippines (IBP) dues is now moot and academic, since respondents'
counsel has already duly complied therewith. It must be stressed that judicial cases do not
come and go through the portals of a court of law by the mere mandate of technicalities. [3 1 ]
Finally, we agree in the ruling of the Court of Appeals that petitioner is liable for the
payment of back rentals, attorney's fees and cost of the suit. Respondents must be duly
indemnified for the loss of income from the subject property on account of petitioner's
refusal to vacate the leased premises.
WHEREFORE, premises considered, the instant Petition is DENIED. The Decision dated 19
September 2006 and Resolution dated 25 January 2007 of the Court of Appeals in CA-G.R.
SP No. 90906 are hereby AFFIRMED in toto. Costs against petitioner.
OSCAR C. REYES, PETITIONER, VS. HON. REGIONAL TRIAL COURT OF MAKATI, BRANCH 142, ZENITH
INSURANCE CORPORATION, AND RODRIGO C. REYES, RESPONDENTS.
DECIS ION
BRION, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Decision
of the Court of Appeals (CA) [1] promulgated on May 26, 2004 in CA-G.R. SP No. 74970. The CA Decision
affirmed the Order of the Regional Trial Court (RTC), Branch 142, Makati City dated November 29,
2002[2] in Civil Case No. 00-1553 (entitled "Accounting of All Corporate Funds and Assets, and Damages")
which denied petitioner Oscar C. Reyes' (Oscar) Motion to Declare Complaint as Nuisance or Harassment
Suit.
BACKGROUND FACTS
Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of the spouses
Pedro and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith
Insurance Corporation (Zenith), a domestic corporation established by their family. Pedro died in 1964,
while Anastacia died in 1993. Although Pedro's estate was judicially partitioned among his heirs
sometime in the 1970s, no similar settlement and partition appear to have been made with Anastacia's
estate, which included her shareholdings in Zenith. As of June 30, 1990, Anastacia owned 136,598 shares
of Zenith; Oscar and Rodrigo owned 8,715,637 and 4,250 shares, respectively.[3]
On May 9, 2000, Zenith and Rodrigo filed a complaint[4] with the Securities and Exchange Commission
(SEC) against Oscar, docketed as SEC Case No. 05-00-6615. The complaint stated that it is "a derivative
suit initiated and filed by the complainant Rodrigo C. Reyes to obtain an accounting of the funds and
assets of ZENITH INSURANCE CORPORATION which are now or formerly in the control, custody, and/or
possession of respondent [herein petitioner Oscar] and to determine the shares of stock of deceased
spouses Pedro and Anastacia Reyes that were arbitrarily and fraudulently appropriated [by Oscar] for
himself [and] which were not collated and taken into account in the partition, distribution, and/or
settlement of the estate of the deceased spouses, for which he should be ordered to account for all the
income from the time he took these shares of stock, and should now deliver to his brothers and sisters
their just and respective shares."[5] [Emphasis supplied.]
In his Answer with Counterclaim,[6] Oscar denied the charge that he illegally acquired the shares of
Anastacia Reyes. He asserted, as a defense, that he purchased the subject shares with his own funds
from the unissued stocks of Zenith, and that the suit is not a bona fide derivative suit because the
requisites therefor have not been complied with. He thus questioned the SEC's jurisdiction to entertain
the complaint because it pertains to the settlement of the estate of Anastacia Reyes.
When Republic Act (R.A.) No. 8799[7] took effect, the SEC's exclusive and original jurisdiction over cases
enumerated in Section 5 of Presidential Decree (P.D.) No. 902-A was transferred to the RTC designated
as a special commercial court.[8] The records of Rodrigo's SEC case were thus turned over to the RTC,
Branch 142, Makati, and docketed as Civil Case No. 00-1553.
On October 22, 2002, Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit.[9] He
claimed that the complaint is a mere nuisance or harassment suit and should, according to the Interim
Rules of Procedure for Intra-Corporate Controversies, be dismissed; and that it is not a bona fide
REMLAW Page 269
Rules of Procedure for Intra-Corporate Controversies, be dismissed; and that it is not a bona fide
derivative suit as it partakes of the nature of a petition for the settlement of estate of the deceased
Anastacia that is outside the jurisdiction of a special commercial court. The RTC, in its Order dated
November 29, 2002 (RTC Order), denied the motion in part and declared:
A close reading of the Complaint disclosed the presence of two (2) causes of action, namely: a) a
derivative suit for accounting of the funds and assets of the corporation which are in the control,
custody, and/or possession of the respondent [herein petitioner Oscar] with prayer to appoint a
management committee; and b) an action for determination of the shares of stock of deceased spouses
Pedro and Anastacia Reyes allegedly taken by respondent, its accounting and the corresponding delivery
of these shares to the parties' brothers and sisters. The latter is not a derivative suit and should properly
be threshed out in a petition for settlement of estate.
Accordingly, the motion is denied. However, only the derivative suit consisting of the first cause of
action will be taken cognizance of by this Court.[10]
Oscar thereupon went to the CA on a petition for certiorari, prohibition, and mandamus[11] and prayed
that the RTC Order be annulled and set aside and that the trial court be prohibited from continuing with
the proceedings. The appellate court affirmed the RTC Order and denied the petition in its Decision
dated May 26, 2004. It likewise denied Oscar's motion for reconsideration in a Resolution dated October
21, 2004.
Petitioner now comes before us on appeal through a petition for review on certiorari under Rule 45 of
the Rules of Court.
ASSIGNMENT OF ERRORS
Petitioner Oscar presents the following points as conclusions the CA should have made:
1. that the complaint is a mere nuisance or harassment suit that should be dismissed under the Interim
Rules of Procedure of Intra-Corporate Controversies; and
2. that the complaint is not a bona fide derivative suit but is in fact in the nature of a petition for
settlement of estate; hence, it is outside the jurisdiction of the RTC acting as a special commercial court.
Accordingly, he prays for the setting aside and annulment of the CA decision and resolution, and the
dismissal of Rodrigo's complaint before the RTC.
THE COURT'S RULING
The core question for our determination is whether the trial court, sitting as a special commercial court,
has jurisdiction over the subject matter of Rodrigo's complaint. To resolve it, we rely on the judicial
principle that "jurisdiction over the subject matter of a case 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."[12]
P.D. No. 902-A enumerates the cases over which the SEC (now the RTC acting as a special commercial
court) exercises exclusive jurisdiction:
SECTION 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations, partnership, and other forms of associations registered with it as
expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear
and decide cases involving:
a) Devices or schemes employed by or any acts of the board of directors, business associates, its officers
or partners, amounting to fraud and misrepresentation which may be detrimental to the interest of the
public and/or of the stockholders, partners, members of associations or organizations registered with
the Commission.
The rule is that a complaint must contain a plain, concise, and direct statement of the ultimate facts
constituting the plaintiff's cause of action and must specify the relief sought.[13] Section 5, Rule 8 of the
Revised Rules of Court provides that in all averments of fraud or mistake, the circumstances
constituting fraud or mistake must be stated with particularity.[14] These rules find specific application
to Section 5(a) of P.D. No. 902-A which speaks of corporate devices or schemes that amount to fraud or
misrepresentation detrimental to the public and/or to the stockholders.
In an attempt to hold Oscar responsible for corporate fraud, Rodrigo alleged in the complaint the
following:
3. This is a complaint...to determine the shares of stock of the deceased spouses Pedro and Anastacia
Reyes that were arbitrarily and fraudulently appropriated for himself [herein petitioner Oscar] which
were not collated and taken into account in the partition, distribution, and/or settlement of the estate
of the deceased Spouses Pedro and Anastacia Reyes, for which he should be ordered to account for all
the income from the time he took these shares of stock, and should now deliver to his brothers and
sisters their just and respective shares with the corresponding equivalent amount of P7,099,934.82 plus
interest thereon from 1978 representing his obligations to the Associated Citizens' Bank that was paid
for his account by his late mother, Anastacia C. Reyes. This amount was not collated or taken into
account in the partition or distribution of the estate of their late mother, Anastacia C. Reyes.
3.1. Respondent Oscar C. Reyes, through other schemes of fraud including misrepresentation,
unilaterally, and for his own benefit, capriciously transferred and took possession and control of the
management of Zenith Insurance Corporation which is considered as a family corporation, and other
properties and businesses belonging to Spouses Pedro and Anastacia Reyes.
xxx x
4.1. During the increase of capitalization of Zenith Insurance Corporation, sometime in 1968, the
property covered by TCT No. 225324 was illegally and fraudulently used by respondent as a collateral.
xxx x
5. The complainant Rodrigo C. Reyes discovered that by some manipulative scheme, the shareholdings
of their deceased mother, Doña Anastacia C. Reyes, shares of stocks and [sic] valued in the corporate
books at P7,699,934.28, more or less, excluding interest and/or dividends, had been transferred solely
in the name of respondent. By such fraudulent manipulations and misrepresentation, the shareholdings
of said respondent Oscar C. Reyes abruptly increased to P8,715,637.00 [sic] and becomes [sic] the
majority stockholder of Zenith Insurance Corporation, which portion of said shares must be distributed
equally amongst the brothers and sisters of the respondent Oscar C. Reyes including the complainant
herein.
9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C. Reyes valued at
P7,099,934.28 were illegally and fraudulently transferred solely to the respondent's [herein petitioner
Oscar] name and installed himself as a majority stockholder of Zenith Insurance Corporation [and]
thereby deprived his brothers and sisters of their respective equal shares thereof including complainant
hereto.
xxx x
10.1 By refusal of the respondent to account of his [sic] shareholdings in the company, he illegally and
fraudulently transferred solely in his name wherein [sic] the shares of stock of the deceased Anastacia
C. Reyes [which] must be properly collated and/or distributed equally amongst the children, including
the complainant Rodrigo C. Reyes herein, to their damage and prejudice.
xxx x
11.1 By continuous refusal of the respondent to account of his [sic] shareholding with Zenith Insurance
Corporation[,] particularly the number of shares of stocks illegally and fraudulently transferred to him
from their deceased parents Sps. Pedro and Anastacia Reyes[,] which are all subject for collation and/or
partition in equal shares among their children. [Emphasis supplied.]
Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely
conclusions of law that, without supporting statements of the facts to which the allegations of fraud
refer, do not sufficiently state an effective cause of action.[15] The late Justice Jose Feria, a noted
authority in Remedial Law, declared that fraud and mistake are required to be averred with particularity
in order to enable the opposing party to controvert the particular facts allegedly constituting such fraud
or mistake.[16]
Tested against these standards, we find that the charges of fraud against Oscar were not properly
supported by the required factual allegations. While the complaint contained allegations of fraud
purportedly committed by him, these allegations are not particular enough to bring the controversy
within the special commercial court's jurisdiction; they are not statements of ultimate facts, but are
mere conclusions of law: how and why the alleged appropriation of shares can be characterized as
"illegal and fraudulent" were not explained nor elaborated on.
Not every allegation of fraud done in a corporate setting or perpetrated by corporate officers will bring
the case within the special commercial court's jurisdiction. To fall within this jurisdiction, there must be
sufficient nexus showing that the corporation's nature, structure, or powers were used to facilitate the
fraudulent device or scheme. Contrary to this concept, the complaint presented a reverse situation. No
corporate power or office was alleged to have facilitated the transfer of the shares; rather, Oscar, as an
individual and without reference to his corporate personality, was alleged to have transferred the shares
of Anastacia to his name, allowing him to become the majority and controlling stockholder of Zenith,
and eventually, the corporation's President. This is the essence of the complaint read as a whole and is
particularly demonstrated under the following allegations:
5. The complainant Rodrigo C. Reyes discovered that by some manipulative scheme, the shareholdings
of their deceased mother, Doña Anastacia C. Reyes, shares of stocks and *sic+ valued in the corporate
books at P7,699,934.28, more or less, excluding interest and/or dividends, had been transferred solely in
the name of respondent. By such fraudulent manipulations and misrepresentation, the shareholdings
of said respondent Oscar C. Reyes abruptly increased to P8,715,637.00 [sic] and becomes [sic] the
majority stockholder of Zenith Insurance Corporation, which portion of said shares must be distributed
equally amongst the brothers and sisters of the respondent Oscar C. Reyes including the complainant
herein.
xxx x
We note that twice in the course of this case, Rodrigo had been given the opportunity to study the
propriety of amending or withdrawing the complaint, but he consistently refused. The court's function in
resolving issues of jurisdiction is limited to the review of the allegations of the complaint and, on the
basis of these allegations, to the determination of whether they are of such nature and subject that they
fall within the terms of the law defining the court's jurisdiction. Regretfully, we cannot read into the
complaint any specifically alleged corporate fraud that will call for the exercise of the court's special
commercial jurisdiction. Thus, we cannot affirm the RTC's assumption of jurisdiction over Rodrigo's
complaint on the basis of Section 5(a) of P.D. No. 902-A.[18]
Intra-Corporate Controversy
A review of relevant jurisprudence shows a development in the Court's approach in classifying what
constitutes an intra-corporate controversy. Initially, the main consideration in determining whether a
dispute constitutes an intra-corporate controversy was limited to a consideration of the intra-corporate
relationship existing between or among the parties.[19] The types of relationships embraced under
Section 5(b), as declared in the case of Union Glass & Container Corp. v. SEC,[20] were as follows:
a) between the corporation, partnership, or association and the public;
b) between the corporation, partnership, or association and its stockholders, partners, members, or
officers;
c) between the corporation, partnership, or association and the State as far as its franchise, permit or
license to operate is concerned; and
d) among the stockholders, partners, or associates themselves. [Emphasis supplied.]
The existence of any of the above intra-corporate relations was sufficient to confer jurisdiction to the
SEC, regardless of the subject matter of the dispute. This came to be known as the relationship test.
However, in the 1984 case of DMRC Enterprises v. Esta del Sol Mountain Reserve, Inc.,[21]the Court
introduced the nature of the controversy test. We declared in this case that it is not the mere existence
of an intra-corporate relationship that gives rise to an intra-corporate controversy; to rely on the
relationship test alone will divest the regular courts of their jurisdiction for the sole reason that the
dispute involves a corporation, its directors, officers, or stockholders. We saw that there is no legal
sense in disregarding or minimizing the value of the nature of the transactions which gives rise to the
dispute.
Under the nature of the controversy test, the incidents of that relationship must also be considered for
the purpose of ascertaining whether the controversy itself is intra-corporate.[22] The controversy must
not only be rooted in the existence of an intra-corporate relationship, but must as well pertain to the
enforcement of the parties' correlative rights and obligations under the Corporation Code and the
internal and intra-corporate regulatory rules of the corporation. If the relationship and its incidents are
merely incidental to the controversy or if there will still be conflict even if the relationship does not
exist, then no intra-corporate controversy exists.
The Court then combined the two tests and declared that jurisdiction should be determined by
considering not only the status or relationship of the parties, but also the nature of the question under
controversy.[23] This two-tier test was adopted in the recent case of Speed Distribution, Inc. v. Court of
Appeals:[24]
To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by
the branches of the RTC specifically designated by the Court to try and decide such cases, two elements
must concur: (a) the status or relationship of the parties; and (2) the nature of the question that is the
subject of their controversy.
The first element requires that the controversy must arise out of intra-corporate or partnership relations
between any or all of the parties and the corporation, partnership, or association of which they are
stockholders, members or associates; between any or all of them and the corporation, partnership, or
association of which they are stockholders, members, or associates, respectively; and between such
corporation, partnership, or association and the State insofar as it concerns their individual franchises.
The second element requires that the dispute among the parties be intrinsically connected with the
regulation of the corporation. If the nature of the controversy involves matters that are purely civil in
character, necessarily, the case does not involve an intra-corporate controversy.
Given these standards, we now tackle the question posed for our determination under the specific
circumstances of this case:
Is there an intra-corporate relationship between the parties that would characterize the case as an intra-
corporate dispute?
We point out at the outset that while Rodrigo holds shares of stock in Zenith, he holds them in two
capacities: in his own right with respect to the 4,250 shares registered in his name, and as one of the
heirs of Anastacia Reyes with respect to the 136,598 shares registered in her name. What is material in
resolving the issues of this case under the allegations of the complaint is Rodrigo's interest as an heir
since the subject matter of the present controversy centers on the shares of stocks belonging to
Anastacia, not on Rodrigo's personally-owned shares nor on his personality as shareholder owning these
shares. In this light, all reference to shares of stocks in this case shall pertain to the shareholdings of the
deceased Anastacia and the parties' interest therein as her heirs.
Article 777 of the Civil Code declares that the successional rights are transmitted from the moment of
death of the decedent. Accordingly, upon Anastacia's death, her children acquired legal title to her
estate (which title includes her shareholdings in Zenith), and they are, prior to the estate's partition,
deemed co-owners thereof.[25] This status as co-owners, however, does not immediately and necessarily
make them stockholders of the corporation. Unless and until there is compliance with Section 63 of the
Corporation Code on the manner of transferring shares, the heirs do not become registered
stockholders of the corporation. Section 63 provides:
Section 63. Certificate of stock and transfer of shares. - The capital stock of stock corporations shall be
divided into shares for which certificates signed by the president or vice-president, countersigned by the
secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in
accordance with the by-laws. Shares of stock so issued are personal property and may be transferred by
delivery of the certificate or certificates indorsed by the owner or his attorney-in-fact or other person
legally authorized to make the transfer. No transfer, however, shall be valid, except as between the
parties, until the transfer is recorded in the books of the corporation so as to show the names of the
parties to the transaction, the date of the transfer, the number of the certificate or certificates, and
the number of shares transferred. [Emphasis supplied.]
No shares of stock against which the corporation holds any unpaid claim shall be transferable in the
books of the corporation.
We note, in relation with the above statement, that in Abejo v. Dela Cruz[27] and TCL Sales Corporation v.
Court of Appeals[28] we did not require the registration of the transfer before considering the transferee
a stockholder of the corporation (in effect upholding the existence of an intra-corporate relation
between the parties and bringing the case within the jurisdiction of the SEC as an intra-corporate
controversy). A marked difference, however, exists between these cases and the present one.
In Abejo and TCL Sales, the transferees held definite and uncontested titles to a specific number of
shares of the corporation; after the transferee had established prima facie ownership over the shares of
stocks in question, registration became a mere formality in confirming their status as stockholders. In
the present case, each of Anastacia's heirs holds only an undivided interest in the shares. This interest,
at this point, is still inchoate and subject to the outcome of a settlement proceeding; the right of the
heirs to specific, distributive shares of inheritance will not be determined until all the debts of the estate
of the decedent are paid. In short, the heirs are only entitled to what remains after payment of the
decedent's debts;[29] whether there will be residue remains to be seen. Justice Jurado aptly puts it as
follows:
No succession shall be declared unless and until a liquidation of the assets and debts left by the
decedent shall have been made and all his creditors are fully paid. Until a final liquidation is made and
all the debts are paid, the right of the heirs to inherit remains inchoate. This is so because under our
rules of procedure, liquidation is necessary in order to determine whether or not the decedent has left
any liquid assets which may be transmitted to his heirs.[30] [Emphasis supplied.]
Rodrigo must, therefore, hurdle two obstacles before he can be considered a stockholder of Zenith with
respect to the shareholdings originally belonging to Anastacia. First, he must prove that there are
shareholdings that will be left to him and his co-heirs, and this can be determined only in a settlement of
the decedent's estate. No such proceeding has been commenced to date. Second, he must register the
transfer of the shares allotted to him to make it binding against the corporation. He cannot demand that
this be done unless and until he has established his specific allotment (and prima facie ownership) of the
shares. Without the settlement of Anastacia's estate, there can be no definite partition and distribution
of the estate to the heirs. Without the partition and distribution, there can be no registration of the
transfer. And without the registration, we cannot consider the transferee-heir a stockholder who may
invoke the existence of an intra-corporate relationship as premise for an intra-corporate controversy
within the jurisdiction of a special commercial court.
In sum, we find that - insofar as the subject shares of stock (i.e., Anastacia's shares) are concerned -
Rodrigo cannot be considered a stockholder of Zenith. Consequently, we cannot declare that an intra-
corporate relationship exists that would serve as basis to bring this case within the special commercial
court's jurisdiction under Section 5(b) of PD 902-A, as amended. Rodrigo's complaint, therefore, fails the
relationship test.
The body rather than the title of the complaint determines the nature of an action.[31] Our examination
of the complaint yields the conclusion that, more than anything else, the complaint is about the
protection and enforcement of successional rights. The controversy it presents is purely civil rather than
corporate, although it is denominated as a "complaint for accounting of all corporate funds and assets."
Contrary to the findings of both the trial and appellate courts, we read only one cause of action alleged
in the complaint. The "derivative suit for accounting of the funds and assets of the corporation which
are in the control, custody, and/or possession of the respondent [herein petitioner Oscar]" does not
constitute a separate cause of action but is, as correctly claimed by Oscar, only an incident to the "action
Another significant indicator that points us to the real nature of the complaint are Rodrigo's repeated
claims of illegal and fraudulent transfers of Anastacia's shares by Oscar to the prejudice of the other
heirs of the decedent; he cited these allegedly fraudulent acts as basis for his demand for the collation
and distribution of Anastacia's shares to the heirs. These claims tell us unequivocally that the present
controversy arose from the parties' relationship as heirs of Anastacia and not as shareholders of Zenith.
Rodrigo, in filing the complaint, is enforcing his rights as a co-heir and not as a stockholder of Zenith. The
injury he seeks to remedy is one suffered by an heir (for the impairment of his successional rights) and
not by the corporation nor by Rodrigo as a shareholder on record.
More than the matters of injury and redress, what Rodrigo clearly aims to accomplish through his
allegations of illegal acquisition by Oscar is the distribution of Anastacia's shareholdings without a prior
settlement of her estate - an objective that, by law and established jurisprudence, cannot be done. The
RTC of Makati, acting as a special commercial court, has no jurisdiction to settle, partition, and distribute
the estate of a deceased. A relevant provision - Section 2 of Rule 90 of the Revised Rules of Court - that
contemplates properties of the decedent held by one of the heirs declares:
Questions as to advancement made or alleged to have been made by the deceased to any heir may be
heard and determined by the court having jurisdiction of the estate proceedings; and the final order of
the court thereon shall be binding on the person raising the questions and on the heir. [Emphasis
supplied.]
Worth noting are this Court's statements in the case of Natcher v. Court of Appeals:[32]
Matters which involve settlement and distribution of the estate of the decedent fall within the
exclusive province of the probate court in the exercise of its limited jurisdiction.
xxx x
It is clear that trial courts trying an ordinary action cannot resolve to perform acts pertaining to a
special proceeding because it is subject to specific prescribed rules. [Emphasis supplied.]
That an accounting of the funds and assets of Zenith to determine the extent and value of Anastacia's
shareholdings will be undertaken by a probate court and not by a special commercial court is completely
consistent with the probate court's limited jurisdiction. It has the power to enforce an accounting as a
necessary means to its authority to determine the properties included in the inventory of the estate to
be administered, divided up, and distributed. Beyond this, the determination of title or ownership over
the subject shares (whether belonging to Anastacia or Oscar) may be conclusively settled by the probate
court as a question of collation or advancement. We had occasion to recognize the court's authority to
act on questions of title or ownership in a collation or advancement situation in Coca v. Pangilinan[33]
where we ruled:
It should be clarified that whether a particular matter should be resolved by the Court of First Instance
in the exercise of its general jurisdiction or of its limited probate jurisdiction is in reality not a
jurisdictional question. In essence, it is a procedural question involving a mode of practice "which may
be waived."
As a general rule, the question as to title to property should not be passed upon in the testate or
intestate proceeding. That question should be ventilated in a separate action. That general rule has
Thus, the probate court may provisionally pass upon in an intestate or testate proceeding the question
of inclusion in, or exclusion from, the inventory of a piece of property without prejudice to its final
determination in a separate action.
Although generally, a probate court may not decide a question of title or ownership, yet if the
interested parties are all heirs, or the question is one of collation or advancement, or the parties
consent to the assumption of jurisdiction by the probate court and the rights of third parties are not
impaired, the probate court is competent to decide the question of ownership. [Citations omitted.
Emphasis supplied.]
In sum, we hold that the nature of the present controversy is not one which may be classified as an
intra-corporate dispute and is beyond the jurisdiction of the special commercial court to resolve. In
short, Rodrigo's complaint also fails the nature of the controversy test.
DERIVATIVE SUIT
Rodrigo's bare claim that the complaint is a derivative suit will not suffice to confer jurisdiction on the
RTC (as a special commercial court) if he cannot comply with the requisites for the existence of a
derivative suit. These requisites are:
a. the party bringing suit should be a shareholder during the time of the act or transaction
complained of, the number of shares not being material;
b. the party has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of
directors for the appropriate relief, but the latter has failed or refused to heed his plea; and
c. the cause of action actually devolves on the corporation; the wrongdoing or harm having been or
being caused to the corporation and not to the particular stockholder bringing the suit. [34]
Based on these standards, we hold that the allegations of the present complaint do not amount to a
derivative suit.
First, as already discussed above, Rodrigo is not a shareholder with respect to the shareholdings
originally belonging to Anastacia; he only stands as a transferee-heir whose rights to the share are
inchoate and unrecorded. With respect to his own individually-held shareholdings, Rodrigo has not
alleged any individual cause or basis as a shareholder on record to proceed against Oscar.
Second, in order that a stockholder may show a right to sue on behalf of the corporation, he must allege
with some particularity in his complaint that he has exhausted his remedies within the corporation by
making a sufficient demand upon the directors or other officers for appropriate relief with the
expressed intent to sue if relief is denied.[35] Paragraph 8 of the complaint hardly satisfies this
requirement since what the rule contemplates is the exhaustion of remedies within the corporate
setting:
8. As members of the same family, complainant Rodrigo C. Reyes has resorted [to] and exhausted all
legal means of resolving the dispute with the end view of amicably settling the case, but the
dispute between them ensued.
Lastly, we find no injury, actual or threatened, alleged to have been done to the corporation due to
Oscar's acts. If indeed he illegally and fraudulently transferred Anastacia's shares in his own name, then
the damage is not to the corporation but to his co-heirs; the wrongful transfer did not affect the capital
stock or the assets of Zenith. As already mentioned, neither has Rodrigo alleged any particular cause or
wrongdoing against the corporation that he can champion in his capacity as a shareholder on record.[36]
In summary, whether as an individual or as a derivative suit, the RTC - sitting as special commercial
court - has no jurisdiction to hear Rodrigo's complaint since what is involved is the determination and
distribution of successional rights to the shareholdings of Anastacia Reyes. Rodrigo's proper remedy,
under the circumstances, is to institute a special proceeding for the settlement of the estate of the
deceased Anastacia Reyes, a move that is not foreclosed by the dismissal of his present complaint.
WHEREFORE, we hereby GRANT the petition and REVERSE the decision of the Court of Appeals dated
May 26, 2004 in CA-G.R. SP No. 74970. The complaint before the Regional Trial Court, Branch 142,
Makati, docketed as Civil Case No. 00-1553, is ordered DISMISSED for lack of jurisdiction.
Moreover, a defendant who moves to dismiss the complaint on the ground of lack of cause of action
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 judgment 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.
REYNATO S. PUNO
Chief Justice
LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO
Associate Justice Associate Justice
ANTONIO T. CARPIO MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice Associate Justice
*RENATO C. CORONA CONCHITA CARPIO MORALES
Associate Justice Associate Justice
ADOLFO S. AZCUNA DANTE O. TINGA
Associate Justice Associate Justice
MINITA V. CHICO-NAZARIO PRESBITERO J. VELASCO, JR.
Associate Justice Associate Justice
RUBEN T. REYES TERESITA J. LEONARDO-DE CASTRO
Associate Justice Associate Justice
ARTURO D. BRION
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the
above Decision were reached in consultation before the case was assigned to the writer of the opinion
of the Court.
REYNATO S. PUNO
Chief Justice
Footnotes
* On leave.
1 Cruz, The Law of Public Officers, 2007 ed., p. 223.
2 Moss v. Cummins, 44 Mich. 359, 360-361, 6 N.W. 843, 844 (1880).
3 Rollo, pp. 630-645; Vinzons-Chato v. Fortune Tobacco Corporation, G.R. No. 141309, June 19 2007, 525
SCRA 11.
4 Id. at 632-634.
5
Id. at 643.
6 Id. at 646.
7 Id. at 859.
8 Id. at 860-882.
9 Id. at 860-864.
10 Id. at 881.
11 Id. at 891.
12 Mechem, A Treatise on the Law of Public Offices and Officers (1890), pp. 386-387.
13 Id. at 390.
14 Id. at 390-391.
15 Supra note 1.
16
Supra note 12, at 390-391.
17 Butler v. Kent, 19 Johns. 223, 10 Am. Dec. 219 (1821).
obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties
of another person shall be liable to the latter for damages:
(1) Freedom of religion;
(2) Freedom of speech;
(3) Freedom to write for the press or to maintain a periodical publication;
(4) Freedom from arbitrary or illegal detention;
(5) Freedom of suffrage;
(6) The right against deprivation of property without due process of law;
(7) The right to a just compensation when private property is taken for public use;
(8) The right to the equal protection of the laws;
(9) The right to be secure in one's person, house, papers, and effects against unreasonable searches and
seizures;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and correspondence;
(12) The right to become a member of associations or societies for purposes not contrary to law;
(13) The right to take part in a peaceable assembly to petition the Government for redress of grievances;
(14) The right to be free from involuntary servitude in any form;
(15) The right of the accused against excessive bail;
(16) The right of the accused to be heard by himself and counsel, to be informed of the nature and cause
of the accusation against him, to have a speedy and public trial, to meet witnesses face to face, and to
have compulsory process to secure the attendance of witnesses in his behalf;
(17) Freedom from being compelled to be a witness against one's self, or from being forced to confess
guilt, or from being induced by a promise of immunity or reward to make such confession, except when
the person confessing becomes a State witness;
(18) Freedom from excessive fines, or cruel and unusual punishment, unless the same is imposed or
inflicted in accordance with a statute which has not been judicially declared unconstitutional; and
(19) Freedom of access to the courts.
In any of the cases referred to in this article, whether or not the defendant's act or omission constitutes
a criminal offense, the aggrieved party has a right to commence an entirely separate and distinct civil
action for damages, and for other relief. Such civil action shall proceed independently of any criminal
prosecution (if the latter be instituted) and may be proved by preponderance of evidence.
The indemnity shall include moral damages. Exemplary damages may also be adjudicated.
The responsibility herein set forth is not demandable from a judge unless his act or omission constitutes
a violation of the Penal Code or other penal statute.
20 Vinzons-Chato v. Fortune Tobacco Corporation, supra note 3.
21 Sps. Custodio v. Court of Appeals, 323 Phil. 575 (1996), cited in Laynesa v. Uy, G.R. No. 149553,
236, 244.
G. Tolentino, concurring.
2
TSN, August 17, 2001, p. 7.
3
TSN, October 12, 2001, pp. 51-53.
4 Rollo, pp. 63-134, 136-197.
5
Id. at 198-203.
6
Id. at 203.
7
Id. at 135, 204.
8
Id. at 204.
9
Id. at 205-208.
10 Id. at 277-281.
11 Id. at 282-353.
12 Id. at 280-281.
13 Id. at 355-363.
14 TSN, August 17, 2001, p. 8.
15 Id. at 9.
16 Id. at 7.
17 Records, pp. 442-450.
18 Id. at 451-455.
19 Id. at 462-464.
20 Id. at 465-474.
21 Id. at 481-482.
22 Id. at 483-503.
23 CA rollo, p. 108.
24 Rollo, pp. 43-59.
294.
53 Rollo, pp. 206-207.
54 Id. at 198.
55
TSN, October 12, 2001, pp. 9-13.
56 49 Phil. 703.
57 Id. at 714-716.
58 G.R. No. 74730, August 25, 1989, 176 SCRA 741, 749.
59 Rollo, pp. 556-564.
60 Philippine Bank of Communications v. Court of Appeals, G.R. No. 118552, February 5, 1996, 253 SCRA
241, 253.
61
114 Phil. 401 (1962).
62 Danao v. Court of Appeals, G.R. L-48276, September 30, 1987, 154 SCRA 447, 457.
JAMES ESTRELLER, EDUARDO CULIANAN, GREG CARROS, RAQUEL YEE, JOSELITO PENILLA, LORNA
DOTE, CRESENCIANA CLEOPAS, TRINIDAD TEVES, SONIA PENILLA, ANITA GOMINTONG, CHING
DIONESIO, MARIBEL MANALO, DESIRES HUERTO, and RAYMUNDO CORTES, Petitioners,
vs.
LUIS MIGUEL YSMAEL and CRISTETA L. SANTOS-ALVAREZ, Respondents.*
DE C I S I O N
AUSTRIA-MARTINEZ, J.:
In the present petition, the Court finds occasion to reassert the legal precepts that a co-owner may file
an action for recovery of possession without the necessity of joining all the other co-owners as co-
plaintiffs since the suit is deemed to be instituted for the benefit of all; and that Section 2 of Presidential
Decree (P.D.) No. 2016, reinforced by P.D. No. 1517, which prohibits the eviction of qualified
tenants/occupants, extends only to landless urban families who are rightful occupants of the land and its
structures, and does not include those whose presence on the land is merely tolerated and without the
benefit of contract, those who enter the land by force or deceit, or those whose possession is under
litigation.
Respondents filed with the Regional Trial Court (RTC), Branch 216, Quezon City, a case for Recovery of
Possession against petitioners, claiming ownership of the property subject of dispute located in E.
Rodriguez Avenue and La Filonila Streets in Quezon City, by virtue of Transfer Certificate of Title (TCT)
No. 41698 issued by the Register of Deeds of Quezon City on June 10, 1958. Respondents alleged that on
various dates in 1973, petitioners entered the property through stealth and strategy and had since
occupied the same; and despite demands made in March 1993, petitioners refused to vacate the
premises, prompting respondents to file the action. 1
Petitioners denied respondents' allegations. According to them, respondent Luis Miguel Ysmael (Ysmael)
had no personality to file the suit since he only owned a small portion of the property, while respondent
Cristeta Santos-Alvarez (Alvarez) did not appear to be a registered owner thereof. Petitioners also
contended that their occupation of the property was lawful, having leased the same from the
Magdalena Estate, and later on from Alvarez. Lastly, petitioners asserted that the property has already
been proclaimed by the Quezon City Government as an Area for Priority Development under P. D. Nos.
1517 and 2016, which prohibits the eviction of lawful tenants and demolition of their homes. 2
After trial, the RTC rendered its Decision dated September 15, 2000 in favor of respondents. The
dispositive portion of the Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiffs Luis Miguel Ysmael
and Cristeta L. Santos-Alvarez and against defendants ordering the latter and all persons claiming rights
under them to immediately vacate the subject property and peacefully surrender the same to the
plaintiffs.
Defendants are likewise ordered to pay plaintiffs the following:
1. The amount of P400.00 each per month from the date of extra-judicial demand until the subject
property is surrendered to plaintiffs as reasonable compensation for the use and possession thereof;
2. The amount of P20,000.00 by way of exemplary damages;
3. The amount of P20,000.00 by way of attorney's fees and litigation expenses;
4. Cost of suit.
Corollarily, the counter-claims of defendants are hereby DISMISSED for lack of merit.
SO ORDERED.3
Petitioners appealed to the Court of Appeals (CA), which, in a Decision 4 dated March 14, 2005, dismissed
their appeal and affirmed in toto the RTC Decision.
Hence, the present petition for review under Rule 45 of the Rules of Court, on the following grounds:
I
THE HONORABLE COURT OF APPEALS ERRED IN CONCLUDING THAT RESPONDENTS YSMAEL AND
ALVAREZ ARE BOTH "REAL PARTIES IN INTEREST" WHO WOULD BE BENEFITED OR INJURED BY THE
JUDGMENT OR THE PARTY ENTITLED TO THE AVAILS OF THE SUIT.
II
THE HONORABLE COURT OF APPEALS FAILED TO CONSIDER AND DECIDE THE RELEVANT
JOSEPHINE MARMO,* NESTOR ESGUERRA, DANILO DEL PILAR and MARISA DEL PILAR, Petitioners,
vs.
MOISES O. ANACAY Respondent.
DE C I S I O N
BRION, J.:
Before us is the Petition for Review on Certiorari,1 filed by the spouses Josephine Marmo and Nestor
Esguerra and the spouses Danilo del Pilar and Marisa del Pilar (collectively, the petitioners), to reverse
and set aside the Decision2 dated December 28, 2007 and the Resolution3 dated April 11, 2008 of the
Former Special Eleventh Division of the Court of Appeals (CA) in CA-G.R. SP No. 94673. The assailed CA
Decision dismissed the petitioners’ petition for certiorari challenging the Orders dated March 14, 20064
and May 8, 20065 of the Regional Trial Court (RTC), Branch 90, Dasmariñas, Cavite in Civil Case No.
2919-03, while the assailed CA Resolution denied the petitioners’ motion for reconsideration.
FACTUAL BACKGROUND
The facts of the case, as gathered from the parties’ pleadings, are briefly summarized below:
On September 16, 2003, respondent Moises O. Anacay filed a case for Annulment of Sale, Recovery of
Title with Damages against the petitioners6 and the Register of Deeds of the Province of Cavite,
docketed as Civil Case No. 2919-03.7 The complaint states, among others, that: the respondent is the
bona-fide co-owner, together with his wife, Gloria P. Anacay (now deceased), of a 50-square meter
parcel of land and the house built thereon, located at Blk. 54, Lot 9, Regency Homes, Brgy. Malinta,
Dasmariñas, Cavite, covered by Transfer Certificate of Title (TCT) No. T-815595 of the Register of Deeds
of Cavite; they authorized petitioner Josephine to sell the subject property; petitioner Josephine sold the
subject property to petitioner Danilo for P520,000.00, payable in monthly installments of P8,667.00
from May 2001 to June 2006; petitioner Danilo defaulted in his installment payments from December
2002 onwards; the respondent subsequently discovered that TCT No. 815595 had been cancelled and
TCT No. T-972424 was issued in petitioner Josephine’s name by virtue of a falsified Deed of Absolute
Sale dated September 20, 2001; petitioner Josephine subsequently transferred her title to petitioner
Danilo; TCT No. T-972424 was cancelled and TCT No. T-991035 was issued in petitioner Danilo’s name.
The respondent sought the annulment of the Deed of Absolute Sale dated September 20, 2001 and the
cancellation of TCT No. T-991035; in the alternative, he demanded petitioner Danilo’s payment of the
balance of P347,000.00 with interest from December 2002, and the payment of moral damages,
attorney’s fees, and cost of suit.
In her Answer, petitioner Josephine averred, among others, that the respondent’s children, as co-
owners of the subject property, should have been included as plaintiffs because they are indispensable
parties.8 Petitioner Danilo echoed petitioner Josephine’s submission in his Answer.9
Following the pre-trial conference, the petitioners filed a Motion to Dismiss the case for the
respondent’s failure to include his children as indispensable parties.10
The respondent filed an Opposition, arguing that his children are not indispensable parties because the
issue in the case can be resolved without their participation in the proceedings.11
THE RTC RULING
The RTC found the respondent’s argument to be well-taken and thus denied the petitioners’ motion to
dismiss in an Order dated March 14, 2006.12 It also noted that the petitioners’ motion was simply filed to
delay the proceedings.
After the denial of their Motion for Reconsideration,13 the petitioners elevated their case to the CA
through a Petition for Certiorari under Rule 65 of the Rules of Court.14 They charged the RTC with grave
abuse of discretion amounting to lack of jurisdiction for not dismissing the case after the respondent
failed to include indispensable parties.
THE CA RULING
The CA dismissed the petition15 in a Decision promulgated on December 28, 2007. It found that the RTC
did not commit any grave abuse of discretion in denying the petitioners’ motion to dismiss, noting that
LEONIS NAVIGATION CO., INC. and WORLD MARINE PANAMA, S.A., Petitioners,
vs.
CATALINO U. VILLAMATER and/or The Heirs of the Late Catalino U. Villamater, represented herein by
Sonia Mayuyu Villamater; and NATIONAL LABOR RELATIONS COMMISSION, Respondents.
DE C I S I O N
NACHURA, J.:
This is a petition for review on certiorari 1 under Rule 45 of the Rules of Court, seeking to annul and set
aside the Decision2 dated May 3, 2007 and the Resolution3 dated July 23, 2007 of the Court of Appeals
(CA) in CA-G.R. SP No. 85594, entitled "Leonis Navigation Co., Inc., et al. v. Catalino U. Villamater, et al."
The antecedents of this case are as follows:
Private respondent Catalino U. Villamater (Villamater) was hired as Chief Engineer for the ship MV Nord
Monaco, owned by petitioner World Marine Panama, S.A., through the services of petitioner Leonis
Navigation Co., Inc. (Leonis), as the latter’s local manning agent. Consequent to this employment,
Villamater, on June 4, 2002, executed an employment contract,4 incorporating the Standard Terms and
Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels as prescribed
by the Philippine Overseas Employment Administration (POEA).
Prior to his deployment, Villamater underwent the required Pre-Employment Medical Examination
(PEME). He passed the PEME and was declared "Fit to Work."5 Thereafter, Villamater was deployed on
June 26, 2002.
Sometime in October 2002, around four (4) months after his deployment, Villamater suffered intestinal
bleeding and was given a blood transfusion. Thereafter, he again felt weak, lost considerable weight,
and suffered intermittent intestinal pain. He consulted a physician in Hamburg, Germany, who advised
hospital confinement. Villamater was diagnosed with Obstructive Adenocarcinoma of the Sigmoid, with
multiple liver metastases, possibly local peritoneal carcinosis and infiltration of the bladder, possibly
lung metastasis, and anemia; Candida Esophagitis; and Chronic Gastritis. He was advised to undergo
chemotherapy and continuous supportive treatment, such as pain-killers and blood transfusion.6
Villamater was later repatriated, under medical escort, as soon as he was deemed fit to travel. As soon
as he arrived in the Philippines, Villamater was referred to company-designated physicians. The
diagnosis and the recommended treatment abroad were confirmed. He was advised to undergo six (6)
cycles of chemotherapy. However, Dr. Kelly Siy Salvador, one of the company-designated physicians,
opined that Villamater’s condition "appears to be not work-related," but suggested a disability grading
of 1.7
In the course of his chemotherapy, when no noticeable improvement occurred, Villamater filed a
complaint8 before the Arbitration Branch of the National Labor Relations Commission (NLRC) for
payment of permanent and total disability benefits in the amount of US$80,000.00, reimbursement of
medical and hospitalization expenses in the amount of P11,393.65, moral damages in the sum of
P1,000,000.00, exemplary damages in the amount of P1,000,000.00, as well as attorney’s fees.
After the submission of the required position papers, the Labor Arbiter rendered a decision9 dated July
28, 2003 in favor of Villamater, holding that his illness was compensable, but denying his claim for moral
and exemplary damages. The Labor Arbiter disposed as follows—
WHEREFORE, foregoing premises considered, judgment is hereby rendered declaring complainant’s
illness to be compensable and ordering respondents LEONIS NAVIGATION CO., INC. and WORLD MARINE
PANAMA, S.A. liable to pay, jointly and severally, complainant CATALINO U. VILLAMATER, the amount of
US$60,000.00 or its Philippine Peso equivalent at the time of actual payment, representing the latter’s
permanent total disability benefits plus ten percent (10%) thereof as Attorney’s Fees.
All other claims are dismissed for lack of merit.
SO ORDERED.10
Petitioners appealed to the NLRC. Villamater also filed his own appeal, questioning the award of the
Labor Arbiter and claiming that the 100% degree of disability should be compensated in the amount of
US$80,000.00, pursuant to Section 2, Article XXI of the ITF-JSU/AMOSUP Collective Bargaining
Agreement (CBA) between petitioners and Associated Marine Officers & Seamen’s Union of the
REMLAW Page 334
Agreement (CBA) between petitioners and Associated Marine Officers & Seamen’s Union of the
Philippines, which covered the employment contract of Villamater.
On February 4, 2004, the NLRC issued its resolution,11 dismissing the respective appeals of both parties
and affirming in toto the decision of the Labor Arbiter.
Petitioners filed their motion for reconsideration of the February 4, 2004 resolution, but the NLRC
denied the same in its resolution dated June 15, 2004.
Aggrieved, petitioners filed a petition for certiorari under Rule 65 of the Rules of Court before the CA.
After the filing of the required memoranda, the CA rendered its assailed May 3, 2007 Decision,
dismissing the petition. The appellate court, likewise, denied petitioners’ motion for reconsideration in
its July 23, 2007 Resolution.
Hence, this petition based on the following grounds, to wit:
First, the Court of Appeals erroneously held that *the+ Commission’s Dismissal Decision does not
constitute grave abuse of discretion amounting to lack or excess of jurisdiction but mere error of
judgment, considering that the decision lacks evidentiary support and is contrary to both evidence on
record and prevailing law and jurisprudence.
Second, the Court of Appeals seriously erred in upholding the NLRC’s decision to award Grade 1
Permanent and Total Disability Benefits in favor of seaman Villamater despite the lack of factual and
legal basis to support such award, and more importantly, when it disregarded undisputed facts and
substantial evidence presented by petitioners which show that seaman Villamater’s illness was not
work-related and hence, not compensable, as provided by the Standard Terms of the POEA Contract.
Third, the Court of Appeals erred in holding that non-joinder of indispensable parties warrant the
outright dismissal of the Petition for Review on Certiorari.
Fourth, the Court of Appeals erroneously held that final and executory decisions or resolutions of the
NLRC render appeals to superior courts moot and academic.
Last, the Court of Appeals seriously erred in upholding the award of attorney’s fees considering that the
grant has neither factual nor legal basis.12
Before delving into the merits of this petition, we deem it fit to discuss the procedural issues raised by
petitioners.
First. It is worthy to note that the CA dismissed the petition, considering that (1) the June 15, 2004
Resolution of the NLRC had already become final and executory on June 26, 2004, and the same was
already recorded in the NLRC Book of Entries of Judgments; and that (2) the award of the Labor Arbiter
was already executed, thus, the case was closed and terminated.
According to Sections 14 and 15, Rule VII of the 2005 Revised Rules of Procedure of the NLRC—
Section 14. Finality of decision of the commission and entry of judgment. – a) Finality of the Decisions,
Resolutions or Orders of the Commission. – Except as provided in Section 9 of Rule X, the decisions,
resolutions or orders of the Commission shall become final and executory after ten (10) calendar days
from receipt thereof by the parties.
b) Entry of Judgment. – Upon the expiration of the ten (10) calendar day period provided in paragraph
(a) of this Section, the decision, resolution, or order shall be entered in a book of entries of judgment.
The Executive Clerk or Deputy Executive Clerk shall consider the decision, resolution or order as final
and executory after sixty (60) calendar days from date of mailing in the absence of return cards,
certifications from the post office, or other proof of service to parties.
Section 15. Motions for reconsideration. – Motion for reconsideration of any decision, resolution or
order of the Commission shall not be entertained except when based on palpable or patent errors;
provided that the motion is under oath and filed within ten (10) calendar days from receipt of decision,
resolution or order, with proof of service that a copy of the same has been furnished, within the
reglementary period, the adverse party; and provided further, that only one such motion from the same
party shall be entertained.
Should a motion for reconsideration be entertained pursuant to this SECTION, the resolution shall be
executory after ten (10) calendar days from receipt thereof.13
Petitioners received the June 15, 2004 resolution of the NLRC, denying their motion for reconsideration,
on June 16, 2004. They filed their petition for certiorari before the CA only on August 9, 2004,14 or 54
calendar days from the date of notice of the June 15, 2004 resolution. Considering that the above-
mentioned 10-day period had lapsed without petitioners filing the appropriate appeal, the NLRC issued
an Entry of Judgment dated June 28, 2004.
DEUTSCHE GESELLSCHAFT FÜR TECHNISCHE ZUSAMMENARBEIT, also known as GERMAN AGENCY FOR
TECHNICAL COOPERATION, (GTZ) HANS PETER PAULENZ and ANNE NICOLAY, Petitioners,
vs.
HON. COURT OF APPEALS, HON. ARIEL CADIENTE SANTOS, Labor Arbiter of the Arbitration Branch,
National Labor Relations Commission, and BERNADETTE CARMELLA MAGTAAS, CAROLINA DIONCO,
CHRISTOPHER RAMOS, MELVIN DELA PAZ, RANDY TAMAYO and EDGARDO RAMILLO, Respondents.
DE C I S I O N
TINGA, J.:
On 7 September 1971, the governments of the Federal Republic of Germany and the Republic of the
Philippines ratified an Agreement concerning Technical Co-operation (Agreement) in Bonn, capital of
what was then West Germany. The Agreement affirmed the countries’ "common interest in promoting
the technical and economic development of their States, and recogni[zed] the benefits to be derived by
both States from closer technical co-operation," and allowed for the conclusion of "arrangements
concerning individual projects of technical co-operation."1 While the Agreement provided for a limited
term of effectivity of five (5) years, it nonetheless was stated that "[t]he Agreement shall be tacitly
extended for successive periods of one year unless either of the two Contracting Parties denounces it in
writing three months prior to its expiry," and that even upon the Agreement’s expiry, its provisions
would "continue to apply to any projects agreed upon x x x until their completion."2
On 10 December 1999, the Philippine government, through then Foreign Affairs Secretary Domingo
Siazon, and the German government, agreed to an Arrangement in furtherance of the 1971 Agreement.
This Arrangement affirmed the common commitment of both governments to promote jointly a project
called, Social Health Insurance—Networking and Empowerment (SHINE), which was designed to "enable
Philippine families–especially poor ones–to maintain their health and secure health care of sustainable
quality."3 It appears that SHINE had already been in existence even prior to the effectivity of the
Arrangement, though the record does not indicate when exactly SHINE was constituted. Nonetheless,
the Arrangement stated the various obligations of the Filipino and German governments. The relevant
provisions of the Arrangement are reproduced as follows:
3. The Government of the Federal Republic of Germany shall make the following contributions to the
project.
It shall
(a) second
- one expert in health economy, insurance and health systems for up to 48 expert/months,
- one expert in system development for up to 10 expert/months
- short-term experts to deal with special tasks for a total of up to 18 expert/months,
- project assistants/guest students as required, who shall work on the project as part of their basic and
further training and assume specific project tasks under the separately financed junior staff promotion
programme of the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ);
(b) provide in situ
- short-term experts to deal with diverse special tasks for a total of up to 27 expert/months,
- five local experts in health economy, health insurance, community health systems, information
technology, information systems, training and community mobilization for a total of up to 240
expert/months,
- local and auxiliary personnel for a total of up to 120 months;
(c) supply inputs, in particular
- two cross-country vehicles,
- ten computers with accessories,
- office furnishings and equipment
up to a total value of DM 310,000 (three hundred and ten thousand Deutsche Mark);
(c) meet
SECOND DIVISION
DECIS ION
Tinga, J.:
The Court settles an issue, heretofore undecided, on whether the absence of the signature in the
required verification and certification against forum-shopping of a party misjoined as a plaintiff is a valid
ground for the dismissal of the complaint. We rule in the negative.
The relevant facts in this Petition for Review are culled from the records.
On 24 October 2001, a complaint for damages was lodged before the Regional Trial Court (RTC) of
Caloocan City, Branch 126.[1] The complaint was filed by Christine Chua, herein petitioner, impleading
her brother Jonathan Chua as a necessary co-plaintiff. Named as defendants in the suit were herein
respondents Jorge Torres and Antonio Beltran. Torres was the owner of the 9th Avenue Caltex Service
Center (Caltex Service Center), while Beltran was an employee of the said establishment as the head of
its Sales and Collection Division.[2]
The complaint alleged that on 3 April 2000, Jonathan Chua issued in favor of the Caltex Service Center
his personal Rizal Commercial Banking Corporation (RCBC) Check No. 0412802 in the amount of Nine
Thousand Eight Hundred Forty Nine Pesos and Twenty Centavos (P9,849.20) in payment for purchases
of diesel oil. However, the check was dishonored by the drawee bank when presented for payment on
the ground that the account was closed. Beltran then sent petitioner a demand letter informing her of
the dishonor of the check and demanding the payment thereof. Petitioner ignored the demand letter on
the ground that she was not the one who issued the said check.
Without bothering to ascertain who had actually issued the check, Beltran instituted against petitioner a
criminal action for violation of Batas Pambansa Bilang 22 (B.P. 22). Subsequently, a criminal information
was filed against petitioner with the Metropolitan Trial Court (MTC) of Caloocan City, Branch 50.[3] The
MTC then issued a warrant of arrest against petitioner. The police officers tasked with serving the
warrant looked for her in her residence, in the auto repair shop of her brother, and even at the Central
University were she was enrolled as a medical student, all to the alleged embarrassment and 'social
humiliation of petitioner.[4]
REMLAW Page 363
humiliation of petitioner.[4]
Significantly, while Jonathan Chua was named as a plaintiff to the suit, it was explicitly qualified in the
second paragraph of the complaint that he was being 'impleaded here-in as a necessary party-
plaintiff.[6] There was no allegation in the complaint of any damage or injury sustained by Jonathan,
and the prayer therein expressly named petitioner as the only party to whom respondents were sought
to recompense.[7] Neither did Jonathan Chua sign any verification or certification against forum-
shopping, although petitioner did sign an attestation, wherein she identified herself as 'the principal
plaintiff.[8]
Upon motion of respondents, the RTC ordered the dismissal of the complaint[9] on the ground that
Jonathan Chua had not executed a certification against forum-shopping. The RTC stressed that Section 5,
Rule 7 of the Rules' of Civil Procedure, the rule requiring the
certification, makes no distinction whether the plaintiff required to execute the certification is a
principal party, a nominal party or a necessary party. Instead, the provision requires that a plaintiff or
principal party who files a complaint or initiatory pleading execute such certification. Jonathan Chua,
being a plaintiff in this case, was obliged to execute or sign such certification.[10] Hence, his failure to
do so in violation of the mandatory rule requiring the certification against forum-shopping constituted
valid cause for the dismissal of the petition.[11]
After the RTC denied the motion for reconsideration[12] lodged by petitioner, the matter was elevated
directly to this Court by way of petition for review under Rule 45, raising a purely legal question,[13]
cast, if somewhat unwieldily, as 'whether or not a co-plaintiff impleaded only as a necessary party, who
however has no claim for relief or is not asserting any claim for relief in the complaint, should also make
a certification against forum shopping.[14]
Preliminarily, it bears noting that Jonathan Chua did not sign as well any verification to the complaint,
ostensibly in violation of Section 7, Rule 4 of the Rules of Civil Procedure. The RTC failed to mention such
fact, as does petitioner in her present petition. In their arguments before this Court, respondents do
refer in passing to the verification requirement[15], but do not place any particular focus thereto. The
verification requirement is separate from the certification requirement.[16] It is noted that as a matter
of practice, the verification is usually accomplished at the same time as the certification against forum-
shopping; hence the customary nomenclature, 'Verification and Certification of Non Forum-Shopping or
its variants. For this reason, it is quite possible that the RTC meant to assail as well the failure of
Jonathan Chua to verify the complaint.
The verification requirement is significant, as it is intended to secure an assurance that the allegations in
the pleading are true and correct and not the product of the imagination or a matter of speculation, and
that the pleading is filed in good faith.[17] The absence of a proper verification is cause to treat the
pleading as unsigned and dismissible.[18] It would be as well that the Court discuss whether under the
circumstances, Jonathan Chua is also required to execute a verification in respect to petitioner's
complaint.
Having established the proper parameters of the petition, we proceed to the core issues. We find the
petition has merit, although we appreciate the situation differently from petitioner. Our decision
proceeds from the fundamental premise that Jonathan Chua was misjoined as a party plaintiff in this
It is elementary that it is only in the name of a real party in interest that a civil suit may be
prosecuted.[19] Under Section 2, Rule 3 of the Rules of Civil Procedure, 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.[20] One having no right or interest to protect cannot invoke the jurisdiction of
the court as a party plaintiff in an action.[21] To qualify a person to be a real party in interest in whose
name an action must be prosecuted, he must appear to be the present real owner of the right sought to
enforced.[22]
The subject complaint does not allege any rights of Jonathan Chua violated by respondents, present any
rights of his to be enforced, or seek in his behalf any rights to the avails of suit. In short, Jonathan claims
nothing, and for nothing, in the subject complaint. If he alone filed the complaint, it would have been
dismissed on the ground that the complaint states no cause of action, instituted as it was by a person
who was not a real party in interest.
But was it proper for petitioner to have even impleaded Jonathan as a co-plaintiff in the first place?
Petitioner alleged in her complaint that Jonathan was a necessary party, and remains consistent to that
claim even before this Court. She however fails to demonstrate how Jonathan can be considered as a
necessary party, other than by noting that he was 'the one who really
issued the check in controversy.[23] Such fact, if proven, may establish the malice of respondents in
filing the criminal case against petitioner for violation of B.P. 22, but does not create the need to require
Jonathan's participation as a necessary party.
Section 8, Rule 7 of the Rules of Civil Procedure defines a necessary party as 'one who is not
indispensable but who ought to be joined as a party if complete relief is to be accorded as to those
already parties, or for a complete determination or settlement of the claim subject of the action.[24]
Necessary parties are those whose presence is necessary to adjudicate the whole controversy, but
whose interests are so far separable that a final decree can be made in their absence without affecting
them.[25]
An example of a necessary party may be found in Seno v. Mangubat.[26] Petitioner therein sold her
property through a deed of sale to three vendees. Two of the vendees then sold their shares to the third
buyer, who then sold the property to another set of persons. Thereafter, petitioner, who claimed that
the true intent of the first sale was an equitable mortgage, filed a complaint seeking the reformation of
the deed of sale and the annulment of the second sale. The question arose whether the two vendees
who had since disposed of their shares should be considered as indispensable parties or necessary
parties. In concluding that they were only necessary parties, the Court reasoned:
In the present case, there are no rights of defendants Andres Evangelista and Bienvenido
Mangubat to be safeguarded if the sale should be held to be in fact an absolute sale nor if the sale
is held to be an equitable mortgage. Defendant Marcos Mangubat became the absolute owner of
the subject property by virtue of the sale to him of the shares of the aforementioned defendants
in the property. Said defendants no longer have any interest in the subject property. However,
being parties to the instrument sought to be reformed, their presence is necessary in order to
settle all the possible issues of the controversy. Whether the disputed sale be declared an
absolute sale or an equitable mortgage, the rights of all the defendants will have been amply
protected. Defendants-spouses Luzame in any event may enforce their rights against defendant
Marcos Mangubat.[27]
In Seno, the persons deemed by the Court as necessary parties may have had already disposed of their
interests in the property. However, should the lower court therein grant the prayer for the reformation
In contrast, Jonathan Chua does not stand to be affected should the RTC rule either favorably or
unfavorably of the complaint. This is due to the nature of the cause of action of the complaint, which
alleges an injury personal to petitioner, and the relief prayed for, which is to be adjudicated solely to
petitioner. There is no allegation in the complaint alleging any violation or omission of any right of
Jonathan, either arising from contract or from law.
It may be so that Jonathan may be called to testify by his sister, in order to prove the essential allegation
that she did not issue the check in question, and perhaps such testimony would be vital to petitioner's
cause of action. But this does not mean that Jonathan should be deemed a necessary party, as such
circumstance would merely place him in the same class as those witnesses whose testimony would be
necessary to prove the allegations of the complaint. But the fact remains that Jonathan would stand
unaffected by the final ruling on the complaint. The judicial confirmation or rejection of the allegations
therein, or grant or denial of the reliefs prayed for will not infringe on or augment any of his rights under
the law. If there would be any effect to Jonathan of the RTC's ultimate decision on the complaint, it
would be merely emotional, arising from whatever ties of kinship he may retain towards his sister, and
no different from whatever effects that may be similarly sustained on petitioner's immediate family.
Since we are unconvinced by petitioner's basic premise that Jonathan was a necessary party, it is
unnecessary to directly settle the issue as couched by petitioner of 'whether or not a co-plaintiff
impleaded only as a necessary party, who however has no claim for relief or is not asserting any claim
for relief in the complaint, should also make a certification against forum shopping.[28] We can note, as
the RTC did, that Section 5, Rule 7 of the 1997 Rules of Civil Procedure makes no distinctions that would
expressly exempt a necessary party from executing the certification against forum shopping.
Nonetheless, there are dimensions to the matter, heretofore unraised, that may unsettle a strict
application of the rule, such as if the necessary party is impleaded as a plaintiff or counterclaimant
without his knowledge or against his will.[29] But these circumstances relevant to a necessary party are
not present in this case, and thus require no further comment upon for now.
Instead, what the Court may rule upon is whether the absence of the signature of the person misjoined
as a party-plaintiff in either the verification page or certification against forum-shopping is ground for
the dismissal of the action. We rule that it is not so, and that the RTC erred in dismissing the instant
complaint. There is no judicial precedent affirming or rejecting such a view, but we are comfortable with
making such a pronouncement. A misjoined party plaintiff has no business participating in the case as a
plaintiff in the first place, and it would make little sense to require the misjoined party in complying with
all the requirements expected of plaintiffs.
At the same time, Section 11, Rule 3 of the 1997 Rules of Civil Procedure states:
Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties may be
dropped or added by order of the court on motion of any party or on its own initiative at any stage
of the action and on such terms as are just. Any claim against a misjoined party may be severed
and proceeded with separately. [30]
Clearly, misjoinder of parties is not fatal to the complaint. The rule prohibits dismissal of a suit on the
ground of non-joinder or misjoinder of parties.[31] Moreover, the dropping of misjoined parties from
the complaint may be done motu proprio by the court, at any stage, without need for a motion to such
effect from the adverse party.[32] Section 11, Rule 3 indicates that the misjoinder of parties, while
erroneous, may be corrected with ease through amendment, without further hindrance to the
It should then follow that any act or omission committed by a misjoined party plaintiff should not be
cause for impediment to the prosecution of the case, much less for the dismissal of the suit. After all,
such party should not have been included in the first place, and no efficacy should be accorded to
whatever act or omission of
the party.[33] Since the misjoined party plaintiff receives no recognition from the court as either an
indispensable or necessary party-plaintiff, it then follows that whatever action or inaction the misjoined
party may take on the verification or certification against forum-shopping is inconsequential. Hence, it
should not have mattered to the RTC that Jonathan Chua had failed to sign the certification against
forum-shopping, since he was misjoined as a plaintiff in the first place. The fact that Jonathan was
misjoined is clear on the face of the complaint itself, and the error of the RTC in dismissing the
complaint is not obviated by the fact that the adverse party failed to raise this point. After all, the RTC
could have motu proprio dropped Jonathan as a plaintiff, for the reasons above-stated which should
have been evident to it upon examination of the complaint.
There may be a school of thought that would nonetheless find some satisfaction in petitioner's woes
before the RTC, as it was her error in the first place of wrongfully impleading her brother as a party
plaintiff which ultimately served as cause for the dismissal of the complaint. The blame may in the final
analysis lie with petitioner, yet we should not construe the rules of procedure to quench an unnecessary
thirst to punish at the expense of the intellectual integrity of the rules. For our Rules of Court do not
regard the misjoinder of parties as an error of fatal consequence, and the logical extension of this
principle is to consider those procedural acts or omissions of misjoined parties as of similar import.
WHEREFORE, the Petition is GRANTED. The Orders dated 3 December 2001 and 15 January 2002 of the
Regional Trial Court of Caloocan City, Branch 126, in Civil Case No. C-19863 are SET ASIDE, and the
Complaint in the aforementioned case is REINSTATED. The lower court is enjoined to hear and decide
the case with deliberate dispatch. No pronouncement as to costs.
SO ORDERED.
LITTIE SARAH A. AGDEPPA, LYNN SARAH A. AGDEPPA, LOUELLA JEANNE A. AGDEPPA, and LALAINE
LILIBETH A. AGDEPPA, Petitioners,
vs.
HEIRS OF IGNACIO BONETE, represented by DOROTEA BONETE, HIPOLITO BONETE, MILAGROS
BONETE, MAURICIO BONETE, FERNANDO BONETE, and OPHELIA BONETE, Respondents.
DE C I S I O N
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari,1 seeking the reversal of the Court of Appeals (CA)
Decision,2 dated December 27, 2002,
which reversed and set aside the Order,3 dated May 21, 1990, issued by the Regional Trial Court (RTC),
Branch 18, of Midsayap, Cotabato.
The factual and procedural antecedents of the case are as follows:
In 1979, respondent Dorotea Bonete (Dorotea), widow of the late Ignacio Bonete and mother of
respondents Hipolito Bonete, Milagros Bonete, Mauricio Bonete, Fernando Bonete, and Ophelia Bonete
(respondents), obtained a loan in the amount of P55,000.00 from Development Bank of the Philippines
(DBP), Cotabato City Branch, in order to buy farm implements. A parcel of agricultural land, known as
Lot No. (1144) H-207865 with an area of 18.00 hectares, covered by Transfer Certificate of Title (TCT)
No. T-56923,4 issued in the name of Dorotea and situated in Demapaco, Libungan, Cotabato (subject
property), was used as collateral to secure the said loan.
In 1982, respondents, through Dorotea, received a notice of collection from DBP. Respondents alleged
that herein petitioner and counsel, Atty. Littie Sarah A. Agdeppa (Littie Sarah), expressed deep concern
and sympathy for them. Consequently, Littie Sarah accompanied Dorotea to DBP and obligated herself
to pay the loan. Thereafter, Dorotea was allegedly made to sign a document as Littie Sarah’s security for
the amount which the latter paid to DBP in connection with the said loan. Further, respondents alleged
that, since 1982, Littie Sarah and her representatives had been gradually easing them out of the subject
property and that they were ordered to stop the cultivation of their respective ricefields. Eventually,
respondents were forcibly ejected from the subject property.
Further, Littie Sarah planted corn and put up duck-raising projects on the subject property.
On this account, respondents inquired from the Register of Deeds and found that the title to the subject
property, which was in the name of respondents' predecessor-in-interest, the late Ignacio Bonete, had
already been canceled and transferred to Littie Sarah under TCT No. T-75454 by virtue of a purported
deed of sale. According to Dorotea, Littie Sarah took advantage of her by letting her sign a contract,
ostensibly as security for the loan from DBP, which later turned out to be a deed of sale. Thus,
respondents filed a Complaint5 for Recovery of Ownership and Possession and/or Annulment of Deed of
Sale of the Subject Property with Damages, docketed as Civil Case No. 484 before the RTC.
Littie Sarah filed a Motion to Dismiss6 the Complaint based on the following grounds: 1) that
respondents had no legal capacity to sue; 2) that respondents were not the real parties in interest; 3)
that the Complaint stated no cause of action; and 4) that the claim or demand set forth in the Complaint
had already been waived and extinguished.
Later, the Complaint was amended, impleading herein petitioners Lynn Sarah Agdeppa, Louella Jeanne
Agdeppa, and Lalaine Lilibeth Agdeppa, together with Littie Sarah, as defendants (petitioners).7
Respondents also filed an Opposition to the Motion to Dismiss. 8
On May 21, 1990, the RTC issued an Order dismissing the Amended Complaint with costs against
respondents. It held that the Amended Complaint did not show the character and representation that
respondents claimed to have. TCT No. T-56923, covering the subject property, was not in the name of
the late Ignacio Bonete but in Dorotea's name. Thus, the RTC held that respondents were not real
parties in interest. Respondents filed a Motion for Reconsideration9 which the RTC denied in its Order10
dated January 12, 1991. Therein, the RTC held that respondents lacked the personality to sue; thus, a
SECTION 5. Joinder of causes of action. – A party may in one pleading assert, in the alternative or
otherwise, as many causes of action as may have against an opposing party, subject to the following
conditions:
xxx x
(c) Where the causes of action are between the same parties but pertain to different venues or
jurisdictions, the joinder may be allowed in the Regional Trial Court provided one of the causes of action
falls within the jurisdiction of said court and the venue lies therein; x x x (Underscoring supplied)
13 Polytrade Corporation v. Blanco, 140 Phil. 604, 607 (1969).
14
G.R. No. 151037, June 23, 2005, 461 SCRA 89.
15 Id. at 94-95.
16
Id. at 95.
Cognizable by the Securities and Exchange Commission, took effect on December 15, 2000.
6
Records, p. 77.
7 Rollo, p. 31.
8
Id. at 92-102.
9
Id. at 141-142.
10
Banco Filipino Savings and Mortgage Bank v. Court of Appeals, G.R No. 132703, June 23, 2000, 334
SCRA 305, 315.
11
SEC. 4. When and where petition filed. - The petition may be filed not later than sixty (60) days from
notice of the judgment, order or resolution sought to be assailed in the Supreme Court or, if it relates to
the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial
Court exercising jurisdiction over the territorial area as defined by the Supreme Court whether or not
the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate
jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by
law or these rules, the petition shall be filed in and cognizable only by the Court of Appeals.
12 Banco Filipino Savings and Mortgage Bank v. Court of Appeals, supra at 316.
13 Id.
14 Petitioner received a copy of the assailed Resolution dated May 26, 2005 on May 31, 2005.
15 Banco Filipino Savings and Mortgage Bank v. Court of Appeals, supra at 315.
16
R.N. Symaco Trading Corporation v. Santos, G.R. No. 142474, August 18, 2005, 467 SCRA 312, 329.
17 Filipinas Port Services, Inc. v. Go, G.R. No. 161886, March 16, 2007, 518 SCRA 453, 471.
18 Id.
19 Id. at 472.
20 Chua v. Court of Appeals, G.R. No. 150793, November 19, 2004, 443 SCRA 259, 268.
21 Rollo, p. 35.
22 Filipinas Port Services, Inc., v. Go, supra at 472.
23
Took effect on April 1, 2001.
24 The Securities Regulation Code, approved on July 19, 2000.
25 SECTION 1.
(a) Cases covered. – These Rules shall govern the procedure to be observed in civil cases involving the
following:
xxx x
(4) Derivative suits; and
xxx x
IRENE MARCOS-ARANETA, DANIEL RUBIO, ORLANDO G. RESLIN, AND JOSE G. RESLIN, PETITIONERS,
VS. COURT OF APPEALS, JULITA C. BENEDICTO, AND FRANCISCA BENEDICTO-PAULINO, RESPONDENTS.
DECIS ION
This Petition for Review on Certiorari under Rule 45 assails and seeks to nullify the Decision[1] dated
October 17, 2001 of the Court of Appeals (CA) in CA-G.R. SP No. 64246 and its Resolution[2] of June 20,
2002 denying petitioners' motion for reconsideration. The assailed CA decision annulled and set aside
the Orders dated October 9, 2000, December 18, 2000, and March 15, 2001 of the Regional Trial Court
(RTC), Branch 17 in Batac, Ilocos Norte which admitted petitioners' amended complaint in Civil Case Nos.
3341-17 and 3342-17.
The Facts
Sometime in 1968 and 1972, Ambassador Roberto S. Benedicto, now deceased, and his business
associates (Benedicto Group) organized Far East Managers and Investors, Inc. (FEMII) and Universal
Equity Corporation (UEC), respectively. As petitioner Irene Marcos-Araneta would later allege, both
corporations were organized pursuant to a contract or arrangement whereby Benedicto, as trustor,
placed in his name and in the name of his associates, as trustees, the shares of stocks of FEMII and UEC
with the obligation to hold those shares and their fruits in trust and for the benefit of Irene to the extent
of 65% of such shares. Several years after, Irene, through her trustee-husband, Gregorio Ma. Araneta III,
demanded the reconveyance of said 65% stockholdings, but the Benedicto Group refused to oblige.
In March 2000, Irene thereupon instituted before the RTC two similar complaints for conveyance of
shares of stock, accounting and receivership against the Benedicto Group with prayer for the issuance of
a temporary restraining order (TRO). The first, docketed as Civil Case No. 3341-17, covered the UEC
shares and named Benedicto, his daughter, and at least 20 other individuals as defendants. The second,
docketed as Civil Case No. 3342-17, sought the recovery to the extent of 65% of FEMII shares held by
Benedicto and the other defendants named therein.
Respondent Francisca Benedicto-Paulino,[3] Benedicto's daughter, filed a Motion to Dismiss Civil Case
No. 3341-17, followed later by an Amended Motion to Dismiss. Benedicto, on the other hand, moved to
dismiss[4] Civil Case No. 3342-17, adopting in toto the five (5) grounds raised by Francisca in her
amended motion to dismiss. Among these were: (1) the cases involved an intra-corporate dispute over
which the Securities and Exchange Commission, not the RTC, has jurisdiction; (2) venue was improperly
laid; and (3) the complaint failed to state a cause of action, as there was no allegation therein that
plaintiff, as beneficiary of the purported trust, has accepted the trust created in her favor.
To the motions to dismiss, Irene filed a Consolidated Opposition, which Benedicto and Francisca
countered with a Joint Reply to Opposition.
During the preliminary proceedings on their motions to dismiss, Benedicto and Francisca, by way of
bolstering their contentions on improper venue, presented the Joint Affidavit[5] of Gilmia B. Valdez,
Catalino A. Bactat, and Conchita R. Rasco who all attested being employed as household staff at the
Marcos' Mansion in Brgy. Lacub, Batac, Ilocos Norte and that Irene did not maintain residence in said
Against the aforesaid unrebutted joint affidavit, Irene presented her PhP 5 community tax certificate [6]
(CTC) issued on "11/07/99" in Curimao, Ilocos Norte to support her claimed residency in Batac, Ilocos
Norte.
In the meantime, on May 15, 2000, Benedicto died and was substituted by his wife, Julita C. Benedicto,
and Francisca.
On June 29, 2000, the RTC dismissed both complaints, stating that these partly constituted "real action,"
and that Irene did not actually reside in Ilocos Norte, and, therefore, venue was improperly laid. In its
dismissal order,[7] the court also declared "all the other issues raised in the different Motions to Dismiss
x x x moot and academic."
From the above order, Irene interposed a Motion for Reconsideration[8] which Julita and Francisca duly
opposed.
Pending resolution of her motion for reconsideration, Irene filed on July 17, 2000 a Motion (to Admit
Amended Complaint),[9] attaching therewith a copy of the Amended Complaint[10] dated July 14, 2000 in
which the names of Daniel Rubio, Orlando G. Reslin, and Jose G. Reslin appeared as additional plaintiffs.
As stated in the amended complaint, the added plaintiffs, all from Ilocos Norte, were Irene's new
trustees. Parenthetically, the amended complaint stated practically the same cause of action but, as
couched, sought the reconveyance of the FEMII shares only.
During the August 25, 2000 hearing, the RTC dictated in open court an order denying Irene's motion for
reconsideration aforementioned, but deferred action on her motion to admit amended complaint and
the opposition thereto.[11]
On October 9, 2000, the RTC issued an Order[12] entertaining the amended complaint, dispositively
stating:
WHEREFORE, the admission of the Amended Complaint being tenable and legal, the same is
GRANTED.
Let copies of the Amended Complaint be served to the defendants who are ordered to answer
within the reglementary period provided by the rules.
The RTC predicated its order on the following premises:
(1) Pursuant to Section 2, Rule 10 of the Rules of Court,[13] Irene may opt to file, as a matter of right, an
amended complaint.
(2) The inclusion of additional plaintiffs, one of whom was a Batac, an Ilocos Norte resident, in the
amended complaint setting out the same cause of action cured the defect of improper venue.
(3) Secs. 2 and 3 of Rule 3 in relation to Sec. 2 of Rule 4 allow the filing of the amended complaint in
question in the place of residence of any of Irene's co-plaintiffs.
In time, Julita and Francisca moved to dismiss the amended complaint, but the RTC, by Order[14] dated
December 18, 2000, denied the motion and reiterated its directive for the two to answer the amended
complaint.
In said order, the RTC stood pat on its holding on the rule on amendments of pleadings. And scoffing at
the argument about there being no complaint to amend in the first place as of October 9, 2000 (when
the RTC granted the motion to amend) as the original complaints were dismissed with finality earlier,
i.e., on August 25, 2000 when the court denied Irene's motion for reconsideration of the June 29, 2000
Following the denial on March 15, 2001 of their motion for the RTC to reconsider its December 18, 2000
order aforestated, Julita and Francisca, in a bid to evade being declared in default, filed on April 10, 2001
their Answer to the amended complaint.[15] But on the same day, they went to the CA via a petition for
certiorari, docketed as CA-G.R. SP No. 64246, seeking to nullify the following RTC orders: the first,
admitting the amended complaint; the second, denying their motion to dismiss the amended complaint;
and the third, denying their motion for reconsideration of the second issuance.
Inasmuch as the verification portion of the joint petition and the certification on non-forum shopping
bore only Francisca's signature, the CA required the joint petitioners "to submit x x x either the written
authority of Julita C. Benedicto to Francisca B. Paulino authorizing the latter to represent her in these
proceedings, or a supplemental verification and certification duly signed by x x x Julita C. Benedicto."[16]
Records show the submission of the corresponding authorizing Affidavit[17] executed by Julita in favor of
Francisca.
Later developments saw the CA issuing a TRO[18] and then a writ of preliminary injunction[19] enjoining
the RTC from conducting further proceedings on the subject civil cases.
On October 17, 2001, the CA rendered a Decision, setting aside the assailed RTC orders and dismissing
the amended complaints in Civil Case Nos. 3341-17 and 3342-17. The fallo of the CA decision reads:
WHEREFORE, based on the foregoing premises, the petition is hereby GRANTED. The assailed
Orders admitting the amended complaints are SET ASIDE for being null and void, and the
amended complaints a quo are, accordingly, DISMISSED. [20]
Irene and her new trustees' motion for reconsideration of the assailed decision was denied through the
equally assailed June 20, 2002 CA Resolution. Hence, this petition for review is before us.
The Issues
Petitioners urge the setting aside and annulment of the assailed CA decision and resolution on the
following submissions that the appellate court erred in: (1) allowing the submission of an affidavit by
Julita as sufficient compliance with the requirement on verification and certification of non-forum
shopping; (2) ruling on the merits of the trust issue which involves factual and evidentiary
determination, processes not proper in a petition for certiorari under Rule 65 of the Rules of Court; (3)
ruling that the amended complaints in the lower court should be dismissed because, at the time it was
filed, there was no more original complaint to amend; (4) ruling that the respondents did not waive
improper venue; and (5) ruling that petitioner Irene was not a resident of Batac, Ilocos Norte and that
none of the principal parties are residents of Ilocos Norte.[21]
We affirm, but not for all the reasons set out in, the CA's decision.
Petitioners tag private respondents' petition in CA-G.R. SP No. 64246 as defective for non-compliance
with the requirements of Secs. 4[22] and 5[23] of Rule 7 of the Rules of Court at least with regard to Julita,
who failed to sign the verification and certification of non-forum shopping. Petitioners thus fault the
appellate court for directing Julita's counsel to submit a written authority for Francisca to represent
Verification is, under the Rules, not a jurisdictional but merely a formal requirement which the court
may motu proprio direct a party to comply with or correct, as the case may be. As the Court articulated
in Kimberly Independent Labor Union for Solidarity, Activism and Nationalism (KILUSAN)-Organized
Labor Associations in Line Industries and Agriculture (OLALIA) v. Court of Appeals:
[V]erification is a formal, not a jurisdictional requisite, as it is mainly intended to secure an
assurance that the allegations therein made are done in good faith or are true and correct and not
mere speculation. The Court may order the correction of the pleading, if not verified, or act on the
unverified pleading if the attending circumstances are such that a strict compliance with the rule
may be dispensed with in order that the ends of justice may be served. [24]
Given this consideration, the CA acted within its sound discretion in ordering the submission of proof of
Francisca's authority to sign on Julita's behalf and represent her in the proceedings before the appellate
court.
Regarding the certificate of non-forum shopping, the general rule is that all the petitioners or plaintiffs
in a case should sign it.[25] However, the Court has time and again stressed that the rules on forum
shopping, which were designed to promote the orderly administration of justice, do not interdict
substantial compliance with its provisions under justifiable circumstances.[26] As has been ruled by the
Court, the signature of any of the principal petitioners[27] or principal parties,[28] as Francisca is in this
case, would constitute a substantial compliance with the rule on verification and certification of non-
forum shopping. It cannot be overemphasized that Francisca herself was a principal party in Civil Case
No. 3341-17 before the RTC and in the certiorari proceedings before the CA. Besides being an heir of
Benedicto, Francisca, with her mother, Julita, was substituted for Benedicto in the instant case after his
demise.
And should there exist a commonality of interest among the parties, or where the parties filed the case
as a "collective," raising only one common cause of action or presenting a common defense, then the
signature of one of the petitioners or complainants, acting as representative, is sufficient compliance.
We said so in Cavile v. Heirs of Clarita Cavile.[29] Like Thomas Cavile, Sr. and the other petitioners in
Cavile, Francisca and Julita, as petitioners before the CA, had filed their petition as a collective, sharing a
common interest and having a common single defense to protect their rights over the shares of stocks in
question.
Petitioners' posture on the second issue is correct. As they aptly pointed out, the CA, in the exercise of
its certiorari jurisdiction under Rule 65, is limited to reviewing and correcting errors of jurisdiction only.
It cannot validly delve into the issue of trust which, under the premises, cannot be judiciously resolved
without first establishing certain facts based on evidence.
Whether a determinative question is one of law or of fact depends on the nature of the dispute. A
question of law exists when the doubt or controversy concerns the correct application of law or
jurisprudence to a certain given set of facts; or when the issue does not call for an examination of the
probative value of the evidence presented, the truth or falsehood of facts being admitted. A question of
fact obtains when the doubt or difference arises as to the truth or falsehood of facts or when the query
Clearly then, the CA overstepped its boundaries when, in disposing of private respondents' petition for
certiorari, it did not confine itself to determining whether or not lack of jurisdiction or grave abuse of
discretion tainted the issuance of the assailed RTC orders, but proceeded to pass on the factual issue of
the existence and enforceability of the asserted trust. In the process, the CA virtually resolved petitioner
Irene's case for reconveyance on its substantive merits even before evidence on the matter could be
adduced. Civil Case Nos. 3341-17 and 3342-17 in fact have not even reached the pre-trial stage. To
stress, the nature of the trust allegedly constituted in Irene's favor and its enforceability, being
evidentiary in nature, are best determined by the trial court. The original complaints and the amended
complaint certainly do not even clearly indicate whether the asserted trust is implied or express. To be
sure, an express trust differs from the implied variety in terms of the manner of proving its existence.[31]
Surely, the onus of factually determining whether the trust allegedly established in favor of Irene, if one
was indeed established, was implied or express properly pertains, at the first instance, to the trial court
and not to the appellate court in a special civil action for certiorari, as here. In the absence of evidence
to prove or disprove the constitution and necessarily the existence of the trust agreement between
Irene, on one hand, and the Benedicto Group, on the other, the appellate court cannot intelligently pass
upon the issue of trust. A pronouncement on said issue of trust rooted on speculation and conjecture, if
properly challenged, must be struck down. So it must be here.
As may be recalled, the CA veritably declared as reversibly erroneous the admission of the amended
complaint. The flaw in the RTC's act of admitting the amended complaint lies, so the CA held, in the fact
that the filing of the amended complaint on July 17, 2000 came after the RTC had ordered with finality
the dismissal of the original complaints. According to petitioners, scoring the CA for its declaration
adverted to and debunking its posture on the finality of the said RTC order, the CA failed to take stock of
their motion for reconsideration of the said dismissal order.
We agree with petitioners and turn to the governing Sec. 2 of Rule 10 of the Rules of Court which
provides:
SEC. 2. Amendments as a matter of right. -- A party may amend his pleading once as a matter of
right at any time before a responsive pleading is served or in the case of a reply, at any time within
ten (10) days after it is served.
As the aforequoted provision makes it abundantly clear that the plaintiff may amend his complaint once
as a matter of right, i.e., without leave of court, before any responsive pleading is filed or served.
Responsive pleadings are those which seek affirmative relief and/or set up defenses,[32] like an answer. A
motion to dismiss is not a responsive pleading for purposes of Sec. 2 of Rule 10.[33] Assayed against the
foregoing perspective, the RTC did not err in admitting petitioners' amended complaint, Julita and
Francisca not having yet answered the original complaints when the amended complaint was filed. At
that precise moment, Irene, by force of said Sec. 2 of Rule 10, had, as a matter of right, the option of
amending her underlying reconveyance complaints. As aptly observed by the RTC, Irene's motion to
admit amended complaint was not even necessary. The Court notes though that the RTC has not offered
an explanation why it saw fit to grant the motion to admit in the first place.
In Alpine Lending Investors v. Corpuz, the Court, expounding on the propriety of admitting an amended
complaint before a responsive pleading is filed, wrote:
[W]hat petitioner Alpine filed in Civil Case No. C-20124 was a motion to dismiss, not an answer.
Settled is the rule that a motion to dismiss is not a responsive pleading for purposes of Section 2,
Rule 10. As no responsive pleading had been filed, respondent could amend her complaint in Civil
Case No. C-20124 as a matter of right. Following this Court's ruling in Breslin v. Luzon Stevedoring
Co. considering that respondent has the right to amend her complaint, it is the correlative duty of
Petitioners maintain that Julita and Francisca were effectively precluded from raising the matter of
improper venue by their subsequent acts of filing numerous pleadings. To petitioners, these pleadings,
taken together, signify a waiver of private respondents' initial objection to improper venue.
This contention is without basis and, at best, tenuous. Venue essentially concerns a rule of procedure
which, in personal actions, is fixed for the greatest convenience possible of the plaintiff and his
witnesses. The ground of improperly laid venue must be raised seasonably, else it is deemed waived.
Where the defendant failed to either file a motion to dismiss on the ground of improper venue or
include the same as an affirmative defense, he is deemed to have waived his right to object to improper
venue.[36] In the case at bench, Benedicto and Francisca raised at the earliest time possible, meaning
"within the time for but before filing the answer to the complaint,"[37] the matter of improper venue.
They would thereafter reiterate and pursue their objection on venue, first, in their answer to the
amended complaints and then in their petition for certiorari before the CA. Any suggestion, therefore,
that Francisca and Benedicto or his substitutes abandoned along the way improper venue as ground to
defeat Irene's claim before the RTC has to be rejected.
It is the posture of Julita and Francisca that the venue was in this case improperly laid since the suit in
question partakes of a real action involving real properties located outside the territorial jurisdiction of
the RTC in Batac.
This contention is not well-taken. In a personal action, the plaintiff seeks the recovery of personal
property, the enforcement of a contract, or the recovery of damages.[38] Real actions, on the other hand,
are those affecting title to or possession of real property, or interest therein. In accordance with the
wordings of Sec. 1 of Rule 4, the venue of real actions shall be the proper court which has territorial
jurisdiction over the area wherein the real property involved, or a portion thereof, is situated. The venue
of personal actions is the court where the plaintiff or any of the principal plaintiffs resides, or where the
defendant or any of the principal defendants resides, or in the case of a non-resident defendant where
he may be found, at the election of the plaintiff.[39]
In the instant case, petitioners are basically asking Benedicto and his Group, as defendants a quo, to
acknowledge holding in trust Irene's purported 65% stockownership of UEC and FEMII, inclusive of the
fruits of the trust, and to execute in Irene's favor the necessary conveying deed over the said 65%
shareholdings. In other words, Irene seeks to compel recognition of the trust arrangement she has with
the Benedicto Group. The fact that FEMII's assets include real properties does not materially change the
nature of the action, for the ownership interest of a stockholder over corporate assets is only inchoate
as the corporation, as a juridical person, solely owns such assets. It is only upon the liquidation of the
corporation that the stockholders, depending on the type and nature of their stockownership, may have
a real inchoate right over the corporate assets, but then only to the extent of their stockownership.
The amended complaint is an action in personam, it being a suit against Francisca and the late Benedicto
(now represented by Julita and Francisca), on the basis of their alleged personal liability to Irene upon an
alleged trust constituted in 1968 and/or 1972. They are not actions in rem where the actions are against
the real properties instead of against persons.[40] We particularly note that possession or title to the real
properties of FEMII and UEC is not being disputed, albeit part of the assets of the corporation happens
to be real properties.
Given the foregoing perspective, we now tackle the determinative question of venue in the light of the
inclusion of additional plaintiffs in the amended complaint.
We point out at the outset that Irene, as categorically and peremptorily found by the RTC after a
hearing, is not a resident of Batac, Ilocos Norte, as she claimed. The Court perceives no compelling
reason to disturb, in the confines of this case, the factual determination of the trial court and the
premises holding it together. Accordingly, Irene cannot, in a personal action, contextually opt for Batac
as venue of her reconveyance complaint. As to her, Batac, Ilocos Norte is not what Sec. 2, Rule 4 of the
Rules of Court adverts to as the place "where the plaintiff or any of the principal plaintiffs resides" at the
time she filed her amended complaint. That Irene holds CTC No. 17019451[41] issued sometime in June
2000 in Batac, Ilocos Norte and in which she indicated her address as Brgy. Lacub, Batac, Ilocos is really
of no moment. Let alone the fact that one can easily secure a basic residence certificate practically
anytime in any Bureau of Internal Revenue or treasurer's office and dictate whatever relevant data one
desires entered, Irene procured CTC No. 17019451 and appended the same to her motion for
reconsideration following the RTC's pronouncement against her being a resident of Batac.
Petitioners, in an attempt to establish that the RTC in Batac, Ilocos Norte is the proper court venue,
asseverate that Batac, Ilocos Norte is where the principal parties reside.
Pivotal to the resolution of the venue issue is a determination of the status of Irene's co-plaintiffs in the
context of Secs. 2 and 3 of Rule 3 in relation to Sec. 2 of Rule 4, which pertinently provide as follows:
Rule 3
PARTIES TO CIVIL ACTIONS
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.
Rule 4
VENUE OF ACTIONS
SEC. 2. Venue of personal actions. -- All other actions may be commenced and tried where the
plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in the case of a non-resident defendant where he may be found, at the
election of the plaintiff.
There can be no serious dispute that the real party-in-interest plaintiff is Irene. As self-styled beneficiary
of the disputed trust, she stands to be benefited or entitled to the avails of the present suit. It is
undisputed too that petitioners Daniel Rubio, Orlando G. Reslin, and Jose G. Reslin, all from Ilocos Norte,
were included as co-plaintiffs in the amended complaint as Irene's new designated trustees. As trustees,
they can only serve as mere representatives of Irene.
Upon the foregoing consideration, the resolution of the crucial issue of whether or not venue had
properly been laid should not be difficult.
Sec. 2 of Rule 4 indicates quite clearly that when there is more than one plaintiff in a personal action
case, the residences of the principal parties should be the basis for determining proper venue.
According to the late Justice Jose Y. Feria, "the word `principal' has been added [in the uniform
procedure rule] in order to prevent the plaintiff from choosing the residence of a minor plaintiff or
defendant as the venue."[42] Eliminate the qualifying term "principal" and the purpose of the Rule would,
to borrow from Justice Regalado, "be defeated where a nominal or formal party is impleaded in the
action since the latter would not have the degree of interest in the subject of the action which would
warrant and entail the desirably active participation expected of litigants in a case."[43]
Before the RTC in Batac, in Civil Case Nos. 3341-17 and 3342-17, Irene stands undisputedly as the
principal plaintiff, the real party-in-interest. Following Sec. 2 of Rule 4, the subject civil cases ought to be
commenced and prosecuted at the place where Irene resides.
As earlier stated, no less than the RTC in Batac declared Irene as not a resident of Batac, Ilocos Norte.
Withal, that court was an improper venue for her conveyance action.
The Court can concede that Irene's three co-plaintiffs are all residents of Batac, Ilocos Norte. But it
ought to be stressed in this regard that not one of the three can be considered as principal party-
plaintiffs in Civil Case Nos. 3341-17 and 3342-17, included as they were in the amended complaint as
trustees of the principal plaintiff. As trustees, they may be accorded, by virtue of Sec. 3 of Rule 3, the
right to prosecute a suit, but only on behalf of the beneficiary who must be included in the title of the
case and shall be deemed to be the real party-in-interest. In the final analysis, the residences of Irene's
co-plaintiffs cannot be made the basis in determining the venue of the subject suit. This conclusion
becomes all the more forceful considering that Irene herself initiated and was actively prosecuting her
claim against Benedicto, his heirs, assigns, or associates, virtually rendering the impleading of the
trustees unnecessary.
And this brings us to the final point. Irene was a resident during the period material of Forbes Park,
Makati City. She was not a resident of Brgy. Lacub, Batac, Ilocos Norte, although jurisprudence[44] has it
that one can have several residences, if such were the established fact. The Court will not speculate on
the reason why petitioner Irene, for all the inconvenience and expenses she and her adversaries would
have to endure by a Batac trial, preferred that her case be heard and decided by the RTC in Batac. On
the heels of the dismissal of the original complaints on the ground of improper venue, three new
personalities were added to the complaint doubtless to insure, but in vain as it turned out, that the case
stays with the RTC in Batac.
Litigants ought to bank on the righteousness of their causes, the superiority of their cases, and the
persuasiveness of arguments to secure a favorable verdict. It is high time that courts, judges, and those
who come to court for redress keep this ideal in mind.
WHEREFORE, the instant petition is hereby DISMISSED. The Decision and Resolution dated October 17,
SO ORDERED
[1]
Rollo, pp. 306-317. Penned by Associate Justice Elvi John S. Asuncion and concurred in by Associate
Justices Perlita J. Tria Tirona and Amelita G. Tolentino.
[3] She admitted in the motion to be defendant Franscisca De Leon referred to in the first complaint.
[4]
Rollo, pp. 98-99.
[6]
Id. at 128, CTC No. 12308513.
[7]
Id. at 152.
[13] Sec. 2.
Amendments as a matter of right. - A party may amend his pleading once as a matter of right
at any time before a responsive pleading is served x x x.
[14] Rollo,
pp. 358-365A.
[15] Id. at 238-245 & 246-253, for Civil Case Nos. 3341-17 and 3342-17, respectively.
[18]
Id. at 262, CA Resolution.
[20]
Supra note 1, at 316.
[21]
Rollo, p. 677.
[22]
SEC. 4. Verification. -- x x x 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 personal knowledge or based on authentic
records. x x x
[23] 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, [or] tribunal x x x 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 x x x 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.
[24]
G.R. Nos. 149158-59, July 24, 2007, 528 SCRA 45, 60.
[25]
Enopia v. Court of Appeals, G.R. No. 147396, July 31, 2006, 497 SCRA 211, 219.
[26]
Heirs of Venancio Bajenting v. Ibanez, G.R. No. 166190, September 20, 2006, 502 SCRA 531, 547-548;
citing Cavile v. Heirs of Clarita Cavile, G.R. No. 148635, April 1, 2003, 400 SCRA 255.
[27]
Calo v. Villanueva, G.R. No. 153756, January 30, 2006, 480 SCRA 561, 567.
[28] Condo Suite Travel, Inc. v. NLRC, G.R. No. 125671, January 28, 2000, 323 SCRA 679, 687.
[31] Art.
1443 of the Civil Code provides that no express trust concerning an immovable property may be
proved by parol evidence, while Art. 1446 of the Code requires that the beneficiary of an express trust
must accept the trust if it imposes onerous conditions.
[33] Alpine Lending Investors v. Corpuz, November 24, 2006, 508 SCRA 45, 48; citations omitted.
[34] Id.
at 48-49.
[36] Davao Light & Power Co., Inc. v. Court of Appeals, G.R. No. 111685, August 20, 2001, 363 SCRA 396,
400.
[38]
Regner v. Logarta, G.R. No. 168747, October 19, 2007, 537 SCRA 277, 293; citing Hernandez v. Rural
Bank of Lucena, Inc., No. L-29791, January 10, 1978, 81 SCRA 75, 84.
[39]
RULES OF COURT, Rule 4, Sec. 2.
[40] Asiavest Limited v. Court of Appeals, G.R. No. 128803, September 25, 1998, 296 SCRA 539, 552.
[41]
Rollo, p. 157.
[44] Romualdez-Marcos v. Commission on Elections, G.R. No. 119976, September 18, 1995, 248 SCRA 300,
324.
NOCON, J.:
On the strength of the provision in the promissory notes sued upon that Manila shall be the
venue of any action which may arise out of the promissory notes, the Regional Trial Court of
Makati, Metro Manila granted the motion to dismiss the complaint in Civil Case No. 91-3366
entitled "Philippine Banking Corporation v. Brinell Metal Works Corp., et al." for improper venue.
Supported by a plethora of decisions evincing a view contrary to that of the trial court, petitioner
comes to us on a petition for review on certiorari.
Briefly, the facts show that petitioner, Philippine Banking Corporation, filed a complaint with
prayer for preliminary attachment on December 5, 1991 against private respondents herein,
Brinell Metal Works Corporation and Spouses Jose and Nally Ang, for collection of a loan
evidenced by two (2) promissory notes.
On December 16, 1991, respondent Court issued an order granting the petitioner's prayer for
the issuance of writ of preliminary attachment.
On January 28, 1992, private respondents filed with the respondent court a motion to dismiss on
the grounds of (a) lack of jurisdiction over the persons of the defendants; and (b) improper
venue. They claim that summons was served on defendant corporation's customer who was not
authorized to receive the same for and in behalf of the corporation. They likewise object to the
venue claiming that the plaintiffs complaint is based on two promissory notes which commonly
declare, among others:
I/WE HEREBY EXPRESSLY SUBMIT TO THE JURISDICTION OF THE COURTS OF MANILA, ANY
LEGAL ACTION WHICH MAY ARISE OUT OF THIS PROMISSORY NOTE. 1
On February 28, 1992 respondent Court issued the following questioned order, to wit:
Acting on defendants' Motion to Dismiss dated January 28, 1992, on grounds of a) lack of jurisdiction over
the corporate defendant insofar as service of summons upon it was effected on a person not authorized
in law to receive the same; and b) improper venue; and plaintiff having failed to appear for today's hearing
and/or to formally oppose the same notwithstanding a showing of receipt of the subject motion as early as
January 31, 1992.
Finding the motion to be studiously well-taken particularly in connection with the dismissal of this action
on grounds of improper venue consistent with the provisions of Sec. 13, Rule 14 of the Rules of Court, it
appearing on the face of the actionable document sued upon that venue had been by agreement of the
parties laid in Manila.
WHEREFORE, said motion to dismiss is hereby granted forthwith on grounds of impropriety of venue.
The above-entitled case is accordingly dismissed without pronouncement as to costs.
SO ORDERED. 2
On March 2, 1992, petitioner moved for reconsideration of the aforesaid order granting the
motion to dismiss anchored on the ground that in view of the absence of qualifying or restrictive
words in the agreement which would indicate that Manila alone is the venue agreed upon by the
parties, the plaintiffs still has the choice to file the action in the place of his residence citing the
case of Polytrade Corporation v. Blanco. 3
On March 11, 1992, respondent court denied petitioner's motion for reconsideration and
remained steadfast in its position explaining that its dismissal order is predicated on the
doctrinal rule enunciated in Bautista v. Hon. Juan de Borja, et al. 4 that the proper court of
Manila is the venue for an action upon a document stipulating such "in case of any litigation
herefrom, or in connection herewith," on a rationale that neither party reserved the right to
choose venue as provided for in Section 2(b), Rule 4 of the Rules of Court, as would have been
Separate Opinions
PADILLA, J., dissenting:
Section 3, Rule 4 of the Rules of Court allows the parties to agree on the change or transfer of
venue.
# Separate Opinions
PADILLA, J., dissenting:
Section 3, Rule 4 of the Rules of Court allows the parties to agree on the change or transfer of
venue.
The doctrine in Polytrade Corporation vs. Blanco, 30 SCRA 187 (1969) which is upheld by the
majority in this case, that the general rules on venue remain applicable in the absence of
qualifying or restrictive words in the agreement which indicate that the place specified is the only
venue agreed upon, was laid down to prevent undue hardship or inconvenience to the parties.
In my view, the issue of whether or not an agreement fixing the venue of actions prevents the
application of the general rule on venue under Sections 1 and 2 of Rule 4, Rules of Court,
should be settled by keeping the purpose of the doctrine in mind.
There is hardly any question that a stipulation in contracts of adhesion, fixing venue to a
specified place only, is void for, in such cases, there would appear to be no valid and free
waiver of the venue fixed by the Rules of Court. However, in cases where both parties freely
and voluntarily agree on a specified place to be the venue of actions, if any, between them, then
the only considerations should be whether the waiver (of the venue fixed by the Rules of Court)
is against public policy and whether the parties would suffer, by reason of such waiver, undue
hardship and inconvenience; otherwise, such waiver of venue should be upheld as binding on
the parties. The waiver of venue in such cases is sanctioned by the Rules of Court and would
still be subject to and limited by the rules on jurisdiction.
In the case at bench, there us no showing that any party would, in any way, be unduly
inconvenienced in adhering to their agreed venue; besides, the two (2) venues involved, namely
Makati and Manila, are so geographically close to each other, such that there is no perceivable
reason why there would be any substantial difference between the said two (2) venues. In such
a case, the venue agreed by the parties should control.
I therefore vote to DENY the petition and uphold the decision of the court a quo.
# Footnotes
1 Rollo, pp. 21 and 28.
2 Rollo, p. 39.
3 G.R. No. 27033, 30 SCRA 187 (1969).
4 G.R. No. L-20600, 18 SCRA (1966).
5 Supra.
6 Clavecilla Radio System v. Antillon, G.R. No. L-22238, 19 SCRA 379 (1967).
7 Sec. 2(b), Rule 4 of the Revised Rules of Court.
8 Sec. 3, Rule 4 of the Revised Rules of Court.
9 Sec. 4, Rule 4 of the Revised Rules of Court.