[G.R. No. 133000. October 2, 2001] PATRICIA NATCHER, petitioner, vs. HON.

COURT OF APPEALS AND THE HEIRS OF GRACIANO DEL ROSARIO LETICIA DEL ROSARIO, EMILIA DEL ROSARIO-MANANGAN, ROSALINDA FUENTES LLANA, RODOLFO FUENTES, ALBERTO FUENTES, EVELYN DEL ROSARIO, and EDUARDO DEL ROSARIO, respondents. DECISION BUENA, J.: May a Regional Trial Court, acting as a court of general jurisdiction in an action for reconveyance and annulment of title with damages, adjudicate matters relating to the settlement of the estate of a deceased person particularly in questions as to advancement of property made by the decedent to any of the heirs? Sought to be reversed in this petition for review on certiorari under Rule 45 is the decision[1] of public respondent Court of Appeals, the decretal portion of which declares: Wherefore in view of the foregoing considerations, judgment appealed from is reversed and set aside and another one entered annulling the Deed of Sale executed by Graciano Del Rosario in favor of defendant-appellee Patricia Natcher, and ordering the Register of Deeds to Cancel TCT No. 186059 and reinstate TCT No. 107443 without prejudice to the filing of a special proceeding for the settlement of the estate of Graciano Del Rosario in a proper court. No costs. So ordered. Spouses Graciano del Rosario and Graciana Esguerra were registered owners of a parcel of land with an area of 9,322 square meters located in Manila and covered by Transfer Certificate of Title No. 11889. Upon the death of Graciana in 1951, Graciano, together with his six children, namely: Bayani, Ricardo, Rafael, Leticia, Emiliana and Nieves, entered into an extrajudicial settlement of Gracianas estate on 09 February 1954 adjudicating and dividing among themselves the real property subject of TCT No. 11889. Under the agreement, Graciano received 8/14 share while each of the six children received 1/14 share of the said property. Accordingly, TCT No. 11889 was cancelled, and in lieu thereof, TCT No. 35980 was issued in the name of Graciano and the six children. Further, on 09 February 1954, said heirs executed and forged an Agreement of Consolidation-Subdivision of Real Property with Waiver of Rights where they subdivided among themselves the parcel of land covered by TCT No. 35980 into several lots. Graciano then donated to his children, share and share alike, a portion of his interest in the land amounting to 4,849.38 square meters leaving only 447.60 square meters registered under Gracianos name, as covered by TCT No. 35988. Subsequently, the land subject of TCT No. 35988 was further subdivided into two separate lots where the first lot with a land area of 80.90 square meters was registered under TCT No. 107442 and the second lot with a land area of 396.70 square meters was registered under TCT No. 107443. Eventually, Graciano sold the first lot[2] to a third person but retained ownership over the second lot.[3] On 20 March 1980, Graciano married herein petitioner Patricia Natcher. During their marriage, Graciano sold the land covered by TCT No. 107443 to his wife Patricia as a result of which TCT No. 186059[4] was issued in the latters

name. On 07 October 1985, Graciano died leaving his second wife Patricia and his six children by his first marriage, as heirs. In a complaint[5] filed in Civil Case No. 71075 before the Regional Trial Court of Manila, Branch 55, herein private respondents alleged that upon Gracianos death, petitioner Natcher, through the employment of fraud, misrepresentation and forgery, acquired TCT No. 107443, by making it appear that Graciano executed a Deed of Sale dated 25 June 1987[6] in favor of herein petitioner resulting in the cancellation of TCT No. 107443 and the issuance of TCT No. 186059 in the name of Patricia Natcher. Similarly, herein private respondents alleged in said complaint that as a consequence of such fraudulent sale, their legitimes have been impaired. In her answer[7] dated 19 August 1994, herein petitioner Natcher averred that she was legally married to Graciano on 20 March 1980 and thus, under the law, she was likewise considered a compulsory heir of the latter. Petitioner further alleged that during Gracianos lifetime, Graciano already distributed, in advance, properties to his children, hence, herein private respondents may not anymore claim against Gracianos estate or against herein petitioners property. After trial, the Regional Trial Court of Manila, Branch 55, rendered a decision dated 26 January 1996 holding:[8] 1) The deed of sale executed by the late Graciano del Rosario in favor of Patricia Natcher is prohibited by law and thus a complete nullity. There being no evidence that a separation of property was agreed upon in the marriage settlements or that there has been decreed a judicial separation of property between them, the spouses are prohibited from entering (into) a contract of sale; 2) The deed of sale cannot be likewise regarded as a valid donation as it was equally prohibited by law under Article 133 of the New Civil Code; 3) Although the deed of sale cannot be regarded as such or as a donation, it may however be regarded as an extension of advance inheritance of Patricia Natcher being a compulsory heir of the deceased. On appeal, the Court of Appeals reversed and set aside the lower courts decision ratiocinating, inter alia: It is the probate court that has exclusive jurisdiction to make a just and legal distribution of the estate. The court a quo, trying an ordinary action for reconveyance/annulment of title, went beyond its jurisdiction when it performed the acts proper only in a special proceeding for the settlement of estate of a deceased person. XXX X X X Thus the court a quo erred in regarding the subject property as an advance inheritance. What the court should have done was merely to rule on the validity of (the) sale and leave the issue on advancement to be resolved in a separate proceeding instituted for that purpose. X X X Aggrieved, herein petitioner seeks refuge under our protective mantle through the expediency of Rule 45 of the Rules of Court and assails the appellate courts decision for being contrary to law and the facts of the case. We concur with the Court of Appeals and find no merit in the instant petition. Section 3, Rule 1 of the 1997 Rules of Civil Procedure defines civil action and special proceedings, in this wise: X X X a) A civil action is one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong.

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A civil action may either be ordinary or special. Both are governed by the rules for ordinary civil actions, subject to specific rules prescribed for a special civil action. X X X c) A special proceeding is a remedy by which a party seeks to establish a status, a right or a particular fact. As could be gleaned from the foregoing, there lies a marked distinction between an action and a special proceeding. An action is a formal demand of ones right in a court of justice in the manner prescribed by the court or by the law. It is the method of applying legal remedies according to definite established rules. The term special proceeding may be defined as an application or proceeding to establish the status or right of a party, or a particular fact. Usually, in special proceedings, no formal pleadings are required unless the statute expressly so provides. In special proceedings, the remedy is granted generally upon an application or motion.[9] Citing American Jurisprudence, a noted authority in Remedial Law expounds further: It may accordingly be stated generally that actions include those proceedings which are instituted and prosecuted according to the ordinary rules and provisions relating to actions at law or suits in equity, and that special proceedings include those proceedings which are not ordinary in this sense, but is instituted and prosecuted according to some special mode as in the case of proceedings commenced without summons and prosecuted without regular pleadings, which are characteristics of ordinary actions. X X X A special proceeding must therefore be in the nature of a distinct and independent proceeding for particular relief, such as may be instituted independently of a pending action, by petition or motion upon notice.[10] Applying these principles, an action for reconveyance and annulment of title with damages is a civil action, whereas matters relating to settlement of the estate of a deceased person such as advancement of property made by the decedent, partake of the nature of a special proceeding, which concomitantly requires the application of specific rules as provided for in the Rules of Court. Clearly, 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. Thus, under Section 2, Rule 90 of the Rules of Court, 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. While it may be true that the Rules used the word may, it is nevertheless clear that the same provision[11] contemplates a probate court when it speaks of the court having jurisdiction of the estate proceedings. Corollarily, the Regional Trial Court in the instant case, acting in its general jurisdiction, is devoid of authority to render an adjudication and resolve the issue of advancement of the real property in favor of herein petitioner Natcher, inasmuch as Civil Case No. 71075 for reconveyance and annulment of title with damages is not, to our mind, the proper vehicle to thresh out said question. Moreover, under the present circumstances, the RTC of Manila, Branch 55 was not properly constituted as a probate court so as to validly pass upon the question of advancement made by the decedent Graciano Del Rosario to

his wife, herein petitioner Natcher. At this point, the appellate courts disquisition is elucidating: Before a court can make a partition and distribution of the estate of a deceased, it must first settle the estate in a special proceeding instituted for the purpose. In the case at hand, the court a quo determined the respective legitimes of the plaintiffs-appellants and assigned the subject property owned by the estate of the deceased to defendant-appellee without observing the proper proceedings provided (for) by the Rules of Court. From the aforecited discussions, 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. Thus, the court a quo erred in regarding the subject property as an advance inheritance.[12] In resolving the case at bench, this Court is not unaware of our pronouncement in Coca vs. Borromeo[13] and Mendoza vs. Teh[14] that whether a particular matter should be resolved by the Regional Trial Court (then Court of First Instance) in the exercise of its general jurisdiction or its limited probate jurisdiction is not a jurisdictional issue but a mere question of procedure. In essence, it is a procedural question involving a mode of practice which may be waived.[15] Notwithstanding, we do not see any waiver on the part of herein private respondents inasmuch as the six children of the decedent even assailed the authority of the trial court, acting in its general jurisdiction, to rule on this specific issue of advancement made by the decedent to petitioner. Analogously, in a train of decisions, this Court has consistently enunciated the long standing principle that 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, then the probate court is competent to decide the question of ownership.[16] Similarly in Mendoza vs. Teh, we had occasion to hold: In the present suit, no settlement of estate is involved, but merely an allegation seeking appointment as estate administratrix which does not necessarily involve settlement of estate that would have invited the exercise of the limited jurisdiction of a probate court.[17] (emphasis supplied) Of equal importance is that before any conclusion about the legal share due to a compulsory heir may be reached, it is necessary that certain steps be taken first.[18] The net estate of the decedent must be ascertained, by deducting all payable obligations and charges from the value of the property owned by the deceased at the time of his death; then, all donations subject to collation would be added to it. With the partible estate thus determined, the legitime of the compulsory heir or heirs can be established; and only thereafter can it be ascertained whether or not a donation had prejudiced the legitimes.[19] A perusal of the records, specifically the antecedents and proceedings in the present case, reveals that the trial court failed to observe established rules of procedure governing the settlement of the estate of Graciano Del Rosario. This Court sees no cogent reason to sanction the non-observance of these well-entrenched rules and hereby holds that under the prevailing circumstances, a probate court, in the exercise of its limited jurisdiction, is indeed the best forum to ventilate and adjudge the issue of advancement as well as other related

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matters involving the settlement of Graciano Del Rosarios estate. WHEREFORE, premises considered, the assailed decision of the Court of Appeals is hereby AFFIRMED and the instant petition is DISMISSED for lack of merit. SO ORDERED. Bellosillo, (Chairman), Mendoza, Quisumbing, and De Leon, Jr., G.R. No. L-29791 January 10, 1978 FRANCISCO S. HERNANDEZ and JOSEFA U. ATIENZA, plaintiffs-appellees, vs. RURAL BANK OF LUCENA, INC., CENTRAL BANK OF THE PHILIPPINES, in its capacity as Liquidator of Rural Bank of Lucena, and JOSE S. MARTINEZ in his capacity as Receiver of Rural Bank of Lucena, defendants-appellants. (Kim) RTC (1) Plaintiffs filed an action to compel the Rural Bank of Lucena, Inc., the Central Bank as liquidator, and Jose S. Martinez as receiver, to accept the check and to execute the cancellation of the real estate mortgage. (2) The Central Bank filed a motion to dismiss. It contended that there was improper venue. THIS COURT (4) The Lucena bank, the Central Bank and its employee, the receiver, then appealed to this Court. .

deposit accounts and (d) not to issue drafts or make any disbursements without the prior approval of Central Bank examiners. On August 22, 1961, Hernandez went to the Lucena bank and offered to pay the loan by means of a check for P6,000. Hernandez was later informed that the check could not be honored for the time being because of adverse events that had disrupted the bank's operations. Later on, Hernandez informed the Central Bank that he had sent to the Lucena bank on April 25, 1962 the check for P6,000. He requested that his mortgage be cancelled. The Associate Superintendent of Banks returned the check to Hernandez and informed him that, according to the Lucena bank's executive vicepresident, the check could not be applied to the payment of Hernandez' loan because the bank was already closed when he received the check. Moreover, the check was drawn against the current deposits of the San Pablo Colleges in the Lucena bank which was in the process of liquidation. On October 12, 1964 Hernandez and his wife filed an action in the Court of First Instance at Lipa City to compel the Rural Bank of Lucena, Inc., the Central Bank as liquidator, and Jose S. Martinez as receiver, to accept the check and to execute the cancellation of the real estate mortgage. On October 20, 1964 the Central Bank filed a motion to dismiss. It contended that there was improper venue because, as the action allegedly involved title to real property, it should have been instituted in Quezon City where the encumbered lots are situated. After trial, the lower court rendered an amended decision dated October 31, 1967, ordering the Lucena Bank or the Central Bank, as liquidator, to accept the honor the check, to cancel the mortage, and to pay Hernandez spouses (P25,000 as moral damages (not P10,000 as prayed for the complaint) plus P1,000 as attorney's fees.

(5) Courts decision: WHEREFORE, the trial court judgment is reversed and set aside. The case is dismissed without prejudice to the right of the Hernandez spouses to take up with the liquidation court the settlement of their mortgage obligation.

(3) RTC rendered decision favouring the plaintiff spouses. Facts:

Issues: whether or not the court erred in not holding the venue was improperly laid Held: Section 2(a), Rule 4 of the Rules of Court provides that "actions affecting title to, or for recovery of possession, or for partition or condemnation of, or foreclosure of mortgage on, real property, shall be commenced and tried in the province where the property or any part thereof lies". The rule mentions an action for foreclosure of a real estate mortgage but does not mention an action for the cancellation of a real mortgage. In the instant case, the action is primarily to compel the mortgagee to accept payment of the mortgage debt and to release the mortgage. It is a personal action and

The Monetary Board advised the stockholders to reorganize the Lucena bank by electing a new board of directors and directed that bank (a) not to grant new loans or renewals; (b) not to accept deposits from new depositors; (c) to service only the existing

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The spouses Francisco S. Hernandez and Josefa U. Atienza obtained from the Rural Bank of Lucena, Inc. a loan of P6,000. The loan was cured by a mortgage on their two lots. About three months after that loan was obtained, the Lucena Bank became a distress bank.

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not a real action. The mortgagee has, not foreclosure the mortgage, Plaintiffs' title is not in question. They are in possession of the mortgaged lots. Note that the rule mentions an action for foreclosure of a real estate mortgage but does not mention an action for the cancellation of a real mortgage. In the instant case, the action is primarily to compel the mortgagee to accept payment of the mortgage debt and to release the mortgage. The venue of plaintiffs' personal action is the place where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff. A real action is not the same as an action in rem and a personal action is not the same as an action in personam. Thus, the court hold that the trial court should have dismissed the action because the venue thereof was improperly laid in Batangas. The term "resides" in section 2[b] of Rule 4 refers to the place of actual residence or domicile. In the case at bar, the plaintiffs were considered residents of Cubao, Quezon city since it is what they stated when they transacted with rural bank of lucena. WHEREFORE, the trial court judgment is reversed and set aside. The case is dismissed without prejudice to the right of the Hernandez spouses to take up with the liquidation court the settlement of their mortgage obligation.

No, it is a real action as it involves possession of real property and as such jurisdiction lies with the CFI of Misamis Occidental where the property is located. The imposition of a five (5) year lease condition also contemplates another condition imposed on possession of the lot in question. Real action imposable against the whole world; i.e. title to property, possession, partition and foreclosure of real property. Personal action recovery of personal property, damages and enforcement of contract; imposable upon and between the parties.

FIRST DIVISION EMERITA MUOZ, Petitioner, - versus ATTY. VICTORIANO R. YABUT, JR. and SAMUEL GO CHAN, Respondents. x-----------------------x EMERITA MUOZ, Petitioner, G.R. No. 142676

Anne Paderanga vs Buissan and Elumba GR No. L-49475 September 28, 1993 (Erwin) Facts: Petitioner (PADERANGA) is the owner of the lot in question. Elumba leased the lot, setup a ticketing station. Paderanga constructed a partition wall, dividing the lot into two (2). Elumba filed a case for damages and imposition of a fixed lease of five (5) years with the CFI of Zamboanga del Norte. Paderanga moved to dismiss the case as he asserts that jurisdiction is with the CFI of Misamis Occidental. Elumba = where the petitioner or private respondent lives; Paderanga = where the property is located. Elumba believes that it is a mere personal action affecting individual rights as the action prays for the award of damages. Paderanga asserts that it is a real action as it involves possession of the lot and the five (5) year condition.

G.R. No. 146718 Present: CORONA, C.J., Chairperson, VELASCO, JR., LEONARDO-DE CASTRO, DEL CASTILLO, and PEREZ, JJ. Promulgated: June 6, 2011

- versus -

SPOUSES SAMUEL GO CHAN and AIDA C. CHAN, and THE BANK OF THE PHILIPPINE ISLANDS, Respondents.

Issue: W/N it is a personal action, as alleged by Elumba. Held:

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION

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CFI Zamboanga Motion to Dismiss (D) MR (D) SC for grave abuse of discretion

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LEONARDO-DE CASTRO, J.: Before Us are the following consolidated petitions for review on certiorari under Rule 45 of the Rules of Court. In G.R. No. 142676, Emerita Muoz (Muoz) is seeking the reversal, annulment, and setting aside of the Decision[1] dated July 21, 1995 and Resolution[2] dated March 9, 2000 of the Court of Appeals in CA-G.R. SP No. 35322, which affirmed the Orders[3] dated June 10, 1994 and August 5, 1994 of the Regional Trial Court, Branch 88 (RTC-Branch 88) of Quezon City in Civil Case No. Q-94-20632. The RTC dismissed Civil Case No. 8286, the forcible entry case instituted by Muoz against Atty. Victoriano R. Yabut, Jr. (Atty. Yabut) and Samuel Go Chan before the Metropolitan Trial Court (MeTC), Branch 33 of Quezon City; and nullified the MeTC Order[4] dated May 16, 1994, granting Muozs prayer for the issuance of a writ of preliminary mandatory injunction which restored possession of the subject property to Muoz. In G.R. No. 146718, Muoz is praying for the reversal, setting aside, and nullification of the Decision[5] dated September 29, 2000 and Resolution[6] dated January 5, 2001 of the Court of Appeals in CA-G.R. SP No. 40019, which affirmed the Orders[7] dated August 21, 1995 and October 3, 1995 of the Quezon City RTC, Branch 95 (RTC-Branch 95) in Civil Case No. Q-28580 denying Muozs Motion for an Alias Writ of Execution and Application for Surrender of the Owners Duplicate Copy of TCT No. 53297[8] against respondents Bank of the Philippine Islands (BPI) and the spouses Samuel Go Chan and Aida C. Chan (spouses Chan). I FACTS The subject property is a house and lot at No. 48 Scout Madrian St., Diliman, Quezon City, formerly owned by Yee L. Ching. Yee L. Ching is married to Emilia M. Ching (spouses Ching), Muozs sister. Muoz lived at the subject property with the spouses Ching. As consideration for the valuable services rendered by Muoz to the spouses Chings family, Yee L. Ching agreed to have the subject property transferred to Muoz. By virtue of a Deed of Absolute Sale, seemingly executed by Yee L. Ching in favor of Muoz,[9] the latter acquired a Transfer Certificate of Title (TCT) No. 186306 covering the subject property in her name on December 22, 1972.[10] However, in a Deed of Absolute Sale dated December 28, 1972, Muoz purportedly sold the subject property to her sister, Emilia M. Ching. As a result, TCT No. 186306 was cancelled and TCT No. 186366 was issued in Emilia M. Chings name. Emilia M. Ching, in a Deed of Absolute Sale dated July 16, 1979, sold the subject property to spouses Go Song and Tan Sio Kien (spouses Go), hence, TCT No. 186366 was cancelled and replaced by TCT No. 258977 in the spouses Gos names. On October 15, 1979, Muoz registered her adverse claim to the subject property on TCT No. 258977 of the spouses Go. The next day, on October 16, 1979, Muoz filed a complaint for the annulment of the deeds of absolute sale

dated December 28, 1972 and July 16, 1979, the cancellation of TCT No. 258977 in the spouses Gos names, and the restoration and revival of TCT No. 186306 in Muozs name. The complaint was docketed as Civil Case No. Q28580 and raffled to RTC-Branch 95. On October 17, 1979, Muoz caused the annotation of a notice of lis pendens on TCT No. 258977 of the spouses Go. In an Order dated December 17, 1979, the RTC-Branch 95 granted the spouses Gos motion for the issuance of a writ of preliminary mandatory injunction and ordered the sheriff to put the spouses Go in possession of the subject property. The writ was implemented by the sheriff on March 26, 1980, driving Muoz and her housemates away from the subject property. Muoz filed a petition for certiorari and prohibition before the Court of Appeals, assailing the issuance of the writ of preliminary mandatory injunction, which was docketed as CAG.R. SP No. 10148. The appellate court dismissed Muozs petition on January 4, 1980. Yee L. Ching and his son Frederick M. Ching filed an urgent motion for leave to intervene in CA-G.R. SP No. 10148 and for the issuance of a temporary restraining order (TRO). The Court of Appeals issued a TRO. However, in a Resolution dated March 18, 1980, the appellate court denied the motion to intervene of Yee L. Ching and Frederick M. Ching, and cancelled the TRO previously issued. Yee L. Ching and Frederick M. Ching challenged before this Court, in G.R. No. 53463, the Resolution dated March 18, 1980 of the Court of Appeals. Eventually, in a Resolution dated June 3, 1981, the Court dismissed the petition in G.R. No. 53463, for lack of merit and failure of Yee L. Ching and Frederick M. Ching to substantially show that the RTC-Branch 95 and the Court of Appeals gravely abused their discretion. In a subsequent Resolution dated June 21, 1982, the Court clarified that its Resolution of June 3, 1981 was without prejudice to the continuation of the litigation in Civil Case No. Q-28580 still pending before the trial court, in order that proper and final adjudication may be made of whether or not the deed of sale by Emerita L. Muoz in favor of Emilia M. Ching is a real, genuine and authentic transaction, thereby to settle once and for all the issue of ownership of the property herein in question.[11] Trial in Civil Case No. Q-28580 proceeded before RTCBranch 95. In the meantime, Muozs adverse claim and notice of lis pendens on TCT No. 258977 was cancelled on October 28, 1982 on the basis of an alleged final judgment in favor of the spouses Go.[12] The spouses Go obtained a loan of P500,000.00 from BPI Family Savings Bank (BPI Family) and to secure the same, they constituted a mortgage on the subject property on November 23, 1982.[13] When the spouses Go defaulted on the payment of their loan, BPI Family foreclosed the mortgage. BPI Family was the highest bidder at the auction sale of the subject property. The spouses Go failed to exercise their right of redemption within the prescribed period, thus, BPI Family was finally able to register the subject property in its name on October 23, 1987 under TCT No. 370364.[14] Apparently, the original copy of TCT No. 370364 was among those razed in the fire at the Quezon City Register of Deeds on June 11, 1988. As a result of the

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administrative reconstitution of the lost title, TCT No. RT54376 (370364) was issued to BPI Family. On December 3, 1990, BPI Family executed in favor of the spouses Samuel Go Chan and Aida C. Chan (spouses Chan) a Deed of Absolute Sale[15] covering the subject property for and in consideration of P3,350,000.00. Consequently, TCT No. RT-54376 (370364) in the name of BPI Family was cancelled and TCT No. 53297 was issued in the spouses Chans names on January 28, 1991.[16] The spouses Chan obtained a loan from BPI Family on October 2, 1992 for the construction of a building on the subject property, and to secure the same, constituted a mortgage on the subject property in favor of BPI Family.[17] On July 19, 1991, RTC-Branch 95 rendered its Decision[18] in Civil Case No. Q-28580, against Emilia M. Ching, Yee L. Ching, and the spouses Go (Emilia M. Ching, et al.). It found that Muozs signature on the Deed of Absolute Sale dated December 28, 1972 was forged; that Muoz never sold the subject property to her sister, Emilia M. Ching; and that the spouses Go were not innocent purchasers for value of the subject property. The fallo of the said decision reads: WHEREFORE, judgment is hereby rendered dismissing for lack of merit [Emilia M. Ching, et al.s] respective counterclaims, cross-claims, and counter-cross-claim, declaring as null and void ab initiothe following documents, to wit: (a) Deed of Absolute Sale dated December 28, 1972, copy of which is marked in evidence as Exh. M; (b) TCT No. 186366 of the Registry of Deeds for Quezon City, copy of which is marked in evidence as Exh. N; (c) Deed of Absolute Sale dated July 16, 1979, copy of which is marked in evidence as Exh. 3; and, (d) TCT No. 258977 of the Registry of Deeds for Metro Manila District III, copy of which is marked in evidence as Exh. 4, and directing defendant Register of Deeds of Quezon City to cancel from the records of the subject property the registrations of all the said documents and to restore and revive, free from all liens and encumbrances, TCT No. 186306 of the Registry of Deeds for Quezon City, copy of which is marked in evidence as Exh. L, as well as ordering defendants Emilia M. Ching, Go Song and Tan Sio Kien jointly and severally to pay [Muoz] the sum of P50,000.00 as and for attorneys fees and to pay the costs of suit. The court also hereby dismisses the rest of the claims in [Muozs] complaint, there being no satisfactory warrant therefor.[19] Emilia M. Ching, et al.s, appeal of the foregoing judgment of the RTC-Branch 95 was docketed as CA-G.R. CV No. 33811 before the Court of Appeals. In its Decision[20]dated March 4, 1993, the appellate court not only affirmed the appealed judgment, but also ordered the spouses Go and their successors-in-interest and assigns and those acting on their behalf to vacate the subject property, to wit: WHEREFORE, premises considered, the decision appealed from is AFFIRMED, with costs against [Emilia M. Ching, et al.]. The writ of preliminary mandatory injunction issued on December 17, 1979 is hereby set aside and declared dissolved. Defendants-appellants Go and Tan, their successors-in-interest and assigns and those acting on their behalf, are ordered to vacate the disputed premises and to deliver the same to [Muoz] immediately upon receipt of this

decision.[21] Emilia L. Ching, et al., filed before this Court a motion for extension of time to file their petition for review, which was assigned the docket number G.R. No. 109260. However, they failed to file their intended petition within the extended period which expired on April 23, 1993. In a Resolution[22] dated July 12, 1993, the Court declared G.R. No. 109260 terminated. The Resolution dated July 12, 1993 of the Court in G.R. No. 109260 became final and executory on July 15, 1993 and was entered in the Book of Entries of Judgments on even date.[23] More than two months later, on September 20, 1993, the RTCBranch 95 issued a writ of execution to implement the judgment in Civil Case No. Q-28580. The spouses Chan, who bought the subject property from BPI Family, then came forward and filed before the RTC-Branch 95 on October 22, 1993 an Urgent Motion to Stop Execution as Against Spouses Samuel Go Chan and Aida Chan,[24] opposing the writ of execution issued in Civil Case No. Q-28580. The spouses Chan asserted ownership and possession of the subject property on the basis of a clean title registered in their names under TCT No. 53297. The spouses Chan further contended that the final judgment in Civil Case No. Q-28580 could not be executed against them since they were not parties to the said case; they were not successors-ininterest, assigns, or acting on behalf of the spouses Go; and they purchased the subject property from BPI Family without any notice of defect in the latters title. It was only at this point that Muoz, upon her own inquiry, discovered the cancellation on October 28, 1982 of her adverse claim and notice of lis pendens annotated on the spouses Gos TCT No. 258977, and the subsequent events that led to the transfer and registration of the title to the subject property from the spouses Go, to BPI Family, and finally, to the spouses Chan. In its Order[25] dated December 28, 1993, the RTC-Branch 95 denied the spouses Chans urgent motion to stop the execution. According to the RTC-Branch 95, the photocopy of TCT No. 370364 in the name of BPI Family, submitted by the spouses Chan with their motion, could hardly be regarded as satisfactory proof that Muozs adverse claim and notice of lis pendens annotated therein were also missing from the original copy of said certificate of title. Muozs adverse claim and notice of lis pendens were annotated on TCT No. 258977 in the spouses Gos names as P.E.-8078 and P.E.8178, respectively. So when TCT No. 258977 of the spouses Go was cancelled and TCT No. 370364 was issued to BPI Family, it could be presumed that the Register of Deeds regularly performed his official duty by carrying over Muozs adverse claim and notice of lis pendens to TCT No. 370364. In addition, the RTC-Branch 95 pointed out that in this jurisdiction, the entry of the notice of lis pendens in the day book of the Register of Deeds was already sufficient notice to the whole world of the dispute over the subject property, and there was no more need to annotate the same on the owners duplicate of the certificate of title. Finally, the RTC-Branch 95 held that TCT No. RT-54376 (370364) of BPI

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Family and TCT No. 53297 of the spouses Chan shall be subject to the reservation under Section 7 of Republic Act No. 26[26] [t]hat certificates of title reconstituted extrajudicially, in the manner stated in sections five and six hereof, shall be without prejudice to any party whose right or interest in the property was duly noted in the original, at the time it was lost or destroyed, but entry or notation of which has not been made on the reconstituted certificate of title. Thus, the spouses Chan were deemed to have taken the disputed property subject to the final outcome of Civil Case No. Q-28580. On January 3, 1994, the RTC-Branch 95 issued an Alias Writ of Execution.[27] On January 10, 1994, the writ was enforced, and possession of the subject property was taken from the spouses Chan and returned to Muoz.[28] In its Orders dated April 8, 1994 and June 17, 1994, the RTC-Branch 95 denied the spouses Chans motion for reconsideration and notice of appeal, respectively. [29] G.R. No. 142676 Pending resolution by the RTC-Branch 95 of the spouses Chans motion for reconsideration and notice of appeal in Civil Case No. Q-28580, Muoz instituted before the MeTC on February 4, 1994 a Complaint for Forcible Entry with Prayer for Preliminary Mandatory Injunction[30] against Samuel Go Chan and Atty. Yabut, docketed as Civil Case No. 8286. Muoz alleged in her complaint that she had been in actual and physical possession of the subject property since January 10, 1994. She hired a caretaker and two security guards for the said property. On February 2, 1994, Samuel Go Chan and Atty. Yabut, along with 20 other men, some of whom were armed, ousted Muoz of possession of the subject property by stealth, threat, force, and intimidation. Muoz prayed for the issuance of a writ of preliminary mandatory injunction directing Samuel Go Chan and Atty. Yabut and all persons claiming right under them to vacate the subject property. Muoz additionally prayed for judgment making the mandatory injunction permanent and directing Samuel Go Chan and Atty. Yabut to pay Muoz: (1) compensation for the unlawful occupation of the subject property in the amount of P50,000.00 per month, beginning February 2, 1994 until the said property is fully and completely turned over to Muoz; (2) attorneys fees in the amount of P50,000.00, plus P1,500.00 per court appearance of Muozs counsel; and (3) costs of suit. Samuel Go Chan and Atty. Yabut denied Muozs allegations, insisting that Samuel Go Chan is the valid, lawful, and true legal owner and possessor of the subject property. Samuel Go Chan and Atty. Yabut averred that the Turn-Over of Possession and Receipt of Possession dated January 10, 1994 attached to Muozs complaint as proof that the subject property had been placed in her possession is a falsified document. The Writ of Execution issued on September 20, 1993 in Civil Case No. Q-28580 had already expired and the Sheriffs Return on the Writ another document purporting to show that possession of the subject property was turned-over to Muoz on January 10, 1994 was then being challenged in a complaint before the Office of Deputy Court Administrator Reynaldo L. Suarez of the Supreme Court. Samuel Go Chans

possession of the subject property has never been interrupted. His sister, Cely Chan, resided at the subject property and was never removed therefrom. On February 2, 1994, Atty. Yabut was at the subject property only to protect the rights and interest of his client, Samuel Go Chan, and since the latters possession of the subject property had never been interrupted, Atty. Yabut entered the same peacefully, without intimidation, force, or stealth. The other people at the subject property on February 2, 1994 were there to attend the services at the Buddhist Temple which occupied the fourth floor of the building erected by the spouses Chan on the subject property. Samuel Go Chan and Atty. Yabut, thus, asked the MeTC to dismiss Muozs complaint for lack of merit and legal basis.[31] The MeTC received evidence from the parties on whether a writ of preliminary injunction should be issued, as prayed for by Muoz. In its Order dated May 16, 1994, the MeTC adjudged that the final judgment in Civil Case No. Q-28580 was already executed against the spouses Chan and there was, indeed, a turn-over of possession of the subject property to Muoz. Accordingly, the MeTC granted Muozs prayer for the issuance of a writ of preliminary mandatory injunction, restoring possession of the subject property to Muoz. Samuel Go Chan and Atty. Yabut questioned the foregoing MeTC order through a Petition for Certiorari with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction[32] before the RTC-Branch 88, which was docketed as Civil Case No. Q-94-20632. They asserted that they were not bound by the execution of the final judgment of RTCBranch 95 in Civil Case No. Q-28580 as they were not parties to the said case. Muoz, on the other hand, argued that the MeTC Order of May 16, 1994 was an interlocutory order, and under Section 19 of the Rules of Summary Procedure, a petition for certiorari against an interlocutory order issued by the court is one of the prohibited pleadings and motions in summary proceedings. In its Order dated June 10, 1994, the RTC-Branch 88 issued a writ of preliminary injunction to enjoin the implementation of the MeTC Order dated May 16, 1994. On August 5, 1994, the RTC-Branch 88 issued another Order resolving Muozs motion to dismiss the petition for certiorari in Civil Case No. Q-94-20632, motion for reconsideration of the Order dated June 10, 1994 of RTCBranch 88 granting the issuance of a writ of preliminary injunction, and motion to resolve with additional grounds for dismissal. According to the RTC-Branch 88, the MeTC failed to distinguish the issue of finality of the judgment of the RTCBranch 95 in Civil Case No. Q-28580 from the assertions of Samuel Go Chan and Atty. Yabut that the spouses Chan are not covered by said final judgment because they are not successors-in-interest, assigns, or privies of the spouses Go and they are purchasers of the subject property in good faith. The issue of whether the final judgment in Civil Case No. Q-28580 extended to the spouses Chan was then still being litigated in the same case before RTC-Branch 95, where the spouses Chans motion for reconsideration of the denial of their notice of appeal was pending. The RTC-Branch 88 further found that the MeTC committed grave abuse of

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discretion in not dismissing Muozs complaint for forcible entry on the ground of lis pendens, as the issue as to who between Muoz and the spouses Chan had the better right to possession of the subject property was the subject of the pending proceeding in Civil Case No. Q-28580 before the RTC-Branch 95. In the end, the RTC-Branch 88 decreed: WHEREFORE, premises considered, the Court renders judgment (a) Denying the motion to dismiss of respondent Muoz for lack of merit; (b) Denying the motion for reconsideration of respondent Muoz for the recall and/or setting aside of the writ of preliminary injunction granted to petitioners; (c) Declaring the Order dated May 16, 1994 of Public respondent Hon. Elsa de Guzman in Civil Case No. 8286 illegal and therefore null and void; and (d) Dismissing the ejectment suit in Civil Case No. 8286 on ground of lis pendens. Without pronouncement as to costs.[33] Muoz appealed the Orders dated June 10, 1994 and August 5, 1994 of RTC-Branch 88 before the Court of Appeals. Her appeal was docketed as CA-G.R. SP No. 35322. Aside from the nullification of the two orders, Muoz additionally prayed for the dismissal from the service of the RTC-Branch 88 presiding judge and the disbarment of Atty. Yabut. The Court of Appeals, in its Decision dated July 21, 1995, sustained the appealed orders of RTC-Branch 88. The Court of Appeals held that the MeTC should have dismissed the forcible entry case on the ground of lis pendens; that the spouses Chan were not parties in Civil Case No. Q-28580, and impleading them only in the execution stage of said case vitiated their right to due process; that the order of the RTCBranch 95 involving the spouses Chan in Civil Case No. Q28580 was null and void, considering that they are strangers to the case, and they are innocent purchasers for value of the subject property; that the notice of lis pendens was already cancelled from the spouses Gos certificate of title at the time they mortgaged the subject property to BPI Family; and that the title to the subject property was already free of any and all liens and encumbrances when the spouses Chan purchased the said property from BPI Family. The Court of Appeals, in its Resolution dated March 9, 2000, denied Muozs motion for reconsideration. G.R. No. 146718 Meanwhile, Muoz filed before the RTC-Branch 95 in Civil Case No. Q-28580 a Motion to Cite the Register of Deeds in Contempt of Court for the failure of the Register of Deeds to restore Muozs TCT No. 186306 despite having been served with a copy of the writ of execution on October 11, 1993. In its Judgment (on the Contempt Proceedings against the Register of Deeds of Quezon City Samuel C. Cleofe)[34] dated March 18, 1994, the RTC-Branch 95 denied

Muozs motion, convinced that the Register of Deeds had a valid excuse for his inability to implement the served writ. The Register of Deeds could not cancel the spouses Chans TCT No. 53297, the subsisting certificate of title over the subject property, absent any authority or directive for him to do so. The directive in the final judgment in Civil Case No. Q-28580 and the writ of execution for the same only pertained to the cancellation of the spouses Gos TCT No. 258977. Thereafter, Muoz filed a Motion for Contempt against the spouses Chan and a Second Motion for Contempt against Samuel Go Chan and Atty. Yabut. Muoz also filed a Motion for an Alias Writ of Execution and Application for Surrender of the Owners Duplicate Copy of TCT No. 53297,[35] in which she prayed for the issuance of an alias writ of execution directing the Register of Deeds not only to cancel TCT No. 258977 and all documents declared null and void ab initio in the dispositive portion of the Decision[36] dated July 19, 1991 of RTC-Branch 95 in Civil Case No. Q-28580, and to restore and revive, free from all liens and encumbrances Muozs TCT No. 186306, but likewise to cancel the present certificate of title covering the subject property, TCT No. 53297. In its Order dated August 21, 1995, the RTC-Branch 95 denied all of Muozs aforementioned motions. The RTCBranch 95 was of the view that Samuel Go Chans title should be litigated in another forum, not in Civil Case No. Q-28580 where the judgment had already become final and executory. The RTC-Branch 95 also stressed that since the judgment in Civil Case No. Q-28580 had long become final and executory, it could no longer be changed or amended except for clerical error or mistake. Accordingly, the RTCBranch 95 resolved as follows: 1. Ordering, as it hereby orders, the denial of [Muozs] first and second motions for contempt and hereby absolves respondents Samuel Go Chan, Celia Chan, Atty. Victoriano R. Yabut, Jr., and several John Does of the Contempt Charges against them. 2. Ordering, as it hereby orders, the issuance of an alias writ of execution directing the Courts Deputy Sheriff: (a) Defendants Go Song and Tan Sio Kien, their successors-in-interest and assigns and those acting on their behalf to vacate the disputed premises and deliver the same to [Muoz]; (b) Defendant Register of Deeds of Quezon City to cancel from the records of the subject property the registration of all the following documents, to wit: (1) Deed of Absolute Sale dated December 28, 1972; (2) Transfer Certificate of Title (TCT) No. 186366 of the Register of Deeds of Quezon City; (3) Deed of Absolute Sale dated July 16, 1979; and (4) TCT No. 258977 of the Registry of Deeds for Metro Manila II, and to restore and revive, free from all liens and encumbrances TCT No. 186306 of the Registry of Deeds for Quezon City; and (c) Defendants Emilia M. Ching, Go Song and Tan Sio Kien jointly and severally to pay [Muoz] the sum of P50,000.00 as and for attorneys fees and to pay the cost of

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suit.[37]

Unrelenting, Muoz filed a Motion for Clarificatory Order, pointing out that the spouses Chan are the present occupants of the subject property. The Order dated August 21, 1995 of the RTC-Branch 95 directed the deputy sheriff to deliver the subject property to Muoz, and this could not be done unless the spouses Chan are evicted therefrom. Resultantly, Muoz prayed that a clarificatory order be made categorically stating that the spouses Samuel Go Chan and Aida C. Chan, and all persons claiming right under them, are likewise evicted from the subject premises pursuant to the Order of 21 August 1995.[38] Once more, the RTC-Branch 95 denied Muozs motion in its Order dated October 3, 1995. The RTC-Branch 95 reiterated the rule that after the judgment had become final, only clerical errors, as distinguished from substantial errors, can be amended by the court. Furthermore, when the decision or judgment sought to be amended is promulgated by an appellate court, it is beyond the power of the trial court to change, amplify, enlarge, alter, or modify. Ultimately, the RTC-Branch 95 pronounced that it was restrained x x x to consider as mere clerical error the exclusion of spouses Samuel Go Chan and Aida C. Chan in the Decision of the Court dated July 19, 1991, a final judgment, which judgment cannot now be made to speak a different language.[39] Attributing grave abuse of discretion on the part of the RTCBranch 95 in issuing its Orders dated August 21, 1995 and October 3, 1995, Muoz filed before this Court a Petition for Certiorari and Mandamus, which was remanded to the Court of Appeals in observance of the hierarchy of courts, where it was docketed as CA-G.R. SP No. 40019. The Court of Appeals promulgated its Decision on September 29, 2000 dismissing Muozs petition. The Court of Appeals agreed with the RTC-Branch 95 that the spouses Chan could not be covered by the alias writ of execution considering that they were not impleaded in Civil Case No. Q-28580. The cancellation of TCT No. 53297 in the spouses Chans names could not be done apart from a separate action exclusively for that matter. The spouses Chan are deemed buyers in good faith and for value as the certificate of title delivered to them by BPI Family was free from any liens or encumbrances or any mark that would have raised the spouses Chans suspicions. Every person dealing with registered lands may safely rely on the correctness of the certificate of title of the vendor/transferor, and he is not required to go beyond the certificate and inquire into the circumstances culminating in the vendors acquisition of the property. The Court of Appeals denied Muozs motion for reconsideration in a Resolution dated January 5, 2001. Muoz comes before this Court via the present consolidated petitions. Muoz posits that the final judgment and writ of execution of RTC-Branch 95 in Civil Case No. Q-28580 bind not only Emilia M. Ching and the spouses Go, but also their successors-in-interest, assigns, or persons acting on their

behalf, namely, BPI Family and spouses Chan. The spouses Chan cannot be deemed innocent purchasers for value of the property since the cancellation of the adverse claim and notice of lis pendens on the spouses Gos TCT No. 258977 is completely null and void. Muoz further argues that the MeTC Order dated May 16, 1994 in Civil Case No. 8286 correctly ordered the issuance of a writ of preliminary mandatory injunction restoring possession of the subject property to her, as she had already acquired prior possession of the said property upon the execution of the final judgment in Civil Case No. Q28580. Also, the spouses Chans petition for certiorari before the RTC-Branch 88, docketed as Civil Case No. Q-94-20632, challenging the Order dated May 16, 1994 of the MeTC in Civil Case No. 8286, is a prohibited pleading under the Rules of Summary Procedure; and the RTC-Branch 88 and the Court of Appeals should be faulted for giving due course to the said petition even in the absence of jurisdiction. On the other hand, in their comments to the two petitions at bar, the spouses Chan, Atty. Yabut, and BPI Family assert that given the peculiar factual circumstances of the case, RTCBranch 88 was justified in taking cognizance of Samuel Go Chan and Atty. Yabuts petition for certiorari in Civil Case No. Q-94-20632; that Muoz is estopped from questioning the jurisdiction of RTC-Branch 88 after participating in the proceedings in Civil Case No. Q-94-20632; that the spouses Chans title to the subject property is not affected by the final judgment of RTC-Branch 95 in Civil Case No. Q-28580, and the said judgment cannot be executed against the spouses Chan since they are neither parties to the case, nor are they the successors-in-interest, assigns, or persons acting on behalf of Emilia M. Ching or the spouses Go; that BPI Family and consequently, the spouses Chan, obtained title to the subject property as innocent purchasers for value, there being no notice of any infirmity in said title; and that Muoz is guilty of forum shopping for filing her petition in G.R. No. 146718 even while her petition in G.R. No. 142676 is still pending. II RULING For the sake of expediency, we will be discussing first the merits of the petition in G.R. No. 146718. G.R. No. 146718 Civil Case No. Q-28580 involved Muozs complaint for the annulment of the deeds of absolute sale dated December 28, 1972[40] and July 16, 1979,[41] the cancellation of the spouses Gos TCT No. 258977, and the restoration and revival of Muozs TCT No. 186306. The final judgment of RTCBranch 95 in Civil Case No. Q-28580 was in favor of Muoz and against Emilia M. Ching and the spouses Go. The problem arose when during the pendency of the said case, title and possession of the subject property were transferred from the spouses Go, to BPI Family, and finally, to the spouses Chan. BPI Family and the spouses Chan were never impleaded as parties and were not referred to in the dispositive

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portion of the final judgment in Civil Case No. Q-28580. Muoz questions in G.R. No. 146718: (1) the Order dated August 21, 1995 denying her Motion for Contempt against the spouses Chan, Second Motion for Contempt against Samuel Go Chan and Atty. Yabut, and Motion for an Alias Writ of Execution and Application for Surrender of the Owners Duplicate Copy of TCT No. 53297; and (2) the Order dated October 3, 1995 denying her Motion for Clarificatory Order, both issued by the RTC-Branch 95 in Civil Case No. Q-28580, and upheld by the Court of Appeals in CA-G.R. SP No. 40019. In sum, Muoz was seeking in her aforementioned motions: (1) a categorical order from the RTC-Branch 95 that the final judgment in Civil Case No. Q28580 be executed against the spouses Chan; and (2) the surrender and cancellation of the spouses Chans TCT No. 53297 and restoration of Muozs TCT No. 186306. There is no merit in Muozs petition in G.R. No. 146718. Civil Case No. Q-28580 is an action for reconveyance of real property. In Heirs of Eugenio Lopez, Sr. v. Enriquez,[42] we described an action for reconveyance as follows: An action for reconveyance is an action in personam available to a person whose property has been wrongfully registered under the Torrens system in anothers name. Although the decree is recognized as incontrovertible and no longer open to review, the registered owner is not necessarily held free from liens. As a remedy, an action for reconveyance is filed as an ordinary action in the ordinary courts of justice and not with the land registration court. Reconveyance is always available as long as the property has not passed to an innocent third person for value. A notice of lis pendens may thus be annotated on the certificate of title immediately upon the institution of the action in court. The notice of lis pendens will avoid transfer to an innocent third person for value and preserve the claim of the real owner.[43] (Emphases ours.) The rule is that: (1) a judgment in rem is binding upon the whole world, such as a judgment in a land registration case or probate of a will; and (2) a judgment in personam is binding upon the parties and their successors-in-interest but not upon strangers. A judgment directing a party to deliver possession of a property to another is in personam; it is binding only against the parties and their successors-in-interest by title subsequent to the commencement of the action. An action for declaration of nullity of title and recovery of ownership of real property, or re-conveyance, is a real action but it is an action in personam, for it binds a particular individual only although it concerns the right to a tangible thing. Any judgment therein is binding only upon the parties properly impleaded.[44] Since they were not impleaded as parties and given the opportunity to participate in Civil Case No. Q-28580, the final judgment in said case cannot bind BPI Family and the spouses Chan. The effect of the said judgment cannot be extended to BPI Family and the spouses Chan by simply issuing an alias writ of execution against them. No man shall be affected by

any proceeding to which he is a stranger, and strangers to a case are not bound by any judgment rendered by the court. In the same manner, a writ of execution can be issued only against a party and not against one who did not have his day in court. Only real parties in interest in an action are bound by the judgment therein and by writs of execution issued pursuant thereto.[45] A similar situation existed in Dino v. Court of Appeals, [46] where we resolved that: As the registered owner of the subject property, petitioners are not bound by decision in Civil Case No. R-18073 for they were never summoned in said case and the notice of lis pendens annotated on TCT No. 73069 was already cancelled at the time petitioners purchased the subject property. While it is true that petitioners are indispensable parties in Civil Case No. R-18073, without whom no complete relief could be accorded to the private respondents, the fact still remains that petitioners were never actually joined as defendants in said case. Impleading petitioners as additional defendants only in the execution stage of said case violated petitioners right to due process as no notice of lis pendens was annotated on the existing certificate of title of said property nor were petitioners given notice of the pending case, therefore petitioners remain strangers in said case and the Order of the trial court involving them is null and void, considering that petitioners are innocent purchasers of the subject property for value.[47] We further stress that Section 48 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, clearly provides that [a] certificate of title shall not be subject to collateral attack. It cannot be altered, modified or cancelled except in a direct proceeding in accordance with law. Herein, several Torrens titles were already issued after the cancellation of Muozs. Certificates of title had been successively issued to Emilia M. Ching, spouses Go, BPI Family, and spouses Chan. Civil Case No. Q-28580, in which a final judgment had already been rendered, specifically challenged the validity of the certificates of title of Emilia M. Ching and the spouses Go only. To have the present certificate of title of the spouses Chan cancelled, Muoz must institute another case directly attacking the validity of the same. The fact that the titles to the subject property of Emilia M. Ching and the spouses Go were already declared null and void ab initio by final judgment in Civil Case No. Q-28580 is not enough, for it does not automatically make the subsequent titles of BPI Family and the spouses Chan correspondingly null and void ab initio. It has long been ingrained in our jurisprudence that a void title may become the root of a valid title if the derivative title was obtained in good faith and for value. Following the principle of indefeasibility of a Torrens title, every person dealing with registered lands may safely rely on the correctness of the certificate of title of the vendor/transferor, and he is not required to go beyond the certificate and inquire into the circumstances culminating in the vendors acquisition of the property. The rights of innocent third persons who relied on

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the correctness of the certificate of title and acquired rights over the property covered thereby cannot be disregarded and the courts cannot order the cancellation of such certificate for that would impair or erode public confidence in the Torrens system of land registration.[48]

Hence, we pronounced in Republic v. Agunoy, Sr.[49]: Here, it bears stressing that, by petitioner's own judicial admission, the lots in dispute are no longer part of the public domain, and there are numerous third, fourth, fifth and more parties holding Torrenstitles in their favor and enjoying the presumption of good faith. This brings to mind what we have reechoed in Pino v. Court of Appeals and the cases therein cited: [E]ven on the supposition that the sale was void, the general rule that the direct result of a previous illegal contract cannot be valid (on the theory that the spring cannot rise higher than its source) cannot apply here for We are confronted with the functionings of the Torrens System of Registration. The doctrine to follow is simple enough: a fraudulent or forged document of sale may become the ROOT of a valid title if the certificate of title has already been transferred from the name of the true owner to the name of the forger or the name indicated by the forger.[50] (Emphases ours.) Although the RTC-Branch 95 had declared with finality in Civil Case No. Q-28580 that the titles of Emilia M. Ching and the spouses Go were null and void, there is yet no similar determination on the titles of BPI Family and the spouses Chan. The question of whether or not the titles to the subject property of BPI Family and the spouses Chan are null and void, since they are merely the successors-in-interest, assigns, or privies of Emilia M. Ching and the spouses Go, ultimately depends on the issue of whether or not BPI Family and the spouses Chan obtained their titles to the subject property in bad faith, i.e., with notice of Muozs adverse claim and knowledge of the pendency of Civil Case No. Q-28580. The latter is a factual issue on which we cannot rule in the present petition, not only because we are not a trier of facts, but more importantly, because it was not among the issues raised and tried in Civil Case No. Q-28580. In support of her prayer for an alias writ of execution against BPI Family and the spouses Go, Muoz cites our ruling in Calalang v. Register of Deeds of Quezon City,[51] in relation to De la Cruz v. De la Cruz.[52] De la Cruz is an action for reconveyance of Lot 671 founded on breach of trust filed by Augustina de la Cruz, et al., against Lucia dela Cruz (Lucia) and Iglesia Ni Kristo (INK). We upheld the validity of the sale of Lot 671 by Lucia to INK, and thereby validated the title of INK to the said property. Calalang actually involved two petitions: (1) a special civil action for certiorari and prohibition originally filed by Virginia Calalang (Calalang) before this Court, and (2) a petition for injunction with damages originally filed by

Augusto M. de Leon (De Leon), et al., before the RTC and docketed as Civil Case No. Q-45767. Calalang and De Leon, et al., assert titles that were adverse to that of INK. De Leon, et al., in particular, claim that their titles to Lot 671 were derived from Amando Clemente. Calalang and De Leon, et al., sought from the court orders enjoining INK from building a fence to enclose Lot 671; requiring the Administrator of the National Land Titles and Deeds Registration Administration (NLTDRA) to conduct an investigation of the anomaly regarding Lucias reconstituted title to Lot 671; and dismissing the proceedings instituted by the Register of Deeds for the cancellation of their titles. We dismissed the petitions of Calalang and De Leon, et al., on the ground of res judicata, the legality or validity of the title of INK over Lot 671 had been settled with finality in De la Cruz. De la Cruz was applied to Calalang and De Leon, et al., since the facts on which such decision was predicated continued to be the facts on which the petitions of Calalang and De Leon, et al., were based. Muozs reliance on Calalang is misplaced. There are substantial differences in the facts and issues involved in Calalang and the present case. In Calalang, there is duplication or overlapping of certificates of title issued to different persons over the same property. We already upheld in De la Cruz the validity of the certificate of title of INK over Lot 671, which effectively prevents us from recognizing the validity of any other certificate of title over the same property. In addition, Lucia, the predecessor-ininterest of INK, had her certificate of title judicially reconstituted. The judicial reconstitution of title is a proceeding in rem, constituting constructive notice to the whole world. Hence, we rejected the petitions of Calalang and De Leon, et al., to enjoin INK from building a fence enclosing Lot 671, and the concerned public authorities from instituting appropriate proceedings to have all other certificates of title over Lot 671 annulled and cancelled. In the instant case, there has been no duplication or overlapping of certificates of title. The subject property has always been covered by only one certificate of title at a time, and at present, such certificate is in the spouses Chans names. As we have previously discussed herein, Muoz cannot have the spouses Chans TCT No. 53297 cancelled by a mere motion for the issuance of an alias writ of execution in Civil Case No. Q-28580, when the spouses Chan were not parties to the case. Civil Case No. Q-28580 was a proceeding in personam, and the final judgment rendered therein declaring null and void the titles to the subject property of Emilia M. Ching and the spouses Go should bind only the parties thereto. Furthermore, despite the void titles of Emilia M. Ching and the spouses Go, the derivative titles of BPI Family and the spouses Chan may still be valid provided that they had acquired the same in good faith and for value. More in point with the instant petition is Pineda v. Santiago. [53] Pineda still involved Lot 671. INK sought from the RTC a second alias writ of execution to implement the judgment in Calalang against Conrado Pineda (Pineda), et. al. In opposing the issuance of such writ, Pineda, et al., asserted that

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they held titles to Lot 671 adverse to those of Lucia and INK and that they were not parties in De la Cruz or in Calalang. In its assailed order, the RTC granted the second alias writ of execution on the basis that the issue of ownership of Lot 671 was already determined with finality in favor of Lucia and INK. The writ ordered the deputy sheriff to eject Pineda, et al., from Lot 671. When the matter was brought before us, we annulled the assailed order as the writ of execution issued was against Pineda, et al., who were not parties to Civil Case No. Q-45767, the ejectment suit instituted by De Leon, et al. We elaborated in Pineda that: Being a suit for injunction, Civil Case No. Q-45767 partakes of an action in personam. In Domagas v. Jensen, we have explained the nature of an action in personam and enumerated some actions and proceedings which are in personam, viz: The settled rule is that the aim and object of an action determine its character. Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its nature and purpose, and by these only. A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with the mandate of the court. The purpose of a proceeding in personam is to impose, through the judgment of a court, some responsibility or liability directly upon the person of the defendant. Of this character are suits to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on him. An action in personam is said to be one which has for its object a judgment against the person, as distinguished from a judgment against the propriety to determine its state. It has been held that an action in personam is a proceeding to enforce personal rights or obligations; such action is brought against the person. As far as suits for injunctive relief are concerned, it is well-settled that it is an injunctive act in personam. In Combs v. Combs, the appellate court held that proceedings to enforce personal rights and obligations and in which personal judgments are rendered adjusting the rights and obligations between the affected parties is in personam. Actions for recovery of real property are in personam. The respondent judge's jurisdiction is, therefore, limited to the parties in the injunction suit. To stress, the petition for injunction, docketed as Civil Case No. Q-45767, was filed only by therein petitioners Augusto M. de Leon, Jose de Castro, Jose A. Panlilio, Felicidad Vergara Vda. De Pineda, Fernando L. Vitug I, Fernando M. Vitug II, Fernando M. Vitug III, and Faustino Tobia, and later amended to include Elena Ostrea and Feliza C. Cristobal-Generoso as additional petitioners therein, against Bishop Erao Manalo, in his capacity as titular and spiritual head of I.N.K. Herein petitionersConrado Pineda, et al. never became parties thereto. Any and all orders and writs of execution, which the respondent judge may issue in that case can, therefore, be enforced only against those parties and not against the herein petitioners Conrado Pineda, et al. In issuing the assailed Order dated 22 April 1998, which directed the issuance of the 2nd Alias Writ of Execution to eject non-parties (herein

petitioners), the respondent judge clearly went out of bounds and committed grave abuse of discretion. The nature of the injunction suit Civil Case No. Q45767 as an action in personam in the RTC remains to be the same whether it is elevated to the CA or to this Court for review. An action in personam does not become an action in rem just because a pronouncement confirming I.N.K.'s title to Lot 671 was made by this Court in the Calalang decision. Final rulings may be made by this Court, as the Highest Court of the Land, in actions in personam but such rulings are binding only as against the parties therein and not against the whole world. Here lies another grave abuse of discretion on the part of the respondent judge when he relied on the Calalang decision in his assailed Order dated 07 May 1998 as if it were binding against the whole world, saying: After evaluating the arguments of both parties, decisive on the incident is the decision of the Supreme Court in favor of the respondent I.N.K., represented by its titular and spiritual head Bishop Erao G. Manalo, sustaining its ownership over the subject Lot 671. This Court could do no less but to follow and give substantial meaning to its ownership which shall include all dominical rights by way of a Writ of Execution. To delay the issuance of such writ is a denial of justice due the I.N.K. As a final word, this decision shall not be misinterpreted as disturbing or modifying our ruling in Calalang. The final ruling on I.N.K.'s ownership and title is not at all affected. Private respondent I.N.K., as the true and lawful owner of Lot 671 as ruled by the Court in Calalang, simply has to file the proper action against the herein petitioners to enforce its property rights within the bounds of the law and our rules. I.N.K.'s recourse of asking for the issuance of an alias writ of execution against the petitioners in Civil Case No. Q-45767 and the respondent judge's orders in said case, granting I.N.K.'s prayer and enforcing the alias writ of execution against the present petitioners, constitutes blatant disregard of very fundamental rules and must therefore be stricken down.[54] (Emphases ours.) Consistent with Pineda, and as appositely recommended by the RTC-Branch 95 and the Court of Appeals in the present case, Muozs legal remedy is to directly assail in a separate action the validity of the certificates of title of BPI Family and the spouses Chan. G.R. No. 142676 G.R. No. 142676 is Muozs appeal of the dismissal of Civil Case No. 8286, the forcible entry case she instituted against Samuel Go Chan and Atty. Yabut before the MeTC. There is forcible entry or desahucio when one is deprived of physical possession of land or building by means of force, intimidation, threat, strategy or stealth. In such cases, the possession is illegal from the beginning and the basic inquiry centers on who has the prior possession de facto. In filing forcible entry cases, the law tells us that two allegations are

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mandatory for the municipal court to acquire jurisdiction: first, the plaintiff must allege prior physical possession of the property, and second, he must also allege that he was deprived of his possession by any of the means provided for in Section 1, Rule 70 of the Rules of Court, i.e., by force, intimidation, threat, strategy, or stealth. It is also settled that in the resolution thereof, what is important is determining who is entitled to the physical possession of the property. Indeed, any of the parties who can prove prior possession de facto may recover such possession even from the owner himself since such cases proceed independently of any claim of ownership and the plaintiff needs merely to prove prior possession de facto and undue deprivation thereof.
[55]

MeTC had only gone so far as holding a hearing on and eventually granting Muozs prayer for the issuance of a writ of preliminary mandatory injunction. Muoz alleges in her complaint in Civil Case No. 8286 that she had been in prior possession of the subject property since it was turned-over to her by the sheriff on January 10, 1994, pursuant to the Alias Writ of Execution issued by the RTCBranch 95 to implement the final judgment in Civil Case No. Q-28580. The factual issue of who was in prior possession of the subject property should be litigated between the parties regardless of whether or not the final judgment in Civil Case No. Q-28580 extended to the spouses Chan. Hence, the pendency of the latter issue in Civil Case No. Q-28580 before the RTC-Branch 95 did not warrant the dismissal of Civil Case No. 8286 before the MeTC on the ground of litis pendentia. The two cases could proceed independently of one another. Samuel Go Chan and Atty. Yabut aver that the spouses Chan have never lost possession of the subject property since acquiring the same from BPI Family in 1990. This is a worthy defense to Muozs complaint for forcible entry, which Samuel Go Chan and Atty. Yabut should substantiate with evidence in the continuation of the proceedings in Civil Case No. 8286 before the MeTC. In addition, Civil Case No. 8286, a forcible entry case, is governed by the Revised Rule on Summary Procedure, Section 19 whereof provides: SEC. 19. Prohibited pleadings and motions. The following pleadings, motions, or petitions shall not be allowed in the cases covered by this Rule: xxxx (g) Petition for certiorari, mandamus, or prohibition against any interlocutory order issued by the court. The purpose of the Rule on Summary Procedure is to achieve an expeditious and inexpensive determination of cases without regard to technical rules. Pursuant to this objective, the Rule prohibits petitions for certiorari, like a number of other pleadings, in order to prevent unnecessary delays and to expedite the disposition of cases.[59] Interlocutory orders are those that determine incidental matters that do not touch on the merits of the case or put an end to the proceedings.[60] An order granting a preliminary injunction, whether mandatory or prohibitory, is interlocutory and unappealable.[61] The writ of preliminary mandatory injunction issued by the MeTC in its Order dated May 16, 1994, directing that Muoz be placed in possession of the subject property during the course of Civil Case No. 8286, is an interlocutory order. Samuel Go Chan and Atty. Yabut assailed the said order before the RTC-Branch 88 via a petition for certiorari, docketed as Civil Case No. Q-94-20632. The RTC-Branch 88 gave due course to said petition, and not only declared the CivPro | Nov 24 |

Title is never in issue in a forcible entry case, the court should base its decision on who had prior physical possession. The main thing to be proven in an action for forcible entry is prior possession and that same was lost through force, intimidation, threat, strategy, and stealth, so that it behooves the court to restore possession regardless of title or ownership.[56] We more extensively discussed in Pajuyo v. Court of Appeals[57] that: Ownership or the right to possess arising from ownership is not at issue in an action for recovery of possession. The parties cannot present evidence to prove ownership or right to legal possession except to prove the nature of the possession when necessary to resolve the issue of physical possession. The same is true when the defendant asserts the absence of title over the property. The absence of title over the contested lot is not a ground for the courts to withhold relief from the parties in an ejectment case. The only question that the courts must resolve in ejectment proceedings is - who is entitled to the physical possession of the premises, that is, to the possession de facto and not to the possession de jure. It does not even matter if a partys title to the property is questionable, or when both parties intruded into public land and their applications to own the land have yet to be approved by the proper government agency. Regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be thrown out by a strong hand, violence or terror. Neither is the unlawful withholding of property allowed. Courts will always uphold respect for prior possession. Thus, a party who can prove prior possession can recover such possession even against the owner himself. Whatever may be the character of his possession, if he has in his favor prior possession in time, he has the security that entitles him to remain on the property until a person with a better right lawfully ejects him. To repeat, the only issue that the court has to settle in an ejectment suit is the right to physical possession.[58] (Emphases ours.) Based on the foregoing, we find that the RTC-Branch 88 erred in ordering the dismissal of Civil Case No. 8286 even before completion of the proceedings before the MeTC. At the time said case was ordered dismissed by RTC-Branch 88, the

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MeTC Order dated May 16, 1994 null and void, but went further by dismissing Civil Case No. 8286. The prohibition in Section 19(g) of the Revised Rule on Summary Procedure is plain enough. Its further exposition is unnecessary verbiage.[62] The petition for certiorariof Samuel Go Chan and Atty. Yabut in Civil Case No. Q-94-20632 is clearly covered by the said prohibition, thus, it should have been dismissed outright by the RTC-Branch 88. While the circumstances involved in Muozs forcible entry case against Samuel Go Chan and Atty. Yabut are admittedly very peculiar, these are insufficient to except the petition for certiorari of Samuel Go Chan and Atty. Yabut in Civil Case No. Q-94-20632 from the prohibition. The liberality in the interpretation and application of the rules applies only in proper cases and under justifiable causes and circumstances. While it is true that litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to insure an orderly and speedy administration of justice.[63] Nonetheless, even though the peculiar circumstances extant herein do not justify the dismissal of Civil Case No. 8286, they do require limiting pro hac vice the reliefs the MeTC may accord to Muoz in the event that she is able to successfully prove forcible entry by Samuel Go Chan and Atty. Yabut into the subject property (i.e., that the sheriff actually turned-over to Muoz the possession of the subject property on January 10, 1994, and that she was deprived of such possession by Samuel Go Chan and Atty. Yabut on February 2, 1994 by means of force, intimidation, threat, strategy, and stealth). Taking into account our ruling in G.R. No. 146718 that the final judgment in Civil Case No. Q-28580 does not extend to the spouses Chan, who were not impleaded as parties to the said case the MeTC is precluded from granting to Muoz relief, whether preliminary or final, that will give her possession of the subject property. Otherwise, we will be perpetuating the wrongful execution of the final judgment in Civil Case No. Q28580. Based on the same reason, Muoz can no longer insist on the reinstatement of the MeTC Order dated May 16, 1994 granting a preliminary mandatory injunction that puts her in possession of the subject property during the course of the trial. Muoz though may recover damages if she is able to prove wrongful deprivation of possession of the subject property from February 2, 1994 until the finality of this decision in G.R. No. 146718. WHEREFORE, in view of the foregoing, we: (1) GRANT Emerita Muozs petition in G.R. No. 142676. We REVERSE and SET ASIDE the Decision dated July 21, 1995 and Resolution dated March 9, 2000 of the Court of Appeals in CA-G.R. SP No. 35322, which affirmed the Orders dated June 10, 1994 and August 5, 1994 of the Regional Trial Court, Branch 88 of Quezon City in Civil Case No. Q-94-20632. We DIRECT the Metropolitan Trial Court, Branch 33 of Quezon City to reinstate Emerita Muozs complaint for forcible entry in Civil Case No. 8286 and to resume the proceedings only to determine whether or not Emerita Muoz was forcibly deprived of possession of the subject property from February 2, 1994 until finality of this

judgment, and if so, whether or not she is entitled to an award for damages for deprivation of possession during the aforementioned period of time; and (2) DENY Emerita Munozs petition in G.R. No. 146718 for lack of merit, and AFFIRM the Decision dated September 29, 2000 and Resolution dated January 5, 2001 of the Court of Appeals in CA-G.R. SP No. 40019, which in turn, affirmed the Orders dated August 21, 1995 and October 3, 1995 of the Regional Trial Court, Branch 95 of Quezon City in Civil Case No. Q-28580. ======================== Republic of the Philippines Supreme Court Manila THIRD DIVISION JUANA COMPLEX I HOMEOWNERS ASSOCIATION, INC., ANDRES C. BAUTISTA, BRIGIDO DIMACULANGAN, DOLORES P. PRADO, IMELDA DE LA CRUZ, EDITHA C. DY, FLORENCIA M. MERCADO, LEOVINO C. DATARIO, AIDA A. ABAYON, NAPOLEON M. DIMAANO, ROSITA G. ESTIGOY and NELSON A. LOYOLA, Petitioners, - versus FIL-ESTATE LAND, INC., FIL ESTATE ECOCENTRUM CORPORATION, LA PAZHOUSING AND DEVELOPMENT CORPORATION, WARBIRD SECURITY AGENCY, ENRIQUE RIVILLA, MICHAEL E. JETHMAL and MICHAEL ALUNAN, Respondents. x-------------------------------------------x FIL-ESTATE LAND, INC., FIL ESTATE ECOCENTRUM CORPORATION, LA PAZHOUSING AND DEVELOPMENT CORPORATION, WARBIRD SECURITY AGENCY, ENRIQUE RIVILLA, MICHAEL E. JETHMAL and MICHAEL ALUNAN, Petitioners, - versus JUANA COMPLEX I HOMEOWNERS ASSOCIATION, INC., ANDRES C. BAUTISTA, BRIGIDO DIMACULANGAN, DOLORES P. PRADO, IMELDA DE LA CRUZ, EDITHA C. DY, FLORENCIA M. MERCADO, LEOVINO C. DATARIO, AIDA A. ABAYON, NAPOLEON M. DIMAANO, ROSITA G. ESTIGOY and NELSON A.

G.R. No. 152

G. R. No. 152 Present:

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VELASCO, J PERALTA, ABAD, MENDOZA, PERLAS-BE

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LOYOLA, Respondents. Accordingly, JCHA, et al. also prayed for the immediate issuance of a Temporary Restraining Order (TRO) or a writ of preliminary injunction (WPI) to enjoin Fil-Estate, et al. from stopping and intimidating them in their use of La Paz Road.

Promulgated:On February 10, 1999, a TRO was issued ordering Fil-Estate, et al, for a period of twenty (20) days, to stop preventing, March 5,coercing, intimidating or harassing the commuters and 2012 X motorists from using the La Paz Road. [6] ------------------------------------------------------------------------------------- X Subsequently, the RTC conducted several hearings to DECISION determine the propriety of the issuance of a WPI. MENDOZA, J.: Before the Court are two (2) consolidated petitions assailing the July 31, 2001 Decision[1] and February 21, 2002 Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 60543, which annulled and set aside the March 3, 1999 Order[3] of the Regional Trial Court, Branch 25, Bian, Laguna (RTC), granting the application for the issuance of a writ of preliminary injunction, and upheld the June 16, 2000 Omnibus Order[4] denying the motion to dismiss. The Facts: On January 20, 1999, Juana Complex I Homeowners Association, Inc. (JCHA), together with individual residents of Juana Complex I and other neighboring subdivisions(collectively referred as JCHA, et. al.), instituted a complaint[5] for damages, in its own behalf and as a class suit representing the regular commuters and motorists of Juana Complex I and neighboring subdivisions who were deprived of the use of La Paz Road, against Fil-Estate Land, Inc. (FilEstate), Fil-estate Ecocentrum Corporation (FEEC), La Paz Housing & Development Corporation (La Paz), and Warbird Security Agency and their respective officers (collectively referred as Fil-Estate, et al.). The complaint alleged that JCHA, et al. were regular commuters and motorists who constantly travelled towards the direction of Manila and Calamba; that they used the entry and exit toll gates of South Luzon Expressway (SLEX) by passing through right-of-way public road known as La Paz Road; that they had been using La Paz Road for more than ten (10) years; that in August 1998, Fil-estate excavated, broke and deliberately ruined La Paz Road that led to SLEX so JCHA, et al. would not be able to pass through the said road; that La Paz Road was restored by the residents to make it passable but Filestate excavated the road again; that JCHA reported the matter to the Municipal Government and the Office of the Municipal Engineer but the latter failed to repair the road to make it passable and safe to motorists and pedestrians; that the act of Fil-estate in excavating La Paz Road caused damage, prejudice, inconvenience, annoyance, and loss of precious hours to them, to the commuters and motorists because traffic was re-routed to narrow streets that caused terrible traffic congestion and hazard; and that its permanent closure would not only prejudice their right to free and unhampered use of the property but would also cause great damage and irreparable injury. On February 26, 1999, Fil-Estate, et al. filed a motion to dismiss[7] arguing that the complaint failed to state a cause of action and that it was improperly filed as a class suit. On March 5, 1999, JCHA, et al. filed their comment[8] on the motion to dismiss to which respondents filed a reply. [9] On March 3, 1999, the RTC issued an Order [10] granting the WPI and required JCHA, et al. to post a bond. On March 19, 1999, Fil-Estate, et al. filed a motion for reconsideration[11] arguing, among others, that JCHA, et al. failed to satisfy the requirements for the issuance of a WPI. On March 23, 1999, JCHA, et al. filed their opposition to the motion.[12] The RTC then issued its June 16, 2000 Omnibus Order, denying both the motion to dismiss and the motion for reconsideration filed by Fil-Estate, et al. Not satisfied, Fil-Estate, et al. filed a petition for certiorari and prohibition before the CA to annul (1) the Order dated March 3, 1999 and (2) the Omnibus Order dated June 16, 2000. They contended that the complaint failed to state a cause of action and that it was improperly filed as a class suit. With regard to the issuance of the WPI, the defendants averred that JCHA, et al. failed to show that they had a clear and unmistakable right to the use of La Paz Road; and further claimed that La Paz Road was a torrens registered private road and there was neither a voluntary nor legal easement constituted over it.[13] On July 31, 2001, the CA rendered the decision partially granting the petition, the dispositive portion of which reads: WHEREFORE, the petition is hereby partially GRANTED. The Order dated March 3, 1999 granting the writ of preliminary injunction is hereby ANNULLED and SET ASIDE but the portion of the Omnibus Order dated June 16, 2000 denying the motion to dismiss is upheld.

The CA ruled that the complaint sufficiently stated a cause of action when JCHA, et al. alleged in their complaint that they had been using La Paz Road for more than ten (10) years and that their right was violated when Fil-Estate closed and excavated the road. It sustained the RTC ruling that the complaint was properly filed as a class suit as it was shown

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SO ORDERED.[14]

that the case was of common interest and that the individuals sought to be represented were so numerous that it was impractical to include all of them as parties. The CA, however, annulled the WPI for failure of JCHA, et al. to prove their clear and present right over La Paz Road. The CA ordered the remand of the case to the RTC for a full-blown trial on the merits. Hence, these petitions for review. In G.R. No. 152272, JCHA, et al. come to this Court, raising the following issues: (A) THE HONORABLE COURT OF APPEALS, IN HOLDING THAT A FULL-BLOWN TRIAL ON THE MERITS IS REQUIRED TO DETERMINE THE NATURE OF THE LA PAZ ROAD, HAD DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION. (B) THE HONORABLE COURT OF APPEALS, IN HOLDING THAT THE PETITIONERS FAILED TO SATISFY THE REQUIREMENTS FOR THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION, HAD DECIDED NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT.[15] In G.R. No. 152397, on the other hand, Fil-Estate, et al. anchor their petition on the following issues: I. The Court of Appeals declaration that respondents Complaint states a cause of action is contrary to existing law and jurisprudence. II. The Court of Appeals pronouncement that respondents complaint was properly filed as a class suit is contrary to existing law and jurisprudence. III. The Court of Appeals conclusion that full blown trial on the merits is required to determine the nature of the La Paz Road is contrary to existing laws and jurisprudence.[16] JCHA, et al. concur with the CA that the complaint sufficiently stated a cause of action. They, however, disagree with the CAs pronouncement that a full-blown trial on the merits was necessary. They claim that during the hearing on the application of the writ of injunction, they had sufficiently proven that La Paz Road was a public road and that commuters and motorists of their neighboring villages had used this road as their means of access to the San Agustin Church, Colegio De San Agustin and to SLEX in going to

Metro Manila and to Southern Tagalog particularly during the rush hours when traffic at Carmona Entry/Exit and Susana Heights Entry/Exit was at its worst. JCHA, et al. argue that La Paz Road has attained the status and character of a public road or burdened by an apparent easement of public right of way. They point out that La Paz Road is the widest road in the neighborhood used by motorists in going to Halang Road and in entering the SLEX-Halang toll gate and that there is no other road as wide as La Paz Road existing in the vicinity. For residents of San Pedro, Laguna, the shortest, convenient and safe route towards SLEX Halang is along Rosario Avenue joining La Paz Road. Finally, JCHA, et al. argue that the CA erred when it voided the WPI because the public nature of La Paz Road had been sufficiently proven and, as residents of San Pedro and Bian, Laguna, their right to use La Paz Road is undeniable. In their Memorandum,[17] Fil-Estate, et al. explain that La Paz Road is included in the parcels of land covered by Transfer Certificates of Title (TCT) Nos. T-120008, T-90321 and T90607, all registered in the name of La Paz. The purpose of constructing La Paz Road was to provide a passageway for La Paz to its intended projects to the south, one of which was the Juana Complex I. When Juana Complex I was completed, La Paz donated the open spaces, drainage, canal, and lighting facilities inside the Juana Complex I to the Municipality of Bian. The streets within the subdivisions were then converted to public roads and were opened for use of the general public. The La Paz Road, not being part of the Juana Complex I, was excluded from the donation. Subsequently, La Paz became a shareholder of FEEC, a consortium formed to develop several real properties in Bian, Laguna, known as Ecocentrum Project. In exchange for shares of stock, La Paz contributed some of its real properties to the Municipality of Bian, including the properties constituting La Paz Road, to form part of the Ecocentrum Project. Fil-Estate, et al. agree with the CA that the annulment of the WPI was proper since JCHA, et al. failed to prove that they have a clear right over La Paz Road. Fil-Estate, et al. assert that JCHA, et al. failed to prove the existence of a right of way or a right to pass over La Paz Road and that the closure of the said road constituted an injury to such right. According to them, La Paz Road is a torrens registered private road and there is neither a voluntary nor legal easement constituted over it. They claim that La Paz Road is a private property registered under the name of La Paz and the beneficial ownership thereof was transferred to FEEC when La Paz joined the consortium for the Ecocentrum Project. Fil-Estate, et al., however, insist that the complaint did not sufficiently contain the ultimate facts to show a cause of action. They aver the bare allegation that one is entitled to something is an allegation of a conclusion which adds nothing to the pleading. They likewise argue that the complaint was improperly filed as a class suit for it failed to show that JCHA, et al. and the commuters and motorists they are representing have a welldefined community of interest over La Paz Road. They claim

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that the excavation of La Paz Road would not necessarily give rise to a common right or cause of action for JCHA, et al. against them since each of them has a separate and distinct purpose and each may be affected differently than the others. The Courts Ruling The issues for the Courts resolution are: (1) whether or not the complaint states a cause of action; (2) whether the complaint has been properly filed as a class suit; and (2) whether or not a WPI is warranted. Section 2, Rule 2 of the Rules of Court defines a cause of action as an act or omission by which a party violates the right of another. A complaint states a cause of action when it contains three (3) essential elements of a cause of action, namely: (1) the legal right of the plaintiff, (2) the correlative obligation of the defendant, and (3) the act or omission of the defendant in violation of said legal right.[18] The question of whether the complaint states a cause of action is determined by its averments regarding the acts committed by the defendant.[19] Thus, it must contain a concise statement of the ultimate or essential facts constituting the plaintiffs cause of action.[20] To be taken into account are only the material allegations in the complaint; extraneous facts and circumstances or other matters aliunde are not considered.[21] The test of sufficiency of facts alleged in the complaint as constituting a cause of action is whether or not admitting the facts alleged, the court could render a valid verdict in accordance with the prayer of said complaint.[22] Stated differently, 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 asserted by the defendant.[23] In the present case, the Court finds the allegations in the complaint sufficient to establish a cause of action. First, JCHA, et al.s averments in the complaint show a demandable right over La Paz Road. These are: (1) their right to use the road on the basis of their allegation that they had been using the road for more than 10 years; and (2) an easement of a right of way has been constituted over the said roads. There is no other road as wide as La Paz Road existing in the vicinity and it is the shortest, convenient and safe route towards SLEX Halang that the commuters and motorists may use. Second, there is an alleged violation of such right committed by Fil-Estate, et al. when they excavated the road and prevented the commuters and motorists from using the same. Third, JCHA, et al. consequently suffered injury and that a valid judgment could have been rendered in accordance with the relief sought therein. With respect to the issue that the case was improperly instituted as a class suit, the Court finds the opposition without merit. Section 12, Rule 3 of the Rules of Court defines a class suit, as follows: Sec. 12. Class suit. When the subject matter of the

controversy is one of common or general interest to many persons so numerous that it is impracticable to join all as parties, a number of them which the court finds to be sufficiently numerous and representative as to fully protect the interests of all concerned may sue or defend for the benefit of all. Any party in interest shall have the right to intervene to protect his individual interest. The necessary elements for the maintenance of a class suit are: 1) the subject matter of controversy is one of common or general interest to many persons; 2) the parties affected are so numerous that it is impracticable to bring them all to court; and 3) the parties bringing the class suit are sufficiently numerous or representative of the class and can fully protect the interests of all concerned.[24] In this case, the suit is clearly one that benefits all commuters and motorists who use La Paz Road. As succinctly stated by the CA: The subject matter of the instant case, i.e., the closure and excavation of the La Paz Road, is initially shown to be of common or general interest to many persons. The records reveal that numerous individuals have filed manifestations with the lower court, conveying their intention to join private respondents in the suit and claiming that they are similarly situated with private respondents for they were also prejudiced by the acts of petitioners in closing and excavating the La Paz Road. Moreover, the individuals sought to be represented by private respondents in the suit are so numerous that it is impracticable to join them all as parties and be named individually as plaintiffs in the complaint. These individuals claim to be residents of various barangays in Bian, Laguna and other barangays in San Pedro, Laguna. Anent the issue on the propriety of the WPI, Section 3, Rule 58 of the Rules of Court lays down the rules for the issuance thereof. Thus: (a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the acts complained of, or in the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) That a party, court, or agency or a person is doing, threatening, or attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. A writ of preliminary injunction is available to prevent a threatened or continuous irremediable injury to parties before their claims can be thoroughly studied and adjudicated.[25] The requisites for its issuance are: (1) the existence of a clear and unmistakable right that must be protected; and (2) an urgent and paramount necessity for the writ to prevent serious

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damage.[26] For the writ to issue, the right sought to be protected must be a present right, a legal right which must be shown to be clear and positive.[27] This means that the persons applying for the writ must show that they have an ostensible right to the final relief prayed for in their complaint.[28] In the case at bench, JCHA, et al. failed to establish a prima facie proof of violation of their right to justify the issuance of a WPI. Their right to the use of La Paz Road is disputable since they have no clear legal right therein. As correctly ruled by the CA: Here, contrary to the ruling of respondent Judge, private respondents failed to prove as yet that they have a clear and unmistakable right over the La Paz Road which was sought to be protected by the injunctive writ. They merely anchor their purported right over the La Paz Road on the bare allegation that they have been using the same as public road right-of-way for more than ten years. A mere allegation does not meet the standard of proof that would warrant the issuance of the injunctive writ. Failure to establish the existence of a clear right which should be judicially protected through the writ of injunction is a sufficient ground for denying the injunction. Consequently, the case should be further heard by the RTC so that the parties can fully prove their respective positions on the issues. Due process considerations dictate that the assailed injunctive writ is not a judgment on the merits but merely an order for the grant of a provisional and ancillary remedy to preserve the status quo until the merits of the case can be heard. The hearing on the application for issuance of a writ of preliminary injunction is separate and distinct from the trial on the merits of the main case. [29] The evidence submitted during the hearing of the incident is not conclusive or complete for only a "sampling" is needed to give the trial court an idea of the justification for the preliminary injunction pending the decision of the case on the merits.[30] There are vital facts that have yet to be presented during the trial which may not be obtained or presented during the hearing on the application for the injunctive writ.[31] Moreover, the quantum of evidence required for one is different from that for the other.[32] WHEREFORE, the petitions are DENIED. Accordingly, the July 31, 2001 Decision and February 21, 2002 Resolution of the Court of Appeals in CA-G.R. SP No. 60543 are AFFIRMED.

How it went to the SC: Alcordo illegal dismissal complaint -> NLRC via Labor Arbiter (for Manila Hotel but ordered payment to Alcordo) Manila Hotel appealed -> NLRC (reversed LA and favored Alcordo) M.R. denied Manila Hotel 65 certio -> CA (CA dismissed) M.R. denied Manila Hotel 45 review on certio -> SC (current petition) Facts: Alcordo was hired by Manila Hotel as a Food and Beverage Director (salary = 75,000) but was eventually terminated on the ground of loss due to loss of confidence due to inability to improve profitabiliy of the restaurants he was handling. Alcordo filed illegal dismissal complaint. The Labor Arbiter found for Manila Hotel and dismiss Alcordo's complaint. It held that Manila Hotel was justified in terminating Alcordo since as a managerial employee, he was hired not only to oversee the operations but to improve the profitability. Manila Hotel was, however, ordered to Alcordo 80k as one month's salary, in lieu of the 30day advance notice of dismissal plus 5k as indemnity for failure to comply with due process. Manila Hotel appealed to the NLRC. The latter reversed the LA decision ruling that Manila Hotel failed to prove that Alcordo was hired with the condition that he will improve the profits and that the unsatisfactory performance of the restaurants was due to Alcordo's negligence. Manila Hotel was ordered to pay full backwages, separation pay and damages. Manila Hotel's M.R. was denied. Manila Hotel filed a 65 certio with the CA. The CA dismissed the petition because: 1) the petition was not accompanied by copies of the decision of the LA and the position paper of the parties; 2) the certificate of non-forum shopping was signed by Manila Hotel's counsel (Atty. Isidro, who was also the assistant VP of the Personnel Dept.); and, 3) the petition did not attach a board resolution giving the counsel authority to act in behalf of Manila Hotel. A M.R. was filed by petitioner with the copies of the needed documents to "cure" the petition. Petitioner stated that its initial failure to attach the said documents were due to inadvertence or oversight. CA, however, denied the M.R. stating that under rule 46, sec. 3, failure to append copies of the relevant documents is sufficient ground for dismissal. Aggrieved, Manila Hotel filed the current petition with the SC praying for the liberal interpretation of

Manila Hotel Corporation, petitioner, - vs. - Court of Appeals and Samuel Alcordo, respondents. - G.R. No. 143574. July 11, 2002 (Noel) - Review on Certiorari Proceeding which sought to set aside Resolutions of the CA. The CA dismissed Manila Hotel's 65 certiorari wherein it assailed the decision of the NLRC. -

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the rules of procedure. Issue: W/N the rules should be applied liberally in favor of Manila Hotel (SC: NO) Held: Rule 65, Section 1 states that: SECTION 1. Petition for certiorari. xxx xxx xxx The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of Section 3, Rule 46. SECTION 3. Contents and filing of petition; effect of noncompliance with requirements. xxx xxx xxx It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the respondent with the original copy intended for the court indicated as such by the petitioner, and shall be accompanied by a clearly legible duplicate original or certified true copy of the judgment, order, resolution or ruling subject thereof, such material portions of the record as are referred to therein, and other documents relevant or pertinent thereto. . . . . xxx xxx xxx The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. The issue posed before the Court of Appeals is the validity of the termination of Alcordo's employment. Hence, the need to append copies of the Labor Arbiters decision and the position papers of the parties. Under the circumstances, there was a necessity for the appellate court to review the facts and the law on which the conclusions were based, considering the conflicting findings of the NLRC and the Labor Arbiter. (which is why the CA dismissed the petition at its onset). Liberal construction of the rule has been allowed by this Court in the following cases: (1) where a rigid application will result in manifest failure or miscarriage of justice, especially if a party successfully shows that the alleged defect in the questioned final and executory judgment is not apparent on its face or from the recitals contained therein; (2) where the interest of substantial justice will be served; (3) where the resolution of the motion is addressed solely to the sound and judicious discretion of the court; and (4) where the injustice to the adverse party is not commensurate with the degree of his -

thoughtlessness in not complying with the procedure prescribed. Manila Hotel contends that the omission of the required documents is due to "oversight" or "inadvertence." In Sea Power Shipping Enterprises, Inc. v. Court of Appeals, et al., however, the Court held that "oversight" and "excusable negligence" have become an all too familiar and ready excuse on the part of lawyers remiss in their bounden duty to comply with established rules. Rules of procedure are tools designed to promote efficiency and orderliness as well as to facilitate attainment of justice, such that strict adherence thereto is required. The application of the Rules may be relaxed only when rigidity would result in a defeat of equity and substantial justice. In the case at bar, petitioner has not shown any cogent reason for the Court to be liberal in the application of the rules.

Hence, the dismissal of its petition by the Court of Appeals on technical grounds must be sustained. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 146611 February 6, 2007

TANCREDO REDEA, Petitioner, vs. HON. COURT OF APPEALS and LEOCADIO REDEA, Respondents. DECISION GARCIA, J.: In this special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, petitioner Tancredo Redea (Tancredo, hereafter) seeks the annulment and setting aside of the Resolution1 dated April 28, 2000 of the Court of Appeals in CA-G.R. CV No. 59641, as reiterated in its Resolution2 of November 16, 2000, denying the petitioners motion for reconsideration. The present controversy sprung from an action for partition filed by petitioner Tancredo against his older half-brother, herein private respondent Leocadio Redea (Leocadio, for brevity) before the then Court of First Instance (now Regional Trial Court [RTC]) of San Pablo City, Laguna, and thereat docketed as Civil Case No. S-241 which was subsequently inherited by Branch 33 of the RTC, Siniloan, Laguna. The basic complaint for partition alleges that plaintiff Tancredo and defendant Leocadio are both sons of one Maximo Redea: Tancredo, by Maximos marriage to Magdalena Fernandez, and Leocadio, by Maximos previous

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marriage to Emerenciana Redea. The complaint further alleged that the parties common father, Maximo, left several pieces of realty, to wit: a residential lot at M. Calim Street, Famy, Laguna; a riceland at Poroza, Famy, Laguna; and another parcel of land at Maate, also in Famy, Laguna. In a decision3 dated August 20, 1997, the trial court, based on the evidence presented, confined the partition to only the property actually pertaining to the estate of the parties deceased father and co-owned by them, namely, the parcel of land at Maate, and accordingly rendered judgment as follows: WHEREFORE, premises considered, judgment is hereby rendered ordering the defendant [now respondent Leocadio] to partition only the property located at Maate, Famy, Laguna after plaintiffs [Tancredos] reimbursement of the expenses incurred by the defendant in relation to the said lot. However, partition cannot be effected with regard to properties located at M. Calim Street, Famy, Laguna and the property located at Poroza, Famy, Laguna, as the same belong to the defendant. No pronouncement as to costs. SO ORDERED. (Words in brackets supplied) On December 11, 1997, petitioner filed with the trial court a Notice of Appeal.4 The court gave due course to the notice and directed the elevation of the records of the case to the CA whereat petitioners appeal was docketed as CA-G.R.CV No. 59641. On September 28, 1998, the CA issued a resolution directing petitioner, as appellant, to file his appellants brief. Evidently, the period for filing the brief was even extended by the CA. On March 9, 1999, there being no appellants brief filed within the extended period, the CA issued a resolution5 considering the appeal abandoned and accordingly dismissing the same. The dismissal resolution reads: For failure of plaintiff-appellant [now petitioner] to file the required brief within the extended period, the instant appeal is hereby considered ABANDONED and accordingly DISMISSED, pursuant to Section 1(e), Rule 50, 1997 Rules of Civil Procedure. On November 8, 1999 or eight (8) months after the CA issued the above resolution, petitioner filed a motion for reconsideration6 thereof. In a resolution7 of November 25, 1999, the CA denied the motion. Then, on December 28, 1999, in the same CA-G.R. CV No. 59641, petitioner filed a Petition for Relief8 bearing date December 27, 1999, anchored on Section 2,9 Rule 38 of the 1997 Rules of Civil Procedure. In that pleading, petitioner prays the CA to set aside its dismissal resolution of March 9, 1999, supra, reinstate his appeal and grant him a fresh period of forty-five (45) days from notice within which to file his appellants brief. In the herein assailed Resolution10 dated April 28, 2000, the CA denied the aforementioned Petition for Relief, thus:

WHEREFORE, the petition for relief dated 27 December 1999 is hereby DENIED. SO ORDERED. Explains the CA in said resolution: Petition for relief is not among the remedies available in the Court of Appeals. In fact, authorities in remedial law (noted authors Regalado, Herrera, and Feria) are one in their commentaries that these petitions are filed with the trial courts. Not one of them has advanced an opinion or comment that this equitable relief can be obtained in the Court of Appeals. Under Rule 47, an annulment of judgment or final orders and resolutions may be filed before this court based on the ground of extrinsic fraud which seems to be the premise of the petition. Perhaps it is worth looking into by the petitioner if the factual basis of the present petition for relief may qualify as an extrinsic fraud, under Rule 47. Petitioners motion for reconsideration of the abovementioned resolution was likewise denied by the CA in its equally challenged Resolution11 of November 16, 2000, wherein the appellate court further wrote: Under the 1964 Rules of Court, there was only one court where a petition for relief may be filed the Court of First Instance, now the Regional Trial Court. Section 1 thereof governs a petition to Court of First Instance for relief from judgment of inferior court while Section 2 thereof governs petition to Court of First Instance for relief from judgment or other proceeding thereof. The 1997 Rules of Civil Procedure has altered the said precept. Now, it must be filed before the Municipal Trial Courts or Metropolitan Trial Courts for judgments or final orders or other proceedings taken in said courts, and in the same case. And for judgment, order, or other proceedings in the Regional Trial Court, it must be filed in the same Regional Trial Court which rendered the judgment or final order, or other proceedings taken and in the same case. In other words, under the present rule, such a petition may be filed in the same court which rendered the judgment or final order, or proceedings taken and in the same case. This is in accordance with uniform procedure rule for Municipal and Regional Trial Courts. The above construction to limit the term "any court" to Municipal Trial Court and Regional Trial Court and not to include the Court of Appeals finds support in Section 7 of the Rules which states: Sec. 7. Procedure where the denial of an appeal is set aside. Where the denial of an appeal is set aside, the lower court shall be required to give due course to the appeal and to elevate the record of the appealed case as if a timely and proper appeal had been made. Significantly, there is no specific provision in both the 1964 and 1997 Rules of Court making the petition under Rule 38, applicable in the Court of Appeals. The procedure in the Court of Appeals from Rule 44 to Rule 55 with the exception of Rule 45 which pertains to the Supreme Court, identifies the remedies available before said court such as annulment of

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judgment or final orders and resolution (Rule 47); motion for reconsideration (Rule 52); and, new trial, (Rule 53). Nowhere is petition for relief under Rule 38 mentioned. But even as the CA stood firm on its stand that a petition for relief from denial of appeal is not among the remedies available before the CA itself, the appellate court, in the same Resolution of November 16, 2000, left the final determination of the question to this Court, thus: Parenthetically, the main question presented herein is novel in that there is yet no definite and definitive jurisprudence from the Supreme Court. Perhaps, the case will clarify this gray area in our adjective law for guidance of the Bench and Bar. The issue should be elevated to that Tribunal. Presently, petitioner is now before this Court via the instant recourse on his submission that the CA committed grave abuse of discretion when it I XXX RULED THAT A PETITION FOR RELIEF IS NOT AN AVAILABLE REMEDY IN THE COURT OF APPEALS. II XXX REFUSED TO GRANT THE PETITION DESPITE A CLEAR SHOWING THAT (A) PETITIONER, BY REASON OF FRAUD AND MISTAKE, WAS PREVENTED FROM PROSECUTING HIS APPEAL, AND (B) PETITIONER HAS A GOOD AND SUBSTANTIAL CAUSE OF ACTION AGAINST PRIVATE RESPONDENT. We DISMISS. In Hagonoy Market Vendor Association v. Municipality of Hagonoy, Bulacan, G.R. No. 137621, February 6, 2002, then Associate Justice, now Chief Justice Reynato S. Puno, reminded us that Laws are of two (2) kinds: substantive and procedural. Substantive laws, insofar as their provisions are unambiguous, are rigorously applied to resolve legal issues on the merits. In contrast, courts generally frown upon an uncompromising application of procedural laws so as not to subvert substantial justice. Nonetheless, it is not totally uncommon for courts to decide cases based on a rigid application of the so-called technical rules of procedure as these rules exist for the orderly administration of justice. From the petition, it is clear that this Court is called upon to relax the application of procedural rules, or suspend them altogether, in favor of petitioners substantial rights. There is no doubt as to the power of this Court to do that. In a fairly recent case, we reiterated: The Court has often stressed that rules of procedure are merely tools designed to facilitate the attainment of justice. They were conceived and promulgated to effectively aid the court in the dispensation of justice. Courts are not slaves to or robots of

technical rules, shorn of judicial discretion. In rendering justice, courts have always been, as they ought to be, conscientiously guided by the norm that on the balance, technicalities take a backseat against substantive rights, and not the other way around. Thus, if the application of the Rules would tend to frustrate rather than promote justice, it is always within our power to suspend the rules or except a particular case from its operation.12 The Rules itself expressly states in Section 2 of Rule 1 that the rules shall be liberally construed in order to promote their object and to assist the parties in obtaining just, speedy and inexpensive determination of every action and proceeding. Courts, therefore, not only have the power but the duty to construe and apply technical rules liberally in favor of substantive law and substantial justice. Furthermore, this Court, unlike courts below, has the power not only to liberally construe the rules, but also to suspend them, in favor of substantive law or substantial rights. Such power inherently belongs to this Court, which is expressly vested with rulemaking power by no less than the Constitution.13 1awphi1.net It is equally settled, however, that this Courts power to liberally construe and even to suspend the rules, presupposes the existence of substantial rights in favor of which, the strict application of technical rules must concede. The facts are borne out by the records pertaining to petitioners purported undivided share in the property at M. Calim Street, Famy, Laguna, and the property in Poroza clearly showed that these two properties had been subject of an agreement (Exh. "1") whereby petitioner recognized respondents rights to said properties. This fact binds this Court, there being nothing on record with the trial court as to the herein alleged fraud against the petitioner. Upon thorough deliberation of the supposed substantial rights claimed by the petitioner with the court below, the Court finds no cogent basis to favorably rule on the merits of the appeal even if it may be given due course which is indispensable to justify this Court in considering this case as an exception to the rules. The present case will have to be decided in accordance with existing rules of procedure. We apply the settled principle that petition for relief under Rule 38 of the Rules of Court is of equitable character, allowed only in exceptional cases as when there is no other available or adequate remedy.14 Hence, a petition for relief may not be availed of where a party has another adequate remedy available to him, which is either a motion for new trial or appeal from the adverse decision of the lower court, and he is not prevented from filing such motion or taking the appeal. The rule is that relief will not be granted to a party who seeks to be relieved from the effect of the judgment when the loss of the remedy at law is due to his own negligence, or a mistaken mode of procedure; otherwise, the petition for relief will be tantamount to reviving the right of appeal which has already been lost either because of inexcusable negligence or due to a mistake in the mode of procedure taken by counsel.15 Under Section 2 of Rule 38, supra, of the Rules of Court, a party prevented from taking an appeal from a judgment or final order of a court by reason of fraud, accident, mistake or excusable negligence, may file in the same court and in the

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same case a petition for relief praying that his appeal be given due course. This presupposes, of course, that no appeal was taken precisely because of any of the aforestated reasons which prevented him from appealing his case. Hence, a petition for relief under Rule 38 cannot be availed of in the CA, the latter being a court of appellate jurisdiction. For sure, under the present Rules, petitions for relief from a judgment, final order or other proceeding rendered or taken should be filed in and resolved by the court in the same case from which the petition arose. Thus, petition for relief from a judgment, final order or proceeding involved in a case tried by a municipal trial court shall be filed in and decided by the same court in the same case, just like the procedure followed in the present Regional Trial Court.16 Here, the record shows that petitioner in fact filed a Notice of Appeal with the trial court, which the latter granted in its order of December 11, 1997 and ordered the elevation of the records to the CA. In turn, the CA, in its resolution of September 28, 1998, required the petitioner, thru his former counsel, Atty. Geminiano Almeda, to file his appellants brief. But petitioner failed to comply. Consequently, in its resolution of March 9, 1999, the CA considered the appellants appeal as ABANDONED and DISMISSED the same. Additionally, after the dismissal of his appeal, petitioner filed with the CA a motion for reconsideration of the dismissal resolution. Unfortunately, however, the motion was filed very much late on November 8, 1999. Expectedly, in its resolution17 of November 25, 1999, the CA denied the motion for reconsideration, to wit: The last day to file a motion for reconsideration was on 06 April 1999 and as of 18 October 1999 no such motion was ever filed; in fact on 19 October 1999 the court resolved that an entry of judgment may now be issued. The motion for reconsideration, however, pleas for leniency on account of his former lawyers inefficiency and negligence in that he failed to appeal the case. This is not well taken. His former lawyers lack of fidelity and devotion to his client in the discharge of his duty of perfecting the appeal on time without demonstrating fraud, accident, mistake or excusable negligence cannot be a basis for judicial relief. The client has to bear the adverse consequences of the inexcusable mistake or negligence of his counsel or of the latters employee and may not be heard to complain that the result of the litigation might have been different had he proceeded differently (Inocando v. Inocando, 100 Phil. 266) WHEREFORE, the motion is hereby DENIED. Petitioner presents himself as a mere farmer seeking the Courts leniency to the point of disregarding the rules on reglementary period for filing pleadings. But he fails to point out any circumstance which might lead the Court to conclude that his station in life had in any way placed his half-brother in a more advantageous position. As we see it, petitioner failed to show diligence in pursuing his cause. His condition as a farmer, by itself alone, does not excuse or exempt him from being vigilant on his right. He cannot lay the blame solely on his former lawyer. It is settled that clients are bound by the

mistakes, negligence and omission of their counsel.18 While, exceptionally, a client may be excused from the failure of his counsel, the circumstances obtaining in this case do not convince the Court to take exception. In seeking exemption from the above rule, petitioner claims that he will suffer deprivation of property without due process of law on account of the gross negligence of his previous counsel. To him, the negligence of his former counsel was so gross that it practically resulted to fraud because he was allegedly placed under the impression that the counsel had prepared and filed his appellants brief. He thus prays the Court reverse the CA and remand the main case to the court of origin for new trial. Admittedly, this Court has relaxed the rule on the binding effect of counsels negligence and allowed a litigant another chance to present his case (1) where the reckless or gross negligence of counsel deprives the client of due process of law; (2) when application of the rule will result in outright deprivation of the clients liberty or property; or (3) where the interests of justice so require.19 None of these exceptions obtains here. For a claim of counsels gross negligence to prosper, nothing short of clear abandonment of the clients cause must be shown. Here, petitioners counsel failed to file the appellants brief. While this omission can plausibly qualify as simple negligence, it does not amount to gross negligence to justify the annulment of the proceedings below. In Legarda v. Court of Appeals,20 where the Court initially held that the counsels failure to file pleadings at the trial court and later on appeal amounted to gross negligence, the Court, on motion of the respondent therein, granted reconsideration and applied the general rule binding the litigant to her counsels negligence. In said case, the Court noted that the proceedings which led to the filing of the petition "were not attended by any irregularity." The same observation squarely applies here. To recapitulate, petitioner is not entitled to relief under Rule 38, Section 2 of the Rules of Court. He was not prevented from filing his notice of appeal by fraud, accident, mistake or excusable negligence, as in fact he filed one. The relief afforded by Rule 38 will not be granted to a party who seeks to be relieved from the effects of the judgment when the loss of the remedy of law was due to his own negligence, or a mistaken mode of procedure for that matter; otherwise, the petition for relief will be tantamount to reviving the right of appeal which has already been lost, either because of inexcusable negligence or due to a mistake of procedure by counsel.21 The Rules allow a petition for relief only when there is no other available remedy, and not when litigants, like the petitioner, lose a remedy by negligence. On a final note, the extraordinary writ of certiorari may be issued only where it is clearly shown that there is patent and gross abuse of discretion as to amount to an evasion of positive duty or to virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by

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reason of passion or personal hostility.22 The Court finds no such abuse of discretion in this case. WHEREFORE, the instant petition is DISMISSED and the assailed resolutions of the CA are AFFIRMED. No pronouncement as to costs.

merits. A careful review shows that this case will not only affect herein petitioners but also the more or less 70,000 consumers in Davao City and its environs. It appears more appropriate to consider the petition on its merits rather than dismiss it on technicalities.

G.R. No. L-69592 May 8, 1990 (Mell) Francisco P. Tesorero, et al. v. Ponciano G.A. Mathay, et al. ***PETITION FOR CERTIORARI TO REVIEW THE DECISION OF THE BOARD OF ENERGY Board of Energy(dismissed the appraisal) DOE(approved the appraisal) SC (certiorari) FACTS: - Respondent Davao Light filed (1980) with public respondent Board of Energy an application for the approval of the sound value appraisal of its properties worth P339M made by Technical and Management Service - BOE disapproved the appraisal report due to deficiencies and discrepancies - Davao Light filed (1982) again an application for the approval of its appraisal conducted by Asian Appraisal Co - DOE approved P282M as the fair and reasonable value of Davao Lights properties 17 days AFTER receiving the decision, the petitioners filed (Jan 1984) an MR but the same was denied, but the petitioners did not receive this decision - Petitioners prayed that a hearing be conducted and/or a resolution be issued on their MR - BOE replied that the MR has been denied, and provided copies of the decision ISSUE: Is certiorari the proper remedy in this case? NO. HELD: - The proper remedy is to appeal to the Office of the President 7 DAYS FROM RECEIPT OF NOTICE OF ITS DECISIONS OR ORDERS. - The decision was received on Dec 19, 1983, but the petitioners filed their MR on Jan 5, 1984 or 17 days after from receipt of the said decision; they received the copy of the denied MR on Dec 1984 - The Court in the broader interests of justice has in a number of cases given due course to a petition for certiorari, although the proper remedy is appeal especially where the equities warrant recourse and considering the dismissals on technicalities are viewed with disapproval - That litigations should, as much as possible be decided on the merits and not technicalities, that this Court, in the exercise of equity jurisdiction, decided to disregard technicalities in order to resolve the

Chrisostomo Rebollido , Fernando Valencia and Edwin Rebollido, petitioners vs. CA & PEPSICO, Inc., respondents. (170 SCRA 800)~Alfie a petition for certiorari to review the decision of the Court of Appeals Doctrine: A dissolved corporation may be made a party to a case. In a case where petitioners Rebollido are filing a suit for damages against Pepsi Cola Bottling Company, a corporation that is as of the filing of the suit being dissolved, there can still be valid service of summons and acquiring of jurisdiction over Pepsi Cola. The SC ruled that petitioners had a valid cause of action against Pepsi Cola and that the Corporation Code provides that a corporation whose corporate term has ceased can still be made a party to a suit. The right of action of petitioners Rebollido arose when the vehicular accident between their schoolbus and Pepsis truck happened, or when the acts or omission constituting the cause of action accrued. It did not arise, as Pepsi contends upon filing of the case against them, which was after Pepsi was dissolved. Lastly, there is proper service of summons upon Pepsi even if it was only served upon the secretary of the legal department because the notice of action was considered promptly served upon either Pepsi or PEPSICO to whom which the secretary was admittedly connected. Facts: 1. March 1, 1984; vehicular accident between schoolbus owned by Rebollido & Valencia and a truck owned by Pepsi Cola Bottling Co. 2. March 2, 1984; Pepsi Cola Bottling files for dissolution in the SEC; replaced eventually by PEPSICO 3. August 7, 1984, Rebollido et al. file a Civil Case for damages in RTC Makati; 4. September 21, 1984; Sheriff served summons upon PEPSICO; secretary Nenette Sison accepts the summons; claims she is part of the legal department of Pepsi Cola; 5. Pepsi fails to file an answer and is declared in default; RTC rules in favor of Rebollido awarding damages; 6. PEPSICO files a special civil action for certiorari with the Court of Appeals; CA rules in favor of PEPSICO on the ground of lack of jurisdiction and no valid service of summons. 7. Rebollido et al. files his petition in the Supreme Court.

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Issues: Was there a valid service of summons through Nenette Sison? Held: YES. Valid service of summons was served upon Pepsi Cola and successor PEPSICO. Dissolved corporations may still become parties to a case even after they are dissolved. Since the law recognizes the liability of a dissolved corporation to a creditor, the law, by extension, also allows service of process upon a dissolved corporation. Otherwise, substantive rights would be lost to mere procedural rules.

dismissed. He filed the complaint 1980, or a little less than 6 years thereafter.

Minister Ople reversed the Regional Director and called for the reinstatement of Hughes. The finding of the public respondent was that Hughes was not guilty of criminal or civil negligence nor was it correct to say that his action had prescribed. Petitioner contends that the private respondent is not entitled to reinstatement because he had abandoned his work, and is guilty of laches for not asserting his right sooner; and that in any case his cause of action had long prescribed.

G.R. No. L-57642 March 16, 1989 Baliwag Transit, Inc., vs. Hon. Blas F. Ople, Minister of Labor and Employment, and Romeo Hughes, respondents. FACTS: CRUZ, J.: RegionalDirLabor (complaint for illegal dismissal: dismissed) LaborMinister (reversed) SC (affirmed) DOCTRINE: The cause of action does not accrue until the party obligated refuses, expressly or impliedly, to comply with its duty. (BREACH)

ISSUE: Is the private respondent entitled to reinstatement? YES. HELD: The private respondent did not demand his reinstatement earlier because the petitioner deceived him into believing he would be eventually reinstated. Employment or profession is a 'property right' and the wrongful interference therewith is an actionable wrong (Callanta v. Carnation Philippines, Inc). Hence, when one is arbitrarily deprived of his job or means of livelihood, the action instituted to contest the legality of one's dismissal from employment constitutes an action predicated upon an injury to the rights of the plaintiff as contemplated under Article 1146, NCC, which must be brought within 4 years. WHEN DID THE CAUSE OF ACTION ACCRUE? Petitioner argues that it should be when the collision occurred. The private respondent insists it should be when his demand for reinstatement was rejected by the petitioner. CAUSE OF ACTION has three elements, (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission constituting a breach of the obligation of the defendant to the plaintiff. In this case, the third element was not established. The private respondent's right of action could not have accrued from the mere fact of the occurrence of the mishap as he was not considered automatically dismissed on that date. He was deemed suspended from his work as a result of the suspension of his driver's license because of the accident. There existed no justification at that time for the private respondent to demand reinstatement and no opportunity warrant either for the petitioner to reject that demand. SC agrees with the private respondent that May 10, 1980, is the date when his cause of action accrued, for it was then that the petitioner denied his demand for reinstatement and so committed the act or omission "constituting a breach of the obligation of the defendant to the plaintiff." The breach happened when the private respondent demanded his reinstatement on May 2,1980, and his demand was categorically rejected by the petitioner on May 10, 1980.

Petitioner Baliwag Transit is an authorized bus line operator. The private respondent Romeo Hughes was hired (1966) and continued serving as a bus driver until he was relieved of his duties. THE INCIDENT: Respondent was driving his bus when it got stalled (August 10, 1974, 2:30pm) at the railroad crossing in Calumpit, Bulacan. The bus was then hit at its rear end by an onrushing train of the PNR; 18 died, 56 suffered serious physical injuries, the bus itself sustained extensive damage. Petitioner spent for the settlement of the claims of the deceased and injured passengers and the repair of the bus. The court ruled in favor Petitioner in the case for damages it filed against the PNR. The private respondent was absolved of any contributory negligence. The decision is pending resolution at the CA. The criminal case filed against private respondent was provisionally dismissed for failure of the witness to appear. The private respondent claims that soon after the decision against the PNR, he sought reinstatement with Baliwag who advised him to wait until termination of the criminal case against him. His repeated requests were ignored. Private respondent filed (1980) a formal complaint with the Ministry of Labor and Employment for illegal dismissal with a prayer for his reinstatement. The complaint was dismissed by the Regional Director Ministry of Labor - NCR on the ground of prescription. Private respondent was separated from the service on 1974-date of the accident, or in 1975 when he was

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Since a cause of action requires essential elements, not only a legal right of the plaintiff and a correlative obligation of the defendant but also an act or omission of the defendant in violation of said legal right; the cause of action does not accrue until the party obligated refuses, expressly or impliedly, to comply with its duty. SC sustains the order requiring private respondents reinstatement by the petitioner. WHEREFORE, subject to the modification of the challenged order as to the backwages, the petition is DISMISSED, with costs against the petitioner. G.R. No. L-57642 March 16, 1989 ~ Mell Baliwag Transit, Inc., vs. Hon. Blas F. Ople, Minister of Labor and Employment, and Romeo Hughes, respondents. FACTS: CRUZ, J.: RegionalDirLabor (complaint for illegal dismissal: dismissed) LaborMinister (reversed) SC (affirmed) DOCTRINE: The cause of action does not accrue until the party obligated refuses, expressly or impliedly, to comply with its duty. (BREACH)

Ministry of Labor - NCR on the ground of prescription. Private respondent was separated from the service on 1974-date of the accident, or in 1975 when he was dismissed. He filed the complaint 1980, or a little less than 6 years thereafter.

Minister Ople reversed the Regional Director and called for the reinstatement of Hughes. The finding of the public respondent was that Hughes was not guilty of criminal or civil negligence nor was it correct to say that his action had prescribed. Petitioner contends that the private respondent is not entitled to reinstatement because he had abandoned his work, and is guilty of laches for not asserting his right sooner; and that in any case his cause of action had long prescribed.

ISSUE: Is the private respondent entitled to reinstatement? YES. HELD: The private respondent did not demand his reinstatement earlier because the petitioner deceived him into believing he would be eventually reinstated. Employment or profession is a 'property right' and the wrongful interference therewith is an actionable wrong (Callanta v. Carnation Philippines, Inc). Hence, when one is arbitrarily deprived of his job or means of livelihood, the action instituted to contest the legality of one's dismissal from employment constitutes an action predicated upon an injury to the rights of the plaintiff as contemplated under Article 1146, NCC, which must be brought within 4 years. WHEN DID THE CAUSE OF ACTION ACCRUE? Petitioner argues that it should be when the collision occurred. The private respondent insists it should be when his demand for reinstatement was rejected by the petitioner. CAUSE OF ACTION has three elements, (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission constituting a breach of the obligation of the defendant to the plaintiff. In this case, the third element was not established. The private respondent's right of action could not have accrued from the mere fact of the occurrence of the mishap as he was not considered automatically dismissed on that date. He was deemed suspended from his work as a result of the suspension of his driver's license because of the accident. There existed no justification at that time for the private respondent to demand reinstatement and no opportunity warrant either for the petitioner to reject that demand. SC agrees with the private respondent that May 10, 1980, is the date when his cause of action accrued, for it was then that the petitioner denied his demand for reinstatement and so committed the act or omission "constituting a breach of the obligation of the defendant to the plaintiff." The breach

Petitioner Baliwag Transit is an authorized bus line operator. The private respondent Romeo Hughes was hired (1966) and continued serving as a bus driver until he was relieved of his duties. THE INCIDENT: Respondent was driving his bus when it got stalled (August 10, 1974, 2:30pm) at the railroad crossing in Calumpit, Bulacan. The bus was then hit at its rear end by an onrushing train of the PNR; 18 died, 56 suffered serious physical injuries, the bus itself sustained extensive damage. Petitioner spent for the settlement of the claims of the deceased and injured passengers and the repair of the bus. The court ruled in favor Petitioner in the case for damages it filed against the PNR. The private respondent was absolved of any contributory negligence. The decision is pending resolution at the CA. The criminal case filed against private respondent was provisionally dismissed for failure of the witness to appear. The private respondent claims that soon after the decision against the PNR, he sought reinstatement with Baliwag who advised him to wait until termination of the criminal case against him. His repeated requests were ignored. Private respondent filed (1980) a formal complaint with the Ministry of Labor and Employment for illegal dismissal with a prayer for his reinstatement. The complaint was dismissed by the Regional Director

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happened when the private respondent demanded his reinstatement on May 2,1980, and his demand was categorically rejected by the petitioner on May 10, 1980.

daughter respondent Cristina Trinidad Zarate Romero, asserted ownership over the subject property to the extent of one-half thereof. However, respondent discovered that the property was already registered as early as June 13, 1989 in Since a cause of action requires essential elements, not only a the name of DBP under TCT No. 54142,[4] with TCT legal right of the plaintiff and a correlative obligation of the No 10070 in the names of her mother and uncle already defendant but also an act or omission of the defendant in cancelled. violation of said legal right; the cause of action does not Respondent filed before the Regional Trial Court (RTC) accrue until the party obligated refuses, expressly or of Dagupan City a complaint[5] for reconveyance, quieting of impliedly, to comply with its duty. title and damages with prayer for a temporary restraining order (TRO) and writ of preliminary injunction to prevent DBP from SC sustains the order requiring private respondents conducting any auction sale on the subject property during the reinstatement by the petitioner. pendency of the case. Respondent claimed that her uncle and DBP conspired in committing fraudulent acts relative to their WHEREFORE, subject to the modification of the challenged true transaction and concealed the same from her mother, order as to the backwages, the petition is DISMISSED, with thereby depriving her of her right of redemption. costs against the petitioner. The RTC, after hearing, issued on November 24, 1998, a TRO[6] restraining DBP from proceeding with its scheduled auction of the disputed property on November 25, 1998. The dispositive portion of the trial courts order reads: FIRST DIVISION It appearing that plaintiff Cristina Trinidad Romero y Zarate is the sole DEVELOPMENT BANK OF THEPHILIPPINES, G.R. No. 163827heir of the late Maria Corazon Zarate Romero[,] coowner of the pro[-]indiviso of the property covered by TCT Petitioner, Present: No. 10070 which at present is carried in TCT No. 54142 in the name of DBP[,] and to avoid irreparable damage that may arise CORONA, [from] the auction sale (public bidding) scheduled on November 25, 1998[,] this Court hereby issues a Temporary Chairperson Restraining Order LEONARDO-DE CASTRO, (TRO) AGAINST DEFENDANT Development Bank of the Philippines, Makati, Metro Manila - versus BERSAMIN, from proceeding VILLARAMA, JR., and [with] the scheduled auction sale (public bidding) on November 25, 1998 at defendants head office at SERENO, SAM BCG for a period of twenty (20) days from receipt of this HON. SILVERIO Q. CASTILLO and Promulgated: order. SO ORDERED.[7] CRISTINA TRINIDADZARATE ROMERO, DBP moved to lift the TRO arguing that it violates Section Respondents. August 17, 2011 2[8] of Presidential Decree (P.D.) No. 385[9] which prohibits the x ----------------------------------------issuance of a restraining order, temporary or permanent, ---------x against government financing institutions like DBP to enjoin RESOLUTION any action taken pursuant to the mandatory foreclosure clause VILLARAMA, JR., J.: of the decree.[10] On December 14, 1998, the RTC denied DBPs motion to lift Before us is a petition for review on certiorari under Rule 45 the TRO and granted respondents plea for an injunctive writ. of the 1997 Rules of Civil Procedure, as amended, seeking to [11] [1] The pertinent portions of the trial courts order reads: set aside the July 21, 2003 Decision of the Court of Appeals To the honest evaluation of this Court what is unrestrainable is (CA) in CA-G.R. SP No. 53825 dismissing petitioners the right of government financial institutions to foreclose petition for certiorari. mandatorily all loans with arrearages including interest and The antecedents follow: charges amounting to at least twenty (20%) percent of the total Corazon Zarate Romero and his brother Gonzalo Zarate cooutstanding obligation. owned a property covered by Transfer Certificate of Title xxxx (TCT) No. 10070[2] of the Register of Deeds of Dagupan To allay the fears of the plaintiff and to avoid any irreparable City. The subject property, located damage that may arise while the issues involved in the above in Dagupan City, Province of Pangasinan, is a 1,705-squarecase are still being resolved and determined by the Court in meter lot with a four-storey hotel erected thereon. the light of the evidence so f[a]r presented, [considering that] It appears that sometime in 1975, Corazon and Gonzalo there is a tendency on the part of the Development Bank of the obtained a loan from petitioner Development Bank of the Philippines of continuing the acts complained of (auction Philippines (DBP). As collateral, they executed a real estate sale/Public bidding) and considering further [that] there mortgage[3] over the subject property in favor of DBP. On the [should] be no advantage given to one [party] to the alleged failure of the two borrowers to pay their amortizations, prejudice of the other while this case is still pending in Court, DBP foreclosed the real estate mortgage onSeptember 15, it is hereby ordered that a WRIT of Preliminary Injunction be 1983. Purportedly, no redemption was made within one year, issued against defendant Development Bank of the Philippines and thus, DBP consolidated ownership over the subject from conducting any auction sale of the property involved in property. the above case (formerly covered by TCT No. 10070 and at In March 1993, when Corazon passed away, her sole heir, her

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[present] covered by TCT No. 54142), upon posting of a BOND by the plaintiff in the amount of P3 Million within five (5) days from receipt of this Order.[12] On even date, DBP moved to reconsider[13] the December 14, 1998 Order and at the same time sought the dismissal of respondents complaint on the sole ground that the same states no cause of action.[14] On December 23, 1998, the writ of preliminary injunction[15] was issued in favor of respondent. On March 8, 1999, the RTC denied DBPs motion for reconsideration of the denial of its motion for the lifting of the TRO. The RTC likewise denied in the same order DBPs motion to dismiss the complaint,[16] and ordered DBP to file an answer. On March 23, 1999, DBP moved to reconsider the March 8, 1999 denial of its motion to dismiss.[17] But even before the RTC could resolve said motion, DBP filed its Answer[18] on April 5, 1999. A manifestation[19] was later filed by DBP indicating that the answer it filed was a mere cautionary measure or what is known as an answer ad cautelam and thus without prejudice to any right of action it may take and without any waiver of any of the grounds for the dismissal of the complaint and any favorable resolution or order that a superior court may issue hereinafter. On April 20, 1999, the RTC issued an order[20] denying DBPs motion for reconsideration of its March 8, 1999 Order. The RTC in the same order emphasized that DBP already filed an answer thereby rendering the motion to dismiss moot and academic. On June 23, 1999, DBP filed a petition for certiorari[21] before the CA assailing the following issuances of the RTC: (1) TRO dated November 24, 1998 (received by DBP on November 24, 1998) issued against DBP enjoining it from proceeding with the scheduled auction sale of the disputed property; (2) Order dated December 14, 1998 (received by DBP on December 16, 1998) denying its motion to lift the TRO and granting the respondents prayer for a writ of preliminary injunction; (3) Order dated March 8, 1999 (received by DBP on March 18, 1999) denying DBPs motion to dismiss and motion for reconsideration of the December 14, 1998 Order; and (4) Order dated April 20, 1999 (received by DBP on April 23, 1999) denying DBPs motion for reconsideration of the March 8, 1999 order. In its assailed decision, the CA dismissed the petition on procedural grounds. It held that the petition questioning the first three orders was filed late as the petition should have been filed within 60 days from receipt of the assailed orders. The CA noted that as regards the third order, DBP was notified of the denial of its motion for reconsideration of the December 14, 1998 Order on March 18, 1999 and thus only had until May 17, 1999 to question the same. The CA further stated that DBPs subsequent filing of its Answer to the complaint rendered its motion to dismiss moot and academic. Hence, the present appeal. DBP raises the following issues for this Courts consideration: I. WHETHER THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE ORDER OF THE COURT A QUO DENYING DBPS MOTION TO DISMISS.

II. WHETHER THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE ORDER OF THE COURT A QUO ISSUING THE TEMPORARY RESTRAINING ORDER AND THE PRELIMINARY INJUNCTION AGAINST PETITIONER DBP. III. WHETHER THE RULES OF PROCEDURE [SHOULD NOT] BE APPLIED IN A VERY RIGID AND TECHNICAL SENSE SO AS NOT TO FRUSTRATE THE PROMOTION OF SUBSTANTIAL JUSTICE.[22] DBP insists that it is evident from the face of the complaint that respondent failed to state a cause of action. DBP contends that respondents allegation of conspiracy between DBP and Gonzalo is bare and has no factual basis to stand on. Further, DBP claims that respondent has no legal right over the subject property as she did not inherit the same in the first place. At the time of death of respondents mother, the property was not anymore owned by the latter and therefore not part of her estate. Thus, respondent has no legal right over the property and has no cause of action against DBP. And because she had no right to the property, the issuance of the TRO and injunctive writ were likewise improper. DBP also points to the following provisions of P.D. No. 385 that were allegedly violated with the issuance of the TRO and injunctive writ: SECTION 1. It shall be mandatory for government financial institutions, after the lapse of sixty (60) days from the issuance of this Decree, to foreclose the collaterals and/or securities for any loan, credit, accommodation, and/or guarantees granted by them whenever the arrearages on such account, including accrued interest and other charges, amount to at least twenty percent (20%) of the total outstanding obligations, including interest and other charges, as appearing in the books of account and/or related records of the financial institution concerned. This shall be without prejudice to the exercise by the government financial institutions of such rights and/or remedies available to them under their respective contracts with their debtors, including the right to foreclose on loans, credits, accommodations and/or guarantees on which the arrearages are less than twenty percent (20%). SEC. 2. No restraining order, temporary or permanent injunction shall be issued by the court against any government financial institution in any action taken by such institution in compliance with the mandatory foreclosure provided in Section 1 hereof, whether such restraining order, temporary or permanent injunction is sought by the borrower(s) or any third party or parties, except after due hearing in which it is established by the borrower and admitted by the government financial institution concerned that twenty percent (20%) of the outstanding arrearages has been paid after the filing of foreclosure proceedings. xxxx Respondent, for her part, counters that the CA was correct in dismissing the petition for certiorari for having been filed beyond the sixty (60)-day reglementary period. Also, respondent contends that the provisions of P.D. No. 385 relating to the proscription against the issuance of injunctive writs enjoining foreclosure sales are not applicable in the instant case. She points out that what the RTC enjoined is not an auction sale arising from the foreclosure of mortgage as the subject property had long been foreclosed and title thereto consolidated in the name of DBP. Rather, what the RTC enjoined was DBPs sale of the subject property through

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ordinary public bidding which is not within the ambit of P.D. No. 385. The petition should be denied. As correctly ruled by the CA, the petition for certiorari assailing the orders pertaining to the grant of the TRO and the writ of injunction were filed out of time. Notice of the issuance of the TRO was received by DBP on the same day it was granted, November 24, 1998; thus, the petition for certiorari should have been filed not later than January 23, 1999. The denial of the motion for reconsideration of the order granting the writ of injunction, on the other hand, was received by DBP on March 18, 1999 and thus, it had only until May 17, 1999 to file the petition for certiorari. DBP, however, filed its petition only on June 23, 1999. As to DBPs motion to dismiss the complaint, we agree with the RTC and CA that the same should be denied, but not for the reason cited by said courts that it has been rendered moot and academic by DBPs filing of its answer but because the same lacks merit. Contrary to DBPs submission, a perusal of the allegations of the complaint clearly reveals respondents cause of action against DBP. The complaint states, xxxx 1.1 Plaintiff is the sole heir and successor-in-interest of the late Ma. Corazon Zarate-Romero, who died intestate on 6 March 1993. xxxx 3. During her lifetime, plaintiffs predecessor-in-interest was the erstwhile owner pro-indiviso of that parcel of land, together with improvements, located in Dagupan City, which property used to be covered by Transfer Certificate of Title (TCT) No. 10070 of the Registry of Deeds of Dagupan City. 4. In or about the year 1975, defendant Zarate, who was coowner of the subject property, secured various personal loan obligations from the defendant DBP in the aggregate amount of P2,000,000.00. 4.1 To secure such putative loan obligations of the defendant Zarate, the latter, who wielded moral ascendancy over his younger sister and herein plaintiffs predecessor-in-interest -Ma. Corazon Zarate-Romero, cajoled and prevailed upon the latter to mortgage the entirety of the subject property in favor of defendant DBP, including her one-half (1/2) proindiviso share in the same. 4.2 Accordingly, defendant Zarate assured the plaintiffs predecessor-in-interest that the mortgage would be for a brief period only and that he (defendant Zarate) would forthwith pay and settle in full all his personal loan obligations with the defendant DBP to ensure that said mortgage is cancelled in the soonest time possible. 5. At some point in time during the effectivity of the mortgage, however, defendant Zarate apparently saw an opportunity to claim the entirety of the subject property for himself, to the exclusion of plaintiffs predecessor-in-interest. 5.1 Emboldened by, and taking advantage of, the complete trust and confidence reposed upon him by the plaintiffs predecessor-in-interest anent the subject property, defendant Zarate conspired with the defendant DBP for the ostensible foreclosure of the subject property, with the end in view, however, of subsequently reacquiring the same for himself as sole owner. 6. Pursuant to such sinister plot hatched by defendants, defendant DBP foreclosed the subject property in September

of 1983 and, thereafter, bought the same for itself in the sum of P2,253,101.00 during the auction sale conducted by the Deputy Sheriff of Pangasinan. 7. Significantly enough, and even before the lapse of the mortgagors right of redemption over the subject property, the herein defendants entered into a Deed of Conditional Sale over the same, with the defendant DBP as seller, and the defendant Zarate as buyer. 7.1 Needless to state, all the aforedescribed dealings, transactions and proceedings concerning the subject property -- from its fraudulent foreclosure up to the highly anomalous execution of the Deed of Conditional Sale over the same -were concealed from plaintiffs predecessor-in-interest and even from the plaintiff herself after the death of her mother. x x x x[23] A cause of action is the act or omission by which a party violates a right of another.[24] A complaint states a cause of action when it contains three essential elements: (1) a right in favor of the plaintiff by whatever means and whatever law it arises; (2) the correlative obligation of the defendant to respect such right; and (3) the act or omission of the defendant violates the right of the plaintiff. If any of these elements is absent, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action.[25] Evidently, all the above elements of a cause of action are alleged in the complaint: (1) the legal right of the respondent over the subject property foreclosed premised on the fact that she is the sole heir of one of the owners who is entitled to the right of redemption; (2) the correlative obligation of defendant DBP, as the foreclosing entity, to respect such right of redemption; and (3) the act or omission of the defendant in violation of the legal right, i.e., the act of DBP and its codefendant Zarate to cause the ostensible foreclosure of the subject property and the subsequent execution of a deed of conditional sale between the defendants even prior to the lapse of redemption period to deprive respondents mother of her right over the property. WHEREFORE, the petition is DENIED for lack of merit. The Decision dated July 21, 2003 of the Court of Appeals in CA-G.R. SP No. 53825 is AFFIRMED. No costs.

G.R. No. L-45350 May 29, 1939~Medz Bachrach Motor Co., Inc., plaintiff-appellant, vs. Esteban Icaragal and Oriental Commercial Co., Inc., defendants-appellees. Facts : On June 11 , 1930, defendant Esteban Icaragal, for value received, executed in favor of the plaintiff, Bachrach Motor Co., Inc., a promissory note for one thousand six hundred fourteen pesos (P1,614), and in security for its payment, said Esteban Icaragal executed a real estate mortgage on a parcel of land in Pagil, Laguna. Promissor defaulted in the payment. Plaintiff instituted in the Court of First Instance of Manila an action for the collection of the amount due.

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Judgment was then rendered for Bachrach. A writ of execution was subsequently issued. The provincial sheriff of Laguna levied on the properties of the defendants, including that which has been mortgaged by Esteban Icaragal in favor of the plaintiff. Oriental Commercial Co., Inc., interposed a third-party claim, alleging that by virtue of a writ of execution, the property which was the subject of the mortgage and which has been levied upon by the sheriff, had already been acquired by it at the public auction on May 12, 1933. The sheriff desisted from the sale of the property, as a consequence, the judgment rendered in favor of the plaintiff remained unsatisfied. Bachrach instituted an action to foreclose the mortgage. The trial court dismissed the complaint and, from the judgment thus rendered Bachrach took the present appeal. Issue: Is Bachrach barred from foreclosing the real estate mortgage after it has elected to sue and obtain a personal judgment against the defendant-appellee on the promissory note for the payment of which the mortgage was constituted as a security? YES. HELD: SC ruled against splitting a single cause of action. For non-payment of a note secured by mortgage, the creditor has a single cause of action against the debtor. This single cause of action consists in the recovery of the credit with execution of the security. In other words, the creditor in his action may make two demands, the payment of the debt and the foreclosure of his mortgage. But both demands arise from the same cause, the non-payment of the debt, and, for that reason, they constitute a single cause of action. Both refer to one and the same obligation. There exists only one cause of action for a single breach of that obligation. Plaintiff cannot split up his single cause of action by filing a complaint for payment of the debt, and thereafter another complaint for foreclosure of the mortgage. If he does so, the filing of the first complaint will bar the subsequent complaint. The rule against splitting a single cause of action is intended "to prevent repeated litigation between the same parties in regard to the same subject of controversy; to protect defendant from unnecessary vexation; and to avoid the costs and expenses incident to numerous suits." It comes from that old maxim nemo bedet bis vexare pro una et eadem cause (no man shall be twice vexed for one and the same cause). We hold, therefore, that a mortgage creditor may institute

against the mortgage debtor either a personal action for debt or real action to foreclose the mortgage. He may pursue either of the two remedies, but not both.

Republic of the Philippines Supreme Court Manila FIRST DIVISION

CORONA, C.J., Chairperson, LEONARDO-DE - versus CASTRO, BERSAMIN, DEL CASTILLO, and SPOUSES FERNANDO C. PEREZ,* JJ. CUNANAN and TRINIDAD N. CUNANAN, BENELDA ESTATE DEVELOPMENT Promulgated: CORPORATION, and SPOUSES AMADO E. CARLOS and GLORIA A. CARLOS, September 12, 2011 Respondents. x----------------------------------------------------------------------------------------x DECISION BERSAMIN, J.: If two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of the others.[1] We review the decision promulgated on November 19, 2002, [2] whereby the Court of Appeals (CA) dismissed the petitioners amended complaint in Civil Case No. 12251 of the Regional Trial Court, Branch 41, in San Fernando City, Pampanga (RTC) for being barred by res judicata. Antecedents On September 30, 1986, Spouses Manuel and Catalina Chu (Chus) executed a deed of sale with assumption of mortgage[3] involving their five parcels of land situated in Saguin, San Fernando City, Pampanga, registered under Transfer Certificate of Title (TCT) No. 198470-R, TCT No. 198471-R, TCT No. 198472-R, TCT No. 198473-R, and TCT CivPro | Nov 24 |

CATALINA B. CHU, THEANLYN B. CHU, THEAN CHING LEE B. CHU, THEAN LEEWN B. CHU, and MARTIN LAWRENCE B. CHU, Petitioners,

G.R. No. 156185 Present:

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No. 199556-R, all of the Office of the Registry of Deeds of the Province of Pampanga, in favor of Trinidad N. Cunanan (Cunanan) for the consideration ofP5,161,090.00. They also executed a so-called side agreement, whereby they clarified that Cunanan had paid only P1,000,000.00 to the Chus despite the Chus, as vendors, having acknowledged receiving P5,161,090.00; that the amount of P1,600,000.00 was to be paid directly to Benito Co and to Security Bank and Trust Company (SBTC) in whose favor the five lots had been mortgaged; and that Cunanan would pay the balance of P2,561.90.00 within three months, with a grace period of one month subject to 3%/month interest on any remaining unpaid amount. The parties further stipulated that the ownership of the lots would remain with the Chus as the vendors and would be transferred to Cunanan only upon complete payment of the total consideration and compliance with the terms of the deed of sale with assumption of mortgage.[4] Thereafter, the Chus executed a special power of attorney authorizing Cunanan to borrow P5,161,090.00 from any banking institution and to mortgage the five lots as security, and then to deliver the proceeds to the Chus net of the balance of the mortgage obligation and the downpayment.
[5]

dismissal of Civil Case No. G-1936 in G.R. No. 142313 entitled Chu, Sr. v. Benelda Estate Development Corporation.
[8]

On December 2, 1999, the Chus, the Cunanans, and Cool Town Realty entered into a compromise agreement,[9] whereby the Cunanans transferred to the Chus their 50% share in all the parcels of land situated in Saguin, San Fernando, Pampanga registered in the name of Cool Town Realty for and in consideration of the full settlement of their case. The RTC approved the compromise agreement in a partial decision dated January 25, 2000.[10] Thereafter, on April 30, 2001, the petitioners herein (i.e., Catalina Chu and her children) brought another suit, Civil Case No. 12251, against the Carloses and Benelda Estate, [11] seeking the cancellation of the TCTs of the two lots in the name of Benelda Estate, and the issuance of new TCTs in their favor, plus damages. The petitioners amended their complaint in Civil Case No. 12251 on February 4, 2002 to implead the Cunanans as additional defendants.[12] The Cunanans moved to dismiss the amended complaint based on two grounds, namely: (a) bar by prior judgment, and (b) the claim or demand had been paid, waived, and abandoned. Benelda Estate likewise moved to dismiss the amended complaint, citing as grounds: (a) forum shopping; (b) bar by prior judgment, and (c) failure to state a cause of action. On their part, the Carloses raised affirmative defenses in their answer, namely: (a) the failure to state a cause of action; (b) res judicata or bar by prior judgment; and (c) bar by statute of limitations. On April 25, 2002, the RTC denied both motions to dismiss,[13] holding that the amended complaint stated a cause of action against all the defendants; that the action was not barred by res judicata because there was no identity of parties and subject matter between Civil Case No.12251 and Civil Case No. G-1936; and that the Cunanans did not establish that the petitioners had waived and abandoned their claim or that their claim had been paid by virtue of the compromise agreement, pointing out that the compromise agreement involved only the three parcels of land registered in the name of Cool Town Realty.[14] The Cunanans sought reconsideration, but their motion was denied on May 31, 2002.[15] On September 2, 2002, the Cunanans filed a petition for certiorari in the CA (SP-72558), assailing the RTCs denial of their motion to dismiss and motion for reconsideration.[16] On November 19, 2002, the CA promulgated its decision, [17] granting the petition for certiorari and nullifying the challenged orders of the RTC. The CA ruled that thecompromise agreement had ended the legal controversy between the parties with respect to the cause of action arising from the deed of sale with assumption of mortgage covering all the five parcels of land; that Civil Case No. G-1936 and

Cunanan was able to transfer the title of the five lots to her name without the knowledge of the Chus, and to borrow money with the lots as security without paying the balance of the purchase price to the Chus. She later transferred two of the lots to Spouses Amado and Gloria Carlos (Carloses) on July 29, 1987. As a result, on March 18, 1988, the Chus caused the annotation of an unpaid vendors lien on three of the lots. Nonetheless, Cunanan still assigned the remaining three lots to Cool Town Realty on May 25, 1989 despite the annotation.[6] In February 1988, the Chus commenced Civil Case No. G1936 in the RTC to recover the unpaid balance from Spouses Fernando and Trinidad Cunanan (Cunanans). Five years later, on April 19, 1993, the Chus amended the complaint to seek the annulment of the deed of sale with assumption of mortgage and of the TCTs issued pursuant to the deed, and to recover damages. They impleaded Cool Town Realty and Development Corporation (Cool Town Realty), and the Office of the Registry of Deeds of Pampanga as defendants in addition to the Cunanans.[7] Considering that the Carloses had meanwhile sold the two lots to Benelda Estate Development Corporation (Benelda Estate) in 1995, the Chus further amended the complaint in Civil Case No. G-1936 to implead Benelda Estate as additional defendant. In due course, Benelda Estate filed its answer with a motion to dismiss, claiming, among others, that the amended complaint stated no cause of action because it had acted in good faith in buying the affected lots, exerting all efforts to verify the authenticity of the titles, and had found no defect in them. After the RTC denied its motion to dismiss, Benelda Estate assailed the denial on certiorari in the CA, which annulled the RTCs denial for being tainted with grave abuse of discretion and dismissed Civil Case No. G-1936 as against Benelda Estate. On March 1, 2001, the Court upheld the

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Civil Case No.12251 involved the violation by the Cunanans of the same legal right under the deed of sale with assumption of mortgage; and that the filing of Civil Case No.12251 contravened the rule against splitting of a cause of action, and rendered Civil Case No.12251 subject of a motion to dismiss based on bar by res judicata. The CA disposed thusly: WHEREFORE, premises considered, the present petition for certiorari is hereby GIVEN DUE COURSE and the writ prayed for, accordingly GRANTED. Consequently, the challenged Orders of the respondent court denying the motions to dismiss are hereby ANNULLED and SET ASIDE and a new one is hereby rendered DISMISSING the Amended Complaint in Civil Case No. 12251. No costs. SO ORDERED.[18] Hence, this appeal. Issue Was Civil Case No. 12251 barred by res judicata although the compromise agreement did not expressly include Benelda Estate as a party and although the compromise agreement made no reference to the lots now registered in Benelda Estates name? Ruling We deny the petition for review. I The petitioners contend that the compromise agreement did not apply or extend to the Carloses and Benelda Estate; hence, their Civil Case No. 12251 was not barred by res judicata. We disagree. A compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.[19] It encompasses the objects specifically stated therein, although it may include other objects by necessary implication,[20] and is binding on the contracting parties, being expressly acknowledged as a juridical agreement between them.[21] It has the effect and authority of res judicata upon the parties.[22] In the construction or interpretation of a compromise agreement, the intention of the parties is to be ascertained from the agreement itself, and effect should be given to that intention.[23] Thus, the compromise agreement must be read as a whole. The following pertinent portions of the compromise agreement indicate that the parties intended to thereby settle all their claims against each other, to wit: 1. That the defendants SPOUSES TRINIDAD N.CUNANAN and FERNANDO C.CUNANAN for and in

consideration of the full settlement of their case in the above-entitled case, hereby TRANSFER, DELIVER, and CONVEY unto the plaintiffs all their rights, interest, benefits, participation, possession and ownership which consists of FIFTY (50%) percent share on all the parcels of land situated in Saguin, San Fernando Pampanga now registered in the name of defendant, COOL TOWN REALTY & DEVELOPMENT CORPORATION, as particularly evidenced by the corresponding Transfer Certificates of Titles xxx xxxx 6. That the plaintiffs and the defendant herein are waiving, abandoning, surrendering, quitclaiming, releasing, relinquishing any and all their respective claims against each other as alleged in the pleadings they respectively filed in connection with this case.[24] (bold emphasis supplied) The intent of the parties to settle all their claims against each other is expressed in the phrase any and all their respective claims against each other as alleged in the pleadings they respectively filed in connection with this case, which was broad enough to cover whatever claims the petitioners might assert based on the deed of sale with assumption of mortgage. There is no question that the deed of sale with assumption of mortgage covered all the five lots, to wit: WHEREAS, the VENDORS are willing to sell the abovedescribed properties and the VENDEE is willing to buy the same at FIFTY FIVE (P55.00) PESOS, Philippine Currency, per square meter, or a total consideration of FIVE MILLION ONE HUNDRED SIXTY ONE THOUSAND and NINETY (P5,161,090.00) PESOS, Philippine Currency.[25] To limit the compromise agreement only to the three lots mentioned therein would contravene the avowed objective of Civil Case No. G-1936 to enforce or to rescind the entiredeed of sale with assumption of mortgage. Such interpretation is akin to saying that the Cunanans separately sold the five lots, which is not the truth. For one, Civil Case No. G-1936 did not demand separate amounts for each of the purchased lots. Also, the compromise agreement did not state that the value being thereby transferred to the petitioners by the Cunanans corresponded only to that of the three lots. Apparently, the petitioners were guilty of splitting their single cause of action to enforce or rescind the deed of sale with assumption of mortgage. Splitting a single cause of action is the act of dividing a single or indivisible cause of action into several parts or claims and instituting two or more actions upon them.[26] A single cause of action or entire claim or demand cannot be split up or divided in order to be made the subject of two or more different actions.[27] Thus, Section 4, Rule 2 of the Rules of Court expressly prohibits splitting of a single cause of action, viz: Section 4. Splitting a single cause of action; effect of. If two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in

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any one is available as a ground for the dismissal of the others. (4a) The petitioners were not at liberty to split their demand to enforce or rescind the deed of sale with assumption of mortgage and to prosecute piecemeal or present only a portion of the grounds upon which a special relief was sought under the deed of sale with assumption of mortgage, and then to leave the rest to be presented in another suit; otherwise, there would be no end to litigation.[28] Their splitting violated the policy against multiplicity of suits, whose primary objective was to avoid unduly burdening the dockets of the courts. Their contravention of the policy merited the dismissal of Civil Case No. 12251 on the ground of bar by res judicata. Res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter settled by judgment.[29] The doctrine of res judicata is an old axiom of law, dictated by wisdom and sanctified by age, and founded on the broad principle that it is to the interest of the public that there should be an end to litigation by the same parties over a subject once fully and fairly adjudicated. It has been appropriately said that the doctrine is a rule pervading every well-regulated system of jurisprudence, and is put upon two grounds embodied in various maxims of the common law: the one, public policy and necessity, which makes it to the interest of the State that there should be an end to litigation interest reipublicae ut sit finis litium; the other, the hardship on the individual that he should be vexed twice for one and the same cause nemo debet bis vexari pro una et eadem causa. A contrary doctrine would subject the public peace and quiet to the will and neglect of individuals and prefer the gratification of the litigious disposition on the part of suitors to the preservation of the public tranquillity and happiness.[30] Under the doctrine of res judicata, a final judgment or decree on the merits rendered by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits and on all points and matters determined in the previous suit.[31] The foundation principle upon which the doctrine rests is that the parties ought not to be permitted to litigate the same issue more than once; that when a right or fact has been judicially tried and determined by a court of competent jurisdiction, so long as it remains unreversed, should be conclusive upon the parties and those in privity with them in law or estate.[32] Yet, in order that res judicata may bar the institution of a subsequent action, the following requisites must concur: (a) the former judgment must be final; (b) it must have been rendered by a court having jurisdiction of the subject matter and the parties; (c) it must be a judgment on the merits; and (d) there must be between the first and second actions (i) identity of parties, (ii) identity of the subject matter, and (iii) identity of cause of action.[33] The first requisite was attendant. Civil Case No. G-1936 was already terminated under the compromise agreement, for the judgment, being upon a compromise, was immediately final and unappealable. As to the second requisite, the RTC had jurisdiction over the cause of action in Civil Case No. G-1936

for the enforcement or rescission of thedeed of sale with assumption of mortgage, which was an action whose subject matter was not capable of pecuniary estimation. That the compromise agreement explicitly settled the entirety of Civil Case No. G-1936 by resolving all the claims of the parties against each other indicated that the third requisite was also satisfied.[34] But was there an identity of parties, of subject matter, and of causes of action between Civil Case No.G-1936 and Civil Case No. 12251? There is identity of parties when the parties in both actions are the same, or there is privity between them, or they are successors-in-interest by title subsequent to the commencement of the action litigating for the same thing and under the same title and in the same capacity. [35] The requirement of the identity of parties was fully met, because the Chus, on the one hand, and the Cunanans, on the other hand, were the parties in both cases along with their respective privies. The fact that the Carloses and Benelda Estate, defendants in Civil Case No. 12251, were not parties in the compromise agreement was inconsequential, for they were also the privies of the Cunanans as transferees and successorsin-interest. It is settled that the absolute identity of parties was not a condition sine qua non for res judicata to apply, because a shared identity of interest sufficed.[36]Mere substantial identity of parties, or even community of interests between parties in the prior and subsequent cases, even if the latter were not impleaded in the first case, was sufficient.[37] As to identity of the subject matter, both actions dealt with the properties involved in the deed of sale with assumption of mortgage. Identity of the causes of action was also met, because Case No. G-1936 and Civil Case No. 12251 were rooted in one and the same cause of action the failure of Cunanan to pay in full the purchase price of the five lots subject of the deed of sale with assumption of mortgage. In other words, Civil Case No. 12251 reprised Civil Case No. G1936, the only difference between them being that the petitioners alleged in the former that Benelda Estate was not also a purchaser for value and in good faith.[38] In fine, the rights and obligations of the parties vis--vis the five lots were all defined and governed by the deed of sale with assumption of mortgage, the only contract between them. That contract was single and indivisible, as far as they were concerned. Consequently, the Chus could not properly proceed against the respondents in Civil Case No. 12251, despite the silence of the compromise agreement as to the Carloses and Benelda Estate, because there can only be one action where the contract is entire, and the breach total, and the petitioners must therein recover all their claims and damages. [39] The Chus could not be permitted to split up a single cause of action and make that single cause of action the basis of several suits.[40] WHEREFORE, we deny the petition for review on certiorari, and affirm the decision promulgated in CA-G.R. SP No. 72558. The petitioners shall pay the costs of suit. =========================================

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On November 18, 2000, Ernesto L. Treyes, Jr. (respondent) allegedly forcibly and unlawfully entered the leased properties and once inside barricaded the entrance to the fishponds, set up a barbed wire fence along the road going to petitioners fishponds, and harvested several tons of milkfish, fry and fingerlings owned by petitioners. On November 22, 2000, petitioners promptly filed with the Municipal Trial Court (MTC) in Sagay City separate complaints for Forcible Entry With Temporary Restraining Order And/Or Preliminary Injunction And Damages, docketed as Civil Case Nos. 1331,[6] 1332[7] and 1333,[8] against Ernesto M. Treyes, Sr. and respondent. In a separate move, petitioners filed in March 2004 with the Bacolod RTC a complaint for damages against respondent, docketed as Civil Case No, 04-12284, alleging, interalia, SECOND DIVISION CGR CORPORATION herein represented by its President ALBERTO RAMOS, III, HERMAN M. BENEDICTO and ALBERTO R. BENEDICTO, Petitioners, G.R. No. Present: QUISUMBING, J., Chairperson, CARPIO, CARPIO MORALES, TINGA, and VELASCO, JR., JJ. Promulgated: ERNESTO L. TREYES, JR., April 27, 2007 Respondent. x------------------------------------------ - - - - - - - -x DECISION CARPIO MORALES, J.: Assailed via petition for review are issuances of the Regional Trial Court (RTC), Branch 43, Bacolod City, in Civil Case No. 04-12284, to wit: Order[1] dated August 26, 2005 which dismissed petitioners complaint for damages on the ground of prematurity, and Order[2] dated January 2, 2006 which denied petitioners motion for reconsideration. In issue is one of law whether a complainant in a forcible entry case can file an independent action for damages arising after the act of dispossession had occurred. CGR Corporation, Herman M. Benedicto and Alberto R. Benedicto (petitioners) claimed to have occupied 37.3033 hectares of public land in Barangay Bulanon, Sagay City,Negros Occidental even before the notarized separate Fishpond Lease Agreement Nos. 5674,[3] 5694[4] and 5695[5] in their respective favor were approved in October 2000 by the Secretary of Agriculture for a period of twenty-five (25) years or until December 31, 2024. 170916 xxxx V That prior to the issuance of the fishpond lease agreement in favor of the plaintiffs, they had already been in open and continuous possession of the same parcel of land;

VI - versus As lessee and in possession of the above[-]described fishpond, plaintiffs have continuously occupied, cultivated and developed the said fishpond and since then, had been regularly harvesting milkfish, shrimps, mud crabs and other produce of the fishponds; VII That the yearly income of the fishpond of the plaintiff corporation is at least P300,000.00 more or less, while the yearly income of the fishpond of plaintiff Herman Benedicto, Sr. is at least P100,000.00more or less, and the yearly income of the fishpond of plaintiff Alberto Benedicto is at least P100,000.00 more or less; VIII That sometime last November 18, 2000 or thereabout, defendant Ernesto L. Treyes, Jr. and his armed men and with the help of the blue guards from the Negros Veterans Security Agency forcibly and unlawfully entered the fishponds of the plaintiffs and once inside barricaded the entrance of the fishpond and set up barb wire fence along the road going to plaintiffs fishpond and harvested the milkfish and carted away several tons of milkfish owned by the plaintiffs; IX That on succeeding days, defendants men continued their forage on the fishponds of the plaintiffs by carting and taking

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away the remaining full grown milkfish, fry and fingerlings and other marine products in the fishponds. NOT ONLY THAT, even the chapel built by plaintiff CGR Corporation was ransacked and destroyed and the materials taken away by defendants men. Religious icons were also stolen and as an extreme act of sacrilege, even decapitated the heads of some of these icons; xxxx XIII That the unlawful, forcible and illegal intrusion/destruction of defendant Ernesto Treyes, Jr. and his men on the fishpond leased and possessed by the plaintiffs is without any authority of law and in violation of Article 539 of the New Civil Code which states: Art. 539. Every possessor has a right to be respected in his possession; and should he be disturbed therein he shall be protected in or restored to said possession by the means established by the laws and rules of the Court.[9] (Underscoring supplied)

dispossession by respondent of the premises. Petitioners meet the issue in the affirmative. Respondents assert otherwise. The petition is impressed with merit. Section 17, Rule 70 of the Rules of Court provides: SEC. 17. Judgment. If after trial the court finds that the allegations of the complaint are true, it shall render judgment in favor of the plaintiff for the restitution of the premises, the sum justly due as arrears of rent or as reasonable compensation for the use and occupation of the premises, attorneys fees and costs. If it finds that said allegations are not true, it shall render judgment for the defendant to recover his costs. If a counterclaim is established, the court shall render judgment for the sum found in arrears from either party and award costs as justice requires. (Emphasis supplied) The recoverable damages in forcible entry and detainer cases thus refer to rents or the reasonable compensation for the use and occupation of the premises or fair rental value of the property and attorneys fees and costs.[13] The 2006 case of Dumo v. Espinas[14] reiterates the longestablished rule that the only form of damages that may be recovered in an action for forcible entry is the fair rental value or the reasonable compensation for the use and occupation of the property: Lastly, we agree with the CA and the RTC that there is no basis for the MTC to award actual, moral, and exemplary damages in view of the settled rule that in ejectment cases, the only damage that can be recovered is the fair rental value or the reasonable compensation for the use and occupation of the property. Considering that the only issue raised in ejectment is that of rightful possession, damages which could be recovered are those which the plaintiff could have sustained as a mere possessor, or those caused by the loss of the use and occupation of the property, and not the damages which he may have suffered but which have no direct relation to his loss of material possession. x x x[15] (Emphasis, underscoring and italics supplied; citations omitted) Other damages must thus be claimed in an ordinary action.[16] In asserting the negative of the issue, respondent cites the 1999 case of Progressive Development Corporation, Inc. v. Court of Appeals.[17] In this case, Progressive Development Corporation, Inc. (Progressive), as lessor, repossessed the leased premises from the lessee allegedly pursuant to their contract of lease whereby it was authorized to do so if the lessee failed to pay monthly rentals. The lessee filed a case for forcible entry with damages against Progressive before the Metropolitan Trial Court (MeTC) of QuezonCity. During the pendency of the case, the lessee filed an action for damages before the RTC, drawing Progressive to file a motion to dismiss based on litis pendentia. The RTC denied the

and praying for the following reliefs: 1) Ordering the defendant to pay plaintiff CGR Corporation the sum of at least P900,000.00 and to plaintiffs Herman and Alberto Benedicto, the sum of at least P300,000.00 each by way of actualdamages and such other amounts as proved during the trial; 2) Ordering the defendant to pay the plaintiffs the sum of P100,000.00 each as moral damages; 3) Ordering the defendant to pay the plaintiffs the sum of P100,000.00 each as exemplary damages; 4) Ordering the defendant to pay the plaintiffs the sum of P200,000.00 as attorneys fees, and to reimburse plaintiffs with all such sums paid to their counsel by way of appearance fees.[10] (Underscoring supplied) Respondent filed a Motion to Dismiss[11] petitioners complaint for damages on three grounds litis pendentia, res judicata and forum shopping. By the assailed Order[12] of August 26, 2005, Branch 43 of the Bacolod RTC dismissed petitioners complaint on the ground of prematurity, it holding that a complaint for damages may only be maintained after a final determination on the forcible entry cases has been made. Hence, the present petition for review. The only issue is whether, during the pendency of their separate complaints for forcible entry, petitioners can independently institute and maintain an action for damages which they claim arose from incidents occurring after the

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motion. On appeal by Progressive, the Court of Appeals sustained the RTC order denying the motion to dismiss. Progressive brought the case to this Court. Citing Section 1, Rule 70 of the Rules of Court, this Court reversed the lower courts ruling, it holding that all cases for forcible entry or unlawful detainer shall be filed before the Municipal Trial Court which shall include not only the plea for restoration of possession but also all claims for damages and coststherefrom. In other words, this Court held that no claim for damages arising out of forcible entry or unlawful detainer may be filed separately and independently of the claim for restoration of possession.[18] (Underscoring supplied) In thus ruling, this Court in Progressive made a comparative study of the therein two complaints, thus: A comparative study of the two (2) complaints filed by private respondent against petitioner before the two (2) trial courts shows that not only are the elements of res adjudicata present, at least insofar as the claim for actual and compensatory damages is concerned, but also that the claim for damages moral and exemplary in addition to actual and compensatory constitutes splitting a single cause of action. Since this runs counter to the rule against multiplicity of suits, the dismissal of the second action becomes imperative. The complaint for forcible entry contains the following pertinent allegations 2.01 On 02 January 1989, plaintiff entered into a contract of lease with defendant PDC over a property designated as Ground Floor, Seafood Market (hereinafter Subject Premises) situated at the corner of EDSA corner MacArthur Street, Araneta Center, Cubao, Quezon City , for a period of ten (10) years from 02 January 1989 to 30 April 1998. 2.02 Immediately after having acquired actual physical possession of the Subject Premises, plaintiff established and now operates thereon the now famous Seafood Market Restaurant. Since then, plaintiff had been in actual, continuous, and peaceful physical possession of the Subject Premises until 31 October 1992. xxxx 3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the peaceful occupation and enjoyment of the Subject Premises to the exclusion of all others, including defendants herein. 3.03 Defendants resort to strong arms tactics to forcibly wrest possession of the Subject Premises from plaintiff and maintain possession thereof through the use of force, threat, strategy and intimidation by the use of superior number of men and arms amounts to the taking of the law into their own hands.

3.04 Thus, defendants act of unlawfully evicting out plaintiff from the Subject Premises it is leasing from defendant PDC and depriving it of possession thereof through the use of force, threat, strategy and intimidation should be condemned and declared illegal for being contrary to public order and policy. 3.05 Consequently, defendants should be enjoined from continuing with their illegal acts and be ordered to vacate the Subject Premises and restore possession thereof, together with its contents to plaintiff. xxxx 4.07 Considering that defendants act of forcibly grabbing possession of the Subject Premises from plaintiff is illegal and null and void, defendant should be adjudged liable to plaintiff for all the aforedescribed damages which plaintiff incurred as a result thereof. The amended complaint for damages filed by private respondent alleges basically the same factual circumstances and issues as bases for the relief prayed for, to wit: 4. On May 28, 1991, plaintiff and defendant PDC entered into a Contract of Lease for a period of ten years or from January 2, 1989 up to April 30, 1998 over a property designated as Ground Floor, Seafood Market (hereinafter referred to as Subject Premises) situated at the corner of EDSA corner McArthur Street, Araneta Center, Cubao, Quezon City. A copy of the lease contract is attached hereto as Annex A. 5. Immediately thereafter, plaintiff took over actual physical possession of Subject Premises, and established thereon the now famous Seafood Market Restaurant. xxxx 7. On October 31, 1992 at around 8:30 p.m., defendant PDC, without the benefit of any writ of possession or any lawful court order and with the aid of approximately forty (40) armed security guards and policemen under the supervision of defendant Tejam, forcibly entered the subject premises through force, intimidation, threats and stealth and relying on brute force and in a thunderboltish manner and against plaintiffs will, unceremoniously drew away all of plaintiffs men out of the subject premises, thereby depriving herein plaintiff of its actual, physical and natural possession of the subject premises. The illegal high-handed manner of gestapo like take-over by defendants of subject premises is more particularly described as follows: x x x x 8. To date, defendants continue to illegally possess and hold the Subject Premises, including all the multi-million improvements, fixtures and equipment therein owned by plaintiff, all to the damage and prejudice of plaintiff. The actuations of defendants constitute an unlawful appropriation, seizure and taking of property against the will and consent of plaintiff. Worse, defendants are threatening to sell at public auction and without the consent, of plaintiff and without lawful authority, the multi-million fixtures and equipment of plaintiff and at prices way below the market value

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thereof. Plaintiff hereby attaches as Annex B the letter from defendants dated August 6, 1993 addressed to plaintiff, informing the latter that the former intends to sell at an auction on August 19, 1993 at 2:00 p.m. properties of the plaintiff presently in defendants possession. xxxx 12. Defendants unlawful takeover of the premises constitutes a violation of its obligation under Art. 1654 of the New Civil Code requiring the lessor to maintain the lessee in peaceful and adequate enjoyment of the lease for the entire duration of the contract. Hence, plaintiff has filed the present suit for the recovery of damages under Art. 1659 of the New Civil Code x x xx[19] (Emphasis in the original; underscoring supplied) Analyzing the two complaints, this Court, still in Progressive, observed: Restated in its bare essentials, the forcible entry case has one cause of action, namely, the alleged unlawful entry by petitioner into the leased premises out of which three (3) reliefs (denominated by private respondent as its causes of action) arose: (a) the restoration by the lessor (petitioner herein) of the possession of the leased premises to the lessee, (b) the claim for actual damages due to the losses suffered by private respondent such as the deterioration of perishable foodstuffs stored inside the premises and the deprivation of the use of the premises causing loss of expected profits; and, (c) the claim for attorneys fees and costs of suit. On the other hand, the complaint for damages prays for a monetary award consisting of (a) moral damages of P500,000.00 and exemplary damages of another P500,000.00; (b) actual damages of P20,000.00 and compensatory damages of P1,000,000.00 representing unrealized profits; and, (c) P200,000.00 for attorneys fees and costs, all based on the alleged forcible takeover of the leased premises by petitioner. Since actual and compensatory damages were already prayed for in the forcible entry case before the MeTC, it is obvious that this cannot be relitigated in the damage suit before the RTC by reason of res adjudicata. The other claims for moral and exemplary damages cannot also succeed considering that these sprung from the main incident being heard before the MeTC. x x x[20] (Italics in the original; Emphasis and underscoring supplied)

Surely, one of the elements of litis pendentia - that the identity between the pending actions, with respect to the parties, rights asserted and reliefs prayed for, is such that any judgment rendered on one action will, regardless of which is successful, amount to res judicata in the action under consideration - is not present, hence, it may not be invoked to dismiss petitioners complaint for damages.[21] Res judicata may not apply because the court in a forcible entry case has no jurisdiction over claims for damages other than the use and occupation of the premises and attorneys fees.[22] Neither may forum-shopping justify a dismissal of the complaint for damages, the elements of litis pendentia not being present, or where a final judgment in the forcible entry case will not amount to res judicata in the former.[23] Petitioners filing of an independent action for damages other than those sustained as a result of their dispossession or those caused by the loss of their use and occupation of their properties could not thus be considered as splitting of a cause of action. WHEREFORE, the Orders dated August 26, 2005 and January 2, 2006 issued by the Regional Trial Court, Branch 43, Bacolod City, in Civil Case No. 04-12284 areREVERSED and SET ASIDE. The Regional Trial Court, Branch 43, Bacolod City, is directed to REINSTATE Civil Case No. 04-12284 to its docket and to conduct proceedings thereon with dispatch. ========================== Glicerio Agustin (Deceased) as Administrator of the Intestate Estate of Susana Agustin, petitioner-plaintiff-appellant, vs. Laureano Bacalan and The Provincial Sheriff of Cebu, respondents-defendantsappellees.~Anne

Complaint for ejectment with damages filed by plaintiffappellant Agustin, as adininistrator of the Intestate Estate of Susana Agustin, against defendant-appellee Bacalan, before the City Court of Cebu. FACTS: Bacalan is a lessee of a one-door ground floor space in a building owned by the late Susana Agustin. Due to nonpayment of rentals despite repeated demands an action to eject him was filed against him. CivPro | Nov 24 | In his complaint, Agustin prayed that Bacalan be ordered to immediately vacate the place and to pay him the sum of P2300 representing arrearages in rentals plus the corresponding rentals until he actually vacates the place, attorneys fees, expenses and cost.

It bears noting, however, that as reflected in the earlier-quoted allegations in the complaint for damages of herein petitioners, their claim for damages have no direct relation to their loss of possession of the premises. It had to do with respondents alleged harvesting and carting away several tons of milkfish and other marine products in their fishponds,ransacking and destroying of a chapel built by petitioner CGR Corporation, and stealing religious icons and even decapitating the heads of some of them, after the act of dispossession had occurred.

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Bacalan filed an answer including a counter claim stating that the action was tainted with malice and bad faith. He claimed that Agustin knows that Bacalan does not have any rentals in arrears to the estate of Susana Agustin, but despite this knowledge, Agustin still filed the present action to annoy, vex, embarrass and inconvenience the defendant. Bacalan prayed for actual and moral damages in the amount of no less than P50, 000 and 10, 000 in the concept of exemplary damages. The City Court of Cebu dismissed the counterclaim and ordered the defendant to vacate the premises. Bacalan filed an appeal with Branch III of the CFI of Cebu The CFI reversed the judgment of the City Court Agustin did file any claim. The decision lapsed into finality and became executory. A writ of execution was issued by virtue of which a notice to sell at public auction real properties belonging to the estate of Susana Agustin was issued. Agustins counsel filed a motion for reconsideration, confessing his fault and giving the reason why he failed to perfect the appeal on time. The motion was denied. With the aid of new counsel, Agustin filed a complaint with Branch V of the CFI of Cebu against Bacalan for the declaration of nullity of the decision of the CFI of Cebu, Branch III. He contended that the exercise of appellate jurisdiction was null and void because the prior court had no jurisdiction over the case under Section 88 of the Judiciary Act of 1948. Motion to dismiss was filed by Bacalan on the ground that Agustin had no cause of action and that the court lacks jurisdiction to declare the nullity of a decision of another branch. Agustin when his MR was denied, filed an appeal before the CA.

jurisdiction as stated in Section 5, Rule 5, Revised Rules of Court. A counterclaim beyond the court's jurisdiction may only be pleaded by way of defense, the purpose of which, however, is only to defeat or weaken plaintiff's claim, but not to obtain affirmative relief. Nevertheless, Bacalan, in the case at bar, set up his claim in excess of the jurisdiction of the city court as a compulsory counterclaim. Thus, by presenting his claim voluntarily before the City Court of Cebu, Bacalam submitted the same to the jurisdiction of the court. He became bound thereby. The amount of P10,000.00 being the jurisdictional amount assigned the City Court of Cebu, whose jurisdiction Bacalan has invoked, he is thereby deemed to have waived the excess of his claim beyond P10,000.00. It is as though the defendant-appellee had set up a counterclaim in the amount of P10,000.00 only. The amount of judgment, therefore, obtained by the defendant-appellee on appeal, cannot exceed the jurisdiction of the court in which the action began. Since the trial court did not acquire jurisdiction over the defendant's counterclaim in excess of the jurisdictional amount, the appellate court, likewise, acquired no jurisdiction over the same by its decisions or otherwise The Court of First Instance, in the case at bar, having awarded judgment in favor of the defendant-appellee in excess of its appellate jurisdiction to the extent of P6,000.00 over the maximum allowable award of P10,000.00, the excess is null and void and of no effect. Such being the case, an action to declare the nullity of the award as brought by the plaintiffappellant before the Court of First Instance of Cebu, Branch V is a proper remedy. Remedio V. Flores, petitioner, vs. Hon. Judge Heilia S. Mallare-Phillipps, Ignacio Binongcal & Fernando Calion, respondents.~Kim DOCTRINE: the totality rule is applied also to cases where two or more plaintiffs having separate causes of action against a defendant join in a single complaint, as well as to cases where a plaintiff has separate causes of action against two or more defendants joined in a single complaint. HOWEVER, the causes of action in favor of the two or more plaintiffs or against two or more defendants should arise out of the same transaction or series of transactions and there should be a common question of law or fact as provided in Sec. 6 Rule 3 Nature of the petition: Appeal by certiorari from the order of the RTC of Baguio City. FACTS: Petitioner has appealed by certiorari from the order of Judge Mallare-Phillipps of the RTC of Baguio City and Benguet Province which dismissed his complaint for lack of jurisdiction. The order appealed from states two causes of action; the first cause of action is against respondent Binongcal for refusing to pay the amount of P11,643, and the second one is against respondent

ISSUE: Whether or not the CFI, on appeal, award counterclaim in an amount exceeding or beyond the jurisdiction of the court of origin HELD: No.It is well-settled that a court has no jurisdiction to hear and determine a set-off or counterclaim in excess of its

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Calion for refusing to pay the amount P10,212. On December 15, 1983, respondent Binongcal filed a Motion to Dismiss on the ground of lack of jurisdiction since the amount of the demand against said respondent was only P11,643.00 (RTC has exclusive original jurisdiction if the amount of the demand is more than P20,000). It was further averred in said motion that although another person, Calion, was allegedly indebted to petitioner in the amount of P10,212.00, his obligation was separate and distinct from that of the other respondent. The trial court dismissed the complaint for lack of jurisdiction. Petitioner maintains that the lower court has jurisdiction over the case following the totality rule introduced in Section 33(l) of BP129 and Section 11 of the Interim Rules. The pertinent portion of Section 33(l) of BP129 reads as follows: THIS IS THE PRESENT RULE ... Provided,That where there are several claims or causes of action between the same or different parties, embodied in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of the same or different transactions. ...
Section 11 of the Interim Rules provides thus: Application of the totality rule.-In actions where the jurisdiction of the court is dependent on the amount involved, the test of jurisdiction shall be the aggregate sum of all the money demands, exclusive only of interest and costs, irrespective of whether or not the separate claims are owned by or due to different parties. If any demand is for damages in a civil action, the amount thereof must be specifically alleged.

the case. Ther re is no difference between the former and present rules in cases where a plaintiff sues a defendant on two or more separate causes of action. In such cases, the amount of the demand shall be the totality of the claims in all the causes of action irrespective of whether the causes of action arose out of the same or different transactions. If the total demand exceeds twenty thousand pesos, then the regional trial court has jurisdiction. On the other hand, there is a difference between the former and present rules in cases where two or more plaintiffs having separate causes of action against a defendanunt join in a single complaint. Each separate claim shall furnish the jurisdictional test But Under the present law, the totality rule is applied also to cases where two or more plaintiffs having separate causes of action against a defendant join in a single complaint, as well as to cases where a plaintiff has separate causes of action against two or more defendants joined in a single complaint. HOWEVER, the causes of action in favor of the two or more plaintiffs or against two or more defendants should arise out of the same transaction or series of transactions and there should be a common question of law or fact as provided in Sec. 6 Rule 3. In the case at bar, the lower court correctly held that the jurisdictional test is subject to the rules on joinder of parties pursuant to Section 5 of Rule 2 and Section 6 of Rule 3 of the Rules of Court and that, after a careful scrutiny of the complaint, it appears that there is a misjoinder of parties for the reason that the claims against respondents Binongcal and Calion are separate and distinct and neither of which falls within its jurisdiction.

G.R. No. 140746 March 16, 2005 ~Suzette Pantranco North Express, Inc., and Alexander Buncan, Petitioner, vs. Standard Insurance Company, Inc., and Martina Gicale, respondents. RTC respondents filed a complaint for sum of money (in favor of resp) CA affirmed petitioner filed MR (denied) SC PFROC (denied) Nature: Petition For Review On Certiorari assailing the Resolution of the CA FACTS: - Crispin Gicale (son of respondent Martina) was driving the passenger jeepney while Buncan was driving the Pantranco-owned bus o The passenger bus hit the left rear side of the jeepney and sped away

Petitioner compares the above-quoted provisions with the pertinent portion of the FORMER RULE under Section 88 of the Judiciary Act of 1948 as amended which reads as follows: ... Where there are several claims or causes of action between the same parties embodied in the same complaint, the amount of the demand shall be the totality of the demand in all the causes of action, irrespective of whether the causes of action arose out of the same or different transactions; but where the claims or causes of action joined in a single complaint are separately owned by or due to different parties, each separate claim shall furnish the jurisdictional test. ... ISSUE: Was the Court correct in dismissing the case due to lack of jurisdiction? HELD: Yes. RTC does not have the proper jurisdiction over

Respondent Standard partly paid for the repair of the jeepney

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Respondents then demanded reimbursement from the Petitioners but the latter refused Respondents filed with the RTC a complaint for sum of money o Petitioners argue that the RTC had no jurisdiction; it should be the MTC

o -

Whether Petitioners are negligent

There being a single transaction common to both respondents, consequently, they have the same cause of action against Petitioners To determine the identity of cause of action, it must be ascertained whether the same evidence which is necessary to sustain the second cause of action would have been sufficient to authorize recovery in the first o Here, had respondents filed separate suits, the same evidence would have been presented. Thus, the filing of the complaints by respondents with the court is in order Such joinder of multiplicity of suits parties avoids

5 June 1992 TC rendered a decision in favor of Respondents 23 July 1999 CA affirmed the decision of the TC

Despite the individual claim of the respondents falling under the jurisdiction of the MTC (P13,415 and P8,000), it was held that under the Totality Rule in Sec. 19 of BP 129, it is the sum of the two claims that determines the jurisdictional amount Appellants likewise contend that there was a misjoinder of parties. Assuming that there was, under the Rules of Court as well as under the Rules of Civil Procedure, the same does not affect the jurisdiction of the court neither is it a ground to dismiss the case the complaint

Sec. 5 (d), Rule 2 of the RoC provides for a Joinder of causes of action o This provision presupposes that the different causes of action which are joined accrue in favor of the same plaintiff and against the same defendant and that no misjoinder of parties is involved

4 Nov 1999 CA denied Petitioners MR Hence, this petition

Issue: - W/N the TC has jurisdiction over the subject of the action considering that respondents respective cause of action did not arise out of the same transaction Held: - TC has jurisdiction

The issue of whether Respondents claims can be lumped together is determined by Par. (d) of the same provision as this embodied the Totality Rule stating that where there are several claims or causes of actions between the same or different parties embodied in the same complaint, the amount of the demand shall be the totality of the claims in the causes of action o Respondents cause of action arose out of the same transaction, thus the amount of demand shall be the totality of the claims

Under Sec.6, Rule 3 of the RoC, Permissive joinder of parties requires: o Right to relief arises out of the same transaction or series of transactions There is a question of law or fact common to all the plaintiffs or defendants Such joinder is not otherwise proscribed by the provisions of the Rule on jurisdiction and venue

With the total claim of the Respondents amounting to more than P20,000, clearly, it is the RTC which has jurisdiction o It bears emphasis that when the complaint was filed, RA 7691 which expanded the jurisdiction of the MeTC, MTC and MCTC had not yet taken effect as it only became effective on 15 April 1994

In this case, there is a single transaction common to all o Pantrancos bus hitting the jeepney

The finding of the TC, affirmed by the CA, that the Petitioners were negligent are binding upon this Court Petition is DENIED

There is also common question of fact

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SPOUSES DECENA vs. SPOUSES PIQUERO (Tin) Facts: 1. Petitioner Spouses Decena own a house and lot situated in Paranaque. 2. Petitioners executed a MOA wherein they sold the said property to Spouses Piquero 3. Petitioners, then residents of Malolos, Bulacan, filed a Complaint against respondents with the RTC of Malolos, Bulacan, for the annulment of the sale/MOA, recovery of possession and damages because the check issued by the vendees in payment for the purchase price of the property were dishonored by the drawee bank 4. The respondents filed a motion to dismiss the complaint on the ground of improper venue and lack of jurisdiction over the property subject matter of the action.

petitioners have against defendants? 2. WON the venue was properly laid in the RTC of Malolos, Bulacan? Held: 1. Petitioners had only one cause of action against the respondents, namely, the breach of the MOA upon the latter's refusal to pay the first two installments in payment of the property as agreed upon, and turn over to the petitioners the possession of the real property, as well as the house constructed thereon occupied by the respondents. The claim for damages are merely incidental to the main cause of action, and are not independent or separate causes of action. There being only one cause of action against defendants, joinder of causes of action Sec 5(c) Rule 2) is inapplicable in the case at bar. 2. NO. Since the main action is a real action, it should have been filed in the court where the property is located, namely, in Paranaque City. Doctrine: If the allegations of the complaint show one primary right and one wrong, only one cause of action is alleged even though other matters are incidentally involved, and although different acts, methods, elements of injury, items of claims or theories of recovery are set forth. Where two or more primary rights and wrongs appear, there is a joinder of causes of action An action for rescission of a contract of sale of a real property and reconveyance is a real action which must be filed in the place where the property is situated. A claim for damages arising out of the same transaction is merely incidental. As a real action, it should have been filed in Paranaque, the place where the property is located.

respondents averred that the principal action of the petitioners for the rescission of the MOA, and the recovery of the possession of the property is a real action; hence, it should have been brought in the RTC of Paranaque City, where the property subject matter of the action was located. 5. In opposition, the petitioners insisted that their action for damages and attorney's fees is a personal action; hence, it may be filed in the RTC of Bulacan where they reside. T

They averred that while their second cause of action for the recovery of the possession of the property is a real action, the same may, nevertheless, be joined with the rest of their causes of action for damages (legal basis: Sec 5(c) Rule 2). 6. The RTC granted the motion and ordered the dismissal of the complaint. It ruled that the principal action of the petitioners was a real action and should have been filed in the RTC of Paranaque City where the property subject matter of the complaint was located. 7. Hence the present recourse. Issue: 1. How many causes of action does

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FIRST DIVISION

ROMAN CATHOLIC ARCHBISHOP OF SAN FERNANDO, PAMPANGA represented herein by the incumbent Archbishop, Petitioner, - versus -

G.R. No. 153829

EDUARDO SORIANO, JR., EDNA YALUN, EVANGELINA ABLAZA, FELICIDAD Y. URBINA, FELIX SALENGA, REYNALDO I. MALLARI, MARCIANA B. BARCOMA, BIENVENIDO PANGANIBAN, BRIGIDA NAVARRO, EUFRANCIA T. FLORES, VICTORIA B. SUDSOD, EUFRONIO CAPARAS, CRISANTO MANANSALA, LILY MASANGCAY, BENJAMIN GUINTO, JR., MARTHA G. CASTRO and LINO TOLENTINO, Respondents. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - -x BENJAMIN GUINTO, JR.,[1] Petitioner, G.R. No. 160909 Present: CORONA, C.J., Chairperson, LEONARDO-DE CASTRO, BERSAMIN, DEL CASTILLO, and VILLARAMA, JR., JJ.

- versus -

DECISION VILLARAMA, JR., J.: Before this Court are two petitions for resolution: the first, a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, filed by the Roman Catholic Archbishop (RCA) of San Fernando, Pampanga,

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ROMAN CATHOLIC ARCHBISHOP OF SAN FERNANDO, PAMPANGA Promulgated: represented herein by the incumbent Archbishop, August 17, 2011 Respondent. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

assailing the March 18, 2002 Decision[2] and the May 30, 2002 Resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No. 66974; and the second, a Petition for Injunction under Rule 58, filed by Benjamin Guinto, Jr. (Guinto), seeking to enjoin the implementation of the Writ of Execution[4] dated October 14, 2003, issued by the Municipal Circuit Trial Court (MCTC) of Macabebe-Masantol, Pampanga in Civil Case No. 2000(23). The facts follow: The RCA of San Fernando, Pampanga, represented by Most Rev. Paciano B. Aniceto, D.D., claimed that it is the owner of a vast tract of land located near the Catholic Church at Poblacion, Macabebe, Pampanga and covered by Original Certificate of Title (OCT) No. 17629 issued by the Registry of Deeds of San Fernando on February 21, 1929.[5] The RCA alleged that several individuals unlawfully occupied the subject land and refused to vacate despite repeated demands. Having no other recourse, the RCA filed an ejectment case, docketed as Civil Case No. 2000(23), before the MCTC of Macabebe-Masantol, Pampanga against the alleged intruders, namely, Leocadio and Rufina Reyes, Jose Balagtas, Marcial and Victoria Balagtas, Levita Naluz, Dionisio Barcoma, Felicidad Urbina, Justiniano Reyes, Lawrence Muniz, Eduardo Soriano, Cosmer Vergara, Perlita Bustos, Brigida Navarro, Leonoda Cruz, Leonida Manansala, Angelito Juliano, Eduardo Ibay, Edna Yalung, Reynaldo Mallari, Lily Masangcay, Evangelina Ablaza, Crisanto Manansala, Feliza Esguerra, Gloria Manansala, Bienvenido and Felicisima Panganiban, Ofroneo Caparas, Tino Enriquez, Elizabeth and Benjamin Guinto, Felix Salenga, Eleno and Rosala Salenga, Luisa and Domingo Sison, Francia Flores, Eduardo and Rosita Gutierrez, Zosima and Ener Basilio, Andy and Loreto Bonifacio, Peter and Felicisima Villajuan.[6] On the other hand, defendants countered that the RCA has no cause of action against them because its title is spurious. They contended that the subject land belonged to the State, but they have already acquired the same by acquisitive prescription as they and their predecessors-in-interest have been in continuous possession of the land for more than thirty (30) years. After considering the pleadings submitted by the parties, the MCTC rendered decision on September 28, 2001 in favor of the RCA. The trial court held that OCT No. 17629 in the name of the RCA remains valid and binding against the whole world until it is declared void by a court of competent jurisdiction. Thus, defendants were ordered to vacate the premises and to pay reasonable monthly rentals from August 15, 2000 until they shall have finally vacated the premises.[7] Defendants appealed to the Regional Trial Court (RTC). However, the appeal was dismissed because of their failure to file the appeal memorandum. When defendants elevated the case to the CA, their petition for certiorari was not given due course for failure to file the same within the extended period. Hence, the decision ejecting the defendants from the premises became final. Pursuant to Section 21,[8] Rule 70 of the 1997 Rules of Civil Procedure, as amended, the RCA filed an Urgent Motion for Immediate Issuance of a Writ of Execution, which the MCTC granted in an Order[9] dated February 10, 2003, as follows: WHEREFORE, on the basis of the rules and

jurisprudence aforecited, the Motion for Execution filed by plaintiff is hereby granted. Let a writ of execution be issued in connection with this case which is a ministerial duty of the Court. Defendants Motion for Inhibition is denied for lack of merit. SO ORDERED.[10] Thereafter, the MCTC issued another Order dated October 6, 2003, the pertinent portion of which states: Let a writ of execution be issued to implement the Decision dated September 28, 2001. No further defendants motion to stay execution shall be entertained. SO ORDERED.[11] Accordingly, a writ of execution[12] was issued commanding the sheriff or his deputies to implement the MCTC Decision. Thus, Sheriff Edgar Joseph C. David sent the defendants a Notice to Vacate[13] dated December 8, 2003. Seeking to enjoin the implementation of the writ of execution and the notice to vacate, Guinto filed the instant Petition for Injunction with Prayer for Issuance of a Temporary Restraining Order (TRO),[14] docketed as G.R. No. 160909. Meanwhile, during the pendency of the ejectment case at the MCTC, some of the defendants therein, namely, Eduardo Soriano, Jr., Edna Yalun, Evangelina Ablaza, Felicidad Y. Urbina, Felix Salenga, Reynaldo I. Mallari, Marciana B. Barcoma, Bienvenido Panganiban, Brigida Navarro, Eufrancia T. Flores, Victoria B. Sodsod, Eufronio Caparas, Crisanto Manansala, Lily Masangcay, Benjamin Guinto, Jr., Martha G. Castro and Lino Tolentino filed Civil Case No. 01-1046(M) against the RCA for Quieting of Title and Declaration of Nullity of Title before the RTC of Macabebe, Pampanga. [15] They claimed that they are in actual possession of the land in the concept of owners and alleged that OCT No. 17629 in the name of RCA is spurious and fake. Before filing its Answer, the RCA moved to dismiss the case on grounds of noncompliance with a condition precedent, laches, and for being a collateral attack on its title. The RCA likewise later filed a supplement to its motion to dismiss. In an Order[16] dated June 4, 2001, the RTC denied the motion to dismiss reasoning that when the rules speak of noncompliance with a condition precedent, it could refer only to the failure of a party to secure the appropriate certificate to file action under the Local Government Code, or the failure to exert earnest efforts towards an amicable settlement when the suit involves members of the same family. The RTC also found that plaintiffs have a cause of action. Furthermore, the trial court held that RCAs argument that the property cannot be acquired by prescription because it has title over it is a matter of evidence which may be established during the trial on the merits. Aggrieved, the RCA filed a motion for reconsideration, which the trial court denied in an Order[17] dated July 24, 2001. Thereafter, the RCA filed with the CA a petition for certiorari with prayer for preliminary injunction.[18] On March 18, 2002, the CA promulgated the assailed Decision,[19] the dispositive portion of which reads: WHEREFORE, for lack of merit, the petition is hereby DISMISSED. SO ORDERED.[20] A motion for reconsideration[21] of the Decision was

filed by the RCA. However, in the Resolution[22] dated May 30, 2002, the CA denied the motion for lack of merit. Hence, the RCA filed the present petition for review on certiorari, [23] docketed as G.R. No. 153829, assailing the Decision of the CA, as well as its Resolution denying the motion for reconsideration. On January 14, 2004, we resolved to consolidate G.R. Nos. 160909 and 153829.[24] Subsequently, the Court resolved to treat the petition for injunction with prayer for the issuance of a TRO in G.R. No. 160909 as a motion for the issuance of a TRO and/or writ of preliminary injunction in G.R. No. 153829.[25] The RCA raises the following issues: (A) WHETHER OR NOT CIVIL CASE NO. 011046(M) FOR QUIETING OF TITLE AND DECLARATION OF NULLITY OF TITLE IS LEGALLY DISMISSIBLE FOR VIOLATION OF THE VARIOUS PROVISIONS OF THE RULES OF COURT; and (B) WHETHER OR NOT THE CIVIL ACTION (THE ABOVE MENTIONED CIVIL CASE NO. 01-1046[M]) FILED BY PRIVATE RESPONDENTS CONSTITUTES A COLLATERAL ATTACK ON PETITIONER'S TITLE.
[26]

Essentially, the issue before us is whether the CA erred in not holding that the RTC committed grave abuse of discretion in denying the motion to dismiss filed by the RCA. We affirm the ruling of the CA. Well-entrenched in our jurisdiction is the rule that the trial courts denial of a motion to dismiss cannot be questioned in a certiorari proceeding under Rule 65 of the 1997 Rules of Civil Procedure, as amended. This is because a certiorari writ is a remedy designed to correct errors of jurisdiction and not errors of judgment. The appropriate course of action of the movant in such event is to file an answer and interpose as affirmative defenses the objections raised in the motion to dismiss. If, later, the decision of the trial judge is adverse, the movant may then elevate on appeal the same issues raised in the motion.[27] The only exception to this rule is when the trial court gravely abused its discretion in denying the motion.[28] This exception is, nevertheless, applied sparingly, and only in instances when there is a clear showing that the trial court exercised its judicial power in an arbitrary or despotic manner by reason of passion or personal hostility.[29] Further, the abuse of the court's discretion 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 by, or to act at all in contemplation of, law.[30] Here, in dismissing the petition for certiorari, the CA did not find grave abuse of discretion on the part of the RTC. The appellate court was not convinced with the RCAs argument that plaintiffs failed to comply with the condition precedent provided in Article 477[31] of the Civil Code because they allegedly did not have legal or equitable title to, or interest in the real property. The CA explained that the requirement stated in Article 477 is not a condition precedent before one can file an action for quieting of title. Rather, it is a requisite for an action to quiet title to prosper and the existence or nonexistence of the requisite should be determined only after trial on the merits. The CA also agreed with the trial court in ruling that the RCA cannot raise in a

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motion to dismiss the ground that the complaint is already barred by laches for it still remains to be established during trial how long the plaintiffs have slept on their rights, if such be the case. Evidently, the CA is correct in finding that the denial by the RTC of the RCAs motion to dismiss is not tainted with grave abuse of discretion. Next, the RCA submits that an action for quieting of title is a special civil action covered by Rule 63, while an action for declaration of nullity of title is governed by ordinary rules. Thus, it contends that these cases should have been dismissed for violation of the rule on joinder of actions under Section 5, Rule 2 of the 1997 Rules of Civil Procedure, as amended, which requires that the joinder shall not include special civil actions governed by special rules. Such contention, however, is utterly bereft of merit and insufficient to show that the CA erred in upholding the trial courts decision. Section 6 of Rule 2 explicitly provides that misjoinder of causes of action is not a ground for dismissal of an action. The RCA likewise asserts that the case for quieting of title is a collateral attack on its title which is prohibited by law. However, we agree with the CA in holding that the complaint against the RCA does not amount to a collateral attack because the action for the declaration of nullity of OCT No. 17629 is a clear and direct attack on its title. An action is deemed an attack on a title when its objective is to nullify the title, thereby challenging the judgment pursuant to which the title was decreed. The attack is direct when the objective is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof.[32] The complaint filed with the RTC pertinently alleged that the claim of ownership by the RCA is spurious as its title, denominated as OCT No. 17629, is fake for the following reasons: (1) that the erasures are very apparent and the title itself is fake; (2) it was made to appear under Memorandum of Encumbrance Entry No. 1007 that the title is a reconstituted title when in truth, it is not; and (3) the verification reveals that there was no petition filed before any court where an order was issued for the reconstitution and re-issuance of an owners duplicate copy.[33] It is thus clear from the foregoing that the case filed questioning the genuineness of OCT No. 17629 is a direct attack on the title of the RCA. As regards the petition docketed as G.R. No. 160909 which this Court treated as motion for the issuance of a TRO and/or writ of preliminary injunction, Guinto insists that there is a need to enjoin the sheriff from enforcing the writ of execution as it would cause grave and irreparable damage to Guinto, while the RCA would not suffer any damage if it would later be proved that indeed its title is genuine. We disagree. Section 3, Rule 58 of the 1997 Rules of Civil Procedure, as amended, enumerates the grounds for the issuance of preliminary injunction, viz: SEC. 3. Grounds for issuance of preliminary injunction. A preliminary injunction may be granted when it is established: (a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts

complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or nonperformance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. And as clearly explained in Ocampo v. Sison Vda. de Fernandez:[34] To be entitled to the injunctive writ, the applicant must show that there exists a right to be protected which is directly threatened by an act sought to be enjoined. Furthermore, there must be a showing that the invasion of the right is material and substantial and that there is an urgent and paramount necessity for the writ to prevent serious damage. The applicants right must be clear and unmistakable. In the absence of a clear legal right, the issuance of the writ constitutes grave abuse of discretion. Where the applicants right or title is doubtful or disputed, injunction is not proper. The possibility of irreparable damage without proof of an actual existing right is not a ground for injunction. A clear and positive right especially calling for judicial protection must be shown. Injunction is not a remedy to protect or enforce contingent, abstract, or future rights; it will not issue to protect a right not in esse and which may never arise, or to restrain an act which does not give rise to a cause of action. There must exist an actual right. There must be a patent showing by the applicant that there exists a right to be protected and that the acts against which the writ is to be directed are violative of said right. In this case, the defendants in the ejectment case possess no such legal rights that merit the protection of the courts through the writ of preliminary injunction. The MCTC has already rendered a decision in favor of the RCA and ordered the defendants therein to vacate the premises. Their appeal to the RTC was dismissed and the decision has become final. Evidently, their right to possess the property in question has already been declared inferior or inexistent in relation to the right of the RCA in the MCTC decision which has already become final and executory.[35] WHEREFORE, the petition in G.R. No. 153829 is DENIED. The Decision dated March 18, 2002 and the Resolution dated May 30, 2002 of the Court of Appeals in CA-G.R. SP No. 66974 are AFFIRMED. The motion for the issuance of a TRO and/or writ of preliminary injunction to enjoin the sheriff from enforcing the writ of execution in Civil Case No. 2000(23) is likewise DENIED for lack of merit. No costs.

petition for review of the decision of the Court of Appeals Doctrine: When the statutory term of a non-incorporated agency expires, the powers, duties and functions revert back to the Republic of the Philippines, in the absence of special

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Iron and Steel Authority vs. CA, 249 SCRA 538 (1995) ALFIE

provisions of law specifying some other disposition When the expiring agency is an incorporated one, the consequences of such expiry must be looked for, in the charter of that agency in the Corporation Code. Since, ISA is a nonincorporated agency of the Republic, its powers, duties, functions, assets and liabilities are properly regarded as folded back into the Government Facts: 1. Iron and Steel Authority (ISA) created by law for a term of 5 years (later extended by another 10) to aid in developing the steel industry in the Philippines; National Steel Corp., (NSC) is a GOCC which was undergoing expansion; 2. In order to expand, NSC entered into negotiations with pvt. respondent Maria Christina Fertilizer Corp so it could expropriate the land; negotiations failed 3. ISA commences eminent domain proceedings against Maria Christina Corp for the land; files in the RTC of Iligan City; 4. during the trial, the statutory existence of ISA expired; causing MCFC to move for dismissal of the case since ISA no longer had juridical personality; RTC rules in favor of MCFC 5. ISA appealed to the CA; urging that the Republic of the Philippines, the true party in interest, should be allowed to substitute ISA; CA affirms RTC decision; 6. Petition for review filed before the Supreme Court; Issue: Whether the Republic of the Philippines may substitute ISA as a party in the case for expropriation of MCFCs land; YES; ISA is merely an agent of the Republic.

a cause of action. The motions were denied and the TC held that the allegations were sufficient. In their joint answer, TWA and Travel Wide alleged the special defense that they were not the real parties in interest since they only acted as agents of the principal (Tours Services, Inc.). This allegation was opposed by Decision Systems and Alcuaz positing that they were barred from raising such special defense since it was not raised in the two motions to dismiss the amended complaint. The joint motion was, nevertheless, granted. RTC dismissed complaint of decision systems and Alcuaz finding that Trans and Travel were neither real parties-ininterest. The private respondents went to the then IAC. The latter court reversed the lower court, hence, the current petition. Trans World and Travel Wide invoke rule 16 regarding the grounds for the motion to dismiss. The ground of "not being a real party-in-interest" for a motion to dismiss is not indicated there, thus, they could not have pleaded it in their motion but only in their answer as a special defense. In essence, they were arguing that there is no cause of action because they were not real parties in interest which would fall within the exception. Issue: W/N Petitioners are not real parties-in-interest. (SC: They were real parties-in-interest) Held: SC upheld dismissal of CA but disagrees on ground of dismissal.

Travel Wide Associated Sales, Inc. vs CA, 199 SCRA 205 (1991) NOEL Decision Systems and Alcuaz -> RTC (complaint against Travel Wide and Trans World. RTC dismissed complaint). Decision Systems and Alcuaz -> CA (CA reversed RTC) Travel Wide and Trans World -> SC (Probably an Appeal by Certio or Petition for Review. na pareho lang din, di ba? hehe! It was not clearly stated on what was the action filed by the petitioners with the SC.) Facts: DECISION SYSTEMS CORPORATION and MANUEL A. ALCUAZ, JR. were the complainants in the original case filed in the RTC where they filed a complaint against petitioner Travel Wide and Trans World. They alleged that the latter failed to comply with their obligation under a Trans World Airlines package deal to travel to the U.S. The package deal was already paid. Trans World moved for dismissal for lack of cause of action. The trial court ordered the private respondents to amend their complaint and particularize their averments. They complied but Trans World and Travel Wide filed separate motions to dismiss stating that the amended complaint still failed to state

Re: Trial Court erred in finding that TWA and Travel Wide were not parties in interest In disclaiming liability, the petitioners point to the stipulation on Responsibility in the Travel Pass '73 Plan brochure that "Tour Services, Inc. and/or their agents" are acting "as agents for the passengers." They stress further that the Miscellaneous Charge Order issued to Alcuaz indicated that the amount of $218.00 was payable to Tour Services, Inc. and not to either of them. This would mean that, if at all, they were acting as agents of Tour Services, Inc. and not as principal obligors. Without arriving at any factual conclusion, the Court believes it would be useful to make a careful appraisal of the evidence, particularly the terms and conditions of the brochure distributed by the petitioners and the significance of the Miscellaneous Charges Order which was issued by TWA. We note that even the trial court observed the active participation of TWA in the promotion of the travel pass plan as an additional source of revenue for its airline business. It is also worth noting that if the petitioners were indeed acting as agents of the passengers, as the brochure stipulates, they could still be held liable under Article 1909 of the Civil Code, which provides:

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The agent is responsible not only for fraud, but also for negligence, which shall be judged with more or less rigor by the courts, according to whether the agency was or was not for a compensation. The private respondent * is entitled to prove that the petitioners did not provide adequately for the pre-paid hotel accommodations of Alcuaz, who had to incur additional expenses and was compelled to cut short his business trip because of his depleted dollar allocation. It was not established that the petitioners received any confirmation of the hotel reservations they sent and yet they did not follow up their request nor did they inform Alcuaz that they had not received confirmation. This procedure should have been followed by the petitioners as so provided in the Travel Pass '73 USA. Re: Procedure: Rule 15, Sec.8 of the rules states that in an omnibus motion, all objections available should be included. If not so, they will be deemed waived. An exception to this rule on objections is Rule 9, Sec.2 wherein it is stated that: except the failure to state a cause of action which may be alleged in a latter pleading, if one is permitted, or by motion for judgment on the pleadings, or at the trial on the merits; but in the last instance, the motion shall be disposed of as provided in section 5, Rule 10 in the light of any evidence which may have been received. Whenever it appears that the court has no jurisdiction over the subject matter, it shall dismiss the action. It is understandable if in granting the motion for a preliminary hearing on the special defense, the trial judge relied on Rule 16, Section 5, of the Rules of Court, providing as follows: Section 5. Pleading grounds as affirmative defenses. Any of the grounds for dismissal provided for in this rule, except improper venue, may be pleaded as an affirmative defense, and a preliminary hearing may be had thereon as if a motion to dismiss had been filed. However, the following doctrine laid down in The Heirs of Juliana Clavano v. Genato should have guided him to the contrary, and correct, conclusion: Besides, under this section a preliminary hearing may be had on the affirmative defenses as if a motion to dismiss had been filed. During such preliminary hearing evidence may be admitted. Nevertheless, We believe that the respondent Judge committed an error in conducting a preliminary hearing on the private respondent's affirmative defenses. It is a well-settled rule that in a motion to dismiss based on the ground that the complaint fails to state a cause of action, the question submitted to the court for determination is the sufficiency of the allegations in the complaint itself. Whether those allegations are true or not is beside the point, for their truth is hypothetically admitted by the motion. The issue rather is:

admitting them to be true, may the court render a valid judgment in accordance with the prayer of the complaint? Stated otherwise, the sufficiency of the cause of action must appear on the face of the complaint in order to sustain a dismissal on this ground. No extraneous matter may be considered nor facts not alleged, which would require evidence and therefore must be raised as defenses and await the trial. In other words, to determine the sufficiency of the cause of action, only the facts alleged in the complaint, and no others should be considered. The respondent Judge departed from this rule in conducting a hearing and in receiving evidence in support of the private respondent's affirmative defense, that is, lack of cause of action. The SC sustained the CA in ruling that the trial court should not have dismissed the complaint, albeit nor for the reasons given in the challenged decision. Because the petitioners are real parties-in-interest as defendants in the suit below, the motion to dismiss for lack of a cause of action should not have been granted.

Ralla vs. Ralla, 199 SCRA SCRA 495 (1991.) -MELL DOCTRINE: As a GENERAL RULE, one having no right or interest to protect cannot invoke the jurisdiction of the court as a party-plaintiff in an action. As a validly disinherited heir, and not claiming to be a creditor of his deceased father, Pedro Ralla had no legal personality to question the deed of sale dated between Rosendo Ralla and his son Pablo. Legally speaking, Pedro Ralla was a stranger to the transaction as he did not stand to benefit from its annulment. His disinheritance had rendered him hors de combat.

FACTS: CRUZ, J.: RTC(approved the will; disapproved the disinheritance) CA(approved the disinheritance) SC (dismissed) RTC(sale is void | MR: sale is valid) CA(sale is void) SC(sale is valid) Pablo and Pedro are siblings. Their father, Rosendo, favored Pablo but not the latter. Pablo administered part of the family properties. Pedro lived with his mother in another town. He was not on good terms with his father. CivPro | Nov 24 | The two brothers partitioned 63 parcels of land left as paraphernal property of their mother. Meanwhile, Rosendo executed a will disinheriting Pedro and leaving everything he owned to Pablo, to whom he said he had earlier sold a part of his property for P10,000. Rosendo himself filed for the probate of the will but died pendente lite.

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The last will and testament of Rosendo Ralla was allowed but the disinheritance of Pedro was disapproved. This order was elevated to the CA. CA reversed the trial court and reinstated the disinheritance clause after finding that the requisites of a valid disinheritance had been complied with in the will. CA noted that Pedro had threatened to kill his father. The decision was assailed before SC which was dismissed. MR was denied. In this petition, what is involved is the correctness of the decision of the respondent court annulling the deed of sale executed by Rosendo Ralla in favor of Pablo over 149 parcels of land. Pedro had filed on (1972), a complaint to annul the transaction on the ground that it was simulated. The original decision of the trial court declared the sale null and void. On MR, the judge completely reversed himself and held the deed of sale to be valid. This order was in turn set aside by CA, which reinstated the original decision invalidating the deed of sale.

ISSUE: May Pedro question the validity of the sale of their fathers land to Pablo? NO. HELD: CA approved the disinheritance of Pedro Ralla. SC dismissed the petition for review which has long since become final. Since then, Pedro Ralla no longer had the legal standing to question the validity of the sale executed by Rosendo in favor of his other son Pablo. The REAL PARTY-IN-INTEREST is the party who stands to be benefited or injured by the judgment OR the party entitled to the avails of the suit. "Interest" 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. As a GENERAL RULE, one having no right or interest to protect cannot invoke the jurisdiction of the court as a party-plaintiff in an action. As the sole heir, Pablo Ralla had the right to inherit the totality of his father's estate after payment of all its debts. Even if it be assumed that the deed of sale was indeed invalid, the subjectmatter nevertheless devolved upon Pablo as the universal successor of his father Rosendo. Our decision is that as a validly disinherited heir, and not claiming to be a creditor of his deceased father, Pedro Ralla had no legal personality to question the deed of sale dated between Rosendo Ralla and his son Pablo. Legally speaking, Pedro Ralla was a stranger to the transaction as he did not stand to benefit from its annulment. His disinheritance had rendered him hors de combat. WHEREFORE, the decision of the respondent court dated is set aside and another judgment is hereby rendered dismissing the Civil Case Tampingco vs. IAC, 207 SCRA 652 -MEDZ - May 10, 1985 Petitioner Tampingco filed a

complaint for payment of disturbance compensation with damages against respondent Horca. o Petitioner Tampinco is the tenant-lessee of the respondents agricultural land under a leasehold contract entered into sometime April 1976 o In a letter dated April 9 1985 respondent informed plaintiff to desist working on the subject land having donated it on Feb 3 1985. Respondent ordered petitioner to vacate the land and is determined to oust him from the premises in violation of the law o Petitioner is willing to accept payment of disturbance or in the alternative, to remain as tenant-lessee of the land. - July 5, 1985 case was called for pretrial. TC gave res til July 9, 1985 to file answer - Respondent filed motion to dismiss complaint states no cause of action bec the respondent is not the real party in interest having already donated the subject land as a school site and the donation not having benefited the respondent, no compensation is due to petitioner since under Section 36 (1) of the Agrarian Reform Code as amended, disturbance compensation holds true only in cases wherein the lessor-owner derives financial benefits from the conversion of the agricultural land into nonagricultural purposes. - RTC granted respondents motion to dismiss, denied petitioners MR. - CA found no merit in the case and dismissed it. - WON the private respondent is a real party in interest in whom the suit should be brought. - The private respondent bolsters his claim that he is not the real party-in-interest on Section 10 of Republic Act No. 3844 (Code of Agrarian Reforms of the Philippines) which provides that: . . . In the case the agricultural lessor sells, alienates or transfers the legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligation of the agricultural lessor. - The private respondent is of the view that the Ministry of Education, Culture and Sports, as donee, became the new lessor of the agricultural lessee by operation of law and is therefore the real party-ininterest against whom the claim for disturbance compensation should be directed. - We agree with the contentions of the private respondent. The petitioner should have impleaded the Ministry of Education, Culture and Sports as the party-defendant for as stated in Roman Catholic Archbishop of Manila v. Court of Appeals (198 SCRA 300 [1991]), a donation, as a mode of acquiring ownership, results in an effective transfer of title over the property from the donor to the donee and once a donation is accepted, the donee becomes the absolute owner of the property donated. - Considering that the tenant in the case at bar is willing to accept payment of disturbance compensation in exchange for his right to cultivate the landholding in question, the real issue is who

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should pay the compensation. We rule that the Ministry of Education, Culture and Sports as the new owner cannot oust the petitioner from the subject riceland and build a public high school thereon until after there is payment of the disturbance compensation in accordance with Section 36 (1) of R.A. No. 3844, as amended. RTC correctly dismissed the complaint for payment because the private respondent is not a real party in interest.

Rule 65 (R65): Petition for Certiorari (PfC) *Grave Abuse of Discretion (GAD) Rule 45 (R45): Petition for Review on Certiorari (PfRC) *Purely questions of LAW; Supreme Court only Motion for Reconsideration (MfR) Motion to Dismiss (MtD)

Towers Development Corporation for the primary purpose of engaging in the real estate business. Subsequently, Centertown assigned all its rights and obligations to Towers under the Deed of Conditional Sale, with the consent and approval of the GSIS. Petitioner Association then filed a complaint with the RTC of Manila against Centertown, Towers and GSIS for the annulment of the deed of conditional sale and the assignment thereof by Centertown to GSIS. The complaint alleged that the Deed of Conditional Sale is null and void ab initio for being ultra vires since Centertown is not qualified to acquire real estate property or to engage in real estate transactions. The trial court DISMISSED the complaint. Petitioners filed MR. MR was denied. Petitioners appealed to the CA. CA affirmed the TCs judgment. MR was denied.

House International Building Tenants Assoc. vs. IAC, 151 SCRA 703 (1987) ANNE Nature of the Petition: Annulment of Deed of Conditional Sale Court of Appeals SC MR (denied) MR (denied) Trial Court

ISSUE: WHETHER PETITIONER ASSOCIATION HAS THE PERSONALITY TO SUE, ON ITS OWN, AS A CORPORATION REPRESENTING ITS MEMBERS WHO ARE TENANTS OF THE HOUSE INTERNATIONAL BUILDING. HELD: No, under Sec. 2 Rule 3 of the Rules of Court, it provides that Parties in interest Every action must be prosecuted and defended in the name of the real party in interest. All persons having an interest in the subject matter of the action and in obtaining the relief amended shall be joined as plaintiffs. The real party in interest is the party who stands to be benefitted or injured by the judgment 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. Consequently, a person who is not a party to a contract and for whose benefit it was not expressly made cannot maintain an action thereon, notwithstanding that the contract, if performed by the parties to it, would incidentally inure to his benefit. In the present case, the real parties in interest are the tenants of the House International Building and not the petitioner Association, which has a personality separate and distinct from that of its members and therefore it has the capacity to sue and be sued although it is composed of the tenants. Petitioner Association has not shown any real, actual, material or substantial interest in the subject matter of the action. The Association has sued in its name, but has not alleged any right belonging to it was violated. The benefits are not meant for the Association but for the unnamed members of the Association who have been allegedly been tenants of the long standing building in question.

DOCTRINE: The real party in interest is the party who stands to be benefitted or injured by the judgment 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. Consequently, a person who is not a party to a contract and for whose benefit it was not expressly made cannot maintain an action thereon, notwithstanding that the contract, if performed by the parties to it, would incidentally inure to his benefit. FACTS: Petitioner House International Building Tenants Association, INC. (ASSOCIATION, for short) is an association which constitute the great majority of more than a hundred heads of families who are tenants of long and good standing of the 14-storey House International Building. The land and improvements thereon initially belonged to a certain Atty. Felipe Ang who mortagaged the same to the GSIS. For failure to pay, GSIS foreclosed the mortgaged it subsequently sold it to Centertown Marketing Corporation (CENTERTOWN) in a deed of conditional sale, without notice to the tenants of the building and without securing the prior clearance of the then Ministry of Human Settlements. Centertown organized a sister corporation, the Manila

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FIRST DIVISION ALLAN C. GO, doing business under the name and style ACG Express Liner, Petitioner, - versus MORTIMER F. CORDERO, Respondent. x----------------------------------------x MORTIMER F. CORDERO, Petitioner, - versus G.R. No. 164747 Present: PUNO, C.J., Chairperson, CARPIO MORALES, LEONARDO-DE CASTRO, BERSAMIN, and VILLARAMA, JR., JJ. G.R. No. 164703

ALLAN C. GO, doing business Promulgated: under the name and style ACG Express Liner, May 4, 2010 FELIPE M. LANDICHO and VINCENT D. TECSON, Respondents. x----------------------------------------------------------------------------------------x DECISION VILLARAMA, JR., J.: For review is the Decision[1] dated March 16, 2004 as modified by the Resolution[2] dated July 22, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 69113, which affirmed with modifications the Decision[3] dated May 31, 2000 of the Regional Trial Court (RTC) of Quezon City, Branch 85 in Civil Case No. 98-35332. The factual antecedents: Sometime in 1996, Mortimer F. Cordero, Vice-President of Pamana Marketing Corporation (Pamana), ventured into the business of marketing inter-island passenger vessels. After contacting various overseas fast ferry manufacturers from all over the world, he came to meet Tony Robinson, an Australian national based in Brisbane, Australia, who is the Managing Director of Aluminium Fast Ferries Australia (AFFA). Between June and August 1997, Robinson signed documents appointing Cordero as the exclusive distributor of AFFA catamaran and other fast ferry vessels in thePhilippines. As such exclusive distributor, Cordero offered for sale to prospective buyers the 25-meter Aluminium Passenger catamaran known as the SEACAT 25.[4] After negotiations with Felipe Landicho and Vincent Tecson, lawyers of Allan C. Go who is the owner/operator of

ACG Express Liner of Cebu City, a single proprietorship, Cordero was able to close a deal for the purchase of two (2) SEACAT 25 as evidenced by the Memorandum of Agreement dated August 7, 1997.[5] Accordingly, the parties executed Shipbuilding Contract No. 7825 for one (1) high-speed catamaran (SEACAT 25) for the price of US$1,465,512.00. [6] Per agreement between Robinson and Cordero, the latter shall receive commissions totalling US$328,742.00, or 22.43% of the purchase price, from the sale of each vessel.[7] Cordero made two (2) trips to the AFFA Shipyard in Brisbane, Australia, and on one (1) occasion even accompanied Go and his family and Landicho, to monitor the progress of the building of the vessel. He shouldered all the expenses for airfare, food, hotel accommodations, transportation and entertainment during these trips. He also spent for long distance telephone calls to communicate regularly with Robinson, Go, Tecson and Landicho. However, Cordero later discovered that Go was dealing directly with Robinson when he was informed by Dennis Padua of Wartsila Philippines that Go was canvassing for a second catamaran engine from their company which provided the ship engine for the first SEACAT 25. Padua told Cordero that Go instructed him to fax the requested quotation of the second engine to the Park Royal Hotel in Brisbane where Go was then staying. Cordero tried to contact Go and Landicho to confirm the matter but they were nowhere to be found, while Robinson refused to answer his calls. Cordero immediately flew to Brisbane to clarify matters with Robinson, only to find out that Go and Landicho were already there in Brisbane negotiating for the sale of the second SEACAT 25. Despite repeated follow-up calls, no explanation was given by Robinson, Go, Landicho and Tecson who even made Cordero believe there would be no further sale between AFFA and ACG Express Liner. In a handwritten letter dated June 24, 1998, Cordero informed Go that such act of dealing directly with Robinson violated his exclusive distributorship and demanded that they respect the same, without prejudice to legal action against him and Robinson should they fail to heed the same.[8] Corderos lawyer, Atty. Ernesto A. Tabujara, Jr. of ACCRA law firm, also wrote ACG Express Liner assailing the fraudulent actuations and misrepresentations committed by Go in connivance with his lawyers (Landicho and Tecson) in breach of Corderos exclusive distributorship appointment.[9] Having been apprised of Corderos demand letter, Thyne & Macartney, the lawyer of AFFA and Robinson, faxed a letter to ACCRA law firm asserting that the appointment of Cordero as AFFAs distributor was for the purpose of one (1) transaction only, that is, the purchase of a high-speed catamaran vessel by ACG Express Liner in August 1997. The letter further stated that Cordero was offered the exclusive distributorship, the terms of which were contained in a draft agreement which Cordero allegedly failed to return to AFFA within a reasonable time, and which offer is already being revoked by AFFA.[10] As to the response of Go, Landicho and Tecson to his demand letter, Cordero testified before the trial court that on the same day, Landicho, acting on behalf of Go, talked to him over the telephone and offered to amicably settle their dispute. Tecson and Landicho offered to convince Go to honor his exclusive distributorship with AFFA and to purchase all vessels for ACG Express Liner through him for

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the next three (3) years. In an effort to amicably settle the matter, Landicho, acting in behalf of Go, set up a meeting with Cordero on June 29, 1998 between 9:30 p.m. to 10:30 p.m. at the Mactan Island Resort Hotel lobby. On said date, however, only Landicho and Tecson came and no reason was given for Gos absence. Tecson and Landicho proposed that they will convince Go to pay him US$1,500,000.00 on the condition that they will get a cut of 20%. And so it was agreed between him, Landicho and Tecson that the latter would give him a weekly status report and that the matter will be settled in three (3) to four (4) weeks and neither party will file an action against each other until a final report on the proposed settlement. No such report was made by either Tecson or Landicho who, it turned out, had no intention to do so and were just buying time as the catamaran vessel was due to arrive from Australia. Cordero then filed a complaint with the Bureau of Customs (BOC) to prohibit the entry of SEACAT 25 from Australia based on misdeclaration and undervaluation. Consequently, an Alert Order was issued by Acting BOC Commissioner Nelson Tan for the vessel which in fact arrived on July 17, 1998. Cordero claimed that Go and Robinson had conspired to undervalue the vessel by around US$500,000.00.[11] On August 21, 1998, Cordero instituted Civil Case No. 98-35332 seeking to hold Robinson, Go, Tecson and Landicho liable jointly and solidarily for conniving and conspiring together in violating his exclusive distributorship in bad faith and wanton disregard of his rights, thus depriving him of his due commissions (balance of unpaid commission from the sale of the first vessel in the amount of US$31,522.01 and unpaid commission for the sale of the second vessel in the amount of US$328,742.00) and causing him actual, moral and exemplary damages, including P800,000.00 representing expenses for airplane travel to Australia, telecommunications bills and entertainment, on account of AFFAs untimely cancellation of the exclusive distributorship agreement. Cordero also prayed for the award of moral and exemplary damages, as well as attorneys fees and litigation expenses.[12] Robinson filed a motion to dismiss grounded on lack of jurisdiction over his person and failure to state a cause of action, asserting that there was no act committed in violation of the distributorship agreement. Said motion was denied by the trial court on December 20, 1999. Robinson was likewise declared in default for failure to file his answer within the period granted by the trial court.[13] As for Go and Tecson, their motion to dismiss based on failure to state a cause of action was likewise denied by the trial court onFebruary 26, 1999.[14] Subsequently, they filed their Answer denying that they have anything to do with the termination by AFFA of Corderos authority as exclusive distributor in the Philippines. On the contrary, they averred it was Cordero who stopped communicating with Go in connection with the purchase of the first vessel from AFFA and was not doing his part in making progress status reports and airing the clients grievances to his principal, AFFA, such that Go engaged the services of Landicho to fly to Australia and attend to the documents needed for shipment of the vessel to the Philippines. As to the inquiry for the Philippine price for a Wartsila ship engine for AFFAs other on-going vessel construction, this was merely requested by Robinson but which Cordero misinterpreted as indication that Go was

buying a second vessel. Moreover, Landicho and Tecson had no transaction whatsoever with Cordero who had no document to show any such shipbuilding contract. As to the supposed meeting to settle their dispute, this was due to the malicious demand of Cordero to be given US$3,000,000 as otherwise he will expose in the media the alleged undervaluation of the vessel with the BOC. In any case, Cordero no longer had cause of action for his commission for the sale of the second vessel under the memorandum of agreement dated August 7, 1997 considering the termination of his authority by AFFAs lawyers on June 26, 1998.[15] Pre-trial was reset twice to afford the parties opportunity to reach a settlement. However, on motion filed by Cordero through counsel, the trial court reconsidered the resetting of the pre-trial to another date for the third time as requested by Go, Tecson and Landicho, in view of the latters failure to appear at the pre-trial conference on January 7, 2000 despite due notice. The trial court further confirmed that said defendants misled the trial court in moving for continuance during the pre-trial conference held on December 10, 1999, purportedly to go abroad for the holiday season when in truth a Hold-Departure Order had been issued against them. [16] Accordingly, plaintiff Cordero was allowed to present his evidence ex parte. Corderos testimony regarding his transaction with defendants Go, Landicho and Tecson, and the latters offer of settlement, was corroborated by his counsel who also took the witness stand. Further, documentary evidence including photographs taken of the June 29, 1998 meeting with Landicho, Tecson and Atty. Tabujara at Shangri-las Mactan Island Resort, photographs taken in Brisbane showing Cordero, Go with his family, Robinson and Landicho, and also various documents, communications, vouchers and bank transmittals were presented to prove that: (1) Cordero was properly authorized and actually transacted in behalf of AFFA as exclusive distributor in the Philippines; (2) Cordero spent considerable sums of money in pursuance of the contract with Go and ACG Express Liner; and (3) AFFA through Robinson paid Cordero his commissions from each scheduled payment made by Go for the first SEACAT 25 purchased from AFFA pursuant to Shipbuilding Contract No. 7825.[17] On May 31, 2000, the trial court rendered its decision, the dispositive portion of which reads as follows: WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in favor of Plaintiff and against defendants Allan C. Go, Tony Robinson, Felipe Landicho, and Vincent Tecson. As prayed for, defendants are hereby ordered to pay Plaintiff jointly and solidarily, the following: 1. On the First Cause of Action, the sum total of SIXTEEN MILLION TWO HUNDRED NINETY ONE THOUSAND THREE HUNDRED FIFTY TWO AND FORTY THREE CENTAVOS (P16,291,352.43) as actual damages with legal interest from 25 June 1998 until fully paid; 2. On the Second Cause of Action, the sum of ONE MILLION PESOS (P1,000,000.00) as moral damages; 3. On the Third Cause of Action, the sum of ONE MILLION PESOS (P1,000,000.00) as exemplary damages; and 4. On the Fourth Cause of Action, the sum of ONE

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MILLION PESOS (P1,000,000.00) as attorneys fees; Costs against the defendants. SO ORDERED.[18] Go, Robinson, Landicho and Tecson filed a motion for new trial, claiming that they have been unduly prejudiced by the negligence of their counsel who was allegedly unaware that the pre-trial conference on January 28, 2000 did not push through for the reason that Cordero was then allowed to present his evidence ex-parte, as he had assumed that the saidex-parte hearing was being conducted only against Robinson who was earlier declared in default.[19] In its Order dated July 28, 2000, the trial court denied the motion for new trial.[20] In the same order, Corderos motion for execution pending appeal was granted. Defendants moved to reconsider the said order insofar as it granted the motion for execution pending appeal.[21] On August 8, 2000, they filed a notice of appeal.[22] On August 18, 2000, the trial court denied the motion for reconsideration and on August 21, 2000, the writ of execution pending appeal was issued.[23] Meanwhile, the notice of appeal was denied for failure to pay the appellate court docket fee within the prescribed period.[24] Defendants filed a motion for reconsideration and to transmit the case records to the CA.[25] On September 29, 2000, the CA issued a temporary restraining order at the instance of defendants in the certiorari case they filed with said court docketed as CA-G.R. SP No. 60354 questioning the execution orders issued by the trial court. Consequently, as requested by the defendants, the trial court recalled and set aside its November 6, 2000 Order granting the ex-parte motion for release of garnished funds, cancelled the scheduled public auction sale of levied real properties, and denied the ex-parte Motion for Break-Open Order and Ex-Parte Motion for Encashment of Check filed by Cordero.[26] On November 29, 2000, the trial court reconsidered its Order dated August 21, 2000 denying due course to the notice of appeal and forthwith directed the transmittal of the records to the CA.[27] On January 29, 2001, the CA rendered judgment granting the petition for certiorari in CA-G.R. SP No. 60354 and setting aside the trial courts orders of execution pending appeal. Cordero appealed the said judgment in a petition for review filed with this Court which was eventually denied under our Decision dated September 17, 2002.[28] On March 16, 2004, the CA in CA-G.R. CV No. 69113 affirmed the trial court (1) in allowing Cordero to present his evidence ex-parte after the unjustified failure of appellants (Go, Tecson and Landicho) to appear at the pre-trial conference despite due notice; (2) in finding that it was Cordero and not Pamana who was appointed by AFFA as the exclusive distributor in the Philippines of its SEACAT 25 and other fast ferry vessels, which is not limited to the sale of one (1) such catamaran to Go on August 7, 1997; and (3) in finding that Cordero is entitled to a commission per vessel sold for AFFA through his efforts in the amount equivalent to 22.43% of the price of each vessel or US$328,742.00, and with payments of US$297,219.91 having been made to Cordero, there remained a balance of US$31,522.09 still due to him. The CA sustained the trial court in ruling that Cordero is entitled to damages for the breach of his exclusive

distributorship agreement with AFFA. However, it held that Cordero is entitled only to commission for the sale of the first catamaran obtained through his efforts with the remaining unpaid sum of US$31,522.09 or P1,355,449.90 (on the basis of US$1.00=P43.00 rate) with interest at 6% per annum from the time of the filing of the complaint until the same is fully paid. As to the P800,000.00 representing expenses incurred by Cordero for transportation, phone bills, entertainment, food and lodging, the CA declared there was no basis for such award, the same being the logical and necessary consequences of the exclusive distributorship agreement which are normal in the field of sales and distribution, and the expenditures having redounded to the benefit of the distributor (Cordero). On the amounts awarded by the trial court as moral and exemplary damages, as well as attorneys fees, the CA reduced the same to P500,000.00, P300,000.00 andP50,000.00, respectively. Appellants were held solidarily liable pursuant to the provisions of Article 1207 in relation to Articles 19, 20, 21 and 22 of the New Civil Code. The CA further ruled that no error was committed by the trial court in denying their motion for new trial, which said court found to be pro forma and did not raise any substantial matter as to warrant the conduct of another trial. By Resolution dated July 22, 2004, the CA denied the motions for reconsideration respectively filed by the appellants and appellee, and affirmed the Decision dated March 16, 2004 with the sole modification that the legal interest of 6% per annum shall start to run from June 24, 1998 until the finality of the decision, and the rate of 12% interest per annum shall apply once the decision becomes final and executory until the judgment has been satisfied. The case before us is a consolidation of the petitions for review under Rule 45 separately filed by Go (G.R. No. 164703) and Cordero (G.R. No. 164747) in which petitioners raised the following arguments: G.R. No. 164703 (Petitioner Go) I. THE HONORABLE COURT OF APPEALS DISREGARDED THE RULES OF COURT AND PERTINENT JURISPRUDENCE AND ACTED WITH GRAVE ABUSE OF DISCRETION IN NOT RULING THAT THE RESPONDENT IS NOT THE REAL PARTYIN-INTEREST AND IN NOT DISMISSING THE INSTANT CASE ON THE GROUND OF LACK OF CAUSE OF ACTION; II. THE HONORABLE COURT OF APPEALS IGNORED THE LAW AND JURISPRUDENCE AND ACTED WITH GRAVE ABUSE OF DISCRETION IN HOLDING HEREIN PETITIONER RESPONSIBLE FOR THE BREACH IN THE ALLEGED EXCLUSIVE DISTRIBUTORSHIP AGREEMENT WITH ALUMINIUM FAST FERRIES AUSTRALIA; III. THE HONORABLE APPELLATE COURT MISAPPLIED THE LAW AND ACTED WITH GRAVE ABUSE OF DISCRETION IN FINDING PETITIONER LIABLE IN SOLIDUM WITH THE CO-DEFENDANTS WITH RESPECT TO THE CLAIMS OF RESPONDENT;

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IV. THE HONORABLE COURT OF APPEALS MISAPPLIED LAW AND JURISPRUDENCE AND GRAVELY ABUSED ITS DISCRETION WHEN IT FOUND PETITIONER LIABLE FOR UNPAID COMMISSIONS, DAMAGES, ATTORNEYS FEES, AND LITIGATION EXPENSES; and V. THE HONORABLE APPELLATE COURT ACTED CONTRARY TO LAW AND JURISPRUDENCE AND GRAVELY ABUSED ITS DISCRETION WHEN IT EFFECTIVELY DEPRIVED HEREIN PETITIONER OF HIS RIGHT TO DUE PROCESS BY AFFIRMING THE LOWER COURTS DENIAL OF PETITIONERS MOTION FOR NEW TRIAL.[29] G.R. No. 164747 (Petitioner Cordero) I. THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE JUDGMENT OF THE TRIAL COURT AWARDING PETITIONER ACTUAL DAMAGES FOR HIS COMMISSION FOR THESALE OF THE SECOND VESSEL, SINCE THERE IS SUFFICIENT EVIDENCE ON RECORD WHICH PROVES THAT THERE WAS A SECOND SALE OF A VESSEL. A. THE MEMORANDUM OF AGREEMENT DATED 7 AUGUST 1997 PROVIDES THAT RESPONDENT GO WAS CONTRACTUALLY BOUND TO BUY TWO (2) VESSELS FROM AFFA. B. RESPONDENT GOS POSITION PAPER AND COUNTER-AFFIDAVIT/POSITION PAPER THAT WERE FILED BEFORE THE BUREAU OF CUSTOMS, ADMITS UNDER OATH THAT HE HAD INDEED PURCHASED A SECOND VESSEL FROM AFFA. C. RESPONDENTS ADMITTED IN THEIR PRE-TRIAL BRIEF THAT THEY HAD PURCHASED A SECOND VESSEL. II. THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER IS NOT ENTITLED TO HIS COMMISSIONS FOR THE PURCHASE OF A SECOND VESSEL, SINCE IT WAS PETITIONERS EFFORTS WHICH ACTUALLY FACILITATED AND SET-UP THE TRANSACTION FOR RESPONDENTS.

THE COURT OF APPEALS ERRED IN NOT IMPOSING THE PROPER LEGAL INTEREST RATE ON RESPONDENTS UNPAID OBLIGATION WHICH SHOULD BE TWELVE PERCENT (12%) FROM THE TIME OF THE BREACH OF THE OBLIGATION.

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III.

IV. THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE ORIGINAL AMOUNT OF CONSEQUENTIAL DAMAGES AWARDED TO PETITIONER BY THE TRIAL COURT CONSIDERING THE BAD FAITH AND FRAUDULENT CONDUCT OF RESPONDENTS IN MISAPPROPRIATING THE MONEY OF PETITIONER.[30] The controversy boils down to two (2) main issues: (1) whether petitioner Cordero has the legal personality to sue the respondents for breach of contract; and (2) whether the respondents may be held liable for damages to Cordero for his unpaid commissions and termination of his exclusive distributorship appointment by the principal, AFFA. I. Real Party-in-Interest First, on the issue of whether the case had been filed by the real party-in-interest as required by Section 2, Rule 3 of the Rules of Court, which defines such party as the one (1) to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. The purposes of this provision are: 1) to prevent the prosecution of actions by persons without any right, title or interest in the case; 2) to require that the actual party entitled to legal relief be the one to prosecute the action; 3) to avoid a multiplicity of suits; and 4) to discourage litigation and keep it within certain bounds, pursuant to sound public policy.[31] A case is dismissible for lack of personality to sue upon proof that the plaintiff is not the real party-in-interest, hence grounded on failure to state a cause of action.[32] On this issue, we agree with the CA in ruling that it was Cordero and not Pamana who is the exclusive distributor of AFFA in the Philippines as shown by the Certification dated June 1, 1997 issued by Tony Robinson.[33] Petitioner Go mentions the following documents also signed by respondent Robinson which state that Pamana Marketing Corporation represented by Mr. Mortimer F. Cordero was actually the exclusive distributor: (1) letter dated 1 June 1997[34]; (2) certification dated 5 August 1997[35]; and (3) letter dated 5 August 1997 addressed to petitioner Cordero concerning commissions to be paid to Pamana Marketing Corporation.[36] Such apparent inconsistency in naming AFFAs exclusive distributor in the Philippines is of no moment. For all intents and purposes, Robinson and AFFA dealt only with Cordero who alone made decisions in the performance of the exclusive distributorship, as with other clients to whom he had similarly offered AFFAs fast ferry vessels. Moreover, the stipulated commissions from each progress payments made by Go were directly paid by Robinson to Cordero.[37] Respondents Landicho and Tecson were only too aware of Corderos authority as the person who was appointed and acted as exclusive distributor of AFFA, which can be gleaned from their act of immediately furnishing him with copies of bank transmittals everytime Go remits payment to Robinson, who in turn transfers a portion of funds received to the bank account of Cordero in the Philippines as his commission. Out of these partial payments of his commission, Cordero would still give Landicho and Tecson

their respective commission, or cuts from his own commission. Respondents Landicho and Tecson failed to refute the evidence submitted by Cordero consisting of receipts signed by them. Said amounts were apart from the earlier expenses shouldered by Cordero for Landichos airline tickets, transportation, food and hotel accommodations for the trip to Australia.[38] Moreover, petitioner Go, Landicho and Tecson never raised petitioner Corderos lack of personality to sue on behalf of Pamana,[39] and did so only before the CA when they contended that it is Pamana and not Cordero, who was appointed and acted as exclusive distributor for AFFA.[40] It was Robinson who argued in support of his motion to dismiss that as far as said defendant is concerned, the real party plaintiff appears to be Pamana, against the real party defendant which is AFFA.[41] As already mentioned, the trial court denied the motion to dismiss filed by Robinson. We find no error committed by the trial court in overruling Robinsons objection over the improper resort to summons by publication upon a foreign national like him and in an action in personam, notwithstanding that he raised it in a special appearance specifically raising the issue of lack of jurisdiction over his person. Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint, while jurisdiction over the defendants in a civil case is acquired either through the service of summons upon them in the manner required by law or through their voluntary appearance in court and their submission to its authority. [42] A party who makes a special appearance in court challenging the jurisdiction of said court based on the ground of invalid service of summons is not deemed to have submitted himself to the jurisdiction of the court.[43] In this case, however, although the Motion to Dismiss filed by Robinson specifically stated as one (1) of the grounds the lack of personal jurisdiction, it must be noted that he had earlier filed a Motion for Time to file an appropriate responsive pleading even beyond the time provided in the summons by publication.[44] Such motion did not state that it was a conditional appearance entered to question the regularity of the service of summons, but an appearance submitting to the jurisdiction of the court by acknowledging the summons by publication issued by the court and praying for additional time to file a responsive pleading. Consequently, Robinson having acknowledged the summons by publication and also having invoked the jurisdiction of the trial court to secure affirmative relief in his motion for additional time, he effectively submitted voluntarily to the trial courts jurisdiction. He is now estopped from asserting otherwise, even before this Court.[45] II. Breach of Exclusive Distributorship, Contractual Interference and Respondents Liability for Damages In Yu v. Court of Appeals,[46] this Court ruled that the right to perform an exclusive distributorship agreement and to reap the profits resulting from such performance are proprietary rights which a party may protect. Thus, injunction is the appropriate remedy to prevent a wrongful interference with contracts by strangers to such contracts where the legal remedy is insufficient and the resulting injury is irreparable. In that case, the former dealer of the same goods purchased the CivPro | Nov 24 |

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merchandise from the manufacturer in Englandthrough a trading firm in West Germany and sold these in the Philippines. We held that the rights granted to the petitioner under the exclusive distributorship agreement may not be diminished nor rendered illusory by the expedient act of utilizing or interposing a person or firm to obtain goods for which the exclusive distributorship was conceptualized, at the expense of the sole authorized distributor.[47] In the case at bar, it was established that petitioner Cordero was not paid the balance of his commission by respondent Robinson. From the time petitioner Go and respondent Landicho directly dealt with respondent Robinson in Brisbane, and ceased communicating through petitioner Cordero as the exclusive distributor of AFFA in the Philippines, Cordero was no longer informed of payments remitted to AFFA in Brisbane. In other words, Cordero had clearly been cut off from the transaction until the arrival of the first SEACAT 25 which was sold through his efforts. When Cordero complained to Go, Robinson, Landicho and Tecson about their acts prejudicial to his rights and demanded that they respect his exclusive distributorship, Go simply let his lawyers led by Landicho and Tecson handle the matter and tried to settle it by promising to pay a certain amount and to purchase high-speed catamarans through Cordero. However, Cordero was not paid anything and worse, AFFA through its lawyer in Australia even terminated his exclusive dealership insisting that his services were engaged for only one (1) transaction, that is, the purchase of the first SEACAT 25 in August 1997. Petitioner Go argues that unlike in Yu v. Court of Appeals[48] there is no conclusive proof adduced by petitioner Cordero that they actually purchased a second SEACAT 25 directly from AFFA and hence there was no violation of the exclusive distributorship agreement. Further, he contends that the CA gravely abused its discretion in holding them solidarily liable to Cordero, relying on Articles 1207, 19 and 21 of the Civil Code despite absence of evidence, documentary or testimonial, showing that they conspired to defeat the very purpose of the exclusive distributorship agreement.[49] We find that contrary to the claims of petitioner Cordero, there was indeed no sufficient evidence that respondents actually purchased a second SEACAT 25 directly from AFFA. But this circumstance will not absolve respondents from liability for invading Corderos rights under the exclusive distributorship. Respondents clearly acted in bad faith in bypassing Cordero as they completed the remaining payments to AFFA without advising him and furnishing him with copies of the bank transmittals as they previously did, and directly dealt with AFFA through Robinson regarding arrangements for the arrival of the first SEACAT 25 in Manila and negotiations for the purchase of the second vessel pursuant to the Memorandum of Agreement which Cordero signed in behalf of AFFA. As a result of respondents actuations, Cordero incurred losses as he was not paid the balance of his commission from the sale of the first vessel and his exclusive distributorship revoked by AFFA. Petitioner Go contends that the trial and appellate courts erred in holding them solidarily liable for Corderos unpaid commission, which is the sole obligation of the principal AFFA. It was Robinson on behalf of AFFA who, in the letter dated August 5, 1997 addressed to Cordero, undertook to pay commission payments to Pamana on a staggered progress payment plan in the form of percentage of the commission per

payment. AFFA explicitly committed that it will, upon receipt of progress payments, pay to Pamana their full commission by telegraphic transfer to an account nominated by Pamana within one to two days of [AFFA] receiving such payments.[50] Petitioner Go further maintains that he had not in any way violated or caused the termination of the exclusive distributorship agreement between Cordero and AFFA; he had also paid in full the first and only vessel he purchased from AFFA.[51] While it is true that a third person cannot possibly be sued for breach of contract because only parties can breach contractual provisions, a contracting party may sue a third person not for breach but for inducing another to commit such breach. Article 1314 of the Civil Code provides: Art. 1314. Any third person who induces another to violate his contract shall be liable for damages to the other contracting party. The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of a contract; and (3) interference of the third person is without legal justification.[52] The presence of the first and second elements is not disputed. Through the letters issued by Robinson attesting that Cordero is the exclusive distributor of AFFA in thePhilippines, respondents were clearly aware of the contract between Cordero and AFFA represented by Robinson. In fact, evidence on record showed that respondents initially dealt with and recognized Cordero as such exclusive dealer of AFFA high-speed catamaran vessels in the Philippines. In that capacity as exclusive distributor, petitioner Go entered into the Memorandum of Agreement and Shipbuilding Contract No. 7825 with Cordero in behalf of AFFA. As to the third element, our ruling in the case of So Ping Bun v. Court of Appeals[53] is instructive, to wit: A duty which the law of torts is concerned with is respect for the property of others, and a cause of action ex delicto may be predicated upon an unlawful interference by one person of the enjoyment by the other of his private property. This may pertain to a situation where a third person induces a party to renege on or violate his undertaking under a contract. In the case before us, petitioners Trendsetter Marketing asked DCCSI to execute lease contracts in its favor, and as a result petitioner deprived respondent corporation of the latters property right. Clearly, and as correctly viewed by the appellate court, the three elements of tort interference abovementioned are present in the instant case. Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own financial or economic interest. One view is that, as a general rule, justification for interfering with the business relations of another exists where the actors motive is to benefit himself. Such justification does not exist where his sole motive is to cause harm to the other. Added to this, some authorities believe that it is not necessary that the interferers interest outweigh that of the party whose rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in selfprotection. Moreover, justification for protecting ones financial position should not be made to depend on a

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comparison of his economic interest in the subject matter with that of others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives. As early as Gilchrist vs. Cuddy, we held that where there was no malice in the interference of a contract, and the impulse behind ones conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler. In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at the expense of respondent corporation. Though petitioner took interest in the property of respondent corporation and benefited from it, nothing on record imputes deliberate wrongful motives or malice in him. x x x

one course of conduct by persuasion or intimidation. The records show that the decision of the heirs of the late Bai Tonina Sepi to sell the property was completely of their own volition and that petitioner did absolutely nothing to influence their judgment. Private respondent himself did not proffer any evidence to support his claim. In short, even assuming that private respondent was able to prove the renewal of his lease contract with Bai Tonina Sepi, the fact was that he was unable to prove malice or bad faith on the part of petitioner in purchasing the property. Therefore, the claim of tortuous interference was never established.[57] In their Answer, respondents denied having anything to do with the unpaid balance of the commission due to Cordero and the eventual termination of his exclusive distributorship by AFFA. They gave a different version of the events that transpired following the signing of Shipbuilding Contract No. 7825. According to them, several builder-competitors still entered the picture after the said contract for the purchase of one (1) SEACAT 25 was sent to Brisbane in July 1997 for authentication, adding that the contract was to be effective on August 7, 1997, the time when their funds was to become available. Go admitted he called the attention of AFFA if it can compete with the prices of other builders, and upon mutual agreement, AFFA agreed to give them a discounted price under the following terms and conditions: (1) that the contract price be lowered; (2) that Go will obtain another vessel; (3) that to secure compliance of such conditions, Go must make an advance payment for the building of the second vessel; and (4) that the payment scheme formerly agreed upon as stipulated in the first contract shall still be the basis and used as the guiding factor in remitting money for the building of the first vessel. This led to the signing of another contract superseding the first one (1), still to be dated 07 August 1997. Attached to the answer were photocopies of the second contract stating a lower purchase price (US$1,150,000.00) and facsimile transmission of AFFA to Go confirming the transaction.[58] As to the cessation of communication with Cordero, Go averred it was Cordero who was nowhere to be contacted at the time the shipbuilding progress did not turn good as promised, and it was always Landicho and Tecson who, after several attempts, were able to locate him only to obtain unsatisfactory reports such that it was Go who would still call up Robinson regarding any progress status report, lacking documents for MARINA, etc., and go to Australia for ocular inspection. Hence, in May 1998 on the scheduled launching of the ship in Australia, Go engaged the services of Landicho who went to Australia to see to it that all documents needed for the shipment of the vessel to the Philippines would be in order. It was also during this time that Robinsons request for inquiry on the Philippine price of a Wartsila engine for AFFAs then on-going vessel construction, was misinterpreted by Cordero as indicating that Go was buying a second vessel.
[59]

While we do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the expense of others, however, we find that the conduct herein complained of did not transcend the limits forbidding an obligatory award for damages in the absence of any malice. The business desire is there to make some gain to the detriment of the contracting parties. Lack of malice, however, precludes damages. But it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones. The respondent appellate court correctly confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing, without awarding damages. The injunction saved the respondents from further damage or injury caused by petitioners interference.[54] [EMPHASIS SUPPLIED.] Malice connotes ill will or spite, and speaks not in response to duty. It implies an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad motive.[55] In the case of Lagon v. Court of Appeals,[56] we held that to sustain a case for tortuous interference, the defendant must have acted with malice or must have been driven by purely impure reasons to injure the plaintiff; in other words, his act of interference cannot be justified. We further explained that the word induce refers to situations where a person causes another to choose one course of conduct by persuasion or intimidation. As to the allegation of private respondent in said case that petitioner induced the heirs of the late Bai Tonina Sepi to sell the property to petitioner despite an alleged renewal of the original lease contract with the deceased landowner, we ruled as follows: Assuming ex gratia argumenti that petitioner knew of the contract, such knowledge alone was not sufficient to make him liable for tortuous interference. x x x Furthermore, the records do not support the allegation of private respondent that petitioner induced the heirs of Bai Tonina Sepi to sell the property to him. The word induce refers to situations where a person causes another to choose

We find these allegations unconvincing and a mere afterthought as these were the very same averments contained in the Position Paper for the Importer dated October 9, 1998, which was submitted by Go on behalf of ACG Express Liner in connection with the complaint-affidavit filed by Cordero before the BOC-SGS Appeals Committee relative to the shipment valuation of the first SEACAT 25 purchased from

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AFFA.[60] It appears that the purported second contract superseding the original Shipbuilding Contract No. 7825 and stating a lower price of US$1,150,000.00 (not US$1,465,512.00) was only presented before the BOC to show that the vessel imported into the Philippines was not undervalued by almost US$500,000.00. Cordero vehemently denied there was such modification of the contract and accused respondents of resorting to falsified documents, including the facsimile transmission of AFFA supposedly confirming the said sale for only US$1,150,000.00. Incidentally, another document filed in said BOC case, the Counter-Affidavit/Position Paper for the Importer dated November 16, 1998,[61] states in paragraph 8 under the Antecedent facts thereof, that -8. As elsewhere stated, the total remittances made by herein Importer to AFFA does not alone represent the purchase price for Seacat 25. It includes advance payment for the acquisition of another vessel as part of the deal due to the discounted price.[62] which even gives credence to the claim of Cordero that respondents negotiated for the sale of the second vessel and that the nonpayment of the remaining two (2) instalments of his commission for the sale of the first SEACAT 25 was a result of Go and Landichos directly dealing with Robinson, obviously to obtain a lower price for the second vessel at the expense of Cordero. The act of Go, Landicho and Tecson in inducing Robinson and AFFA to enter into another contract directly with ACG Express Liner to obtain a lower price for the second vessel resulted in AFFAs breach of its contractual obligation to pay in full the commission due to Cordero and unceremonious termination of Corderos appointment as exclusive distributor. Following our pronouncement in Gilchrist v. Cuddy (supra), such act may not be deemed malicious if impelled by a proper business interest rather than in wrongful motives. The attendant circumstances, however, demonstrated that respondents transgressed the bounds of permissible financial interest to benefit themselves at the expense of Cordero. Respondents furtively went directly to Robinson after Cordero had worked hard to close the deal for them to purchase from AFFA two (2) SEACAT 25, closely monitored the progress of building the first vessel sold, attended to their concerns and spent no measly sum for the trip to Australia with Go, Landicho and Gos family members. But what is appalling is the fact that even as Go, Landicho and Tecson secretly negotiated with Robinson for the purchase of a second vessel, Landicho and Tecson continued to demand and receive from Cordero their commission or cut from Corderos earned commission from the sale of the first SEACAT 25. Cordero was practically excluded from the transaction when Go, Robinson, Tecson and Landicho suddenly ceased communicating with him, without giving him any explanation. While there was nothing objectionable in negotiating for a lower price in the second purchase of SEACAT 25, which is not prohibited by the Memorandum of Agreement, Go, Robinson, Tecson and Landicho clearly connived not only in ensuring that Cordero would have no participation in the contract for sale of the second SEACAT 25, but also that Cordero would not be paid the balance of his commission from the sale of the first SEACAT 25. This, despite their knowledge that it was commission already earned

by and due to Cordero. Thus, the trial and appellate courts correctly ruled that the actuations of Go, Robinson, Tecson and Landicho were without legal justification and intended solely to prejudice Cordero. The existence of malice, ill will or bad faith is a factual matter. As a rule, findings of fact of the trial court, when affirmed by the appellate court, are conclusive on this Court.[63] We see no compelling reason to reverse the findings of the RTC and the CA that respondents acted in bad faith and in utter disregard of the rights of Cordero under the exclusive distributorship agreement. The failure of Robinson, Go, Tecson and Landico to act with fairness, honesty and good faith in securing better terms for the purchase of high-speed catamarans from AFFA, to the prejudice of Cordero as the duly appointed exclusive distributor, is further proscribed by Article 19 of the Civil Code: Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. As we have expounded in another case: Elsewhere, we explained that when a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible. The object of this article, therefore, is to set certain standards which must be observed not only in the exercise of ones rights but also in the performance of ones duties. These standards are the following: act with justice, give everyone his due and observe honesty and good faith. Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are the following: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the Civil Code. Article 20 pertains to damages arising from a violation of law x x x. Article 21, on the other hand, states: Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. Article 21 refers to acts contra bonus mores and has the following elements: (1) There is an act which is legal; (2) but which is contrary to morals, good custom, public order, or public policy; and (3) it is done with intent to injure. A common theme runs through Articles 19 and 21, and that is, the act complained of must be intentional.[64] Petitioner Gos argument that he, Landicho and Tecson cannot be held liable solidarily with Robinson for actual, moral and exemplary damages, as well as attorneys fees awarded to Cordero since no law or contract provided for solidary obligation in these cases, is equally bereft of merit. Conformably with Article 2194 of the Civil Code, the responsibility of two or more persons who are liable for the quasi-delict is solidary. [65] In Lafarge Cement Philippines, Inc. v. Continental Cement Corporation,[66] we held: [O]bligations arising from tort are, by their nature, always solidary. We have assiduously maintained this legal principle as early as 1912 in Worcester v. Ocampo, in which we held:

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x x x The difficulty in the contention of the appellants is that they fail to recognize that the basis of the present action is tort. They fail to recognize the universal doctrine that each joint tort feasor is not only individually liable for the tort in which he participates, but is also jointly liable with his tort feasors. x x x It may be stated as a general rule that joint tort feasors are all the persons who command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done for their benefit. They are each liable as principals, to the same extent and in the same manner as if they had performed the wrongful act themselves. x x x Joint tort feasors are jointly and severally liable for the tort which they commit. The persons injured may sue all of them or any number less than all. Each is liable for the whole damages caused by all, and all together are jointly liable for the whole damage. It is no defense for one sued alone, that the others who participated in the wrongful act are not joined with him as defendants; nor is it any excuse for him that his participation in the tort was insignificant as compared to that of the others. x x x Joint tort feasors are not liable pro rata. The damages can not be apportioned among them, except among themselves. They cannot insist upon an apportionment, for the purpose of each paying an aliquot part. They are jointly and severally liable for the whole amount. x x x A payment in full for the damage done, by one of the joint tort feasors, of course satisfies any claim which might exist against the others. There can be but satisfaction. The release of one of the joint tort feasors by agreement generally operates to discharge all. x x x Of course, the court during trial may find that some of the alleged tort feasors are liable and that others are not liable. The courts may release some for lack of evidence while condemning others of the alleged tort feasors. And this is true even though they are charged jointly and severally. [67] [EMPHASIS SUPPLIED.] The rule is that the defendant found guilty of interference with contractual relations cannot be held liable for more than the amount for which the party who was inducted to break the contract can be held liable.[68] Respondents Go, Landicho and Tecson were therefore correctly held liable for the balance of petitioner Corderos commission from the sale of the first SEACAT 25, in the amount of US$31,522.09 or its peso equivalent, which AFFA/Robinson did not pay in violation of the exclusive distributorship agreement, with interest at the rate of 6% per annum from June 24, 1998 until the same is fully paid. Respondents having acted in bad faith, moral damages may be recovered under Article 2219 of the Civil Code.[69] On the other hand, the requirements of an award of exemplary damages are: (1) they may be imposed by way of example in addition to compensatory damages, and only after the claimants right to them has been established; (2) that they

cannot be recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be awarded to the claimant; and (3) the act must be accompanied by bad faith or done in a wanton, fraudulent, oppressive or malevolent manner.[70] The award of exemplary damages is thus in order. However, we find the sums awarded by the trial court as moral and exemplary damages as reduced by the CA, still excessive under the circumstances. Moral damages are meant to compensate and alleviate the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injuries unjustly caused. Although incapable of pecuniary estimation, the amount must somehow be proportional to and in approximation of the suffering inflicted. Moral damages are not punitive in nature and were never intended to enrich the claimant at the expense of the defendant. There is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral damages, since each case must be governed by its own peculiar facts. Trial courts are given discretion in determining the amount, with the limitation that it should not be palpably and scandalously excessive. Indeed, it must be commensurate to the loss or injury suffered.[71] We believe that the amounts of P300,000.00 and P200,000.00 as moral and exemplary damages, respectively, would be sufficient and reasonable. Because exemplary damages are awarded, attorneys fees may also be awarded in consonance with Article 2208 (1).[72] We affirm the appellate courts award of attorneys fees in the amount ofP50,000.00. WHEREFORE, the petitions are DENIED. The Decision dated March 16, 2004 as modified by the Resolution dated July 22, 2004 of the Court of Appeals in CA-G.R. CV No. 69113 are hereby AFFIRMED with MODIFICATION in that the awards of moral and exemplary damages are hereby reduced to P300,000.00 and P200,000.00, respectively. With costs against the petitioner in G.R. No. 164703. SO ORDERED. Golango vs. Jone B. Fung, Nature: We have before us a petition for review on certiorari Facts: o After almost 6 years, the Prosecution had presented only two witnesses in Criminal Case No. 95-145703. On February 16, 2001, the Prosecution requested that a subpoena ad testificandum be issued to and served on Atty. Oscar Ramos, Prosecution still failed to present Atty. Ramos. o The petitioner then assailed on certiorari in the Court of Appeals; claiming that the RTC judge thereby committed grave abuse of discretion for not issuing the subpoena to require Atty. Ramos to appear and testify. He contended that his prior request for the subpoena for the February 20, 2001 hearing should have been treated as a continuing request for the subpoena considering that the Rules of Court did not require a party to apply for a subpoena again should it not be served in the first time. o Court of Appeals rebuffed the petitioner and dismissed the petition for certiorari holding that even then, granting that the subpoena issued for February

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20, 2001 hearing was properly served but which hearing was later on postponed, there is still a need to ask for a new subpoena to the same witness for the next scheduled hearing. The court cannot be tasked to guess whether or not petitioner still intends to present the witness at the next hearing. An intention to still present the witness necessarily requires another request for a subpoena. Hence, this appeal. The issue is whether the Court of Appeals correctly ruled on the petition for certiorari of the petitioner. Held: Before the court continues with the petition for review, it pointed out the gross procedural misstep committed by the petitioner in the Court of Appeals. o The petitioner did not join the People of the Philippines as a party in his action for certiorari in the Court of Appeals. He thereby ignored that the People of the Philippines were indispensable parties due to his objective being to set aside the trial courts order dated May 23, 2001 that concerned the public aspect of Criminal Case No. 95-145703. The omission was fatal and already enough cause for the summary rejection of his petition for certiorari. o The petitioner did not also obtain the consent of the Office of the Solicitor General (OSG) to his petition for certiorari. At the very least, he should have furnished a copy of the petition for certiorari to the OSG prior to the filing thereof,[8] but even that he did not do. The trial courts assailed order terminating the Prosecutions presentation of evidence was merely interlocutory. This fact surely adds justification to the Court of Appeals rejection of the petition for certiorari, because it is the settled rule that certiorari does not lie to review an interlocutory order, but only a final judgment or order that terminates the proceedings. Certiorari will be refused where there has been no final judgment or order and the proceeding for which the writ is sought is still pending and undetermined in the lower court. Equitable PCI Bank, Inc (now known as Banco De OroEPCI, Inc.) vs. Heirs of Antonio C. Tiu, et al., G.R. No. 178529, September 4, 2009. -SUZETTE Petitioner: EQUITABLE PCI BANK Respondents: HEIRS OF ANTONIO TIU Nature of the case: Petition for review on certiorari before the SC Facts: Antonio Tiu executed a Real Estate Mortgage (REM) in favor of PCIB to secure a the loan of Gabriel Ching amounting to 7M. The REM was with the marital consent of Antonios wife, Matilde. Antonio then executed an amendment to the REM (AREM) which increased the amount to 26M, it also bears the signature of his wife above the With my Marital Consent After Antonio died, the obligation remained unsettled. PCI Bank filed a petition for sale for the

extrajudicial foreclosure of the AREM before the RTC of Tacloban. Auction sale was then scheduled A day before the auction, the heirs of Antonio Tiu filed a Complaint/Petition before the RTC Tacloban for the annulment of the AREM and injunction with prayer for writ of preliminary injunction and TRO. The Heirs of Antonio said that the AREM was without force and effect since at the time of the execution of the instrument, Matilde was suffering from advance alzheimers disease and thus incapable of giving her consent to it. RTC issued a TRO and a writ of preliminary injunction Equitable then filed a Motion to Dismiss on the ground that the complaint states no cause of action, since the plaintiffs were not the real parties-ininterests. RTC denied the Motion to Dismiss and the MR filed by Equitable. They filed petition for certiorari, prohibition and mandamus before the CA but was also denied. Equitable then filed a petition for review on certiorari before the SC

Issue: WON the complaint filed without impleading the principal should be dismissed for lack of cause of action. Held: Petition GRANTED. The decision of the CA was REVERSED AND SET ASIDE. And the complaint before the RTC was DISMISSED. Rationale: The court said that since the subject property is presumed conjugal, Matilde is obliged principally under the AREM, hence according to Art 1397 of the Civil Code and Sec 2 Rule 3 of the Rules of Court, she is the real party in interest and the action must be prosecuted in her name as she stands to be benefited or injured in the action. The court also said that it should be the legal guardian of Matilde who should file the action on her behalf assuming she is incapacitated. And since there is no allegation in the complaint that respondents were designated legal guardian to file action on her behalf, the name Matilde, who is deemed the real party in interest, should be included in the title of the case, as provided for in Sec3 of the Rules of Court.

Sec2 Rule 3 of the Rules of Court

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Article 1397 of the Civil Code The action for annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily. However, persons who are capable cannot alleged the incapacity of those with whom they contracted; nor can those who exerted intimidation, violence or undue influence, or employed fraud, or caused mistake base their action upon these flaws of the contract.

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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. Sec3 Rule 3 Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be real party in interest. A representative may be a trustee of an express trust, a guardian, an executor or administrator, or a party authorized by law or these Rules. An agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal.

Section 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. (2a) EN BANC

Pascual vs. Pascual, G.R. No. 157830, Nov 17, 2005 ERWIN Petition for Review on Certiorari from the RTC of Isabela at Roxas based on Rule 45; a question of law Facts Petitioner Dante, a resident of the Unitd States, filed a case for the cancellation of a TCT and Deed of Absolute Sale in favor of his sister Marilou, herein respondent over a parcel of land with the Register of Deeds. Marilou filed a Motion to Dismiss on the grounds that Dante, through Sagario failed to avail of lupon mediation mandated by RA 7160 repealed by PD 1508. The law states that when real parties-in-interest live in one barangay, questions regarding real property ownership must first avail of barangay mediation before trial in the court of proper jurisdiction. Sagario and Marilou live in the same barangay. Private respondents believe that Sagario, being the counsel of her brother became his legal representative and the real party-ininterest. Dante interposed stating that he is a resident of the United States and the real party-in-interest, Sagario is merely his attorney-in-fact representing his interest over the proceedings. The RTC sustained Marilous motion; Dante elevated the case to the SC. Issue Held No, he is only the attorney-in-fact of Petitioner Dante. Applying the concept of a real party-in-interest to the attorneyin-fact would be in direct conflict with the definition of such in the Rules of Court. It is clear that Dante is the real party-ininterest being represented by his counsel, Sagario. Holding Sagario otherwise would be detrimental to the intention of the law. Rule 2. Section 3. Revised Rules of Court. W/N Atty. Sagario is the real party-in-interest.

SOUTHERN HEMISPHERE G.R. No. 178552 ENGAGEMENT NETWORK, INC., on behalf of the South-South Network (SSN) for Non-State Armed Group Engagement, Present: and ATTY. SOLIMAN M. SANTOS, JR., CORONA, C.J., Petitioners, CARPIO, CARPIO MORALES, VELASCO, JR., - versus NACHURA, LEONARDO-DE CASTR BRION, ANTI-TERRORISM COUNCIL, THE PERALTA, EXECUTIVE SECRETARY, THE BERSAMIN, SECRETARY OF JUSTICE, THE DEL CASTILLO, SECRETARY OF FOREIGN AFFAIRS, ABAD, THE SECRETARY OF NATIONAL VILLARAMA, JR., DEFENSE, THE SECRETARY OF THE PEREZ, INTERIOR AND LOCAL MENDOZA, and GOVERNMENT, THE SECRETARY OF SERENO, JJ. FINANCE, THE NATIONAL SECURITY ADVISER, THE CHIEF OF STAFF OF THE ARMED FORCES OF THE PHILIPPINES, AND THE CHIEF OF THE PHILIPPINE NATIONAL POLICE, Respondents. x ------------------------------- x KILUSANG MAYO UNO (KMU), represented by its Chairperson Elmer Promulgated: Labog, NATIONAL FEDERATION OF LABOR UNIONS-KILUSANG MAYO October 5, 2010 UNO (NAFLU-KMU), represented by its National President Joselito V. Ustarez and Secretary General Antonio C. Pascual, G.R. No. 178554 and CENTER FOR TRADE UNION AND HUMAN RIGHTS, represented by its Executive Director Daisy Arago, Petitioners, - versus HON. EDUARDO ERMITA, in his capacity as Executive Secretary, NORBERTO GONZALES, in his capacity as Acting Secretary of National Defense, HON. RAUL GONZALES, in his capacity as Secretary of Justice, HON. RONALDO PUNO, in his capacity as Secretary of the

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Interior and Local Government, GEN. HERMOGENES ESPERON, in his capacity as AFP Chief of Staff, and DIRECTOR GENERAL OSCAR CALDERON, in his capacity as PNP Chief of Staff, Respondents. x ------------------------------------ x BAGONG ALYANSANG MAKABAYAN (BAYAN), GENERAL ALLIANCE BINDING WOMEN FOR REFORMS, INTEGRITY, EQUALITY, LEADERSHIP AND ACTION (GABRIELA), KILUSANG MAGBUBUKID NG PILIPINAS (KMP), MOVEMENT OF CONCERNED CITIZENS FOR CIVIL LIBERTIES (MCCCL), CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT EMPLOYEES (COURAGE), KALIPUNAN NG DAMAYANG MAHIHIRAP (KADAMAY), SOLIDARITY OF CAVITE WORKERS, LEAGUE OF FILIPINO STUDENTS G.R. No. 178581 (LFS), ANAKBAYAN, PAMBANSANG LAKAS NG KILUSANG MAMAMALAKAYA (PAMALAKAYA), ALLIANCE OF CONCERNED TEACHERS (ACT), MIGRANTE, HEALTH ALLIANCE FOR DEMOCRACY (HEAD), AGHAM, TEOFISTO GUINGONA, JR., DR. BIENVENIDO LUMBERA, RENATO CONSTANTINO, JR., SISTER MARY JOHN MANANSAN OSB, DEAN CONSUELO PAZ, ATTY. JOSEFINA LICHAUCO, COL. GERRY CUNANAN (ret.), CARLITOS SIGUION-REYNA, DR. CAROLINA PAGADUANARAULLO, RENATO REYES, DANILO RAMOS, EMERENCIANA DE LESUS, RITA BAUA, REY CLARO CASAMBRE, Petitioners, - versus -

NATIONAL DEFENSE ACTING SECRETARY NORBERTO GONZALES, DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT SECRETARY RONALDO PUNO. DEPARTMENT OF FINANCE SECRETARY MARGARITO TEVES, NATIONAL SECURITY ADVISER NORBERTO GONZALES, THE NATIONAL INTELLIGENCE COORDINATING AGENCY (NICA), THE NATIONAL BUREAU OF INVESTIGATION (NBI), THE BUREAU OF IMMIGRATION, THE OFFICE OF CIVIL DEFENSE, THE INTELLIGENCE SERVICE OF THE ARMED FORCES OF THE PHILIPPINES (ISAFP), THE ANTIMONEY LAUNDERING COUNCIL (AMLC), THE PHILIPPINE CENTER ON TRANSNATIONAL CRIME, THE CHIEF OF THE PHILIPPINE NATIONAL POLICE GEN. OSCAR CALDERON, THE PNP, including its intelligence and investigative elements, AFP CHIEF GEN. HERMOGENES ESPERON, Respondents. x ------------------------------------ x KARAPATAN, ALLIANCE FOR THE ADVANCEMENT OF PEOPLES RIGHTS, represented herein by Dr. Edelina de la Paz, and representing the following organizations: HUSTISYA, represented by Evangeline Hernandez and also on her own behalf; DESAPARECIDOS, represented by Mary Guy Portajada and also on her own behalf, SAMAHAN NG MGA EXDETAINEES LABAN SA DETENSYON AT PARA SA AMNESTIYA (SELDA), represented by Donato Continente and also on his own behalf, ECUMENICAL MOVEMENT FOR JUSTICE AND PEACE (EMJP), represented by Bishop Elmer M. Bolocon, UCCP, and PROMOTION OF CHURCH PEOPLES RESPONSE, represented by Fr. Gilbert Sabado, OCARM, Petitioners, - versus -

GLORIA MACAPAGAL-ARROYO, in her capacity as President and Commander-in-Chief, EXECUTIVE SECRETARY EDUARDO ERMITA, DEPARTMENT OF JUSTICE SECRETARY RAUL GONZALES, DEPARTMENT OF FOREIGN AFFAIRS SECRETARY ALBERTO ROMULO, DEPARTMENT OF

GLORIA MACAPAGAL-ARROYO, in her capacity as President and Commander-in-Chief, EXECUTIVE SECRETARTY EDUARDO ERMITA, DEPARTMENT OF JUSTICE SECRETARY RAUL GONZALEZ, DEPARTMENT OF FOREIGN

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AFFAIRS SECRETARY ALBERTO ROMULO, DEPARTMENT OF NATIONAL DEFENSE ACTING SECRETARY NORBERTO GONZALES, DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT SECRETARY RONALDO PUNO, DEPARTMENT OF FINANCE SECRETARY MARGARITO TEVES, NATIONAL SECURITY ADVISER NORBERTO GONZALES, THE NATIONAL INTELLIGENCE G.R. No. 178890 COORDINATING AGENCY (NICA), THE NATIONAL BUREAU OF INVESTIGATION (NBI), THE BUREAU OF IMMIGRATION, THE OFFICE OF CIVIL DEFENSE, THE INTELLIGENCE SERVICE OF THE ARMED FORCES OF THE PHILIPPINES (ISAFP), THE ANTIMONEY LAUNDERING COUNCIL (AMLC), THE PHILIPPINE CENTER ON TRANSNATIONAL CRIME, THE CHIEF OF THE PHILIPPINE NATIONAL POLICE GEN. OSCAR CALDERON, THE PNP, including its intelligence and investigative elements, AFP CHIEF GEN. HERMOGENES ESPERON, Respondents. x------------------------------------ x THE INTEGRATED BAR OF THE PHILIPPINES (IBP), represented by Atty. Feliciano M. Bautista, COUNSELS FOR THE DEFENSE OF LIBERTY(CODAL), SEN. MA. ANA CONSUELO A.S. MADRIGAL and FORMER SENATORS SERGIO OSMEA III and WIGBERTO E. TAADA, Petitioners, - versus EXECUTIVE SECRETARY EDUARDO ERMITA AND THE MEMBERS OF THE ANTI-TERRORISM COUNCIL (ATC), Respondents. x------------------------------------- x BAGONG ALYANSANG MAKABAYAN-SOUTHERN TAGALOG (BAYAN-ST), GABRIELA-ST, KATIPUNAN NG MGA SAMAHYANG MAGSASAKA-TIMOG KATAGALUGAN (KASAMA-TK),

MOVEMENT OF CONCERNED CITIZENS FOR CIVIL LIBERTIES (MCCCL), PEOPLES MARTYRS, ANAKBAYAN-ST, PAMALAKAYA-ST, CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT EMPLOYEES (COURAGE-ST), PAGKAKAISAT UGNAYAN NG MGA MAGBUBUKID SA LAGUNA (PUMALAG), SAMAHAN NG MGA MAMAMAYAN SA TABING RILES (SMTR-ST), LEAGUE OF FILIPINO STUDENTS (LFS), BAYAN MUNA-ST, KONGRESO NG MGA MAGBUBUKID PARA SA REPORMANG AGRARYO KOMPRA, BIGKIS AT LAKAS NG MGA KATUTUBO SA TIMOG KATAGALUGAN (BALATIK), SAMAHAN AT UGNAYAN NG MGA MAGSASAKANG KABABAIHAN SA TIMOG KATAGALUGAN (SUMAMAKA-TK), STARTER, LOSOS RURAL POOR ORGANIZATION FOR PROGRESS & EQUALITY, CHRISTIAN NIO LAJARA, TEODORO REYES, FRANCESCA B. TOLENTINO, JANNETTE E. BARRIENTOS, OSCAR T. LAPIDA, JR., DELFIN DE CLARO, SALLY P. ASTRERA, ARNEL SEGUNE BELTRAN, Petitioners, - versus G.R. No. 179157 GLORIA MACAPAGAL-ARROYO, in her capacity as President and Commander-in-Chief, EXECUTIVE SECRETARY EDUARDO ERMITA, DEPARTMENT OF JUSTICE SECRETARY RAUL GONZALEZ, DEPARTMENT OF FOREIGN AFFAIRS SECRETARY ALBERTO ROMULO, DEPARTMENT OF NATIONAL DEFENSE ACTING SECRETARY NORBERTO GONZALES, DEPARTMENT OF INTERIOR AND LOCAL GOVERNMEN T SECRETARY RONALDO PUNO, DEPARTMENT OF FINCANCE SECRETARY MARGARITO TEVES, NATIONAL SECURITY ADVISER NORBERTO GONZALES, THE NATIONAL INTELLIGENCE COORDINATING AGENCY (NICA), THE NATIONAL BUREAU OF INVESTIGATION (NBI), THE BUREAU OF IMMIGRATION, THE OFFICE OF CIVIL DEFENSE,

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THE INTELLIGENCE SERVICE OF THE ARMED FORCES OF THE PHILIPPINES (ISAFP), THE ANTIMONEY LAUNDERING COUNCIL (AMLC), THE PHILIPPINE CENTER ON TRANSNATIONAL CRIME, THE CHIEF OF THE PHILIPPINE NATIONAL POLICE GEN. OSCAR CALDERON, THE PNP, including its intelligence and investigative elements, AFP CHIEF GEN. HERMOGENES ESPERON, Respondents.

G.R. No. 179461

x-------------------------------------------------------------------------x DECISION CARPIO MORALES, J.: Before the Court are six petitions challenging the constitutionality of Republic Act No. 9372 (RA 9372), An Act to Secure the State and Protect our People from Terrorism, otherwise known as the Human Security Act of 2007,[1] signed into law on March 6, 2007. Following the effectivity of RA 9372 on July 15, 2007, petitioner Southern Hemisphere Engagement Network, Inc., a non-government organization, and Atty. Soliman Santos, Jr., a concerned citizen, taxpayer and lawyer, filed a petition for certiorari and prohibition on July 16, 2007 docketed as G.R. No. 178552. On even date, petitioners Kilusang Mayo Uno (KMU), National Federation of Labor Unions-Kilusang Mayo Uno (NAFLU-KMU), and Center for Trade Union and Human Rights (CTUHR), represented by their respective officers[3] who are also bringing the action in their capacity as citizens, filed a petition for certiorari and prohibition docketed as G.R. No. 178554.
[2]

The following day, July 17, 2007, organizations Bagong Alyansang Makabayan (BAYAN), General Alliance Binding Women for Reforms, Integrity, Equality, Leadership and Action (GABRIELA), Kilusang Magbubukid ng Pilipinas (KMP), Movement of Concerned Citizens for Civil Liberties (MCCCL), Confederation for Unity, Recognition and Advancement of Government Employees (COURAGE), Kalipunan ng Damayang Mahihirap (KADAMAY), Solidarity of Cavite Workers (SCW), League of Filipino Students (LFS), Anakbayan, Pambansang Lakas ng Kilusang Mamamalakaya (PAMALAKAYA), Alliance of Concerned Teachers (ACT), Migrante, Health Alliance for Democracy (HEAD), and Agham, represented by their respective officers,[4] and joined by concerned citizens and taxpayers Teofisto Guingona, Jr.,

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Dr. Bienvenido Lumbera, Renato Constantino, Jr., Sister Mary John Manansan, OSB, Dean Consuelo Paz, Atty. Josefina Lichauco, Retired Col. Gerry Cunanan, Carlitos SiguionReyna, Dr. Carolina Pagaduan-Araullo, Renato Reyes, Danilo Ramos, Emerenciana de Jesus, Rita Baua and Rey Claro Casambre filed a petition for certiorari and prohibition docketed as G.R. No. 178581. On August 6, 2007, Karapatan and its alliance member organizations Hustisya, Desaparecidos, Samahan ng mga ExDetainees Laban sa Detensyon at para sa Amnestiya (SELDA), Ecumenical Movement for Justice and Peace (EMJP), and Promotion of Church Peoples Response (PCPR), which were represented by their respective officers[5] who are also bringing action on their own behalf, filed a petition for certiorari and prohibition docketed as G.R. No. 178890. On August 29, 2007, the Integrated Bar of the Philippines (IBP), Counsels for the Defense of Liberty (CODAL),[6] Senator Ma. Ana Consuelo A.S. Madrigal, Sergio Osmea III, and Wigberto E. Taada filed a petition for certiorari and prohibition docketed as G.R. No. 179157. Bagong Alyansang Makabayan-Southern Tagalog (BAYAN-ST), other regional chapters and organizations mostly based in the Southern Tagalog Region,[7] and individuals[8] followed suit by filing on September 19, 2007 a petition for certiorari and prohibition docketed as G.R. No. 179461 that replicates the allegations raised in the BAYAN petition in G.R. No. 178581. Impleaded as respondents in the various petitions are the Anti-Terrorism Council[9] composed of, at the time of the filing of the petitions, Executive Secretary Eduardo Ermita as Chairperson, Justice Secretary Raul Gonzales as Vice Chairperson, and Foreign Affairs Secretary Alberto Romulo, Acting Defense Secretary and National Security Adviser Norberto Gonzales, Interior and Local Government Secretary Ronaldo Puno, and Finance Secretary Margarito Teves as members. All the petitions, except that of the IBP, also impleaded Armed Forces of the Philippines (AFP) Chief of Staff Gen. Hermogenes Esperon and Philippine National Police (PNP) Chief Gen. Oscar Calderon. The Karapatan, BAYAN and BAYAN-ST petitions likewise impleaded President Gloria Macapagal-Arroyo and the support agencies for the Anti-Terrorism Council like the National Intelligence Coordinating Agency, National Bureau of Investigation, Bureau of Immigration, Office of Civil Defense, Intelligence Service of the AFP, AntiMoneyLaundering Center, Philippine Center on Transnational Crime, and the PNP intelligence and investigative elements. The petitions fail. Petitioners resort to certiorari is improper Preliminarily, certiorari does not lie against respondents who do not exercise judicial or quasi-judicial

functions. Section 1, Rule 65 of the Rules of Court is clear: Section 1. Petition for certiorari.When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. (Emphasis and underscoring supplied) Parenthetically, petitioners do not even allege with any modicum of particularity how respondents acted without or in excess of their respective jurisdictions, or with grave abuse of discretion amounting to lack or excess of jurisdiction. The impropriety of certiorari as a remedy aside, the petitions fail just the same. In constitutional litigations, the power of judicial review is limited by four exacting requisites, viz: (a) there must be an actual case or controversy; (b) petitioners must possesslocus standi; (c) the question of constitutionality must be raised at the earliest opportunity; and (d) the issue of constitutionality must be the lis mota of the case.[10] In the present case, the dismal absence of the first two requisites, which are the most essential, renders the discussion of the last two superfluous. Petitioners lack locus standi Locus standi or legal standing requires 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.[11] Anak Mindanao Party-List Group v. The Executive Secretary[12] summarized the rule on locus standi, thus: Locus standi or legal standing has been defined as a personal and substantial interest in a case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged. The gist of the question on standing is whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions. [A] party who assails the constitutionality of a statute must have a direct and personal interest. It must show not only that the law or any governmental act is invalid, but also that it sustained or is in immediate danger of sustaining some direct injury as a result of its enforcement, and not merely that it suffers thereby in some indefinite way. It must

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show that it has been or is about to be denied some right or privilege to which it is lawfully entitled or that it is about to be subjected to some burdens or penalties by reason of the statute or act complained of. For a concerned party to be allowed to raise a constitutional question, it must show that (1) it has personally suffered some actual or threatened injury as a result 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. (emphasis and underscoring supplied.) Petitioner-organizations assert locus standi on the basis of being suspected communist fronts by the government, especially the military; whereas individual petitioners invariably invoke the transcendental importance doctrine and their status as citizens and taxpayers. While Chavez v. PCGG[13] holds that transcendental public importance dispenses with the requirement that petitioner has experienced or is in actual danger of suffering direct and personal injury, cases involving the constitutionality of penal legislation belong to an altogether different genus of constitutional litigation. Compelling State and societal interests in the proscription of harmful conduct, as will later be elucidated, necessitate a closer judicial scrutiny of locus standi. Petitioners have not presented any personal stake in the outcome of the controversy. None of them faces any charge under RA 9372. KARAPATAN, Hustisya, Desaparecidos, SELDA, EMJP and PCR, petitioners in G.R. No. 178890, allege that they have been subjected to close security surveillance by state security forces, their members followed by suspicious persons and vehicles with dark windshields, and their offices monitored by men with military build. They likewise claim that they have been branded as enemies of the [S]tate.[14] Even conceding such gratuitous allegations, the Office of the Solicitor General (OSG) correctly points out that petitioners have yet to show any connection between the purported surveillance and the implementation of RA 9372. BAYAN, GABRIELA, KMP, MCCCL, COURAGE, KADAMAY, SCW, LFS, Anakbayan, PAMALAKAYA, ACT, Migrante, HEAD and Agham, petitioner-organizations in G.R. No. 178581, would like the Court to take judicial notice of respondents alleged action of tagging them as militant organizations fronting for the Communist Party of the Philippines (CPP) and its armed wing, the National Peoples Army (NPA). The tagging, according to petitioners, is tantamount to the effects of proscription without following the procedure under the law.[15] The petition of BAYAN-ST, et al. in G.R. No. 179461 pleads the same allegations. The Court cannot take judicial notice of the alleged tagging of petitioners.

Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one of common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or uncertain; and (3) it must be known to be within the limits of the jurisdiction of the court. The principal guide in determining what facts may be assumed to be judicially known is that of notoriety. Hence, it can be said that judicial notice is limited to facts evidenced by public records and facts of general notoriety. Moreover, a judicially noticed fact must be one not subject to a reasonable dispute in that it is either: (1) generally known within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination by resorting to sources whose accuracy cannot reasonably be questionable. Things of common knowledge, of which courts take judicial matters coming to the knowledge of men generally in the course of the ordinary experiences of life, or they may be matters which are generally accepted by mankind as true and are capable of ready and unquestioned demonstration. Thus, facts which are universally known, and which may be found in encyclopedias, dictionaries or other publications, are judicially noticed, provided, they are of such universal notoriety and so generally understood that they may be regarded as forming part of the common knowledge of every person. As the common knowledge of man ranges far and wide, a wide variety of particular facts have been judicially noticed as being matters of common knowledge. But a court cannot take judicial notice of any fact which, in part, is dependent on the existence or non-existence of a fact of which the court has no constructive knowledge.[16] (emphasis and underscoring supplied.) No ground was properly established by petitioners for the taking of judicial notice. Petitioners apprehension is insufficient to substantiate their plea. That no specific charge or proscription under RA 9372 has been filed against them, three years after its effectivity, belies any claim of imminence of their perceived threat emanating from the socalled tagging. The same is true with petitioners KMU, NAFLU and CTUHR in G.R. No. 178554, who merely harp as well on their supposed link to the CPP and NPA. They fail to particularize how the implementation of specific provisions of RA 9372 would result in direct injury to their organization and members. While in our jurisdiction there is still no judicially declared terrorist organization, the United States of America[17] (US) and the European Union[18] (EU) have both classified the CPP, NPA and Abu Sayyaf Group as foreign terrorist organizations. The Court takes note of the joint statement of Executive Secretary Eduardo Ermita and Justice Secretary Raul Gonzales that the Arroyo Administration would adopt the US and EU classification of the CPP and NPA as terrorist organizations.[19] Such statement notwithstanding, there is yet to be filed before the courts an application to declare the CPP and NPA organizations as

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domestic terrorist or outlawed organizations under RA 9372. Again,RA 9372 has been in effect for three years now. From July 2007 up to the present, petitionerorganizations have conducted their activities fully and freely without any threat of, much less an actual, prosecution or proscription under RA 9372. Parenthetically, the Fourteenth Congress, in a resolution initiated by Party-list Representatives Saturnino Ocampo, Teodoro Casio, Rafael Mariano and Luzviminda Ilagan, [20] urged the government to resume peace negotiations with the NDF by removing the impediments thereto, one of which is the adoption of designation of the CPP and NPA by the US and EU as foreign terrorist organizations. Considering the policy statement of the Aquino Administration[21] of resuming peace talks with the NDF, the government is not imminently disposed to ask for the judicial proscription of the CPP-NPA consortium and its allied organizations. More important, there are other parties not before the Court with direct and specific interests in the questions being raised.[22] Of recent development is the filing of thefirst case for proscription under Section 17[23] of RA 9372 by the Department of Justice before the Basilan Regional Trial Court against the Abu Sayyaf Group.[24] Petitionerorganizations do not in the least allege any link to the Abu Sayyaf Group. Some petitioners attempt, in vain though, to show the imminence of a prosecution under RA 9372 by alluding to past rebellion charges against them. In Ladlad v. Velasco,[25] the Court ordered the dismissal of rebellion charges filed in 2006 against then Party-List Representatives Crispin Beltran and Rafael Mariano of Anakpawis, Liza Maza of GABRIELA, and Joel Virador, Teodoro Casio and Saturnino Ocampo of Bayan Muna. Also named in the dismissed rebellion charges were petitioners Rey Claro Casambre, Carolina Pagaduan-Araullo, Renato Reyes, Rita Baua, Emerencia de Jesus and Danilo Ramos; and accused of being front organizations for the Communist movement were petitioner-organizations KMU, BAYAN, GABRIELA, PAMALAKAYA, KMP, KADAMAY, LFS and COURAGE.[26] The dismissed rebellion charges, however, do not save the day for petitioners. For one, those charges were filed in 2006, prior to the enactment of RA 9372, and dismissed by this Court. For another, rebellion is defined and punished under the Revised Penal Code. Prosecution for rebellion is not made more imminent by the enactment of RA 9372, nor does the enactment thereof make it easier to charge a person with rebellion, its elements not having been altered. Conversely, previously filed but dismissed rebellion charges bear no relation to prospective charges under RA 9372. It cannot be overemphasized that three years after the enactment of RA 9372, none of petitioners has been charged. Petitioners IBP and CODAL in G.R. No. 179157 base their claim of locus standi on their sworn duty to uphold the Constitution. The IBP zeroes in on Section 21 of RA 9372

directing it to render assistance to those arrested or detained under the law. The mere invocation of the duty to preserve the rule of law does not, however, suffice to clothe the IBP or any of its members with standing.[27] The IBP failed to sufficiently demonstrate how its mandate under the assailed statute revolts against its constitutional rights and duties. Moreover, both the IBP and CODAL have not pointed to even a single arrest or detention effected under RA 9372. Former Senator Ma. Ana Consuelo Madrigal, who claims to have been the subject of political surveillance, also lacks locus standi. Prescinding from the veracity, let alone legal basis, of the claim of political surveillance, the Court finds that she has not shown even the slightest threat of being charged under RA 9372. Similarly lacking in locus standi are former Senator Wigberto Taada and Senator Sergio Osmea III, who cite their being respectively a human rights advocate and an oppositor to the passage of RA 9372. Outside these gratuitous statements, no concrete injury to them has been pinpointed. Petitioners Southern Hemisphere Engagement Network and Atty. Soliman Santos Jr. in G.R. No. 178552 also conveniently state that the issues they raise are of transcendental importance, which must be settled early and are of far-reaching implications, without mention of any specific provision of RA 9372 under which they have been charged, or may be charged. Mere invocation of human rights advocacy has nowhere been held sufficient to clothe litigants with locus standi. Petitioners must show an actual, or immediate danger of sustaining, direct injury as a result of the laws enforcement. To rule otherwise would be to corrupt the settled doctrine of locus standi, as every worthy cause is an interest shared by the general public. Neither can locus standi be conferred upon individual petitioners as taxpayers and citizens. A taxpayer suit is proper only when there is an exercise of the spending or taxing power of Congress,[28] whereas citizen standing must rest on direct and personal interest in the proceeding.[29] RA 9372 is a penal statute and does not even provide for any appropriation from Congress for its implementation, while none of the individual petitioner-citizens has alleged any direct and personal interest in the implementation of the law. It bears to stress that generalized interests, albeit accompanied by the assertion of a public right, do not establish locus standi. Evidence of a direct and personal interest is key.

By constitutional fiat, judicial power operates only when there is an actual case or controversy. Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law. Judicial power includes the duty of the courts of justice

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Petitioners fail to present an actual case or controversy

to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.[30] (emphasis and underscoring supplied.) As early as Angara v. Electoral Commission,[31] the Court ruled that the power of judicial review is limited to actual cases or controversies to be exercised after full opportunity of argument by the parties. Any attempt at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities. An actual case or controversy means an existing case or controversy that is appropriate or ripe for determination, not conjectural or anticipatory, lest the decision of the court would amount to an advisory opinion.[32] Information Technology Foundation of the Philippines v. COMELEC[33] cannot be more emphatic: [C]ourts do not sit to adjudicate mere academic questions to satisfy scholarly interest, however intellectually challenging. The controversy must be justiciabledefinite and concrete, touching on the legal relations of parties having adverse legal interests. In other words, the pleadings must show an active antagonistic assertion of a legal right, on the one hand, and a denial thereof on the other hand; that is, it must concern a real and not merely a theoretical question or issue. There ought to be an actual and substantial controversy admitting of specific relief through a decree conclusive in nature, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts. (Emphasis and underscoring supplied) Thus, a petition to declare unconstitutional a law converting the Municipality of Makati into a Highly Urbanized City was held to be premature as it was tacked on uncertain, contingent events.[34] Similarly, a petition that fails to allege that an application for a license to operate a radio or television station has been denied or granted by the authorities does not present a justiciable controversy, and merely wheedles the Court to rule on a hypothetical problem.[35] The Court dismissed the petition in Philippine Press Institute v. Commission on Elections[36] for failure to cite any specific affirmative action of the Commission on Elections to implement the assailed resolution. It refused, in Abbas v. Commission on Elections,[37] to rule on the religious freedom claim of the therein petitioners based merely on a perceived potential conflict between the provisions of the Muslim Code and those of the national law, there being no actual controversy between real litigants. The list of cases denying claims resting on purely hypothetical or anticipatory grounds goes on ad infinitum. The Court is not unaware that a reasonable certainty of the occurrence of a perceived threat to any constitutional interest

suffices to provide a basis for mounting a constitutional challenge. This, however, is qualified by the requirement that there must be sufficient facts to enable the Court to intelligently adjudicate the issues.[38] Very recently, the US Supreme Court, in Holder v. Humanitarian Law Project,[39] allowed the pre-enforcement review of a criminal statute, challenged on vagueness grounds, since plaintiffs faced a credible threat of prosecution and should not be required to await and undergo a criminal prosecution as the sole means of seeking relief.[40] The plaintiffs therein filed an action before a federal court to assail the constitutionality of the material support statute, 18 U.S.C. 2339B (a) (1),[41] proscribing the provision of material support to organizations declared by the Secretary of State as foreign terrorist organizations. They claimed that they intended to provide support for the humanitarian and political activities of two such organizations. Prevailing American jurisprudence allows an adjudication on the merits when an anticipatory petition clearly shows that the challenged prohibition forbids the conduct or activity that a petitioner seeks to do, as there would then be a justiciable controversy.[42] Unlike the plaintiffs in Holder, however, herein petitioners have failed to show that the challenged provisions of RA 9372 forbid constitutionally protected conduct oractivity that they seek to do. No demonstrable threat has been established, much less a real and existing one. Petitioners obscure allegations of sporadic surveillance and supposedly being tagged as communist fronts in no way approximate a credible threat of prosecution. From these allegations, the Court is being lured to render an advisory opinion, which is not its function.[43] Without any justiciable controversy, the petitions have become pleas for declaratory relief, over which the Court has no original jurisdiction. Then again, declaratory actions characterized by double contingency, where both the activity the petitioners intend to undertake and the anticipated reaction to it of a public official are merely theorized, lie beyond judicial review for lack of ripeness.[44] The possibility of abuse in the implementation of RA 9372 does not avail to take the present petitions out of the realm of the surreal and merely imagined. Such possibility is not peculiar to RA 9372 since the exercise of any power granted by law may be abused.[45] Allegations of abuse must be anchored on real events before courts may step in to settle actual controversies involving rights which are legally demandable and enforceable. A facial invalidation of a statute is allowed only in free speech cases, wherein certain rules of constitutional litigation are rightly excepted

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Petitioners assail for being intrinsically vague and impermissibly broad the definition of the crime of terrorism[46] under RA 9372 in that terms like widespread and extraordinary fear and panic among the populace and coerce the government to give in to an unlawful demand are nebulous, leaving law enforcement agencies with no standard to measure the prohibited acts. Respondents, through the OSG, counter that the doctrines of void-for-vagueness and overbreadth find no application in the present case since these doctrines apply only to free speech cases; and that RA 9372 regulates conduct, not speech. For a jurisprudentially guided understanding of these doctrines, it is imperative to outline the schools of thought on whether the void-for-vagueness and overbreadth doctrines are equally applicable grounds to assail a penal statute. Respondents interpret recent jurisprudence as slanting toward the idea of limiting the application of the two doctrines to free speech cases. They particularly cite Romualdez v. Hon. Sandiganbayan[47] and Estrada v. Sandiganbayan.[48] The Court clarifies. At issue in Romualdez v. Sandiganbayan was whether the word intervene in Section 5[49] of the Anti-Graft and Corrupt Practices Act was intrinsically vague and impermissibly broad. The Court stated that the overbreadth and the vagueness doctrines have special application only to free-speech cases, and are not appropriate for testing the validity of penal statutes.[50] It added that, at any rate, the challenged provision, under which the therein petitioner was charged, is not vague.[51] While in the subsequent case of Romualdez v. Commission on Elections,[52] the Court stated that a facial invalidation of criminal statutes is not appropriate, it nonetheless proceeded to conduct a vagueness analysis, and concluded that the therein subject election offense[53] under the Voters Registration Act of 1996, with which the therein petitioners were charged, is couched in precise language.[54] The two Romualdez cases rely heavily on the Separate Opinion[55] of Justice Vicente V. Mendoza in the Estrada case, where the Court found the Anti-Plunder Law (Republic Act No. 7080) clear and free from ambiguity respecting the definition of the crime of plunder. The position taken by Justice Mendoza in Estrada relates these two doctrines to the concept of a facial invalidation as opposed to an as-applied challenge. He basically postulated that allegations that a penal statute is vague and overbroad do not justify a facial review of its validity. The pertinent portion of the Concurring Opinion of Justice Mendoza, which was quoted at length in the main Estrada decision, reads: A facial challenge is allowed to be made to a vague statute and to one which is overbroad because of possible "chilling effect" upon protected speech. The theory is that "[w]hen statutes

regulate or proscribe speech and no readily apparent construction suggests itself as a vehicle for rehabilitating the statutes in a single prosecution, the transcendent value to all society of constitutionally protected expression is deemed to justify allowing attacks on overly broad statutes with no requirement that the person making the attack demonstrate that his own conduct could not be regulated by a statute drawn with narrow specificity." The possible harm to society in permitting some unprotected speech to go unpunished is outweighed by the possibility that the protected speech of others may be deterred and perceived grievances left to fester because of possible inhibitory effects of overly broad statutes. This rationale does not apply to penal statutes. Criminal statutes have general in terrorem effect resulting from their very existence, and, if facial challenge is allowed for this reason alone, the State may well be prevented from enacting laws against socially harmful conduct. In the area of criminal law, the law cannot take chances as in the area of free speech. The overbreadth and vagueness doctrines then have special application only to free speech cases. They are inapt for testing the validity of penal statutes. As the U.S. Supreme Court put it, in an opinion by Chief Justice Rehnquist, "we have not recognized an 'overbreadth' doctrine outside the limited context of the First Amendment." In Broadrick v. Oklahoma, the Court ruled that "claims of facial overbreadth have been entertained in cases involving statutes which, by their terms, seek to regulate only spoken words" and, again, that "overbreadth claims, if entertained at all, have been curtailed when invoked against ordinary criminal laws that are sought to be applied to protected conduct." For this reason, it has been held that "a facial challenge to a legislative act is the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which the Act would be valid." As for the vagueness doctrine, it is said that a litigant may challenge a statute on its face only if it is vague in all its possible applications. "A plaintiff who engages in some conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to the conduct of others." In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools developed for testing "on their faces" statutes in free speech cases or, as they are called in American law, First Amendment cases. They cannot be made to do service when what is involved is a criminal statute. With respect to such statute, the established rule is that "one to whom application of a statute is constitutional will not be heard to attack the statute on the ground that impliedly it might also be taken as applying to other persons or other situations in which its application might be unconstitutional." As has been pointed out, "vagueness challenges in the First Amendment context, like overbreadth challenges typically produce facial invalidation, while statutes found vague as a matter of due process typically are invalidated [only] 'as applied' to a particular defendant." Consequently, there is no basis for petitioner's claim that this Court review the Anti-Plunder Law on its face and in its entirety. Indeed, "on its face" invalidation of statutes results in striking

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them down entirely on the ground that they might be applied to parties not before the Court whose activities are constitutionally protected. It constitutes a departure from the case and controversy requirement of the Constitution and permits decisions to be made without concrete factual settings and in sterile abstract contexts. But, as the U.S. Supreme Court pointed out in Younger v. Harris [T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The combination of the relative remoteness of the controversy, the impact on the legislative process of the relief sought, and above all the speculative and amorphous nature of the required line-by-line analysis of detailed statutes, . . . ordinarily results in a kind of case that is wholly unsatisfactory for deciding constitutional questions, whichever way they might be decided. For these reasons, "on its face" invalidation of statutes has been described as "manifestly strong medicine," to be employed "sparingly and only as a last resort," and is generally disfavored. In determining the constitutionality of a statute, therefore, its provisions which are alleged to have been violated in a case must be examined in the light of the conduct with which the defendant is charged.[56] (Underscoring supplied.) The confusion apparently stems from the interlocking relation of the overbreadth and vagueness doctrines as grounds for a facial or as-applied challenge against a penal statute (under a claim of violation of due process of law) or a speech regulation (under a claim of abridgement of the freedom of speech and cognate rights). To be sure, the doctrine of vagueness and the doctrine of overbreadth do not operate on the same plane. A statute or act suffers from the defect of vagueness when it lacks comprehensible standards that men of common intelligence must necessarily guess at its meaning and differ as to its application. It is repugnant to the Constitution in two respects: (1) it violates due process for failure to accord persons, especially the parties targeted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government muscle. [57] The overbreadthdoctrine, meanwhile, decrees that a governmental purpose to control or prevent activities constitutionally subject to state regulations may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms.[58] As distinguished from the vagueness doctrine, the overbreadth doctrine assumes that individuals will understand what a statute prohibits and will accordingly refrain from that behavior, even though some of it is protected.[59] A facial challenge is likewise different from an asapplied challenge.

Distinguished from an as-applied challenge which considers only extant facts affecting real litigants, a facial invalidation is an examination of the entire law, pinpointing its flaws and defects, not only on the basis of its actual operation to the parties, but also on the assumption or prediction that its very existence may cause others not before the court to refrain from constitutionally protected speech or activities.[60] Justice Mendoza accurately phrased the subtitle[61] in his concurring opinion that the vagueness and overbreadth doctrines, as grounds for a facial challenge, are not applicable to penal laws. A litigant cannot thus successfully mount a facial challenge against a criminal statute on either vagueness or overbreadth grounds. The allowance of a facial challenge in free speech cases is justified by the aim to avert the chilling effect on protected speech, the exercise of which should not at all times be abridged.[62] As reflected earlier, this rationale is inapplicable to plain penal statutes that generally bear an in terrorem effect in deterring socially harmful conduct. In fact, the legislature may even forbid and penalize acts formerly considered innocent and lawful, so long as it refrains from diminishing or dissuading the exercise of constitutionally protected rights.[63] The Court reiterated that there are critical limitations by which a criminal statute may be challenged and underscored that an on-its-face invalidation of penal statutes x x x may not be allowed.[64] [T]he rule established in our jurisdiction is, only statutes on free speech, religious freedom, and other fundamental rights may be facially challenged. Under no case may ordinary penal statutes be subjected to a facial challenge. The rationale is obvious. If a facial challenge to a penal statute is permitted, the prosecution of crimes may be hampered. No prosecution would be possible. A strong criticism against employing a facial challenge in the case of penal statutes, if the same is allowed, would effectively go against the grain of the doctrinal requirement of an existing and concrete controversy before judicial power may be appropriately exercised. A facial challenge against a penal statute is, at best, amorphous and speculative. It would, essentially, force the court to consider third parties who are not before it. As I have said in my opposition to the allowance of a facial challenge to attack penal statutes, such a test will impair the States ability to deal with crime. If warranted, there would be nothing that can hinder an accused from defeating the States power to prosecute on a mere showing that, as applied to third parties, the penal statute is vague or overbroad, notwithstanding that the law is clear as applied to him.[65](Emphasis and underscoring supplied) It is settled, on the other hand, that the application of the overbreadth doctrine is limited to a facial kind of challenge and, owing to the given rationale of a facial challenge, applicable only to free speech cases. By its nature, the overbreadth doctrine has to necessarily apply a facial type of invalidation in order to plot areas of

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protected speech, inevitably almost always under situations not before the court, that are impermissibly swept by the substantially overbroad regulation. Otherwise stated, a statute cannot be properly analyzed for being substantially overbroad if the court confines itself only to facts as applied to the litigants. The most distinctive feature of the overbreadth technique is that it marks an exception to some of the usual rules of constitutional litigation. Ordinarily, a particular litigant claims that a statute is unconstitutional as applied to him or her; if the litigant prevails, the courts carve away the unconstitutional aspects of the law by invalidating its improper applications on a case to case basis. Moreover, challengers to a law are not permitted to raise the rights of third parties and can only assert their own interests. In overbreadth analysis, those rules give way; challenges are permitted to raise the rights of third parties; and the court invalidates the entire statute "on its face," not merely "as applied for" so that the overbroad law becomes unenforceable until a properly authorized court construes it more narrowly. The factor that motivates courts to depart from the normal adjudicatory rules is the concern with the "chilling;" deterrent effect of the overbroad statute on third parties not courageous enough to bring suit. The Court assumes that an overbroad laws "very existence may cause others not before the court to refrain from constitutionally protected speech or expression." An overbreadth ruling is designed to remove that deterrent effect on the speech of those third parties. [66] (Emphasis in the original omitted; underscoring supplied.) In restricting the overbreadth doctrine to free speech claims, the Court, in at least two cases,[67] observed that the US Supreme Court has not recognized an overbreadth doctrine outside the limited context of the First Amendment,[68] and that claims of facial overbreadth have been entertained in cases involving statutes which, by their terms, seek to regulate only spoken words.[69] In Virginia v. Hicks,[70] it was held that rarely, if ever, will an overbreadth challenge succeed against a law or regulation that is not specifically addressed to speech or speech-related conduct. Attacks on overly broad statutes are justified by the transcendent value to all society of constitutionally protected expression.[71] Since a penal statute may only be assailed for being vague as applied to petitioners, a limited vagueness analysis of the definition of terrorism in RA 9372 is legally impermissible absent an actual or imminent charge against them While Estrada did not apply the overbreadth doctrine, it did not preclude the operation of the vagueness test on the Anti-Plunder Law as applied to the therein petitioner, finding, however, that there was no basis to review the law on its face and in its entirety.[72] It stressed that statutes found vague as a matter of due process typically are invalidated only 'as applied' to a particular defendant.[73] American jurisprudence[74] instructs that vagueness challenges that do not involve the First Amendment must be examined in light of the specific facts of the case at hand and not with regard to the statute's facial validity.

For more than 125 years, the US Supreme Court has evaluated defendants claims that criminal statutes are unconstitutionally vague, developing a doctrine hailed as among the most important guarantees of liberty under law.[75] In this jurisdiction, the void-for-vagueness doctrine asserted under the due process clause has been utilized in examining the constitutionality of criminal statutes. In at least three cases,[76] the Court brought the doctrine into play in analyzing an ordinance penalizing the non-payment of municipal tax on fishponds, the crime of illegal recruitment punishable under Article 132(b) of the Labor Code, and the vagrancy provision under Article 202 (2) of the Revised Penal Code. Notably, the petitioners in these three cases, similar to those in the two Romualdez and Estrada cases, were actually charged with the therein assailed penal statute, unlike in the present case. There is no merit in the claim that RA 9372 regulates speech so as to permit a facial analysis of its validity From the definition of the crime of terrorism in the earlier cited Section 3 of RA 9372, the following elements may be culled: (1) the offender commits an act punishable under any of the cited provisions of the Revised Penal Code, or under any of the enumerated special penal laws; (2) the commission of the predicate crime sows and creates a condition of widespread and extraordinary fear and panic among the populace; and (3) the offender is actuated by the desire to coerce the government to give in to an unlawful demand. In insisting on a facial challenge on the invocation that the law penalizes speech, petitioners contend that the element of unlawful demand in the definition of terrorism[77]must necessarily be transmitted through some form of expression protected by the free speech clause. The argument does not persuade. What the law seeks to penalize is conduct, not speech. Before a charge for terrorism may be filed under RA 9372, there must first be a predicate crime actually committed to trigger the operation of the key qualifying phrases in the other elements of the crime, including the coercion of the government to accede to an unlawful demand. Given the presence of the first element, any attempt at singling out or highlighting the communicative component of the prohibition cannot recategorize the unprotected conduct into a protected speech. Petitioners notion on the transmission of message is entirely inaccurate, as it unduly focuses on just one particle of an element of the crime. Almost every commission of a crime entails some mincing of words on the part of the offender like in declaring to launch overt criminal acts against a victim, in haggling on the amount of ransom or conditions, or in negotiating a deceitful transaction. An analogy in one U.S. case[78] illustrated that the fact that the prohibition on discrimination in hiring on the basis of race will require an

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employer to take down a sign reading White Applicants Only hardly means that the law should be analyzed as one regulating speech rather than conduct. Utterances not elemental but inevitably incidental to the doing of the criminal conduct alter neither the intent of the law to punish socially harmful conduct nor the essence of the whole act as conduct and not speech. This holds true a fortiori in the present case where the expression figures only as an inevitable incident of making the element of coercion perceptible. [I]t is true that the agreements and course of conduct here were as in most instances brought about through speaking or writing. But it has never been deemed an abridgement of freedom of speech or press to make a course of conduct illegal merely because the conduct was, in part, initiated, evidenced, or carried out by means of language, either spoken, written, or printed. Such an expansive interpretation of the constitutional guaranties of speech and press would make it practically impossible ever to enforce laws against agreements in restraint of trade as well as many other agreements and conspiracies deemed injurious to society.[79] (italics and underscoring supplied) Certain kinds of speech have been treated as unprotected conduct, because they merely evidence a prohibited conduct.[80] Since speech is not involved here, the Court cannot heed the call for a facial analysis. IN FINE, Estrada and the other cited authorities engaged in a vagueness analysis of the therein subject penal statute as applied to the therein petitioners inasmuch as they wereactually charged with the pertinent crimes challenged on vagueness grounds. The Court in said cases, however, found no basis to review the assailed penal statute on its face and in its entirety. In Holder, on the other hand, the US Supreme Court allowed the pre-enforcement review of a criminal statute, challenged on vagueness grounds, since the therein plaintiffs faced a credible threat of prosecution and should not be required to await and undergo a criminal prosecution as the sole means of seeking relief. As earlier reflected, petitioners have established neither an actual charge nor a credible threat of prosecution under RA 9372. Even a limited vagueness analysis of the assailed definition of terrorism is thus legally impermissible. The Court reminds litigants that judicial power neither contemplates speculative counseling on a statutes future effect on hypothetical scenarios nor allows the courts to be used as an extension of a failed legislative lobbying in Congress. WHEREFORE, the petitions are DISMISSED. SO ORDERED.

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