Obligations of the principal SECOND DIVISION [G.R. No.

159489, February 04, 2008] FILIPINAS LIFE ASSURANCE COMPANY (now AYALA LIFE ASSURANCE, INC.), Petitioner, vs. CLEMENTE N. PEDROSO, TERESITA O. PEDROSO and JENNIFER N. PALACIO thru her Attorney-in-Fact PONCIANO C. MARQUEZ, Respondents. DECISION QUISUMBING, J.: This petition for review on certiorari seeks the reversal of the Decision[1] and Resolution,[2] dated November 29, 2002 and August 5, 2003, respectively, of the Court of Appeals in CA-G.R. CV No. 33568. The appellate court had affirmed the Decision[3] dated October 10, 1989 of the Regional Trial Court (RTC) of Manila, Branch 3, finding petitioner as defendant and the co-defendants below jointly and severally liable to the plaintiffs, now herein respondents. The antecedent facts are as follows: Respondent Teresita O. Pedroso is a policyholder of a 20-year endowment life insurance issued by petitioner Filipinas Life Assurance Company (Filipinas Life). Pedroso claims Renato Valle was her insurance agent since 1972 and Valle collected her monthly premiums. In the first week of January 1977, Valle told her that the Filipinas Life Escolta Office was holding a promotional investment program for policyholders. It was offering 8% prepaid interest a month for certain amounts deposited on a monthly basis. Enticed, she initially invested and issued a post-dated check dated January 7, 1977 for P10,000.[4] In return, Valle issued Pedroso his personal check for P800 for the 8%[5] prepaid interest and a Filipinas Life Agents Receipt No. 807838.[6] Subsequently, she called the Escolta office and talked to Francisco Alcantara, the administrative assistant, who referred her to the branch manager, Angel Apetrior. Pedroso inquired about the promotional investment and Apetrior confirmed that there was such a promotion. She was even told she could push through with

the check she issued. From the records, the check, with the endorsement of Alcantara at the back, was deposited in the account of Filipinas Life with the Commercial Bank and Trust Company (CBTC), Escolta Branch. Relying on the representations made by the petitioners duly authorized representatives Apetrior and Alcantara, as well as having known agent Valle for quite some time, Pedroso waited for the maturity of her initial investment. A month after, her investment of P10,000 was returned to her after she made a written request for its refund. The formal written request, dated February 3, 1977, was written on an inter-office memorandum form of Filipinas Life prepared by Alcantara.[7] To collect the amount, Pedroso personally went to the Escolta branch where Alcantara gave her the P10,000 in cash. After a second investment, she made 7 to 8 more investments in varying amounts, totaling P37,000 but at a lower rate of 5%[8] prepaid interest a month. Upon maturity of Pedrosos subsequent investments, Valle would take back from Pedroso the corresponding yellow-colored agents receipt he issued to the latter. Pedroso told respondent Jennifer N. Palacio, also a Filipinas Life insurance policyholder, about the investment plan. Palacio made a total investment of P49,550[9] but at only 5% prepaid interest. However, when Pedroso tried to withdraw her investment, Valle did not want to return some P17,000 worth of it. Palacio also tried to withdraw hers, but Filipinas Life, despite demands, refused to return her money. With the assistance of their lawyer, they went to Filipinas Life Escolta Office to collect their respective investments, and to inquire why they had not seen Valle for quite some time. But their attempts were futile. Hence, respondents filed an action for the recovery of a sum of money. After trial, the RTC, Branch 3, Manila, held Filipinas Life and its co-defendants Valle, Apetrior and Alcantara jointly and solidarily liable to the respondents. On appeal, the Court of Appeals affirmed the trial courts ruling and subsequently denied the motion for reconsideration. Petitioner now comes before us raising a single issue: WHETHER OR NOT THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR AND GRAVELY ABUSED ITS DISCRETION IN AFFIRMING THE DECISION OF THE LOWER COURT HOLDING FLAC [FILIPINAS LIFE] TO BE JOINTLY AND SEVERALLY

LIABLE WITH ITS CO-DEFENDANTS ON THE CLAIM OF RESPONDENTS INSTEAD OF HOLDING ITS AGENT, RENATO VALLE, SOLELY LIABLE TO THE RESPONDENTS.[10] Simply put, did the Court of Appeals err in holding petitioner and its codefendants jointly and severally liable to the herein respondents? Filipinas Life does not dispute that Valle was its agent, but claims that it was only a life insurance company and was not engaged in the business of collecting investment money. It contends that the investment scheme offered to respondents by Valle, Apetrior and Alcantara was outside the scope of their authority as agents of Filipinas Life such that, it cannot be held liable to the respondents.[11] On the other hand, respondents contend that Filipinas Life authorized Valle to solicit investments from them. In fact, Filipinas Lifes official documents and facilities were used in consummating the transactions. These transactions, according to respondents, were confirmed by its officers Apetrior and Alcantara. Respondents assert they exercised all the diligence required of them in ascertaining the authority of petitioners agents; and it is Filipinas Life that failed in its duty to ensure that its agents act within the scope of their authority. Considering the issue raised in the light of the submissions of the parties, we find that the petition lacks merit. The Court of Appeals committed no reversible error nor abused gravely its discretion in rendering the assailed decision and resolution. It appears indisputable that respondents Pedroso and Palacio had invested P47,000 and P49,550, respectively. These were received by Valle and remitted to Filipinas Life, using Filipinas Lifes official receipts, whose authenticity were not disputed. Valles authority to solicit and receive investments was also established by the parties. When respondents sought confirmation, Alcantara, holding a supervisory position, and Apetrior, the branch manager, confirmed that Valle had authority. While it is true that a person dealing with an agent is put upon inquiry and must discover at his own peril the agents authority, in this case, respondents did exercise due diligence in removing all doubts and in confirming the validity of the representations made by Valle. Filipinas Life, as the principal, is liable for obligations contracted by its agent Valle. By the contract of agency, a person binds himself to render some service or to do

something in representation or on behalf of another, with the consent or authority of the latter.[12] The general rule is that the principal is responsible for the acts of its agent done within the scope of its authority, and should bear the damage caused to third persons.[13] When the agent exceeds his authority, the agent becomes personally liable for the damage.[14] But even when the agent exceeds his authority, the principal is still solidarily liable together with the agent if the principal allowed the agent to act as though the agent had full powers.[15] In other words, the acts of an agent beyond the scope of his authority do not bind the principal, unless the principal ratifies them, expressly or impliedly.[16] Ratification in agency is the adoption or confirmation by one person of an act performed on his behalf by another without authority.[17] Filipinas Life cannot profess ignorance of Valles acts. Even if Valles representations were beyond his authority as a debit/insurance agent, Filipinas Life thru Alcantara and Apetrior expressly and knowingly ratified Valles acts. It cannot even be denied that Filipinas Life benefited from the investments deposited by Valle in the account of Filipinas Life. In our considered view, Filipinas Life had clothed Valle with apparent authority; hence, it is now estopped to deny said authority. Innocent third persons should not be prejudiced if the principal failed to adopt the needed measures to prevent misrepresentation, much more so if the principal ratified his agents acts beyond the latters authority. The act of the agent is considered that of the principal itself. Qui per alium facit per seipsum facere videtur. He who does a thing by an agent is considered as doing it himself.[18] WHEREFORE, the petition is DENIED for lack of merit. The Decision and Resolution, dated November 29, 2002 and August 5, 2003, respectively, of the Court of Appeals in CA-G.R. CV No. 33568 are AFFIRMED. Costs against the petitioner. SO ORDERED.

THIRD DIVISION PURITA PAHUD, SOLEDAD PAHUD, and IAN LEE CASTILLA (represented by Mother and Attorney-in-Fact VIRGINIA CASTILLA), Petitioners, - versus COURT OF APPEALS, SPOUSES ISAGANI BELARMINO and LETICIA OCAMPO, EUFEMIA SAN AGUSTIN-MAGSINO, ZENAIDA SAN AGUSTIN-McCRAE, MILAGROS SAN AGUSTIN-FORTMAN, MINERVA SAN AGUSTIN-ATKINSON, FERDINAND SAN AGUSTIN, RAUL SAN AGUSTIN, ISABELITA SAN AGUSTINLUSTENBERGER and VIRGILIO SAN AGUSTIN, Respondents. G.R. No. 160346

Present: CARPIO MORALES, J.,* CHICO-NAZARIO,** Acting Chairperson, VELASCO, JR., NACHURA, and PERALTA, JJ. Promulgated: August 25, 2009

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DECISION NACHURA, J.:

For our resolution is a petition for review on certiorari assailing the April 23, 2003 Decision[1] and October 8, 2003 Resolution[2] of the Court of Appeals (CA) in CA-G.R. CV No. 59426. The appellate court, in the said decision and resolution, reversed and set aside the January 14, 1998 Decision[3] of the Regional Trial Court (RTC), which ruled in favor of petitioners. The dispute stemmed from the following facts. During their lifetime, spouses Pedro San Agustin and Agatona Genil were able to acquire a 246-square meter parcel of land situated in Barangay Anos, Los Baos, Laguna and covered by Original Certificate of Title (OCT) No. O-(1655) 015.[4] Agatona Genil died on September 13, 1990 while Pedro San Agustin died on September 14, 1991. Both died intestate, survived by their eight (8) children: respondents Eufemia, Raul, Ferdinand, Zenaida, Milagros, Minerva, Isabelita and Virgilio. Sometime in 1992, Eufemia, Ferdinand and Raul executed a Deed of Absolute Sale of Undivided Shares[5] conveying in favor of petitioners (the Pahuds, for brevity) their respective shares from the lot they inherited from their deceased parents forP525,000.00.[6] Eufemia also signed the deed on behalf of her four (4) other co-heirs, namely: Isabelita on the basis of a special power of attorney executed on September 28, 1991,[7] and also for Milagros, Minerva, and Zenaida but without their apparent written authority.[8] The deed of sale was also not notarized.[9]

On July 21, 1992, the Pahuds paid P35,792.31 to the Los Baos Rural Bank where the subject property was mortgaged.[10] The bank issued a release of mortgage and turned over the owners copy of the OCT to the Pahuds.[11] Over the following months, the Pahuds made more payments to Eufemia and her siblings totaling to P350,000.00.[12] They agreed to use the [13] remainingP87,500.00 to defray the payment for taxes and the expenses in transferring the title of the property.[14] When Eufemia and her co-heirs drafted an extra-judicial settlement of estate to facilitate the transfer of the title to the Pahuds, Virgilio refused to sign it.[15] On July 8, 1993, Virgilios co-heirs filed a complaint[16] for judicial partition of the subject property before the RTC of Calamba, Laguna. On November 28, 1994, in the course of the proceedings for judicial partition, a Compromise Agreement[17] was signed with seven (7) of the co-heirs agreeing to sell their undivided shares to Virgilio for P700,000.00. The compromise agreement was, however, not approved by the trial court because Atty. Dimetrio Hilbero, lawyer for Eufemia and her six (6) co-heirs, refused to sign the agreement because he knew of the previous sale made to the Pahuds.[18] On December 1, 1994, Eufemia acknowledged having received P700,000.00 from Virgilio.[19] Virgilio then sold the entire property to spouses Isagani Belarmino and Leticia Ocampo (Belarminos) sometime in 1994. The Belarminos immediately constructed a building on the subject property. Alarmed and bewildered by the ongoing construction on the lot they purchased, the Pahuds immediately confronted Eufemia who confirmed to them that Virgilio had sold the property to the Belarminos.[20] Aggrieved, the Pahuds filed a complaint in intervention[21] in the pending case for judicial partition. After trial, the RTC upheld the validity of the sale to petitioners. The dispositive portion of the decision reads:

WHEREFORE, the foregoing considered, the Court orders: 1. the sale of the 7/8 portion of the property covered by OCT No. O (1655) O-15 by the plaintiffs as heirs of deceased Sps. Pedro San Agustin and Agatona Genil in favor of the IntervenorsThird Party plaintiffs as valid and enforceable, but obligating the Intervenors-Third Party plaintiffs to complete the payment of the purchase price of P437,500.00 by paying the balance of P87,500.00 to defendant Fe (sic) San Agustin Magsino. Upon receipt of the balance, the plaintiff shall formalize the sale of the 7/8 portion in favor of the Intervenor[s]-Third Party plaintiffs; 2. declaring the document entitled Salaysay sa Pagsangayon sa Bilihan (Exh. 2-a) signed by plaintiff Eufemia San Agustin attached to the unapproved Compromise Agreement (Exh. 2) as not a valid sale in favor of defendant Virgilio San Agustin; 3. declaring the sale (Exh. 4) made by defendant Virgilio San Agustin of the property covered by OCT No. O (1655)-O-15 registered in the names of Spouses Pedro San Agustin and Agatona Genil in favor of Third-party defendant Spouses Isagani and Leticia Belarmino as not a valid sale and as inexistent; 4. declaring the defendant Virgilio San Agustin and the Third-Party defendants spouses Isagani and Leticia Belarmino as in bad faith in buying the portion of the property already sold by the plaintiffs in favor of the Intervenors-Third Party Plaintiffs and the Third-Party Defendant Sps. Isagani and Leticia Belarmino in constructing the two-[storey] building in (sic) the property subject of this case; and 5. declaring the parties as not entitled to any damages, with the parties shouldering their respective responsibilities regarding the payment of attorney*+s fees to their respective lawyers. No pronouncement as to costs.

SO ORDERED.[22]

Not satisfied, respondents appealed the decision to the CA arguing, in the main, that the sale made by Eufemia for and on behalf of her other co-heirs to the Pahuds should have been declared void and inexistent for want of a written authority from her co-heirs. The CA yielded and set aside the findings of the trial court. In disposing the issue, the CA ruled: WHEREFORE, in view of the foregoing, the Decision dated January 14, 1998, rendered by the Regional Trial Court of Calamba, Laguna, Branch 92 in Civil Case No. 2011-93-C for Judicial Partition is hereby REVERSED and SET ASIDE, and a new one entered, as follows: (1) The case for partition among the plaintiffs-appellees and appellant Virgilio is now considered closed and terminated; (2) Ordering plaintiffs-appellees to return to intervenors-appellees the total amount they received from the latter, plus an interest of 12% per annum from the time the complaint [in] intervention was filed on April 12, 1995 until actual payment of the same; (3) Declaring the sale of appellant Virgilio San Agustin to appellants spouses, Isagani and Leticia Belarmino[,] as valid and binding; (4) Declaring appellants-spouses as buyers in good faith and for value and are the owners of the subject property. No pronouncement as to costs. SO ORDERED.[23]

Petitioners now come to this Court raising the following arguments:

I.

The Court of Appeals committed grave and reversible error when it did not apply the second paragraph of Article 1317 of the New Civil Code insofar as ratification is concerned to the sale of the 4/8 portion of the subject property executed by respondents San Agustin in favor of petitioners; The Court of Appeals committed grave and reversible error in holding that respondents spouses Belarminos are in good faith when they bought the subject property from respondent Virgilio San Agustin despite the findings of fact by the court a quo that they were in bad faith which clearly contravenes the presence of long line of case laws upholding the task of giving utmost weight and value to the factual findings of the trial court during appeals; [and] The Court of Appeals committed grave and reversible error in holding that respondents spouses Belarminos have superior rights over the property in question than petitioners despite the fact that the latter were prior in possession thereby misapplying the provisions of Article 1544 of the New Civil Code.[24]

II.

III.

The focal issue to be resolved is the status of the sale of the subject property by Eufemia and her co-heirs to the Pahuds. We find the transaction to be valid and enforceable. Article 1874 of the Civil Code plainly provides: Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.

Also, under Article 1878,[25] a special power of attorney is necessary for an agent to enter into a contract by which the ownership of an immovable property

is transmitted or acquired, either gratuitously or for a valuable consideration. Such stringent statutory requirement has been explained in Cosmic Lumber Corporation v. Court of Appeals:[26] [T]he authority of an agent to execute a contract [of] sale of real estate must be conferred in writing and must give him specific authority, either to conduct the general business of the principal or to execute a binding contract containing terms and conditions which are in the contract he did execute. A special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. The express mandate required by law to enable an appointee of an agency (couched) in general terms to sell must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act mentioned. For the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the powers of the agent in clear and unmistakable language. When there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document.[27]

In several cases, we have repeatedly held that the absence of a written authority to sell a piece of land is, ipso jure, void,[28]precisely to protect the interest of an unsuspecting owner from being prejudiced by the unwarranted act of another. Based on the foregoing, it is not difficult to conclude, in principle, that the sale made by Eufemia, Isabelita and her two brothers to the Pahuds sometime in 1992 should be valid only with respect to the 4/8 portion of the subject property. The sale with respect to the 3/8 portion, representing the shares of Zenaida, Milagros, and Minerva, is void because Eufemia could not dispose of the interest of her co-heirs in the said lot absent any written authority from the latter, as explicitly required by law. This was, in fact, the ruling of the CA.

Still, in their petition, the Pahuds argue that the sale with respect to the 3/8 portion of the land should have been deemed ratified when the three co-heirs, namely: Milagros, Minerva, and Zenaida, executed their respective special power of attorneys[29] authorizing Eufemia to represent them in the sale of their shares in the subject property.[30] While the sale with respect to the 3/8 portion is void by express provision of law and not susceptible to ratification,[31] we nevertheless uphold its validity on the basis of the common law principle of estoppel. Article 1431 of the Civil Code provides: Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.

True, at the time of the sale to the Pahuds, Eufemia was not armed with the requisite special power of attorney to dispose of the 3/8 portion of the property. Initially, in their answer to the complaint in intervention,[32] Eufemia and her other co-heirs denied having sold their shares to the Pahuds. During the pre-trial conference, however, they admitted that they had indeed sold 7/8 of the property to the Pahuds sometime in 1992.[33] Thus, the previous denial was superseded, if not accordingly amended, by their subsequent admission.[34] Moreover, in their Comment,[35] the said co-heirs again admitted the sale made to petitioners.[36] Interestingly, in no instance did the three (3) heirs concerned assail the validity of the transaction made by Eufemia to the Pahuds on the basis of want of written authority to sell. They could have easily filed a case for annulment of the sale of their respective shares against Eufemia and the Pahuds. Instead, they

opted to remain silent and left the task of raising the validity of the sale as an issue to their co-heir, Virgilio, who is not privy to the said transaction. They cannot be allowed to rely on Eufemia, their attorney-in-fact, to impugn the validity of the first transaction because to allow them to do so would be tantamount to giving premium to their sisters dishonest and fraudulent deed. Undeniably, therefore, the silence and passivity of the three co-heirs on the issue bar them from making a contrary claim. It is a basic rule in the law of agency that a principal is subject to liability for loss caused to another by the latters reliance upon a deceitful representation by an agent in the course of his employment (1) if the representation is authorized; (2) if it is within the implied authority of the agent to make for the principal; or (3) if it is apparently authorized, regardless of whether the agent was authorized by him or not to make the representation.[37] By their continued silence, Zenaida, Milagros and Minerva have caused the Pahuds to believe that they have indeed clothed Eufemia with the authority to transact on their behalf. Clearly, the three co-heirs are now estopped from impugning the validity of the sale from assailing the authority of Eufemia to enter into such transaction. Accordingly, the subsequent sale made by the seven co-heirs to Virgilio was void because they no longer had any interest over the subject property which they could alienate at the time of the second transaction.[38] Nemo dat quod non habet. Virgilio, however, could still alienate his 1/8 undivided share to the Belarminos. The Belarminos, for their part, cannot argue that they purchased the property from Virgilio in good faith. As a general rule, a purchaser of a real property is not required to make any further inquiry beyond what the certificate of title indicates on its face.[39] But the rule excludes those who purchase with knowledge of the defect in the title of the vendor or of facts sufficient to induce a

reasonable and prudent person to inquire into the status of the property.[40] Such purchaser cannot close his eyes to facts which should put a reasonable man on guard, and later claim that he acted in good faith on the belief that there was no defect in the title of the vendor. His mere refusal to believe that such defect exists, or his obvious neglect by closing his eyes to the possibility of the existence of a defect in the vendors title, will not make him an innocent purchaser for value, if afterwards it turns out that the title was, in fact, defective. In such a case, he is deemed to have bought the property at his own risk, and any injury or prejudice occasioned by such transaction must be borne by him.[41] In the case at bar, the Belarminos were fully aware that the property was registered not in the name of the immediate transferor, Virgilio, but remained in the name of Pedro San Agustin and Agatona Genil.[42] This fact alone is sufficient impetus to make further inquiry and, thus, negate their claim that they are purchasers for value in good faith.[43] They knew that the property was still subject of partition proceedings before the trial court, and that the compromise agreement signed by the heirs was not approved by the RTC following the opposition of the counsel for Eufemia and her six other co-heirs.[44] The Belarminos, being transferees pendente lite,are deemed buyers in mala fide, and they stand exactly in the shoes of the transferor and are bound by any judgment or decree which may be rendered for or against the transferor.[45] Furthermore, had they verified the status of the property by asking the neighboring residents, they would have been able to talk to the Pahuds who occupy an adjoining business establishment[46] and would have known that a portion of the property had already been sold. All these existing and readily verifiable facts are sufficient to suggest that the Belarminos knew that they were buying the property at their own risk. WHEREFORE, premises considered, the April 23, 2003 Decision of the Court of Appeals as well as its October 8, 2003 Resolution in CA-G.R. CV No. 59426, are REVERSED and SET ASIDE. Accordingly, the January 14, 1998 Decision of Branch 92 of the Regional Trial Court of Calamba, Laguna

is REINSTATED with the MODIFICATION that the sale made by respondent Virgilio San Agustin to respondent spouses Isagani Belarmino and Leticia Ocampo is valid only with respect to the 1/8 portion of the subject property. The trial court is ordered to proceed with the partition of the property with dispatch. SO ORDERED.

EN BANC G.R. No. L-20145 November 15, 1923 VICENTE VERZOSA and RUIZ, REMENTERIA Y CIA., S. en C., Plaintiffs-Appellants , vs. SILVINO LIM and SIY CONG BIENG and COMPANY, INC., DefendantsAppellants.

STREET, J.: chanrobles virtual law library This action was instituted in the Court of first Instance of the City of Manila by Vicente Versoza and Ruiz, Rementeria y Compania, as owners of the coastwise vessel Perla, against Silvino Lim and Siy Cong Bieng & Company, Inc., as owner and agent, respectively, of the vessel Ban Yek, for the purpose of recovering a sum of money alleged to be the damages resulting to the plaintiffs from a collision which occurred on March 9, 1921, between the two vessels mentioned, it being alleged that said collision was due to the experience, carelessness and lack of skill on the part of the captain of the Ban Yek and to his failure to observe the rules of navigation appropriate to the case. The defendants answered with a general denial, and by way of special defense asserted, among other things, that the collision was due exclusively to the inexperience and carelessness of the captain and officers of the steamship Perla; for which reason the defendants in turn, by way of counterclaim, prayed judgment for the damages suffered by theBan Yek from the same collision. At the hearing the trial judge absolved the defendants from the complaint and likewise absolved the plaintiffs from the

defendants' counterclaim. From this judgment both parties appealed.chanroblesvirtualawlibrary chanrobles virtual law library It appears in evidence that at about five o'clock in the afternoon of March 9, 1921, the coastwise steamer Ban Yekleft the port of Naga on the Bicol River, in the Province of Camarines Sur, with destination to the City of Manila. At the time of her departure from said port the sea was approaching to high tide but the current was still running in through the Bicol River, with the result that the Ban Yek had the current against her. As the ship approached the Malbong bend of the Bicol River, in the municipality of Gainza, another vessel, the Perla, was sighted coming up the river on the way to Naga. While the boats were yet more than a kilometer apart, the Ban Yek gave two blasts with her whistle, thus indicating an intention to pass on the left, or to her own port side. In reply to this signal the Perlagave a single blast, thereby indicating that she disagreed with the signal given by the Ban Yek and would maintain her position on the right, that is, would keep to the starboard. The Ban Yek made no reply to this signal. As the Perlawas navigating with the current, then running in from the sea, this vessel, under paragraph 163 of Customs Marine Circular No. 53, had the right of way over the Ban Yek, and the officers of the Perla interpreted the action of the Ban Yek in not replying to the Perla's signal as an indication of acquiescene of the officers of the Ban Yek in the determination of the Perla to keep to the starboard.chanroblesvirtualawlibrary chanrobles virtual law library The river at this point is about two hundred and fifty feet wide, and the courses thus being respectively pursued by the two vessels necessarily tended to bring them into a head-on collision. When the danger of such an occurrence became imminent, Captain Garrido of the Perla, seeing that he was shut off by the Ban Yek from passing to the right, put his vessel to port, intending to avoid collision or minimize its impact by getting farther out into the stream. An additional reason for this maneuver, as stated by Captain Carrido, is that the captain of the Ban Yek waived his hand to Garrido, indicating that the latter should turn his vessel towards the middle of the stream. At about the same time that the Perla was thus deflected from her course the engine on the Ban Yek was reversed and three blasts were given by this vessel to indicate that she was backing.chanroblesvirtualawlibrary chanrobles virtual law library Now, it appears that when the engine is reversed, a vessel swings to the right or left in accordance with the direction in which the blades of the propeller are set;

and as the Ban Yek began to back, her bow was thrown out into the stream, a movement which was assisted by the current of the river. By this means the Ban Yek was brought to occupy an oblique position across the stream at the moment the Perla was passing; and the bow of the Ban Yekcrashed into the starboard bumpers of the Perla, carrying away external parts of the ship and inflicting material damage on the hull. To effect the repairs thus made necessary to the Perla cost her owners the sum of P17,827, including expenses of survey.chanroblesvirtualawlibrary chanrobles virtual law library The first legal point presented in the case has reference to the sufficiency of the protest. In this connection it appears that within twenty-four hours after the arrival of the Perla at the port of Naga, Captain Garrido appeared before Vicente Rodi, the auxiliary justice of the peace of the municipality of Naga, and made before that officer the sworn protest which is in evidence as Exhibit B. This protest is sufficient in our opinion to answer all the requirements of article 835 of the Code of Commerce. A regular justice of the peace would without doubt be competent to take a marine protest, and the same authority must be conceded to the auxiliary justice in the absence of any showing in the record to the effect that the justice of the peace himself was acting at the time in the municipality (Adm. Code, sec. 211; sec. 334, Code of Civ. Proc., subsecs. 14, 15). We note that in his certificate to this protest Vicente Rodi added to the appellation of auxiliary justice of the peace, following his name, the additional designation "notary public exofficio." However, under subsection (c) of section 242 of the Administrative Code, it is plain that an auxiliary justice of the peace is not an ex-officio notary public. It results that the taking of this protest must be ascribed to the officer in his character as auxiliary justice of the peace and not in the character of notary public ex-officio. It is hardly necessary to add that this court takes judicial notice of the fact that Naga is not a port of entry and that no customs official of rank is there stationed who could have taken cognizance of this protest.chanroblesvirtualawlibrary chanrobles virtual law library Upon the point of responsibility for the collision we have no hesitancy in finding that the fault is to be attributed exclusively to the negligence and inattention of the captain and pilot in charge of the Ban Yek. The Perla undoubtedly had the right of way, since this vessel was navigating with the current, and the officers in charge of the Perla were correct in assuming, from the failure of the Ban Yek to respond to the single blast of the Perla, that the officers in charge of the Ban Yek recognized that the Perla had a right of way and acquiesced in her resolution

to keep to the right. The excuse urged for the Ban Yek is that this vessel is somewhat larger than the Perla and that it was desirable for the Ban Yek to keep on the side of the long arc of the curve of the river; and in this connection it is suggested that the river is deeper on the outer edge of the bend than on the inner edge. It is also stated that on a certain previous occasion the Ban Yek on coming out from this port had gotten stuck in the mud in this bend by keeping too far to the right. Moreover, it is said to be the practice of ships in navigating this stream to keep nearer the outside than to the inside of the bend. These suggestions are by no means convincing. It appears in evidence that the river bottom here is composed of mud and silt, and as the tide at the time of this incident was nearly at its flood, there was ample depth of water to have accommodated the Ban Yek if she had kept to that part of the stream which it was proper for her to occupy. We may further observe that the disparity in the size of the vessels was not such as to dominate the situation and deprive the Perla of the right of way under the conditions stated. Blame for the collision must therefore, as already stated, be attributed to the Ban Yek.chanroblesvirtualawlibrary chanrobles virtual law library On the other hand no fault can be attributed to the officers navigating the Perla either in maintaining the course which had been determined upon for that vessel in conformity with the marine regulations applicable to the case or in deflecting the vessel towards the middle of the stream after the danger of collision became imminent. The trial judge suggests in his opinion that when Captain Garrido saw that the Ban Yek was holding her course to the left, he (Garrido) should have changed the course of the Perla to port more promptly. The validity of this criticism cannot be admitted. Among rules applicable to navigation none is better founded on reason and experience than that which requires the navigating officers of any vessel to assume that an approaching vessel will observe the regulations prescribed for navigation (G. Urrutia & Co. vs. Baco River Plantation Co., 26 Phil., 632, 637). Any other rule would introduce guess work into the control of ships and produce uncertainty in the operation of the regulations.chanroblesvirtualawlibrary chanrobles virtual law library Our conclusion is that his Honor, the trial judge, was in error in not awarding damages to the Perla; but no error was committed in absolving the plaintiffs from the defendants' cross-complaint.chanroblesvirtualawlibrary chanrobles virtual law library

The sum of P17,827 in our opinion represents the limit of the plaintiffs' right of recovery. In the original complaint recovery is sought for an additional amount of P18,000, most of which consists of damages supposed to have been incurred from the inability of the Perla to maintain her regular schedule while laid up in the dock undergoing repairs. The damages thus claimed, in addition to being somewhat of a speculative nature, are in our opinion not sufficiently proved to warrant the court in allowing the same.chanroblesvirtualawlibrary chanrobles virtual law library Having determined the amount which the plaintiffs are entitled to recover, it becomes necessary to consider the person, or persons, who must respond for these damages. Upon this point we note that Silvino Lim is impleaded as owner; and Siy Cong Bieng & Co. is impleaded as the shipping agent (casa naviera), or person in responsible control of the Ban Yek at the time of the accident. We note further that in article 826 of the Code of Commerce it is declared that the owner of any vessel shall be liable for the indemnity due to any other vessel injured by the fault, negligence, or lack of skill of the captain of the first. We say "owner," which is the word used in the current translation of this article in the Spanish Code of Commerce. It is to be observed, however, that the Spanish text itself uses the wordnaviero; and there is some ambiguity in the use of said word in this article, owing to the fact that naviero in Spanish has several meanings. The author of the article which appears under the word naviero in the Enciclopedia Juridica Espaola tells us that in Spanish it may mean either owner, outfitter, charterer, or agent, though he says that the fundamental and correct meaning of the word is that of "owner." That naviero, as used in the Spanish text of article 826, means owner is further to be inferred from article 837, which limits the civil liability expressed in article 826 to the value of the vessel with all her appurtenances and all the freight earned during the voyage. There would have been no propriety in limiting liability to the value of the vessel unless the owner were understood to be the person liable. It is therefore clear that by special provision of the Code of Commerce the owner is made responsible for the damage caused by an accident of the kind under consideration in this case; and in more than one case this court has held the owner liable, when sued alone (Philippine Shipping Co. vs. Garcia Vergara, 6 Phil., 281; G. Urrutia & Co.vs. Baco River Plantation Co., 26 Phil., 632).chanroblesvirtualawlibrary chanrobles virtual law library

But while it is thus demonstrated that Silvino Lim is liable for these damages in the character of owner, it does not necessarily follows that Siy Cong Bieng & Co., as character or agent (casa naviera), is exempt from liability; and we are of the opinion that both the owner and agent can be held responsible where both are impleaded together. In Philippine Shipping Co., vs. Garcia Vergara (6 Phil., 281), it seems to have been accepted as a matter of course that both owner and agent of the offending vessel are liable for the damage done; and this must, we think, be true. The liability of the naviero, in the sense of charterer or agent, if not expressed in article 826 of the Code of Commerce, is clearly deducible from the general doctrine of jurisprudence stated in article 1902 of the Civil Code, and it is also recognized, but more especially as regards contractual obligations, in article 586 of the Code of Commerce. Moreover, we are of the opinion that both the owner and agent (naviero) should be declared to be jointly and severally liable, since the obligation which is the subject of this action had its origin in a tortious act and did not arise from contract. Article 1137 of the Civil Code, declaring that joint obligations shall be apportionable unless otherwise provided, has no application to obligation arising from tort.chanroblesvirtualawlibrary chanrobles virtual law library For the reasons stated the judgment appealed from will be affirmed in so far as it absolves the plaintiffs from the defendants' cross-complaint but will be reversed in so far as it absolves the defendants from the plaintiffs' complaint; and judgment will be entered for the plaintiffs to recover jointly and severally from the defendants Silvino Lim and Siy Cong Bieng & Co. the sum of seventeen thousand eight hundred and twenty-seven pesos (P17,827), with interest from the date of the institution of the action, without special pronouncement as to costs of either instance. So ordered.chanroblesvirtualawlibrary chanrobles virtual law library Johnson, Malcolm, Avancea, Villamor and Romualdez, JJ., concur.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 115838 July 18, 2002

CONSTANTE AMOR DE CASTRO and CORAZON AMOR DE CASTRO, petitioners, vs. COURT OF APPEALS and FRANCISCO ARTIGO, respondents. CARPIO, J.: The Case Before us is a Petition for Review on Certiorari1 seeking to annul the Decision of the Court of Appeals2 dated May 4, 1994 in CA-G.R. CV No. 37996, which affirmed in toto the decision3 of the Regional Trial Court of Quezon City, Branch 80, in Civil Case No. Q-89-2631. The trial court disposed as follows: "WHEREFORE, the Court finds defendants Constante and Corazon Amor de Castro jointly and solidarily liable to plaintiff the sum of: a) P303,606.24 representing unpaid commission; b) P25,000.00 for and by way of moral damages; c) P45,000.00 for and by way of attorney's fees;

d) To pay the cost of this suit. Quezon City, Metro Manila, December 20, 1991." The Antecedent Facts On May 29, 1989, private respondent Francisco Artigo ("Artigo" for brevity) sued petitioners Constante A. De Castro ("Constante" for brevity) and Corazon A. De Castro ("Corazon" for brevity) to collect the unpaid balance of his broker's commission from the De Castros.4 The Court of Appeals summarized the facts in this wise: "x x x. Appellants5 were co-owners of four (4) lots located at EDSA corner New York and Denver Streets in Cubao, Quezon City. In a letter dated January 24, 1984 (Exhibit "A-1, p. 144, Records), appellee6 was authorized by appellants to act as real estate broker in the sale of these properties for the amount ofP23,000,000.00, five percent (5%) of which will be given to the agent as commission. It was appellee who first found Times Transit Corporation, represented by its president Mr. Rondaris, as prospective buyer which desired to buy two (2) lots only, specifically lots 14 and 15. Eventually, sometime in May of 1985, the sale of lots 14 and 15 was consummated. Appellee received from appellants P48,893.76 as commission. It was then that the rift between the contending parties soon emerged. Appellee apparently felt short changed because according to him, his total commission should be P352,500.00 which is five percent (5%) of the agreed price of P7,050,000.00 paid by Times Transit Corporation to appellants for the two (2) lots, and that it was he who introduced the buyer to appellants and unceasingly facilitated the negotiation which ultimately led to the consummation of the sale. Hence, he sued below to collect the balance of P303,606.24 after having received P48,893.76 in advance.1wphi1.nt On the other hand, appellants completely traverse appellee's claims and essentially argue that appellee is selfishly asking for more than what he truly deserved as commission to the prejudice of other agents who were more instrumental in the consummation of the sale. Although appellants readily concede that it was appellee who first introduced Times Transit Corp. to them, appellee was not designated by them as their exclusive real

estate agent but that in fact there were more or less eighteen (18) others whose collective efforts in the long run dwarfed those of appellee's, considering that the first negotiation for the sale where appellee took active participation failed and it was these other agents who successfully brokered in the second negotiation. But despite this and out of appellants' "pure liberality, beneficence and magnanimity", appellee nevertheless was given the largest cut in the commission (P48,893.76), although on the principle of quantum meruit he would have certainly been entitled to less. So appellee should not have been heard to complain of getting only a pittance when he actually got the lion's share of the commission and worse, he should not have been allowed to get the entire commission. Furthermore, the purchase price for the two lots was only P3.6 million as appearing in the deed of sale and not P7.05 million as alleged by appellee. Thus, even assuming that appellee is entitled to the entire commission, he would only be getting 5% of the P3.6 million, or P180,000.00." Ruling of the Court of Appeals The Court of Appeals affirmed in toto the decision of the trial court. First. The Court of Appeals found that Constante authorized Artigo to act as agent in the sale of two lots in Cubao, Quezon City. The handwritten authorization letter signed by Constante clearly established a contract of agency between Constante and Artigo. Thus, Artigo sought prospective buyers and found Times Transit Corporation ("Times Transit" for brevity). Artigo facilitated the negotiations which eventually led to the sale of the two lots. Therefore, the Court of Appeals decided that Artigo is entitled to the 5% commission on the purchase price as provided in the contract of agency. Second. The Court of Appeals ruled that Artigo's complaint is not dismissible for failure to implead as indispensable parties the other co-owners of the two lots. The Court of Appeals explained that it is not necessary to implead the other coowners since the action is exclusively based on a contract of agency between Artigo and Constante. Third. The Court of Appeals likewise declared that the trial court did not err in admitting parol evidence to prove the true amount paid by Times Transit to the De Castros for the two lots. The Court of Appeals ruled that evidencealiunde could

be presented to prove that the actual purchase price was P7.05 million and not P3.6 million as appearing in the deed of sale. Evidence aliunde is admissible considering that Artigo is not a party, but a mere witness in the deed of sale between the De Castros and Times Transit. The Court of Appeals explained that, "the rule that oral evidence is inadmissible to vary the terms of written instruments is generally applied only in suits between parties to the instrument and strangers to the contract are not bound by it." Besides, Artigo was not suing under the deed of sale, but solely under the contract of agency. Thus, the Court of Appeals upheld the trial court's finding that the purchase price was P7.05 million and not P3.6 million. Hence, the instant petition. The Issues According to petitioners, the Court of Appeals erred in I. NOT ORDERING THE DISMISSAL OF THE COMPLAINT FOR FAILURE TO IMPLEAD INDISPENSABLE PARTIES-IN-INTEREST; II. NOT ORDERING THE DISMISSAL OF THE COMPLAINT ON THE GROUND THAT ARTIGO'S CLAIM HAS BEEN EXTINGUISHED BY FULL PAYMENT, WAIVER, OR ABANDONMENT; III. CONSIDERING INCOMPETENT EVIDENCE; IV. GIVING CREDENCE TO PATENTLY PERJURED TESTIMONY; V. SANCTIONING AN AWARD OF MORAL DAMAGES AND ATTORNEY'S FEES; VI. NOT AWARDING THE DE CASTRO'S MORAL AND EXEMPLARY DAMAGES, AND ATTORNEY'S FEES. The Court's Ruling The petition is bereft of merit. First Issue: whether the complaint merits dismissal for failure to implead other co-owners as indispensable parties

The De Castros argue that Artigo's complaint should have been dismissed for failure to implead all the co-owners of the two lots. The De Castros claim that Artigo always knew that the two lots were co-owned by Constante and Corazon with their other siblings Jose and Carmela whom Constante merely represented. The De Castros contend that failure to implead such indispensable parties is fatal to the complaint since Artigo, as agent of all the four co-owners, would be paid with funds co-owned by the four co-owners. The De Castros' contentions are devoid of legal basis. An indispensable party is one whose interest will be affected by the court's action in the litigation, and without whom no final determination of the case can be had.7 The joinder of indispensable parties is mandatory and courts cannot proceed without their presence.8 Whenever it appears to the court in the course of a proceeding that an indispensable party has not been joined, it is the duty of the court to stop the trial and order the inclusion of such party.9 However, the rule on mandatory joinder of indispensable parties is not applicable to the instant case. There is no dispute that Constante appointed Artigo in a handwritten note dated January 24, 1984 to sell the properties of the De Castros for P23 million at a 5 percent commission. The authority was on a first come, first serve basis. The authority reads in full: "24 Jan. 84 To Whom It May Concern: This is to state that Mr. Francisco Artigo is authorized as our real estate broker in connection with the sale of our property located at Edsa Corner New York & Denver, Cubao, Quezon City. Asking price P 23,000,000.00 with 5% commission as agent's fee. C.C. de Castro owner & representing co-owners

This authority is on a first-come First serve basis CAC" Constante signed the note as owner and as representative of the other coowners. Under this note, a contract of agency was clearly constituted between Constante and Artigo. Whether Constante appointed Artigo as agent, in Constante's individual or representative capacity, or both, the De Castros cannot seek the dismissal of the case for failure to implead the other co-owners as indispensable parties. The De Castros admit that the other co-owners are solidarily liable under the contract of agency,10 citing Article 1915 of the Civil Code, which reads: Art. 1915. If two or more persons have appointed an agent for a common transaction or undertaking, they shall be solidarily liable to the agent for all the consequences of the agency. The solidary liability of the four co-owners, however, militates against the De Castros' theory that the other co-owners should be impleaded as indispensable parties. A noted commentator explained Article 1915 thus "The rule in this article applies even when the appointments were made by the principals in separate acts, provided that they are for the same transaction. The solidarity arises from the common interest of the principals, and not from the act of constituting the agency. By virtue of this solidarity, the agent can recover from any principal the whole compensation and indemnity owing to him by the others. The parties, however, may, by express agreement, negate this solidary responsibility. The solidarity does not disappear by the mere partition effected by the principals after the accomplishment of the agency. If the undertaking is one in which several are interested, but only some create the agency, only the latter are solidarily liable, without prejudice to the effects of negotiorum gestio with respect to the others. And if the power granted includes various transactions some of which are common and others are not, only those interested in each transaction shall be liable for it."11

When the law expressly provides for solidarity of the obligation, as in the liability of co-principals in a contract of agency, each obligor may be compelled to pay the entire obligation.12 The agent may recover the whole compensation from any one of the co-principals, as in this case. Indeed, Article 1216 of the Civil Code provides that a creditor may sue any of the solidary debtors. This article reads: Art. 1216. The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected. Thus, the Court has ruled in Operators Incorporated vs. American Biscuit Co., Inc.13 that "x x x solidarity does not make a solidary obligor an indispensable party in a suit filed by the creditor. Article 1216 of the Civil Code says that the creditor `may proceed against anyone of the solidary debtors or some or all of them simultaneously'." (Emphasis supplied) Second Issue: whether Artigo's claim has been extinguished by full payment, waiver or abandonment The De Castros claim that Artigo was fully paid on June 14, 1985, that is, Artigo was given "his proportionate share and no longer entitled to any balance." According to them, Artigo was just one of the agents involved in the sale and entitled to a "proportionate share" in the commission. They assert that Artigo did absolutely nothing during the second negotiation but to sign as a witness in the deed of sale. He did not even prepare the documents for the transaction as an active real estate broker usually does. The De Castros' arguments are flimsy. A contract of agency which is not contrary to law, public order, public policy, morals or good custom is a valid contract, and constitutes the law between the parties.14 The contract of agency entered into by Constante with Artigo is the law between them and both are bound to comply with its terms and conditions in good faith.

The mere fact that "other agents" intervened in the consummation of the sale and were paid their respective commissions cannot vary the terms of the contract of agency granting Artigo a 5 percent commission based on the selling price. These "other agents" turned out to be employees of Times Transit, the buyer Artigo introduced to the De Castros. This prompted the trial court to observe: "The alleged `second group' of agents came into the picture only during the so-called `second negotiation' and it is amusing to note that these (sic) second group, prominent among whom are Atty. Del Castillo and Ms. Prudencio, happened to be employees of Times Transit, the buyer of the properties. And their efforts were limited to convincing Constante to 'part away' with the properties because the redemption period of the foreclosed properties is around the corner, so to speak. (tsn. June 6, 1991). xxx To accept Constante's version of the story is to open the floodgates of fraud and deceit. A seller could always pretend rejection of the offer and wait for sometime for others to renew it who are much willing to accept a commission far less than the original broker. The immorality in the instant case easily presents itself if one has to consider that the alleged `second group' are the employees of the buyer, Times Transit and they have not bettered the offer secured by Mr. Artigo for P7 million. It is to be noted also that while Constante was too particular about the unrenewed real estate broker's license of Mr. Artigo, he did not bother at all to inquire as to the licenses of Prudencio and Castillo. (tsn, April 11, 1991, pp. 39-40)."15 (Emphasis supplied) In any event, we find that the 5 percent real estate broker's commission is reasonable and within the standard practice in the real estate industry for transactions of this nature. The De Castros also contend that Artigo's inaction as well as failure to protest estops him from recovering more than what was actually paid him. The De Castros cite Article 1235 of the Civil Code which reads:

Art. 1235. When the obligee accepts the performance, knowing its incompleteness and irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with. The De Castros' reliance on Article 1235 of the Civil Code is misplaced. Artigo's acceptance of partial payment of his commission neither amounts to a waiver of the balance nor puts him in estoppel. This is the import of Article 1235 which was explained in this wise: "The word accept, as used in Article 1235 of the Civil Code, means to take as satisfactory or sufficient, or agree to an incomplete or irregular performance. Hence, the mere receipt of a partial payment is not equivalent to the required acceptance of performance as would extinguish the whole obligation."16(Emphasis supplied) There is thus a clear distinction between acceptance and mere receipt. In this case, it is evident that Artigo merely received the partial payment without waiving the balance. Thus, there is no estoppel to speak of. The De Castros further argue that laches should apply because Artigo did not file his complaint in court until May 29, 1989, or almost four years later. Hence, Artigo's claim for the balance of his commission is barred by laches. Laches means the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.17 Artigo disputes the claim that he neglected to assert his rights. He was appointed as agent on January 24, 1984. The two lots were finally sold in June 1985. As found by the trial court, Artigo demanded in April and July of 1985 the payment of his commission by Constante on the basis of the selling price of P7.05 million but there was no response from Constante.18 After it became clear that his demands for payment have fallen on deaf ears, Artigo decided to sue on May 29, 1989. Actions upon a written contract, such as a contract of agency, must be brought within ten years from the time the right of action accrues.19 The right of action accrues from the moment the breach of right or duty occurs. From this moment,

the creditor can institute the action even as the ten-year prescriptive period begins to run.20 The De Castros admit that Artigo's claim was filed within the ten-year prescriptive period. The De Castros, however, still maintain that Artigo's cause of action is barred by laches. Laches does not apply because only four years had lapsed from the time of the sale in June 1985. Artigo made a demand in July 1985 and filed the action in court on May 29, 1989, well within the ten-year prescriptive period. This does not constitute an unreasonable delay in asserting one's right. The Court has ruled, "a delay within the prescriptive period is sanctioned by law and is not considered to be a delay that would bar relief."21 In explaining that laches applies only in the absence of a statutory prescriptive period, the Court has stated "Laches is recourse in equity. Equity, however, is applied only in the absence, never in contravention, of statutory law. Thus, laches, cannot, as a rule, be used to abate a collection suit filed within the prescriptive period mandated by the Civil Code."22 Clearly, the De Castros' defense of laches finds no support in law, equity or jurisprudence. Third issue: whether the determination of the purchase price was made in violation of the Rules on Evidence The De Castros want the Court to re-examine the probative value of the evidence adduced in the trial court to determine whether the actual selling price of the two lots was P7.05 million and not P3.6 million. The De Castros contend that it is erroneous to base the 5 percent commission on a purchase price of P7.05 million as ordered by the trial court and the appellate court. The De Castros insist that the purchase price is P3.6 million as expressly stated in the deed of sale, the due execution and authenticity of which was admitted during the trial. The De Castros believe that the trial and appellate courts committed a mistake in considering incompetent evidence and disregarding the best evidence and parole evidence rules. They claim that the Court of Appeals erroneously affirmed sub silentio the trial court's reliance on the various correspondences between Constante and Times Transit which were mere photocopies that do not satisfy the best evidence rule. Further, these letters covered only the first negotiations

between Constante and Times Transit which failed; hence, these are immaterial in determining the final purchase price. The De Castros further argue that if there was an undervaluation, Artigo who signed as witness benefited therefrom, and being equally guilty, should be left where he presently stands. They likewise claim that the Court of Appeals erred in relying on evidence which were not offered for the purpose considered by the trial court. Specifically, Exhibits "B", "C", "D" and "E" were not offered to prove that the purchase price was P7.05 Million. Finally, they argue that the courts a quo erred in giving credence to the perjured testimony of Artigo. They want the entire testimony of Artigo rejected as a falsehood because he was lying when he claimed at the outset that he was a licensed real estate broker when he was not. Whether the actual purchase price was P7.05 Million as found by the trial court and affirmed by the Court of Appeals, or P3.6 Million as claimed by the De Castros, is a question of fact and not of law. Inevitably, this calls for an inquiry into the facts and evidence on record. This we can not do. It is not the function of this Court to re-examine the evidence submitted by the parties, or analyze or weigh the evidence again.23 This Court is not the proper venue to consider a factual issue as it is not a trier of facts. In petitions for review on certiorari as a mode of appeal under Rule 45, a petitioner can only raise questions of law. Our pronouncement in the case of Cormero vs. Court of Appeals24 bears reiteration: "At the outset, it is evident from the errors assigned that the petition is anchored on a plea to review the factual conclusion reached by the respondent court. Such task however is foreclosed by the rule that in petitions for certiorari as a mode of appeal, like this one, only questions of law distinctly set forth may be raised. These questions have been defined as those that do not call for any examination of the probative value of the evidence presented by the parties. (Uniland Resources vs. Development Bank of the Philippines, 200 SCRA 751 [1991] citing Goduco vs. Court of appeals, et al., 119 Phil. 531; Hernandez vs. Court of Appeals, 149 SCRA 67). And when this court is asked to go over the proof presented by the parties, and analyze, assess and weigh them to ascertain if the trial court and the appellate court were correct in according superior credit to this or that piece of evidence and eventually, to the totality of the evidence of one

party or the other, the court cannot and will not do the same. (Elayda vs. Court of Appeals, 199 SCRA 349 [1991]). Thus, in the absence of any showing that the findings complained of are totally devoid of support in the record, or that they are so glaringly erroneous as to constitute serious abuse of discretion, such findings must stand, for this court is not expected or required to examine or contrast the oral and documentary evidence submitted by the parties. (Morales vs. Court of Appeals, 197 SCRA 391 [1991] citing Santa Ana vs. Hernandez, 18 SCRA 973 [1966])." We find no reason to depart from this principle. The trial and appellate courts are in a much better position to evaluate properly the evidence. Hence, we find no other recourse but to affirm their finding on the actual purchase price.1wphi1.nt Fourth Issue: whether award of moral damages and attorney's fees is proper The De Castros claim that Artigo failed to prove that he is entitled to moral damages and attorney's fees. The De Castros, however, cite no concrete reason except to say that they are the ones entitled to damages since the case was filed to harass and extort money from them. Law and jurisprudence support the award of moral damages and attorney's fees in favor of Artigo. The award of damages and attorney's fees is left to the sound discretion of the court, and if such discretion is well exercised, as in this case, it will not be disturbed on appeal.25 Moral damages may be awarded when in a breach of contract the defendant acted in bad faith, or in wanton disregard of his contractual obligation.26 On the other hand, attorney's fees are awarded in instances where "the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim."27 There is no reason to disturb the trial court's finding that "the defendants' lack of good faith and unkind treatment of the plaintiff in refusing to give his due commission deserve censure." This warrants the award of P25,000.00 in moral damages and P 45,000.00 in attorney's fees. The amounts are, in our view, fair and reasonable. Having found a buyer for the two lots, Artigo had already performed his part of the bargain under the contract of agency. The De Castros should have exercised fairness and good judgment in dealing with Artigo by fulfilling their own part of the bargain - paying Artigo his 5 percent broker's commission based on the actual purchase price of the two lots.

WHEREFORE, the petition is denied for lack of merit. The Decision of the Court of Appeals dated May 4, 1994 in CA-G.R. CV No. 37996 is AFFIRMED in toto. SO ORDERED.

THIRD DIVISION

G.R. No. 175910 Present: YNARES-SANTIAGO, J., ATTY. ROGELIO E. SARSABA, Petitioner, Chairperson, CHICO-NAZARIO, VELASCO, JR., - versus NACHURA, and PERALTA, JJ. FE VDA. DE TE, represented by her Promulgated: Attorney-in-Fact, FAUSTINO CASTAEDA, July 30, 2009 Respondents. x---------------------------------------------------x

DECISION

PERALTA, J.:

Before us is a petition for review on certiorari[1] with prayer for preliminary injunction assailing the Order[2] dated March 22, 2006 of the Regional Trial Court (RTC), Branch 19, Digos City, Davao del Sur, in Civil Case No. 3488.

The facts, as culled from the records, follow.

On February 14, 1995, a Decision was rendered in NLRC Case No. RAB-1107-00608-93 entitled, Patricio Sereno v. Teodoro Gasing/Truck Operator, finding Sereno to have been illegally dismissed and ordering Gasing to pay him his monetary claims in the amount of P43,606.47. After the Writ of Execution was returned unsatisfied, Labor Arbiter Newton R. Sancho issued an Alias Writ of Execution[3] on June 10, 1996, directing Fulgencio R. Lavarez, Sheriff II of the National Labor Relations Commission (NLRC), to satisfy the judgment award. On July 23, 1996, Lavarez, accompanied by Sereno and his counsel, petitioner Atty. Rogelio E. Sarsaba, levied a Fuso Truck bearing License Plate No. LBR-514, which at that time was in the possession of Gasing. On July 30, 1996, the truck was sold at public auction, with Sereno appearing as the highest bidder.[4]

Meanwhile, respondent Fe Vda. de Te, represented by her attorney-in-fact, Faustino Castaeda, filed with the RTC, Branch 18, Digos, Davao del Sur, a Complaint[5] for recovery of motor vehicle, damages with prayer for the delivery of the truck pendente lite against petitioner, Sereno, Lavarez and the NLRC of Davao City, docketed as Civil Case No. 3488.

Respondent alleged that: (1) she is the wife of the late Pedro Te, the registered owner of the truck, as evidenced by the Official Receipt[6] and Certificate of Registration;[7] (2) Gasing merely rented the truck from her; (3) Lavarez erroneously assumed that Gasing owned the truck because he was, at the time of the taking,[8] in possession of the same; and (4) since neither she nor her husband were parties to the labor case between Sereno and Gasing, she should

not be made to answer for the judgment award, much less be deprived of the truck as a consequence of the levy in execution.

Petitioner filed a Motion to Dismiss[9] on the following grounds: (1) respondent has no legal personality to sue, having no real interests over the property subject of the instant complaint; (2) the allegations in the complaint do not sufficiently state that the respondent has cause of action; (3) the allegations in the complaint do not contain sufficient cause of action as against him; and (4) the complaint is not accompanied by an Affidavit of Merit and Bond that would entitle the respondent to the delivery of the tuckpendente lite.

The NLRC also filed a Motion to Dismiss[10] on the grounds of lack of jurisdiction and lack of cause of action.

Meanwhile, Lavarez filed an Answer with Compulsory Counterclaim and Third-Party Complaint.[11] By way of special and affirmative defenses, he asserted that the RTC does not have jurisdiction over the subject matter and that the complaint does not state a cause of action.

On January 21, 2000, the RTC issued an Order[12] denying petitioner's Motion to Dismiss for lack of merit.

In his Answer,[13] petitioner denied the material allegations in the complaint. Specifically, he cited as affirmative defenses that: respondent had no legal personality to sue, as she had no interest over the motor vehicle; that there was no showing that the heirs have filed an intestate estate proceedings of the estate of Pedro Te, or that respondent was duly authorized by her co-heirs to file

the case; and that the truck was already sold to Gasing on March 11, 1986 by one Jesus Matias, who bought the same from the Spouses Te. Corollarily, Gasing was already the lawful owner of the truck when it was levied on execution and, later on, sold at public auction.

Incidentally, Lavarez opposed[15] by respondent.

filed

Motion

for

Inhibition,[14] which

was

On October 13, 2000, RTC Branch 18 issued an Order[16] of inhibition and directed the transfer of the records to Branch 19. RTC Branch 19, however, returned the records back to Branch 18 in view of the appointment of a new judge in place of Judge-designate Rodolfo A. Escovilla. Yet, Branch 19 issued another Order[17] dated November 22, 2000 retaining the case in said branch.

Eventually, the RTC issued an Order[18] dated May 19, 2003 denying the separate motions to dismiss filed by the NLRC and Lavarez, and setting the PreTrial Conference on July 25, 2003.

On October 17, 2005, petitioner filed an Omnibus Motion to Dismiss the Case on the following grounds:[19] (1) lack of jurisdiction over one of the principal defendants; and (2) to discharge respondent's attorney-in-fact for lack of legal personality to sue.

It appeared that the respondent, Fe Vda. de Te, died on April 12, 2005.[20]

Respondent, through her lawyer, Atty. William G. Carpentero, filed an Opposition,[21] contending that the failure to serve summons upon Sereno is not a ground for dismissing the complaint, because the other defendants have already submitted their respective responsive pleadings. He also contended that the defendants, including herein petitioner, had previously filed separate motions to dismiss the complaint, which the RTC denied for lack of merit. Moreover, respondent's death did not render functus officio her right to sue since her attorney-in-fact, Faustino Castaeda, had long testified on the complaint on March 13, 1998 for and on her behalf and, accordingly, submitted documentary exhibits in support of the complaint.

On March 22, 2006, the RTC issued the assailed Order[22] denying petitioner's aforesaid motion.

Petitioner then filed a Motion for Reconsideration with Motion for Inhibition,[23] in which he claimed that the judge who issued the Order was biased and partial. He went on to state that the judge's husband was the defendant in a petition for judicial recognition of which he was the counsel, docketed as Civil Case No. C-XXI-100, before the RTC, Branch 21, Bansalan, Davao del Sur. Thus, propriety dictates that the judge should inhibit herself from the case.

Acting on the motion for inhibition, Judge Carmelita Sarno-Davin granted the same[24] and ordered that the case be re-raffled to Branch 18. Eventually, the said RTC issued an Order[25] on October 16, 2006 denying petitioner's motion for reconsideration for lack of merit.

Hence, petitioner directly sought recourse from the Court via the present petition involving pure questions of law, which he claimed were resolved by the RTC contrary to law, rules and existing jurisprudence.[26]

There is a question of law when the doubt or difference arises as to what the law is on certain state of facts, and which does not call for an examination of the probative value of the evidence presented by the parties-litigants. On the other hand, there is a question of fact when the doubt or controversy arises as to the truth or falsity of the alleged facts. Simply put, when there is no dispute as to fact, the question of whether or not the conclusion drawn therefrom is correct, is a question of law.[27]

Verily, the issues raised by herein petitioner are questions of law, as their resolution rest solely on what the law provides given the set of circumstances availing. The first issue involves the jurisdiction of the court over the person of one of the defendants, who was not served with summons on account of his death. The second issue, on the other hand, pertains to the legal effect of death of the plaintiff during the pendency of the case.

At first brush, it may appear that since pure questions of law were raised, petitioner's resort to this Court was justified and the resolution of the aforementioned issues will necessarily follow. However, a perusal of the petition requires that certain procedural issues must initially be resolved before We delve into the merits of the case.

Notably, the petition was filed directly from the RTC which issued the Order in the exercise of its original jurisdiction. The question before Us then is:

whether or not petitioner correctly availed of the mode of appeal under Rule 45 of the Rules of Court.

Significantly, the rule on appeals is outlined below, to wit:[28]

(1) In all cases decided by the RTC in the exercise of its original jurisdiction, appeal may be made to the Court of Appeals by mere notice of appeal where the appellant raises questions of fact or mixed questions of fact and law;

(2) In all cases decided by the RTC in the exercise of its original jurisdiction where the appellant raises only questions of law, the appeal must be taken to the Supreme Court on a petition for review on certiorari under Rule 45.

(3) All appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction, regardless of whether the appellant raises questions of fact, questions of law, or mixed questions of fact and law, shall be brought to the Court of Appeals by filing a petition for review under Rule 42.

Accordingly, an appeal may be taken from the RTC which exercised its original jurisdiction, before the Court of Appeals or directly before this Court, provided that the subject of the same is a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by the Rules to be appealable.[29] The first mode of appeal, to be filed before the Court of Appeals, pertains to a writ of error under Section 2(a), Rule 41 of the

Rules of Court, if questions of fact or questions of fact and law are raised or involved. On the other hand, the second mode is by way of an appeal by certiorari before the Supreme Court under Section 2(c), Rule 41, in relation to Rule 45, where only questions of law are raised or involved.[30]

An order or judgment of the RTC is deemed final when it finally disposes of a pending action, so that nothing more can be done with it in the trial court. In other words, the order or judgment ends the litigation in the lower court.[31] On the other hand, an order which does not dispose of the case completely and indicates that other things remain to be done by the court as regards the merits, is interlocutory. Interlocutory refers to something between the commencement and the end of the suit which decides some point or matter, but is not a final decision on the whole controversy.[32]

The subject of the present petition is an Order of the RTC, which denied petitioner's Omnibus Motion to Dismiss, for lack of merit.

We have said time and again that an order denying a motion to dismiss is interlocutory.[33] Under Section 1(c), Rule 41 of the Rules of Court, an interlocutory order is not appealable. As a remedy for the denial, a party has to file an answer and interpose as a defense the objections raised in the motion, and then to proceed to trial; or, a party may immediately avail of the remedy available to the aggrieved party by filing an appropriate special civil action for certiorari under Rule 65 of the Revised Rules of Court. Let it be stressed though that a petition for certiorari is appropriate only when an order has been issued without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction.

Based on the foregoing, the Order of the RTC denying petitioner's Omnibus Motion to Dismiss is not appealable even on pure questions of law. It is worth mentioning that the proper procedure in this case, as enunciated by this Court, is to cite such interlocutory order as an error in the appeal of the case -- in the event that the RTC rules in favor of respondent -- and not to appeal such interlocutory order. On the other hand, if the petition is to be treated as a petition for review under Rule 45, it would likewise fail because the proper subject would only be judgments or final orders that completely dispose of the case.[34]

Not being a proper subject of an appeal, the Order of the RTC is considered interlocutory. Petitioner should have proceeded with the trial of the case and, should the RTC eventually render an unfavorable verdict, petitioner should assail the said Order as part of an appeal that may be taken from the final judgment to be rendered in this case. Such rule is founded on considerations of orderly procedure, to forestall useless appeals and avoid undue inconvenience to the appealing party by having to assail orders as they are promulgated by the court, when all such orders may be contested in a single appeal.

In one case,[35] the Court adverted to the hazards of interlocutory appeals:

It is axiomatic that an interlocutory order cannot be challenged by an appeal. Thus, it has been held that the proper remedy in such cases is an ordinary appeal from an adverse judgment on the merits, incorporating in said appeal the grounds for assailing the interlocutory order. Allowing appeals from interlocutory orders would result in the `sorry spectacle of a case being subject of a counterproductive ping-pong to and from the appellate court as often as a trial court is perceived to have made an error in any of its interlocutory rulings. x x x.

Another recognized reason of the law in permitting appeal only from a final order or judgment, and not from an interlocutory or incidental one, is to avoid multiplicity of appeals in a single action, which must necessarily suspend the hearing and decision on the merits of the case during the pendency of the appeal. If such appeal were allowed, trial on the merits of the case would necessarily be delayed for a considerable length of time and compel the adverse party to incur unnecessary expenses, for one of the parties may interpose as many appeals as incidental questions may be raised by him, and interlocutory orders rendered or issued by the lower court.[36]

And, even if We treat the petition to have been filed under Rule 65, the same is still dismissible for violating the principle on hierarchy of courts. Generally, a direct resort to us in a petition for certiorari is highly improper, for it violates the established policy of strict observance of the judicial hierarchy of courts.[37] This principle, as a rule, requires that recourse must first be made to the lower-ranked court exercising concurrent jurisdiction with a higher court. However, the judicial hierarchy of courts is not an iron-clad rule. A strict application of the rule is not necessary when cases brought before the appellate courts do not involve factual but legal questions.[38]

In the present case, petitioner submits pure questions of law involving the effect of non-service of summons following the death of the person to whom it should be served, and the effect of the death of the complainant during the pendency of the case. We deem it best to rule on these issues, not only for the benefit of the bench and bar, but in order to prevent further delay in the trial of the case. Resultantly, our relaxation of the policy of strict observance of the judicial hierarchy of courts is warranted.

Anent the first issue, petitioner argues that, since Sereno died before summons was served on him, the RTC should have dismissed the complaint against all the defendants and that the same should be filed against his estate.

The Sheriff's Return of Service[39] dated May 19, 1997 states that Sereno could not be served with copy of the summons, together with a copy of the complaint, because he was already dead.

In view of Sereno's death, petitioner asks that the complaint should be dismissed, not only against Sereno, but as to all the defendants, considering that the RTC did not acquire jurisdiction over the person of Sereno.

Jurisdiction over a party is acquired by service of summons by the sheriff, his deputy or other proper court officer, either personally by handing a copy thereof to the defendant or by substituted service.[40] On the other hand, summons is a writ by which the defendant is notified of the action brought against him. Service of such writ is the means by which the court may acquire jurisdiction over his person.[41] Records show that petitioner had filed a Motion to Dismiss on the grounds of lack of legal personality of respondent; the allegations in the complaint did not sufficiently state that respondent has a cause of action or a cause of action against the defendants; and, the complaint was not accompanied by an affidavit of merit and bond. The RTC denied the motion and held therein that, on the basis of the allegations of fact in the complaint, it can render a valid judgment. Petitioner, subsequently, filed his answer by denying all the material allegations of the complaint. And by way of special and affirmative defenses, he reiterated that respondent had no legal personality to sue as she had no real interest over the property and that while the truck was still registered in Pedro Te's name, the same was already sold to Gasing.

Significantly, a motion to dismiss may be filed within the time for but before the filing of an answer to the complaint or pleading asserting a claim.[42] Among the grounds mentioned is the court's lack of jurisdiction over the person of the defending party. As a rule, all defenses and objections not pleaded, either in a motion to dismiss or in an answer, are deemed waived.[43] The exceptions to this rule are: (1) when the court has no jurisdiction over the subject matter, (2) when there is another action pending between the parties for the same cause, or (3) when the action is barred by prior judgment or by statute of limitations, in which cases, the court may dismiss the claim. In the case before Us, petitioner raises the issue of lack of jurisdiction over the person of Sereno, not in his Motion to Dismiss or in his Answer but only in his Omnibus Motion to Dismiss. Having failed to invoke this ground at the proper time, that is, in a motion to dismiss, petitioner cannot raise it now for the first time on appeal. In fine, We cannot countenance petitioner's argument that the complaint against the other defendants should have been dismissed, considering that the RTC never acquired jurisdiction over the person of Sereno. The court's failure to acquire jurisdiction over one's person is a defense which is personal to the person claiming it. Obviously, it is now impossible for Sereno to invoke the same in view of his death. Neither can petitioner invoke such ground, on behalf of Sereno, so as to reap the benefit of having the case dismissed against all of the defendants. Failure to serve summons on Sereno's person will not be a cause for the dismissal of the complaint against the other defendants, considering that they have been served with copies of the summons and complaints and have long submitted their respective responsive pleadings. In fact, the other defendants in the complaint were given the chance to raise all possible defenses and objections personal to them in their respective motions to dismiss and their subsequent answers. We agree with the RTC in its Order when it resolved the issue in this wise:

As correctly pointed by defendants, the Honorable Court has not acquired jurisdiction over the person of Patricio Sereno since there was indeed no valid service of summons insofar as Patricio Sereno is concerned. Patricio Sereno died before the summons, together with a copy of the complaint and its annexes, could be served upon him.

However, the failure to effect service of summons unto Patricio Sereno, one of the defendants herein does not render the action DISMISSIBLE, considering that the three (3) other defendants, namely, Atty. Rogelio E. Sarsaba, Fulgencio Lavares and the NLRC, were validly served with summons and the case with respect to the answering defendants may still proceed independently. Be it recalled that the three (3) answering defendants have previously filed a Motion to Dismiss the Complaint which was denied by the Court.

Hence, only the case against Patricio Sereno will be DISMISSED and the same may be filed as a claim against the estate of Patricio Sereno, but the case with respect to the three (3) other accused will proceed.

Anent the second issue, petitioner moves that respondent's attorney-in-fact, Faustino Castaeda, be discharged as he has no more legal personality to sue on behalf of Fe Vda. de Te, who passed away on April 12, 2005, during the pendency of the case before the RTC. When a party to a pending action dies and the claim is not extinguished, the Rules of Court require a substitution of the deceased.[44] Section 1, Rule 87 of the Rules of Court enumerates the actions that survived and may be filed against the

decedent's representatives as follows: (1) actions to recover real or personal property or an interest thereon, (2) actions to enforce liens thereon, and (3) actions to recover damages for an injury to a person or a property. In such cases, a counsel is obliged to inform the court of the death of his client and give the name and address of the latter's legal representative.[45] The rule on substitution of parties is governed by Section 16,[46] Rule 3 of the 1997 Rules of Civil Procedure, as amended. Strictly speaking, the rule on substitution by heirs is not a matter of jurisdiction, but a requirement of due process. The rule on substitution was crafted to protect every party's right to due process. It was designed to ensure that the deceased party would continue to be properly represented in the suit through his heirs or the duly appointed legal representative of his estate. Moreover, non-compliance with the Rules results in the denial of the right to due process for the heirs who, though not duly notified of the proceedings, would be substantially affected by the decision rendered therein. Thus, it is only when there is a denial of due process, as when the deceased is not represented by any legal representative or heir, that the court nullifies the trial proceedings and the resulting judgment therein.[47] In the case before Us, it appears that respondent's counsel did not make any manifestation before the RTC as to her death. In fact, he had actively participated in the proceedings. Neither had he shown any proof that he had been retained by respondent's legal representative or any one who succeeded her.

However, such failure of counsel would not lead Us to invalidate the proceedings that have long taken place before the RTC. The Court has repeatedly declared that failure of the counsel to comply with his duty to inform the court of the death of his client, such that no substitution is effected, will not invalidate the proceedings and the judgment rendered thereon if the action survives the death of such party. The trial court's jurisdiction over the case subsists despite the death of the party.[48]

The purpose behind this rule is the protection of the right to due process of every party to the litigation who may be affected by the intervening death. The deceased litigants are themselves protected as they continue to be properly represented in the suit through the duly appointed legal representative of their estate.[49] Anent the claim of petitioner that the special power of attorney[50] dated March 4, 1997 executed by respondent in favor of Faustino has become functus officio and that the agency constituted between them has been extinguished upon the death of respondent, corollarily, he had no more personality to appear and prosecute the case on her behalf. Agency is extinguished by the death of the principal.[51] The only exception where the agency shall remain in full force and effect even after the death of the principal is when if it has been constituted in the common interest of the latter and of the agent, or in the interest of a third person who has accepted the stipulation in his favor.[52]

A perusal of the special power of attorney leads us to conclude that it was constituted for the benefit solely of the principal or for respondent Fe Vda. de Te. Nowhere can we infer from the stipulations therein that it was created for the common interest of respondent and her attorney-in-fact. Neither was there any mention that it was to benefit a third person who has accepted the stipulation in his favor. On this ground, We agree with petitioner. However, We do not believe that such ground would cause the dismissal of the complaint. For as We have said, Civil Case No. 3488, which is an action for the recovery of a personal property, a motor vehicle, is an action that survives pursuant to Section 1, Rule 87 of the Rules of Court. As such, it is not extinguished by the death of a party. In Gonzalez v. Philippine Amusement and Gaming Corporation,[53] We have laid down the criteria for determining whether an action survives the death of a plaintiff or petitioner, to wit: x x x The question as to whether an action survives or not depends on the nature of the action and the damage sued for. If the causes of action which survive the wrong complained [of] affects primarily and principally property and property rights, the injuries to the person being merely incidental, while in the causes of action which do not survive the injury complained of is to the person the property and rights of property affected being incidental. x x x Thus, the RTC aptly resolved the second issue with the following ratiocination: While it may be true as alleged by defendants that with the death of Plaintiff, Fe Vda. de Te, the Special Power of Attorney she executed empowering the Attorney-in-fact, Faustino Castaeda to sue in her behalf has been rendered functus officio, however, this Court believes that the Attorney-in-fact had not lost his personality to prosecute this case.

It bears stressing that when this case was initiated/filed by the Attorney-in-fact, the plaintiff was still very much alive. Records reveal that the Attorney-in-fact has testified long before in behalf of the said plaintiff and more particularly during the state when the plaintiff was vehemently opposing the dismissal of the complainant. Subsequently thereto, he even offered documentary evidence in support of the complaint, and this court admitted the same. When this case was initiated, jurisdiction was vested upon this Court to try and hear the same to the end. Wellsettled is the rule to the point of being elementary that once jurisdiction is acquired by this Court, it attaches until the case is decided.

Thus, the proper remedy here is the Substitution of Heirs and not the dismissal of this case which would work injustice to the plaintiff.

SEC. 16, RULE 3 provides for the substitution of the plaintiff who dies pending hearing of the case by his/her legal heirs. As to whether or not the heirs will still continue to engage the services of the Attorney-in-fact is another matter, which lies within the sole discretion of the heirs.

In fine, We hold that the petition should be denied as the RTC Order is interlocutory; hence, not a proper subject of an appeal before the Court. In the same breath, We also hold that, if the petition is to be treated as a petition for certiorari as a relaxation of the judicial hierarchy of courts, the same is also

dismissible for being substantially insufficient to warrant the Court the nullification of the Order of the RTC.

Let this be an occasion for Us to reiterate that the rules are there to aid litigants in prosecuting or defending their cases before the courts. However, these very rules should not be abused so as to advance one's personal purposes, to the detriment of orderly administration of justice. We can surmise from the present case herein petitioner's manipulation in order to circumvent the rule on modes of appeal and the hierarchy of courts so that the issues presented herein could be settled without going through the established procedures. In Vergara, Sr. v. Suelto,[54] We stressed that this should be the constant policy that must be observed strictly by the courts and lawyers, thus:

x x x. The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the fundamental charter and immemorial tradition. It cannot and should not be burdened with the task of dealing with causes in the first instance. Its original jurisdiction to issue the so-called extraordinary writs should be exercised only where absolutely necessary or where serious and important reasons exist therefor. Hence, that jurisdiction should generally be exercised relative to actions or proceedings before the Court of Appeals, or before constitutional or other tribunals, bodies or agencies whose acts for some reason or another are not controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific action for the writs procurement must be presented. This is and should continue to be the policy in this regard, a policy that courts and lawyers must strictly observe.[55]

WHEREFORE, premises considered, the Petition is DENIED. The Order dated March 22, 2006 of the Regional Trial Court, Branch 19, Digos, Davao del Sur in Civil Case No. 3488, is hereby AFFIRMED. Costs against the petitioner.

SO ORDERED.