Miguel vs Catalino Direct appeal from the judgment in Civil Case No.

1090 of the Court of First Instance of Baguio, dismissing the plaintiffs' complaint for recovery of possession of a parcel of land, registered under Act 496, in the name of one Bacaquio,1 a long-deceased illiterate non-Christian resident of Mountain Province, and declaring the defendant to be the true owner thereof. On January 22, 1962, appellants Simeon, Emilia and Marcelina Miguel, and appellant Grace Ventura brought suit in the Court below against Florendo Catalino for the recovery of the land above-described, plaintiffs claiming to be the children and heirs of the original registered owner, and averred that defendant, without their knowledge or consent, had unlawfully taken possession of the land, gathered its produce and unlawfully excluded plaintiffs therefrom. Defendant answered pleading ownership and adverse possession for 30 years, and counterclaimed for attorney's fees. After trial the Court dismissed the complaint, declared defendant to be the rightful owner, and ordered the Register of Deeds to issue a transfer certificate in lieu of the original. Plaintiffs appealed directly to this Court, assailing the trial Court's findings of fact and law. As found by the trial Court, the land in dispute is situated in the Barrio of San Pascual, Municipality of Tuba, Benguet, Mountain Province and contains an area of 39,446 square meters, more or less. It is covered by Original Certificate of Title No. 31, which was issued on 28 December 1927 in the name of Bacaquio (or Bakakew), a widower. No encumbrance or sale has ever been annotated in the certificate of title. The plaintiff-appellant Grace Ventura2 is the only child of Bacaquio by his first wife, Debsay, and the other plaintiffs-appellants, Simeon, Emilia and Marcelina, all surnamed "Miguel", are his children by his third wife, Cosamang. He begot no issue with his second wife, Dobaney. The three successive wives have all died. Bacaquio, who died in 1943, acquired the land when his second wife died and sold it to Catalino Agyapao, father of the defendant Florendo Catalino, for P300.00 in 1928. Of the purchase price P100.00 was paid and receipted for when the land was surveyed, but the receipt was lost; the balance was paid after the certificate of title was issued. No formal deed of sale was executed, but since the sale in 1928, or for more than 30 years, vendee Catalino Agyapao and his son, defendant-appellee Florendo Catalino, had been in possession of the land, in the concept of owner, paying the taxes thereon and introducing improvements. On 1 February 1949, Grace Ventura, by herself alone, "sold" (as per her Transferor's Affidavit, Exhibit "6") anew the same land for P300.00 to defendant Florendo Catalino. In 1961, Catalino Agyapao in turn sold the land to his son, the defendant Florendo Catalino. This being a direct appeal from the trial court, where the value of the property involved does not exceed P200,000.00, only the issues of law are reviewable by the Supreme Court, the findings of fact of the court a quo being deemed conceded by the appellant (Jacinto v. Jacinto, 105 Phil. 1218; Del Castillo v. Guerro, L-11994, 25 July 1960; Abuyo, et al. v. De Suazo, L-21202, 29 Oct. 1966; 18 SCRA 600, 601). We are thus constrained to discard appellant's second and third assignments of error. In their first assignment, appellants assail the admission in evidence over the objection of the appellant of Exhibit "3". This exhibit is a decision in favor of the defendant-appellee against herein plaintiff-appellant Grace Ventura, by the council of Barrio of San Pascual, Tuba, Benguet, in its Administrative Case No. 4, for the settlement of ownership and possession of the land. The decision is ultra vires because barrio councils, which are not courts, have no judicial powers (Sec. 1, Art. VIII, Constitution; see Sec. 12, Rep. Act 2370, otherwise known as the Barrio Charter). Therefore, as contended by appellants, the exhibit is not admissible in a judicial proceeding as evidence for ascertaining the truth respecting the fact of ownership and possession (Sec. 1, Rule 128, Rules of Court). Appellants are likewise correct in claiming that the sale of the land in 1928 by Bacaquio to Catalino Agyapao, defendant's father, is null and void ab initio, for lack of executive approval (Mangayao et al. vs. Lasud, et al., L-19252, 29 May 1964). However, it is not the provisions of the Public Land Act (particularly Section 118 of Act 2874 and Section 120 of Commonwealth Act 141) that nullify the transaction, for the reason that there is no finding, and the contending parties have not shown, that the land titled in the name of Bacaquio was acquired from the public domain (Palad vs. Saito, 55 Phil. 831). The laws applicable to the said sale are: Section 145(b) of the Administrative Code of Mindanao and Sulu, providing that no conveyance or encumbrance of real property shall be made in that department by any non-christian inhabitant of the same, unless, among other requirements, the deed shall bear indorsed upon it the approval of the provincial governor or his representative duly authorized in writing for the purpose; Section 146 of the same Code, declaring

that every contract or agreement made in violation of Section 145 "shall be null and void"; and Act 2798, as amended by Act 2913, extending the application of the above provisions to Mountain Province and Nueva Vizcaya. Since the 1928 sale is technically invalid, Bacaquio remained, in law, the owner of the land until his death in 1943, when his title passed on, by the law on succession, to his heirs, the plaintiffs-appellants. Notwithstanding the errors aforementioned in the appealed decision, we are of the opinion that the judgment in favor of defendant-appellee Florendo Catalino must be sustained. For despite the invalidity of his sale to Catalino Agyapao, father of defendant-appellee, the vendor Bacaquio suffered the latter to enter, possess and enjoy the land in question without protest, from 1928 to 1943, when the seller died; and the appellants, in turn, while succeeding the deceased, also remained inactive, without taking any step to reivindicate the lot from 1944 to 1962, when the present suit was commenced in court. Even granting appellants' proposition that no prescription lies against their father's recorded title, their passivity and inaction for more than 34 years (1928-1962) justifies the defendant-appellee in setting up the equitable defense of laches in his own behalf. As a result, the action of plaintiffs-appellants must be considered barred and the Court below correctly so held. Courts can not look with favor at parties who, by their silence, delay and inaction, knowingly induce another to spend time, effort and expense in cultivating the land, paying taxes and making improvements thereon for 30 long years, only to spring from ambush and claim title when the possessor's efforts and the rise of land values offer an opportunity to make easy profit at his expense. In Mejia de Lucas vs. Gamponia, 100 Phil. 277, 281, this Court laid down a rule that is here squarely applicable: Upon a careful consideration of the facts and circumstances, we are constrained to find, however, that while no legal defense to the action lies, an equitable one lies in favor of the defendant and that is, the equitable defense of laches. We hold that the defense of prescription or adverse possession in derogation of the title of the registered owner Domingo Mejia does not lie, but that of the equitable defense of laches. Otherwise stated, we hold that while defendant may not be considered as having acquired title by virtue of his and his predecessors' long continued possession for 37 years, the original owner's right to recover back the possession of the property and title thereto from the defendant has, by the long period of 37 years and by patentee's inaction and neglect, been converted into a stale demand. As in the Gamponia case, the four elements of laches are present in the case at bar, namely: (a) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made and for which the complaint seeks a remedy; (b) delay in asserting the complainant's rights, the complainant having had knowledge or notice, of the defendant's conduct and having been afforded an opportunity to institute a suit; (c) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and (d) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred. In the case at bar, Bacaquio sold the land in 1928 but the sale is void for lack of the governor's approval. The vendor, and also his heirs after him, could have instituted an action to annul the sale from that time, since they knew of the invalidity of the sale, which is a matter of law; they did not have to wait for 34 years to institute suit. The defendant was made to feel secure in the belief that no action would be filed against him by such passivity, and also because he "bought" again the land in 1949 from Grace Ventura who alone tried to question his ownership; so that the defendant will be plainly prejudiced in the event the present action is not held to be barred. The difference between prescription and laches was elaborated in Nielsen & Co., Inc. vs. Lepanto Consolidated Mining Co., L-21601, 17 December 1966, 18 SCRA p. 1040, as follows: Appellee is correct in its contention that the defense of laches applies independently of prescription. Laches is different from the statute of limitations. Prescription is concerned with the fact of delay, whereas laches is concerned with the effect of delay. Prescription is a matter of time; laches is principally a question of inequity of permitting a claim to be enforced, this inequity being founded on some change in the condition of the property or the relation of the parties. Prescription is statutory; laches is not. Laches applies in equity, whereas prescription applies at law. Prescription is based on fixed time laches is not, (30 C.J.S., p. 522. See also Pomeroy's Equity Jurisprudence, Vol. 2, 5th ed., p. 177) (18 SCRA 1053). With reference to appellant Grace Ventura, it is well to remark that her situation is even worse than that of her co-heirs and co-plaintiffs, in view of her executing an affidavit of transfer (Exh. 6) attesting under oath to her having sold the land in controversy to herein defendant-appellee, and the lower Court's finding that in 1949 she was paid P300.00 for it, because she, "being a smart woman of enterprise, threatened to cause trouble if the defendant failed

to give her P300.00 more, because her stand (of being the owner of the land) was buttressed by the fact that Original Certificate of Title No. 31 is still in the name of her father, Bacaquio" (Decision, Record on Appeal, p. 24). This sale, that was in fact a quitclaim, may not be contested as needing executive approval; for it has not been shown that Grace Ventura is a non-christian inhabitant like her father, an essential fact that cannot be assumed (Sale de Porkan vs. Yatco, 70 Phil. 161, 175). Since the plaintiffs-appellants are barred from recovery, their divestiture of all the elements of ownership in the land is complete; and the Court a quo was justified in ordering that Bacaquio's original certificate be cancelled, and a new transfer certificate in the name of Florendo Catalino be issued in lieu thereof by the Register of Deeds. FOR THE FOREGOING REASONS, the appealed decision is hereby affirmed, with costs against the plaintiffs-appellants. Mercado vs Espinocilla The case Petitioner Celerino E. Mercado appeals the Decisioni[1] dated April 28, 2008 and Resolutionii[2] dated July 22, 2008 of the Court of Appeals (CA) in CA-G.R. CV No. 87480. The CA dismissed petitioners complaintiii[3] for recovery of possession, quieting of title, partial declaration of nullity of deeds and documents, and damages, on the ground of prescription. The antecedent facts Doroteo Espinocilla owned a parcel of land, Lot No. 552, with an area of 570 sq. m., located at Magsaysay Avenue, Zone 5, Bulan, Sorsogon. After he died, his five children, Salvacion, Aspren, Isabel, Macario, and Dionisia divided Lot No. 552 equally among themselves. Later, Dionisia died without issue ahead of her four siblings, and Macario took possession of Dionisias share. In an affidavit of transfer of real property iv [4] dated November 1, 1948, Macario claimed that Dionisia had donated her share to him in May 1945. Thereafter, on August 9, 1977, Macario and his daughters Betty Gullaba and Saida Gabelo soldv[5] 225 sq. m. to his son Roger Espinocilla, husband of respondent Belen Espinocilla and father of respondent Ferdinand Espinocilla. On March 8, 1985, Roger Espinocilla sold vi [6] 114 sq. m. to Caridad Atienza. Per actual survey of Lot No. 552, respondent Belen Espinocilla occupies 109 sq. m., Caridad Atienza occupies 120 sq. m., Caroline Yu occupies 209 sq. m., and petitioner, Salvacion's son, occupies 132 sq. m.vii[7] The case for petitioner Petitioner sued the respondents to recover two portions: an area of 28.5viii[8] sq. m. which he bought from Aspren and another 28.5 sq. m. which allegedly belonged to him but was occupied by Macarios house. ix [9] His claim has since been modified to an alleged encroachment of only 39 sq. m. that he claims must be returned to him. He avers that he is entitled to own and possess 171 sq. m. of Lot No. 552, having inherited 142.5 sq. m. from his mother Salvacion and bought 28.5 sq. m. from his aunt Aspren. According to him, his mothers inheritance is 142.5 sq. m., that is, 114 sq. m. from Doroteo plus 28.5 sq. m. from Dionisia. Since the area he occupies is only 132 sq. m.,x[10] he claims that respondents encroach on his share by 39 sq. m.xi[11] The case for respondents Respondents agree that Doroteos five children each inherited 114 sq. m. of Lot No. 552. However, Macarios share increased when he received Dionisias share. Macarios increased share was then sold to his son Roger, respondents husband and father. Respondents claim that they rightfully possess the land they occupy by virtue of acquisitive prescription and that there is no basis for petitioners claim of encroachment.xii[12] The trial courts decision On May 15, 2006, the Regional Trial Court (RTC) ruled in favor of petitioner and held that he is entitled to 171 sq. m. The RTC found that petitioner inherited 142.5 sq. m. from his mother Salvacion and bought 28.5 sq. m. from his aunt Aspren. The RTC computed that Salvacion, Aspren, Isabel and Macario each inherited 142.5 sq. m. of Lot No. 552. Each inherited 114 sq. m. from Doroteo and 28.5 sq. m. from Dionisia. The RTC further ruled that Macario was not entitled to 228 sq. m. Thus, respondents must return 39 sq. m. to petitioner who occupies only 132 sq. m.xiii[13]

There being no public document to prove Dionisias donation, the RTC also held that Macarios 1948 affidavit is void and is an invalid repudiation of the shares of his sisters Salvacion, Aspren, and Isabel in Dionisias share. Accordingly, Macario cannot acquire said shares by prescription. The RTC further held that the oral partition of Lot No. 552 by Doroteos heirs did not include Dionisias share and that partition should have been the main action. Thus, the RTC ordered partition and deferred the transfer of possession of the 39 sq. m. pending partition. xiv [14] The dispositive portion of the RTC decision reads: WHEREFORE, in view of the foregoing premises, the court issues the following ORDER, thus a) Partially declaring the nullity of the Deed of Absolute Sale of Property dated August 9, 1977 x x x executed by Macario Espinocilla, Betty E. Gullaba and Saida E. Gabelo in favor of Roger Espinocilla, insofar as it affects the portion or the share belonging to Salvacion Espinocilla, mother of [petitioner,] relative to the property left by Dionisia Espinocilla, including [Tax Declaration] No. 13667 and other documents of the same nature and character which emanated from the said sale;

b) To leave as is the Deeds of Absolute Sale of May 11, 1983 and March 8, 1985, it having been determined that they did not involve the portion belonging to [petitioner] x x x. c) To effect an effective and real partition among the heirs for purposes of determining the exact location of the share (114 sq. m.) of the late Dionisia Espinocilla together with the 28.5 sq. m. belonging to [petitioners] mother Salvacion, as well as, the exact location of the 39 sq. m. portion belonging to the [petitioner] being encroached by the [respondents], with the assistance of the Commissioner (Engr. Fundano) appointed by this court. To hold in abeyance the transfer of possession of the 39 sq. m. portion to the [petitioner] pending the completion of the real partition abovementioned.xv[15] The CA decision On appeal, the CA reversed the RTC decision and dismissed petitioners complaint on the ground that extraordinary acquisitive prescription has already set in in favor of respondents. The CA found that Doroteos four remaining children made an oral partition of Lot No. 552 after Dionisias death in 1945 and occupied specific portions. The oral partition terminated the coownership of Lot No. 552 in 1945. Said partition also included Dionisias share because the lot was divided into four parts only. And since petitioners complaint was filed only on July 13, 2000, the CA concluded that prescription has set in.xvi[16] The CA disposed the appeal as follows: WHEREFORE, the appeal is GRANTED. The assailed May 15, 2006 Decision of the Regional Trial Court (RTC) of Bulan, Sorsogon is hereby REVERSED and SET ASIDE. The Complaint of the [petitioner] is hereby DISMISSED. No costs.xvii[17] The instant petition The core issue to be resolved is whether petitioners action to recover the subject portion is barred by prescription. Petitioner confirms oral partition of Lot No. 552 by Doroteo's heirs, but claims that his share increased from 114 sq. m. to 171 sq. m. and that respondents encroached on his share by 39 sq. m. Since an oral partition is valid, the corresponding survey ordered by the RTC to identify the 39 sq. m. that must be returned to him could be made.xviii[18] Petitioner also alleges that Macario committed fraud in acquiring his share; hence, any evidence adduced by him to justify such acquisition is inadmissible. Petitioner concludes that if a person obtains legal title to property by fraud or concealment, courts of equity will impress upon the title a so-called constructive trust in favor of the defrauded party.xix[19] The Courts ruling

d)

We affirm the CA ruling dismissing petitioners complaint on the ground of prescription. Prescription, as a mode of acquiring ownership and other real rights over immovable property, is concerned with lapse of time in the manner and under conditions laid down by law, namely, that the possession should be in the concept of an owner, public, peaceful, uninterrupted, and adverse. Acquisitive prescription of real rights may be ordinary or extraordinary. Ordinary acquisitive prescription requires possession in good faith and with just title for 10 years. In extraordinary prescription, ownership and other real rights over immovable property are acquired through uninterrupted adverse possession for 30 years without need of title or of good faith.xx[20] Here, petitioner himself admits the adverse nature of respondents possession with his assertion that Macarios fraudulent acquisition of Dionisias share created a constructive trust. In a constructive trust, there is neither a promise nor any fiduciary relation to speak of and the so-called trustee (Macario) neither accepts any trust nor intends holding the property for the beneficiary (Salvacion, Aspren, Isabel). The relation of trustee and cestui que trust does not in fact exist, and the holding of a constructive trust is for the trustee himself, and therefore, at all times adverse.xxi[21] Prescription may supervene even if the trustee does not repudiate the relationship.xxii[22] Then, too, respondents uninterrupted adverse possession for 55 years of 109 sq. m. of Lot No. 552 was established. Macario occupied Dionisias share in 1945 although his claim that Dionisia donated it to him in 1945 was only made in a 1948 affidavit. We also agree with the CA that Macarios possession of Dionisias share was public and adverse since his other co-owners, his three other sisters, also occupied portions of Lot No. 552. Indeed, the 1977 sale made by Macario and his two daughters in favor of his son Roger confirms the adverse nature of Macarios possession because said sale of 225 sq. m.xxiii[23] was an act of ownership over Macarios original share and Dionisias share. In 1985, Roger also exercised an act of ownership when he sold 114 sq. m. to Caridad Atienza. It was only in the year 2000, upon receipt of the summons to answer petitioners complaint, that respondents peaceful possession of the remaining portion (109 sq. m.) was interrupted. By then, however, extraordinary acquisitive prescription has already set in in favor of respondents. That the RTC found Macarios 1948 affidavit void is of no moment. Extraordinary prescription is unconcerned with Macarios title or good faith. Accordingly, the RTC erred in ruling that Macario cannot acquire by prescription the shares of Salvacion, Aspren, and Isabel, in Dionisias 114-sq. m. share from Lot No. 552. Moreover, the CA correctly dismissed petitioners complaint as an action for reconveyance based on an implied or constructive trust prescribes in 10 years from the time the right of action accrues.xxiv[24] This is the other kind of prescription under the Civil Code, called extinctive prescription, where rights and actions are lost by the lapse of time.xxv[25] Petitioners action for recovery of possession having been filed 55 years after Macario occupied Dionisias share, it is also barred by extinctive prescription. The CA while condemning Macarios fraudulent act of depriving his three sisters of their shares in Dionisias share, equally emphasized the fact that Macarios sisters wasted their opportunity to question his acts. WHEREFORE, we DENY the petition for review on certiorari for lack of merit and AFFIRM the assailed Decision dated April 28, 2008 and Resolution dated July 22, 2008 of the Court of Appeals in CA-G.R. CV No. 87480. No pronouncement as to costs.SO ORDERED. Navales vs Rias On the 18th of November, 1904, Vicente Navales filed a complaint with the Court of First Instance of Cebu against Eulogia Rias and Maximo Requiroso, claiming that the latter should be sentenced to pay him the sum of 1,200 pesos, Philippine currency, as damages, together with costs and such other expenses as the court might consider just and equitable. To this end he alleged that the said defendants, without due cause, ordered the pulling down and destruction of his house erected in Daanbuangan, town of Naga, Island of Cebu, which was 6 meters in height with an area of 8.70 square meters, built of wood with a nipa roof, and worth 1,000 pesos, which amount he expended in its construction. He further alleged that the destruction took place in the month of April, 1904, and that, notwithstanding his efforts, he had not obtained any reimbursement from the defendants, and that by reason of their refusal he had been prejudiced to the extent of 200 pesos, Philippine currency. The defendant, in answer to the foregoing complaint, denied all and each one of the allegations therein contained, and asked that judgment be entered dismissing the complaint with costs against the plaintiff.

After considering the proofs submitted by both parties and the proceedings upon the trial, the judge, on the 17th of January, 1906, rendered judgment declaring that the decision entered by the justice of the peace of Naga, and the order given by virtue thereof were illegal, as well as the action of the deputy sheriff Luciano Bacayo, that the defendant were thereby liable for the damages caused to the plaintiff, which amounted to 500 pesos, and that the defendants were sentenced to pay the said sum to the plaintiff, with costs. The defendant upon being informed of this decision, asked that it be set aside, and also moved for a new trial on the ground that the decision was not in accordance with the weight of the evidence. The motion was denied, to which exception was taken, and at the request of the interested party, the corresponding bill of exceptions was limited. The aim of this litigation, therefore, is to obtain payment through a judicial decision, of the damages said to have been caused by the execution of a judgment rendered by the justice of the peace, in an action for ejectment. It is undeniable that, in order to remove from the land of Eulogia Rias, situated within the jurisdiction of the town of Naga, the house which Vicente Navales had constructed thereon, by virtue of the decision of the justice in the action instituted by the said Eulogia Rias against the owner of the house , Vicente Navales, the deputy sheriff who carried the judgment into execution was obliged to destroy the said house and removed it from the land, according to the usual procedure in the action for ejectment. In the order of execution issued to the deputy sheriff, the directive portion of the judgment of the justice of the peace was inserted, and it contained the essential statement that the said judgment, by reason of its not having been appealed from, had become final, and from the contents of the same may be inferred that there had been an action for ejectment between the abovenamed parties, and that there was no reason why it should not be enforced when it had already become final and acquired the nature of res adjudicata. Section 72 of the Code of Civil Procedure reads: Execution. If no appeal from a judgment of a justice of the peace shall be perfected as herein provided, the justice of the peace shall, at the request of the successful party, issue execution for the enforcement of the judgment, and the expiration of the time limited by law for the perfection of an appeal. Assuming that the order for execution of final judgment was issued in accordance with the law, and in view of the fact that it has not been alleged nor proven that the sheriff when complying with the same had committed trespass or exceeded his functions, it must be presumed according to section 334 (14) of the said Code of Procedure, that the official duty was regularly performed. Therefore, it is not possible to impute liability to the plaintiff who obtained the judgment and the execution thereof, when the same was not disputed nor alleged to be null or illegal, and much less to compel the payment of damages to the person who was defeated in the action and sentenced to be ejected from the land which he improperly occupied with his house. No proof has been submitted that a contract had been entered into between the plaintiff and the defendants, or that the latter had committed illegal acts or omissions or incurred in any kind of fault or negligence, from any of which an obligation might have arisen on the part of the defendants to indemnify the plaintiff. For this reason, the claim for indemnity, on account of acts performed by the sheriff while enforcing a judgment, can not under any consideration be sustained. (Art. 1089, Civil Code.) The illegality of the judgment of the justice of the peace, that of the writ of execution thereunder, or of the acts performed by the sheriff for the enforcement of the judgment, has not been shown. Therefore, for the reasons hereinbefore set forth, the judgment appealed from is hereby reversed, and the complaint for damages filed by Vicente Navales against Eulogia Rias and Maximo Requiroso is dismissed without special ruling as to costs. So ordered. Arellano, C.J., Johnson, Willard, and Tracey, JJ., concur. Virata vs Ochoa This is an appeal by certiorari, from the order of the Court of First Instance of Cavite, Branch V, in Civil Case No. B-134 granting the motion of the defendants to dismiss the complaint on the ground that there is another action pending between the same parties for the same cause. 1 The record shows that on September 24, 1975 one Arsenio Virata died as a result of having been bumped while walking along Taft Avenue, Pasay City by

a passenger jeepney driven by Maximo Borilla and registered in the name Of Victoria Ochoa; that Borilla is the employer of Ochoa; that for the death of Arsenio Virata, a action for homicide through reckless imprudence was instituted on September 25, 1975 against Maximo Borilla in the Court of First Instance of Rizal at Pasay City, docketed as C Case No. 3162-P of said court; that at the hearing of the said criminal case on December 12, 1975, Atty. Julio Francisco, the private prosecutor, made a reservation to file a separate civil action for damages against the driver on his criminal liability; that on February 19, 1976 Atty. Julio Francisco filed a motion in said c case to withdraw the reservation to file a separate civil action; that thereafter, the private prosecutor actively participated in the trial and presented evidence on the damages; that on June 29, 1976 the heirs of Arsenio Virata again reserved their right to institute a separate civil action; that on July 19, 1977 the heirs of Arsenio Virata, petitioners herein, commenced Civil No. B-134 in the Court of First Instance of Cavite at Bacoor, Branch V, for damages based on quasi-delict against the driver Maximo Borilla and the registered owner of the jeepney, Victorio Ochoa; that on August 13, 1976 the defendants, private respondents filed a motion to dismiss on the ground that there is another action, Criminal Case No. 3162-P, pending between the same parties for the same cause; that on September 8, 1976 the Court of First Instance of Rizal at Pasay City a decision in Criminal Case No. 3612-P acquitting the accused Maximo Borilla on the ground that he caused an injury by name accident; and that on January 31, 1977, the Court of First Instance of Cavite at Bacoor granted the motion to Civil Case No. B-134 for damages. 2 The principal issue is weather or not the of the Arsenio Virata, can prosecute an action for the damages based on quasi-delict against Maximo Borilla and Victoria Ochoa, driver and owner, respectively on the passenger jeepney that bumped Arsenio Virata. It is settled that in negligence cases the aggrieved parties may choose between an action under the Revised Penal Code or of quasi-delict under Article 2176 of the Civil Code of the Philippines. What is prohibited by Article 2177 of the Civil Code of the Philippines is to recover twice for the same negligent act. The Supreme Court has held that: According to the Code Commission: 'The foregoing provision (Article 2177) though at first sight startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the criminal law, while the latter is a 'culpa aquiliana' or quasi-delict, of ancient origin, having always had its own foundation and individuality, separate from criminal negligence. Such distinction between criminal negligence and 'culpa extra-contractual' or quasi-delito has been sustained by decision of the Supreme Court of Spain and maintained as clear, sound and perfectly tenable by Maura, an outstanding Spanish jurist. Therefore, under the proposed Article 2177, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil liability arising from criminal negligence, but for damages due to a quasi-delict or 'culpa aquiliana'. But said article forestalls a double recovery. (Report of the Code Commission, p. 162.) Although, again, this Article 2177 does seem to literally refer to only acts of negligence, the same argument of Justice Bocobo about construction that upholds 'the spirit that given life' rather than that which is literal that killeth the intent of the lawmaker should be observed in applying the same. And considering that the preliminary chapter on human relations of the new Civil Code definitely establishes the separability and independence of liability in a civil action for acts criminal in character (under Articles 29 to 32) from the civil responsibility arising from crime fixed by Article 100 of the Penal Code, and, in a sense, the Rules of Court, under Sections 2 and 3(c), Rule 111, contemplate also the same separability, it is 'more congruent' with the spirit of law, equity and justice, and more in harmony with modern progress', to borrow the felicitous language in Rakes vs. Atlantic Gulf and Pacific Co., 7 Phil. to 359, to hod as We do hold, that Article 2176, where it refers to 'fault covers not only acts 'not punishable by law' but also criminal in character, whether intentional and voluntary or consequently, a separate civil action lies against the in a criminal act, whether or not he is criminally prosecuted and found guilty and acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the, two assuming the awards made in the two cases vary. In other words the extinction of civil liability refereed to in Par. (c) of Section 13, Rule 111, refers exclusively to civil

liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as a quasidelict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused. Brief stated, We hold, in reitration of Garcia, that culpa aquilina includes voluntary and negligent acts which may be punishable by law. 3 The petitioners are not seeking to recover twice for the same negligent act. Before Criminal Case No. 3162-P was decided, they manifested in said criminal case that they were filing a separate civil action for damages against the owner and driver of the passenger jeepney based on quasi-delict. The acquittal of the driver, Maximo Borilla, of the crime charged in Criminal Case No. 3162-P is not a bar to the prosecution of Civil Case No. B-134 for damages based on quasi-delict The source of the obligation sought to be enforced in Civil Case No. B-134 is quasi-delict, not an act or omission punishable by law. Under Article 1157 of the Civil Code of the Philippines, quasi-delict and an act or omission punishable by law are two different sources of obligation. Moreover, for the petitioners to prevail in the action for damages, Civil Case No. B-134, they have only to establish their cause of action by preponderance of the evidence. WHEREFORE, the order of dismissal appealed from is hereby set aside and Civil Case No. B-134 is reinstated and remanded to the lower court for further proceedings, with costs against the private respondents. SO ORDERED. Hospicio de san jose de barili vs DAR

At the core of this case is an obscure old special law. The issue is whether a provision in the law prohibiting the sale of the properties donated to the charitable organization that was incorporated by the same law bars the implementation of agrarian reform laws as regards said properties. Petitioner Hospicio de San Jose de Barili (Hospicio) is a charitable organization created as a body corporate in 1925 by Act No. 3239. The law was enacted in order to formally accept the offer made by Pedro Cui and Benigna Cui to establish a home for the care and support, free of charge, of indigent invalids and incapacitated and helpless persons.[1] The Hospicio was to be maintained with the revenues of the personal and real properties to be endowed by the Cuis and other donors.[2] Section 4 of Act No. 3239 provides that [t]he personal and real property donated to the [Hospicio] by its founders or by other persons shall not be sold under any consideration.[3] On 10 October 1987, the Department of Agrarian Reform Regional Office (DARRO) Region VII issued an order ordaining that two parcels of land owned by the Hospicio be placed under Operation Land Transfer in favor of twentytwo (22) tillers thereof as beneficiaries. Presidential Decree (P.D.) No. 27, a land reform law, was cited as legal basis for the order. The Hospicio filed a motion for the reconsideration of the order with the Department of Agrarian Reform (DAR) Secretary, citing the aforementioned Section 4 of Act No. 3239. It argued that Act No. 3239 is a special law, which could not have been repealed by P.D. No. 27, a general law, or by the latters general repealing clause. The DAR Secretary rejected the motion for reconsideration in an Order dated 30 March 1997. Therein, the DAR Secretary held that P.D. No. 27 was a special law, as it applied only to particular individuals in the State, specifically the tenants of rice and corn lands. Moreover, P.D. No. 27, which covered all rice and corn lands, provides no exemptions based on the manner of acquisition of the land by the landowner.[4] The Order of the DAR Secretary was assailed in a Petition for Certiorari filed with the Court of Appeals. In a Decision[5] dated 9 July 1999, the Court of Appeals Special Eleventh Division affirmed the DAR Secretarys issuance. It sustained the position of the Office of the Solicitor General (OSG) position that Section 4 of Act No. 3239 was expressly repealed not only by P.D. No. 27, but also by Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, both laws being explicit in mandating the distribution of agricultural lands to qualified beneficiaries. The Court of Appeals further noted that the subject lands did not fall among the exemptions provided under Section 10 of Rep. Act No. 6657. Finally, the appellate court brought into play the aims of land reform, affirming as it did the need to distribute and create an economic equilibrium among the inhabitants of this land, most especially those with less privilege in life, our peasant farmer.[6]

Unsatisfied with the Court of Appeals Decision, the Hospicio lodged the present Petition for Review. The Hospicio alleges that P.D. No. 27, the CARL, and Executive Order No. 407[7] all violate Section 10, Article III of the Constitution, which provides that no law impairing the obligation of contracts shall be passed. More sedately, the Hospicio also argues that Act No. 3239 was not repealed either by P.D. No. 27 or Rep. Act No. 6657 and that the forced disposition of the Hospicios landholdings would incapacitate the discharge of its charitable functions, which equally promote social justice and the upliftment of the lives of the less fortunate. On the other hand, the OSG, representing respondent DAR, bluntly replies that Act No. 3239 was repealed by P.D. No. 27 and Rep. Act No. 6657, which do not exempt lands owned by eleemosynary or charitable institutions from the coverage of those agrarian reform laws. A brief recapitulation of the relevant laws is in order. P.D. No. 27, "Decreeing the Emancipation of Tenants from the Bondage of the Soil, Transferring to Them Ownership of the Land they Till, and Providing the Instrument and Mechanism Therefor, has once been touted as perhaps a radical solution in its pristine sense, one that goes at the root [of the problem of land tenancy].[8] Its constitutionality was upheld in De Chavez v. Zobel.[9] The law generally ordains the emancipation of tenants and confers on them ownership of the lands they till.[10] The following provisions of P.D. No. 27 have concretized this policy:

the other, on the properties and the cause which are to constitute the contract[15] that is to serve ultimately as the basis for the transfer of ownership of the subject lands.[16] Instead, the obligation to transfer arises by compulsion of law, particularly P.D. No. 27.[17] Agrarian reform is justified under the States inherent power of eminent domain that enables it to forcibly acquire private lands intended for public use upon payment of just compensation to the owner.[18] It has even been characterized as beyond the traditional exercise of eminent domain, but a revolutionary kind of expropriation. As expounded in the landmark case of Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, thus: . . . . However, we do not deal here with the traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of the maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit not only of a particular community or of a small segment of the population but of the entire Filipino nation, from all levels of our society, from the impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole territory of this country but goes beyond in time to the foreseeable future, which it hopes to secure and edify with the vision and the sacrifice of the present generation of Filipinos. Generations yet to come are as involved in this program as we are today, although hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the Constitution itself that has ordained this revolution in the farms, calling for "a just distribution" among the farmers of lands that have heretofore been the prison of their dreams but can now become the key at least to their deliverance.[19] This characterization is warranted whether the expropriation is operative under the CARL or P.D. No. 27, as both laws are keyed into the same governmental objective. Moreover, under both laws, the landowner is entitled to just compensation for the properties taken. The twin process of expropriation of lands under agrarian reform and the payment of just compensation is akin to a forced sale, which has been aptly described in common law jurisdictions as sale made under the process of the court, and in the mode prescribed by law, and which is not the voluntary act of the owner, such as to satisfy a debt, whether of a mortgage, judgment, tax lien, etc.[20] The term has not been precisely defined in this jurisdiction, but reference to the phrase itself is made in Articles 223, 232, 237 and 243 of the Civil Code, which uniformly exempt the family home from execution, forced sale, or attachment.[21] Yet a forced sale is clearly different from the sales described under Book V of the Civil Code which are conventional sales, as it does not arise from the consensual agreement of the vendor and vendee, but by compulsion of law. Still, since law is recognized as one of the sources of obligation, there can be no dispute on the efficacy of a forced sale, so long as it is authorized by law. The crucial question now arises, whether the sale prohibited under Section 4 of Act No. 3239 includes even a forced sale. Of course an overly literal reading of the provision would justify such inclusion, but appropriately a more sophisticated approach to statutory construction is warranted. No sance is required to discern the intent of Section 4. It ensures that the properties received by the Hospicio are not alienated for profit by the officers or administrators, in contravention of the charitable purpose for which the Hospicio was created. To an extent, it makes possible the perpetual operation of the Hospicio, which was empowered by law to operate for an indefinite period, by assuring the existence of the property on which the Hospicio could operate. We also do not doubt that whatever fruits of the forcibly retained property would also serve a source of funding for the operations of the Hospicio. The salutariness of these objectives is beyond doubt. The interests they seek to protect are present whether the prohibition encompasses only conventional sales, or even forced sales. Yet to insist that Section 4 likewise

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, and General Order No. 1 dated September 22, 1972, as amended do hereby decree and order the emancipation of all tenant farmers as of this day, October 21, 1972; This shall apply to tenant farmers of private agricultural lands[[11]] primarily devoted to rice and corn under a system of sharecrop or lease-tenancy, whether classified as landed estate or not The tenant farmer, whether in land classified as landed estate or not, shall be deemed owner of a portion constituting a family-size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated; In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now cultivate it; The CARL was not yet in effect when the DARRO and the DAR issued their respective orders. Said law vests P.D. No. 27 with suppletory effect insofar as the earlier law does not run inconsistent with the later law.[12] Under Section 4 of the CARL, placed under coverage are all public and private agricultural lands regardless of tenurial arrangement and commodity produced, subject to the exempted lands listed in Section 10 thereof. We agree with the Court of Appeals that neither P.D. No. 27 nor the CARL exempts the lands of the Hospicio or other charitable institutions from the coverage of agrarian reform. Ultimately, the result arrived at in the assailed issuances should be affirmed. Nonetheless, both the DAR Secretary and the appellate court failed to appreciate what to this Court is indeed the decisive legal dimension of the case. Section 4 of Act No. 3239 prohibits the sale under any consideration of the lands donated to the Hospicio. But the land transfers mandated under P.D. No. 27 cannot be considered a conventional sale under our civil laws. Generally, sale arises out of a contractual obligation. Thus, it must meet the first essential requisite of every contract that is the presence of consent.[13] Consent implies an act of volition in entering into the agreement.[14] The absence or vitiation of consent renders the sale either void or voidable. In this case, the deprivation of the Hospicios property did not arise as a consequence of the Hospicios consent to the transfer. There was no meeting of minds between the Hospicio, on one hand, and the DAR or the tenants, on

prohibits sales or dispositions by operation of law would necessarily imply that the Hospicio is also beyond the reach of any form of judicial execution. The charitable nature of the Hospicio does not shield it from susceptibility to civil liability, and an absolute prohibition on sales, whether forced or conventional, deprives whatever judgment creditors of the Hospicio from any effective means of enforcing relief. Was it the intent of the framers of Act No. 3239 to exempt the Hospicio from all judicial processes, even those arising from civil transactions? We do not think so. The contemporaneous construction of Section 4 indicates that the prohibition intended by the crafters of the law pertained only to conventional sales, and not forced sales. The law was promulgated in 1925, or when the Spanish Civil Code of 1889 was in effect. The provisions in the Civil Code referring to forced sales were not derived from the Spanish Civil Code. On the other hand, the consensual nature of the contract of sale, and of contracts in general, is recognized under the Spanish Civil Code. Under Article 1261 of the Spanish Civil Code, there is no contract unless the consent of the contracting parties exists.[22] Evidently, the word sale, as contemplated by the framers of the law in 1925, pertains to its concept in civil law, with the requisite of consent being present. It cannot refer to sales or dispositions that arise by operation of law, such as through judicial execution, or, as in this case, expropriation. Thus, we can hardly characterize the acquisition of the subject properties from the Hospicio for the benefit of the tenants as a sale, within the contemplation of Section 4 of Act No. 3239. The transfer arises from compulsion of law, and not the desire of any parties. Even if the Hospicio had voluntarily offered to surrender its properties to agrarian reform, the resulting transaction would not be considered as a conventional sale, since the obligation is created not out of the mandate of the parties, but the will of the law. The DARRO Order did note that Section 4 of Act No. 3239 is not applicable in this case, since the transfer is compulsory on the part of the landowner, unlike in ordinary sale.[23] Regrettably, the DAR Secretary and the Court of Appeals failed to apply that sound principle, preferring to rely instead on the conclusion that Section 4 was repealed by P.D. No. 27 and the CARL. Nonetheless, even assuming for the nonce that Section 4 contemplates even forced sales such as those through expropriation, we would agree with the DAR Secretary and the Court of Appeals that Section 4 is deemed repealed by P.D. No. 27 and the CARL. The scope of lands subjected to agrarian reform under these two laws is overwhelming. P.D. No. 27 applies to all private agricultural lands primarily devoted to rice and corn with tenant farmers under a system of sharecrop or lease-tenancy,[24] while the CARL is even broader in scope, generally covering all public and private agricultural lands regardless of tenurial arrangement and commodity produced. Under Section 10 of the CARL, the only exempted lands are: Lands actually, directly and exclusively used and found to be necessary for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds, and mangroves, national defense, school sites and campuses including experimental farm stations operated by public or private schools for educational purposes, seeds and seedlings research and pilot production centers, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent (18%) slope and over, except those already developed . . . . Arguing against too literal an interpretation of Section 10, the Hospicio claims that a serious reading of the provision is revelatory of the spirit and intent of the exemptions. It argues that there are three categories of exemption as: (1) those needed by the nation, such as parks, wildlife and forest reserves, fishponds and for national defense, etc.; (2) those for educational purposes such as school sites; and (3) for religious and charitable purposes like church sites, etc.[25] The Hospicio then claims it falls under the third category of religious and charitable purposes.[26] To begin with, the terms charitable purposes and charitable organizations do not appear in Section 10 of the CARL. For its part, Hospicio

unduly assumes that charity is integrally wedded to religiosity, despite the fact that there are charitable institutions that are avowedly secular in orientation. We disagree that there is a clear intent or spirit to include properties held by charitable institutions, even those directly utilized for charitable purposes, in the list of exempted properties under the CARL. Section 10 does not include properties which are generally used for charitable purposes, such as orphanages, from the exemption. Not even all properties owned by religious institutions are exempt, save for those places of worship and the convents/Islamic centers appurtenant thereto. Even assuming that the Hospicio were actually owned and operated by the Catholic Church, it still would not be exempted from the CARL. It is axiomatic that where a general rule is established by a statute with exceptions, the Court will not curtail nor add to the latter by implication, and it is a rule that an express exception excludes all others.[27] We cannot simply impute into a statute an exception which the Congress did not incorporate. Moreover, general welfare legislation such as land reform laws is to be construed in favor of the promotion of social justice to ensure the well-being and economic security of the people.[28] Since a broad construction of the provision listing the properties exempted under the CARL would tend to denigrate the aims of agrarian reform, a strict application of these exceptions is in order. The crafters of P.D. No. 27 and the CARL were presumably aware of the radical scale of the intended legislation, and the massive effects on property relations nationwide. Considering the magnitude of the changes ordained in these laws, it would be foolhardy to require or expect the legislature to denominate each and every law that would be consequently or logically amended or repealed by the new laws. Hence, the viability of general repealing clauses, which are existent in both P.D. No. 27[29] and the CARL,[30] as a means of repealing all previous enactments inconsistent with revolutionary new laws. The presence of such general repealing clause in a later statute clearly indicates the legislative intent to repeal all prior inconsistent laws on the subject matter, whether the prior law is a general law or a special law, or as in this case, a special private law. Without such clause, a later general law will ordinarily not repeal a prior special law on the same subject. But with such clause contained in the subsequent general law, the prior special law will be deemed repealed, as the clause is a clear legislative intent to bring about that result.[31] Should we construe Section 4 of Act No. 3239 as barring forced sales through expropriation of the properties of the Hospicio, such prohibition would irreconcilably countermand both P.D. No. 27 and the CARL and their mandate to subject the properties to agrarian reform. The general repealing clauses of the two later laws would then sufficiently repeal Section 4 of Act No. 3239, to the extent that it may prohibit expropriation of agricultural lands for agrarian reform. Still, in light of our earlier determinative pronouncement that Section 4 of Act No. 3239 does not contemplate forced sales as part of the prohibition therein, there ultimately is no need to make an abject declaration that Section 4 has indeed been repealed. Indeed, the Court considers the prohibition on Section 4 as still effectual, but only insofar as it relates to conventional sales under the Civil Code. The other arguments raised by the Hospicio are similarly bereft of merit. It wants us to hold that P.D. No. 27 and the CARL, both enacted to implement the urgently needed policy of agrarian reform, violate the non-impairment of contracts clause under the Bill of Rights. Yet the broad sweep of this argument ignores the nuances adopted by this Court in interpreting Section 10 of Article III. We have held that the States exercise of police powers may prevail over obligations imposed by private contracts.[32] Especially in point is Kabiling v. NHA,[33] wherein a law authorizing the expropriation of properties in favor of qualified squatter families was challenged on the basis of the non-impairment clause. The Court held: The stated objective of the decree, namely, to resolve the land tenure problem in the Agno-Leveriza area to allow the implementation of the comprehensive development plans for this depressed community, provides the justification for the exercise of the police power of the State. The police power of the State has been described as "the most essential, insistent and illimitable of powers." It is a power inherent in the State, plenary, "suitably vague and far from precisely defined, rooted in the conception that man in organizing the state and imposing upon the government limitations to safeguard constitutional rights did not intend thereby to enable individual citizens or group of citizens to obstruct unreasonably the enactment of such salutary measure to ensure communal peace, safety, good order and welfare.

The objection raised by petitioners that P.D. No. 1808 impairs the obligations of contract is without merit. The constitutional guaranty of non-impairment of obligations of contract is limited by and subject to the exercise of the police power of the State in the interest of public health, safety, morals and general welfare.[34] More pertinently, what the Hospicio alleges would be impaired is not actually a contract, but a legislative act, Act No. 3239. The Hospicio admits just as much in its petition, [Act No. 3239] is not merely an ordinary contract but a contract enacted into law . . . Act No. 3239 is thus a contract within the purview of the impairment clause of the Constitution.[35]

AAA, a 10 year-old minor, against her will and without her consent, to her damage and prejudice in such amount as may be awarded by the Honorable Court.xxix[4] In two Amended Informations, both dated December 3, 2002, Assistant Provincial Prosecutor Daniel M. Salvadora charged Paniterce with two counts of rape of his other daughter BBB. Aside from the datesxxx[5] of the commission of the rapes, the Informations similarly state: Criminal Case Nos. 6080 and 6081 That on or about 6:00 oclock in the morning of August 26, 2000 x x x Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, with grave abuse of confidence being the father of the offended party with lewd designs by means of force and intimidation, did then and there willfully, unlawfully and feloniously committed RAPE upon his 12year old daughter BBB by then and there, caressing and inserting his finger inside her vagina against her will and without her consent, to her damage and prejudice in such amount as may be awarded by the Honorable Court.xxxi[6] When arraigned, Paniterce pleaded not guilty to all the charges. After trial on the merits, the RTC rendered a Decision on March 2, 2005, with the following dispositive portion: WHEREFORE, in view of all the foregoing, the prosecution having proved the guilt of accused Domingo Paniterce of the crimes of Rape as charged in the aforementioned Informations, he is hereby sentenced to suffer the penalties of imprisonment, to wit: In Criminal Case No. 6076, he is hereby sentenced to suffer the penalty of imprisonment ranging from FOUR (4) MONTHS and ONE (1) DAY of arresto mayor as minimum to FOUR (4) YEARS, TWO (2) MONTHS AND ONE (1) DAY of prision correccional as maximum for Acts of Lasciviousness under Article 336 of the Revised Penal Code as the alleged molestation took place in April 1997 and RA 8353 took effect only on October 22, 1997; In Criminal Cases Nos. 6077, 6078, 6080 and 6081, he is hereby sentenced to suffer in each every case the penalty of imprisonment ranging from FOUR (4) YEARS, TWO (2) MONTHS and ONE (1) DAY of prision correccional as minimum to EIGHT (8) YEARS and ONE (1) DAY of prision mayor as maximum and to pay AAA and BBB Fifty Thousand Pesos (P50,000.00) each as moral damages and Fifty Thousand Pesos (P50,000.00) as exemplary damages; In Criminal Case No. 6079, he is hereby sentenced to suffer the penalty of DEATH and to pay AAA the amount of Fifty Thousand Pesos (P50,000.00) as moral damages and Fifty Thousand Pesos (P50,000.00) as exemplary damages.xxxii[7] On June 4, 2005, Paniterce was committed to the Bureau of Corrections in Muntinlupa City. Paniterce filed an appeal with the Court of Appeals, which was docketed as CA-G.R. CR-H.C. No. 01001. The appellate court rendered a Decision on August 22, 2008 affirming the RTC judgment with modifications, to wit: WHEREFORE, the Decision of the trial court convicting DOMINGO PANITERCE is hereby AFFIRMED with the following modifications: 1. For Acts of Lasciviousness, in Criminal Cases Nos. 6077, 6078, 6080 and 6081, appellant is hereby sentenced to suffer in each [and] every case an indeterminate prison term of six (6) months of arresto mayor, as minimum,

The inanity of this argument is palpable. The non-impairment clause reads: No law impairing the obligation of contracts shall be passed. If, as the Hospicio argues, the constitutional provision applies as well to the impairment of obligations created by law, then Section 10, Article III operates to bar the legislature from amending or repealing its own enactments. This is of course not the case, as the provision was intended to shield the impairment of obligations created by private agreements, and not by legislative fiat. Certainly, Congress can at any time expressly amend or repeal any and all sections of Act No. 3239 without fear of violating the non-impairment clause of the Constitution. In fine, Section 10[36] of Act 3239 provides that the privileges granted by the Act to the Hospicio are subject to the conditions on the grant of franchises as provided in the Jones Law. Section 28 of the Jones Law in turn provides in part, thus: No franchise or right shall be granted to any individual, firm, or corporation except under the conditions that it shall be subject to amendment, alteration, or repeal by the Congress of the United States, and that lands or right of use and occupation of lands thus granted shall revert to the government by which they were respectively granted upon the termination of the franchises and rights under which they were granted or upon their revocation or repeal. (Emphasis supplied.) Finally, the Hospicio alludes to its functions as a charitable institution, which equally promote social justice and the upliftment of lives of the less fortunate. It notes that these purposes are no less noble than giving land to the landless, whom they, with perhaps a touch of contempt, suggest are perfectly healthy to care for themselves.[37] The rationale for holding that the properties of the Hospicio are covered by P.D. No. 27 and Rep. Act No. 6657 is so well-grounded in law that it obviates any resort to the sordid game of choosing which of the two competing aspirations is nobler. The body which would have unquestionable discretion in assigning hierarchical values on the modalities by which social justice may be implemented is the legislature. Land reform affords the opportunity for the landless to break away from the vicious cycle of having to perpetually rely on the kindness of others. By refusing to exempt properties owned by charitable institutions or maintained for charitable purposes from agrarian reform, the legislature has indicated a policy choice which the Court is bound to implement. WHEREFORE, the Petition is DENIED. No pronouncement as to costs. SO ORDERED. People vs Paneterce Before Us is an appeal filed by Domingo Paniterce y Martinez (Paniterce) assailing the Decisionxxvi[1] dated August 22, 2008 of the Court of Appeals in CA-G.R. CR-H.C. No. 01001, entitled People of the Philippines v. Domingo Paniterce, which affirmed with modification the Decision dated March 2, 2005 of the Regional Trial Court (RTC) of Iriga City, Branch 37, in Criminal Case Nos. 6076, 6077, 6078, 6079, 6080 and 6081.xxvii[2] The RTC found Paniterce guilty beyond reasonable doubt of the crimes of Rape and Acts of Lasciviousness. In four Informations, all dated February 11, 2002, 4th Assistant Provincial Prosecutor Hedy S. Aganan charged Paniterce with four counts of rape of his daughter AAA. Except for the datesxxviii[3] of the commission of the rapes, the four Informations identically read: Criminal Case Nos. 6076, 6077, 6078 and 6079 That sometime in the year 1997 in x x x Philippines and within the jurisdiction of this Honorable Court, the above-named accused, with grave abuse of confidence being the father of the offended party with lewd designs by means of force and intimidation, did then and there willfully, unlawfully and feloniously succeed in having carnal knowledge with his daughter

to six (6) years of prision correccional, as maximum and to pay AAA and BBB Fifty Thousand Pesos (P50,000.00) each as moral damages and Fifty Thousand Pesos (P50,000.00) as exemplary damages; and 2. For Rape, in Criminal Case No. 6079, appellant is hereby sentenced to suffer the penalty of Reclusion Perpetua and to pay AAA the amount of Fifty Thousand Pesos (P50,000.00) as moral damages and Fifty Thousand Pesos (P50,000.00) as exemplary damages.

b) c)

Contracts Quasi-contracts

xxxx e) 3. Quasi-delicts

The decision of the trial court finding appellant guilty for Acts of Lasciviousness in Criminal Case No. 6076 is AFFIRMED without any modification.xxxiii[8] 4. On 16 September 2008, Paniterce, through counsel, filed a Notice of Appeal with the Court of Appeals conveying his intention to appeal to us the aforementioned Decision dated August 22, 2008 of the appellate court. The Court of Appeals gave due course to Paniterces Notice of Appeal on September 23, 2008,xxxiv[9] and directed its Judicial Records Division to elevate to us the original records in CA-G.R. CR-H.C. No. 01001. On 15 April 2009, we required xxxv [10] the parties to file their supplemental briefs, and the Director of the Bureau of Corrections to confirm the commitment of Paniterce at the Bureau of Corrections and submit his report thereon within 10 days from notice. Paniterce filed his Supplemental Brief xxxvi [11] on June 16, 2009, while the Office of the Solicitor General filed a Manifestationxxxvii[12] on June 18, 2009 stating that it would no longer file a supplemental brief considering that Paniterce did not raise any new issue in his appeal. On July 22, 2009, we submitted G.R. No. 186382 for resolution. However, in a letter dated October 12, 2009, Julio A. Arciaga, the Assistant Director for Prisons and Security of the Bureau of Corrections, informed us that Paniterce had died on August 22, 2009 at the New Bilibid Prison Hospital. Paniterces Death Certificate was attached to said letter. Given Paniterces death, we are now faced with the question of the effect of such death on the present appeal. Paniterces death on August 22, 2009, during the pendency of his appeal, extinguished not only his criminal liabilities for the rape and acts of lasciviousness committed against his daughters, but also his civil liabilities solely arising from or based on said crimes. According to Article 89(1) of the Revised Penal Code, criminal liability is totally extinguished: 1. By the death of the convict, as to the personal penalties; and as to pecuniary penalties, liability therefor is extinguished only when the death of the offender occurs before final judgment.

Where the civil liability survives, as explained in Number 2 above, an action for recovery therefor may be pursued but only by way of filing a separate civil action and subject to Section 1, Rule 111 of the 1985 Rules on Criminal Procedure as amended. This separate civil action may be enforced either against the executor/administrator or the estate of the accused, depending on the source of obligation upon which the same is based as explained above. Finally, the private offended party need not fear a forfeiture of his right to file this separate civil action by prescription, in cases where during the prosecution of the criminal action and prior to its extinction, the private-offended party instituted together therewith the civil action. In such case, the statute of limitations on the civil liability is deemed interrupted during the pendency of the criminal case, conformably with the provisions of Article 1155 of the Civil Code that should thereby avoid any apprehension on a possible privation of right by prescription.xxxix[14]

Clearly, it is unnecessary for the Court to rule on Paniterces appeal. Whether or not he was guilty of the crimes charged has become irrelevant since, following Article 89(1) of the Revised Penal Code and our disquisition in Bayotas, even assuming Paniterce had incurred criminal liabilities, they were totally extinguished by his death. Moreover, because Paniterces appeal was still pending and no final judgment of conviction had been rendered against him when he died, his civil liabilities arising from the crimes, being civil liabilities ex delicto, were likewise extinguished by his death. Consequently, the appealed Decision dated August 22, 2008 of the Court of Appeals finding Paniterce guilty of rape and acts of lasciviousness, sentencing him to imprisonment, and ordering him to indemnify his victims had become ineffectual. WHEREFORE, in view of the death of accused-appellant Domingo Paniterce y Martinez, the Decision dated August 22, 2008 of the Court of Appeals in CA-G.R. CR-H.C. No. 01001 is SET ASIDE and Criminal Case Nos. 6076, 6077, 6078, 6079, 6080, and 6081 before the Regional Trial Court of Iriga City are DISMISSED. Costs de oficio. SO ORDERED. Serrano vs Central Bank Petition for mandamus and prohibition, with preliminary injunction, that seeks the establishment of joint and solidary liability to the amount of Three Hundred Fifty Thousand Pesos, with interest, against respondent Central Bank of the Philippines and Overseas Bank of Manila and its stockholders, on the alleged failure of the Overseas Bank of Manila to return the time deposits made by petitioner and assigned to him, on the ground that respondent Central Bank failed in its duty to exercise strict supervision over respondent Overseas Bank of Manila to protect depositors and the general public. 1 Petitioner also prays that both respondent banks be ordered to execute the proper and necessary documents to constitute all properties fisted in Annex "7" of the Answer of respondent Central Bank of the Philippines in G.R. No. L-29352, entitled "Emerita M. Ramos, et al vs. Central Bank of the Philippines," into a trust fund in favor of petitioner and all other depositors of respondent Overseas Bank of Manila. It is also prayed that the respondents be prohibited permanently from honoring, implementing, or doing any act predicated upon the validity or efficacy of the deeds of mortgage, assignment. and/or conveyance or transfer of whatever nature of the properties listed in Annex "7" of the Answer of respondent Central Bank in G.R. No. 29352. 2 A sought for ex-parte preliminary injunction against both respondent banks was not given by this Court. Undisputed pertinent facts are:

Applying the foregoing provision, we laid down the following guidelines in People v. Bayotasxxxviii[13]: 1. Death of the accused pending appeal of his conviction extinguishes his criminal liability as well as the civil liability based solely thereon. As opined by Justice Regalado, in this regard, the death of the accused prior to final judgment terminates his criminal liability and only the civil liability directly arising from and based solely on the offense committed, i.e., civil liability ex delicto in senso strictiore. Corollarily, the claim for civil liability survives notwithstanding the death of (the) accused, if the same may also be predicated on a source of obligation other than delict. Article 1157 of the Civil Code enumerates these other sources of obligation from which the civil liability may arise as a result of the same act or omission: a) Law

2.

On October 13, 1966 and December 12, 1966, petitioner made a time deposit, for one year with 6% interest, of One Hundred Fifty Thousand Pesos (P150,000.00) with the respondent Overseas Bank of Manila. 3 Concepcion Maneja also made a time deposit, for one year with 6-% interest, on March 6, 1967, of Two Hundred Thousand Pesos (P200,000.00) with the same respondent Overseas Bank of Manila. 4 On August 31, 1968, Concepcion Maneja, married to Felixberto M. Serrano, assigned and conveyed to petitioner Manuel M. Serrano, her time deposit of P200,000.00 with respondent Overseas Bank of Manila. 5 Notwithstanding series of demands for encashment of the aforementioned time deposits from the respondent Overseas Bank of Manila, dating from December 6, 1967 up to March 4, 1968, not a single one of the time deposit certificates was honored by respondent Overseas Bank of Manila. 6 Respondent Central Bank admits that it is charged with the duty of administering the banking system of the Republic and it exercises supervision over all doing business in the Philippines, but denies the petitioner's allegation that the Central Bank has the duty to exercise a most rigid and stringent supervision of banks, implying that respondent Central Bank has to watch every move or activity of all banks, including respondent Overseas Bank of Manila. Respondent Central Bank claims that as of March 12, 1965, the Overseas Bank of Manila, while operating, was only on a limited degree of banking operations since the Monetary Board decided in its Resolution No. 322, dated March 12, 1965, to prohibit the Overseas Bank of Manila from making new loans and investments in view of its chronic reserve deficiencies against its deposit liabilities. This limited operation of respondent Overseas Bank of Manila continued up to 1968. 7 Respondent Central Bank also denied that it is guarantor of the permanent solvency of any banking institution as claimed by petitioner. It claims that neither the law nor sound banking supervision requires respondent Central Bank to advertise or represent to the public any remedial measures it may impose upon chronic delinquent banks as such action may inevitably result to panic or bank "runs". In the years 1966-1967, there were no findings to declare the respondent Overseas Bank of Manila as insolvent. 8 Respondent Central Bank likewise denied that a constructive trust was created in favor of petitioner and his predecessor in interest Concepcion Maneja when their time deposits were made in 1966 and 1967 with the respondent Overseas Bank of Manila as during that time the latter was not an insolvent bank and its operation as a banking institution was being salvaged by the respondent Central Bank. 9 Respondent Central Bank avers no knowledge of petitioner's claim that the properties given by respondent Overseas Bank of Manila as additional collaterals to respondent Central Bank of the Philippines for the former's overdrafts and emergency loans were acquired through the use of depositors' money, including that of the petitioner and Concepcion Maneja. 10 In G.R. No. L-29362, entitled "Emerita M. Ramos, et al. vs. Central Bank of the Philippines," a case was filed by the petitioner Ramos, wherein respondent Overseas Bank of Manila sought to prevent respondent Central Bank from closing, declaring the former insolvent, and liquidating its assets. Petitioner Manuel Serrano in this case, filed on September 6, 1968, a motion to intervene in G.R. No. L-29352, on the ground that Serrano had a real and legal interest as depositor of the Overseas Bank of Manila in the matter in litigation in that case. Respondent Central Bank in G.R. No. L-29352 opposed petitioner Manuel Serrano's motion to intervene in that case, on the ground that his claim as depositor of the Overseas Bank of Manila should properly be ventilated in the Court of First Instance, and if this Court were to allow Serrano to intervene as depositor in G.R. No. L-29352, thousands of other depositors would follow and thus cause an avalanche of cases in this Court. In the resolution dated October 4, 1968, this Court denied Serrano's, motion to intervene. The contents of said motion to intervene are substantially the same as those of the present petition. 11 This Court rendered decision in G.R. No. L-29352 on October 4, 1971, which became final and executory on March 3, 1972, favorable to the respondent Overseas Bank of Manila, with the dispositive portion to wit: WHEREFORE, the writs prayed for in the petition are hereby granted and respondent Central Bank's resolution Nos. 1263, 1290 and 1333 (that prohibit the Overseas Bank of Manila to participate in clearing, direct the suspension of its operation, and ordering the

liquidation of said bank) are hereby annulled and set aside; and said respondent Central Bank of the Philippines is directed to comply with its obligations under the Voting Trust Agreement, and to desist from taking action in violation therefor. Costs against respondent Central Bank of the Philippines. 12 Because of the above decision, petitioner in this case filed a motion for judgment in this case, praying for a decision on the merits, adjudging respondent Central Bank jointly and severally liable with respondent Overseas Bank of Manila to the petitioner for the P350,000 time deposit made with the latter bank, with all interests due therein; and declaring all assets assigned or mortgaged by the respondents Overseas Bank of Manila and the Ramos groups in favor of the Central Bank as trust funds for the benefit of petitioner and other depositors. 13 By the very nature of the claims and causes of action against respondents, they in reality are recovery of time deposits plus interest from respondent Overseas Bank of Manila, and recovery of damages against respondent Central Bank for its alleged failure to strictly supervise the acts of the other respondent Bank and protect the interests of its depositors by virtue of the constructive trust created when respondent Central Bank required the other respondent to increase its collaterals for its overdrafts said emergency loans, said collaterals allegedly acquired through the use of depositors money. These claims shoud be ventilated in the Court of First Instance of proper jurisdiction as We already pointed out when this Court denied petitioner's motion to intervene in G.R. No. L-29352. Claims of these nature are not proper in actions for mandamus and prohibition as there is no shown clear abuse of discretion by the Central Bank in its exercise of supervision over the other respondent Overseas Bank of Manila, and if there was, petitioner here is not the proper party to raise that question, but rather the Overseas Bank of Manila, as it did in G.R. No. L-29352. Neither is there anything to prohibit in this case, since the questioned acts of the respondent Central Bank (the acts of dissolving and liquidating the Overseas Bank of Manila), which petitioner here intends to use as his basis for claims of damages against respondent Central Bank, had been accomplished a long time ago. Furthermore, both parties overlooked one fundamental principle in the nature of bank deposits when the petitioner claimed that there should be created a constructive trust in his favor when the respondent Overseas Bank of Manila increased its collaterals in favor of respondent Central Bank for the former's overdrafts and emergency loans, since these collaterals were acquired by the use of depositors' money. Bank deposits are in the nature of irregular deposits. They are really loans because they earn interest. All kinds of bank deposits, whether fixed, savings, or current are to be treated as loans and are to be covered by the law on loans. 14 Current and savings deposit are loans to a bank because it can use the same. The petitioner here in making time deposits that earn interests with respondent Overseas Bank of Manila was in reality a creditor of the respondent Bank and not a depositor. The respondent Bank was in turn a debtor of petitioner. Failure of he respondent Bank to honor the time deposit is failure to pay s obligation as a debtor and not a breach of trust arising from depositary's failure to return the subject matter of the deposit WHEREFORE, the petition is dismissed for lack of merit, with costs against petitioner. SO ORDERED. Office of Solicitor General vs Ayala Land Inc Before this Court is a Petition for Review on Certiorari,xl[1] under Rule 45 of the Revised Rules of Court, filed by petitioner Office of the Solicitor General (OSG), seeking the reversal and setting aside of the Decisionxli[2] dated 25 January 2007 of the Court of Appeals in CA-G.R. CV No. 76298, which affirmed in toto the Joint Decisionxlii[3] dated 29 May 2002 of the Regional Trial Court (RTC) of Makati City, Branch 138, in Civil Cases No. 001208 and No. 00-1210; and (2) the Resolutionxliii[4] dated 14 March 2007 of the appellate court in the same case which denied the Motion for Reconsideration of the OSG. The RTC adjudged that respondents Ayala Land Incorporated (Ayala Land), Robinsons Land Corporation (Robinsons), Shangri-la Plaza Corporation (Shangri-la), and SM Prime Holdings, Inc. (SM Prime) could not be obliged to provide free parking spaces in their malls to their patrons and the general public. Respondents Ayala Land, Robinsons, and Shangri-la maintain and operate shopping malls in various locations in Metro Manila. Respondent SM Prime constructs, operates, and leases out commercial buildings and other structures, among which, are SM City, Manila; SM Centerpoint, Sta. Mesa, Manila; SM City, North Avenue, Quezon City; and SM Southmall, Las Pias.

The shopping malls operated or leased out by respondents have parking facilities for all kinds of motor vehicles, either by way of parking spaces inside the mall buildings or in separate buildings and/or adjacent lots that are solely devoted for use as parking spaces. Respondents Ayala Land, Robinsons, and SM Prime spent for the construction of their own parking facilities. Respondent Shangri-la is renting its parking facilities, consisting of land and building specifically used as parking spaces, which were constructed for the lessors account. Respondents expend for the maintenance and administration of their respective parking facilities. They provide security personnel to protect the vehicles parked in their parking facilities and maintain order within the area. In turn, they collect the following parking fees from the persons making use of their parking facilities, regardless of whether said persons are mall patrons or not: Respo ndent Ayala Land Robin sons Shan gri-la SM Prime Parking Fees

collection of parking fees) would be going against the declared policy of R.A. 7394. Section 201 of the National Building Code gives the responsibility for the administration and enforcement of the provisions of the Code, including the imposition of penalties for administrative violations thereof to the Secretary of Public Works. This set up, however, is not being carried out in reality. In the position paper submitted by the Metropolitan Manila Development Authority (MMDA), its chairman, Jejomar C. Binay, accurately pointed out that the Secretary of the DPWH is responsible for the implementation/enforcement of the National Building Code. After the enactment of the Local Government Code of 1991, the local government units (LGUs) were tasked to discharge the regulatory powers of the DPWH. Hence, in the local level, the Building Officials enforce all rules/ regulations formulated by the DPWH relative to all building plans, specifications and designs including parking space requirements. There is, however, no single national department or agency directly tasked to supervise the enforcement of the provisions of the Code on parking, notwithstanding the national character of the law.xlv[6] Senate Committee Report No. 225, thus, contained the following recommendations: In light of the foregoing, the Committees on Trade and Commerce and Justice and Human Rights hereby recommend the following: 1. The Office of the Solicitor General should institute the necessary action to enjoin the collection of parking fees as well as to enforce the penal sanction provisions of the National Building Code. The Office of the Solicitor General should likewise study how refund can be exacted from mall owners who continue to collect parking fees. The Department of Trade and Industry pursuant to the provisions of R.A. No. 7394, otherwise known as the Consumer Act of the Philippines should enforce the provisions of the Code relative to parking. Towards this end, the DTI should formulate the necessary implementing rules and regulations on parking in shopping malls, with prior consultations with the local government units where these are located. Furthermore, the DTI, in coordination with the DPWH, should be empowered to regulate and supervise the construction and maintenance of parking establishments. Finally, Congress should amend and update the National Building Code to expressly prohibit shopping malls from collecting parking fees by at the same time, prohibit them from invoking the waiver of liability.xlvi[7]

On weekdays, P25.00 for the first four hours and P10.00 for every succeeding hour; on weekends, flat rate of P25.00 per day P20.00 for the first three hours and P10.00 for every succeeding hour Flat rate of P30.00 per day P10.00 to P20.00 (depending on whether the parking space is outdoors or indoors) for the first three hours and 59 minutes, and P10.00 for every succeeding hour or fraction thereof

The parking tickets or cards issued by respondents to vehicle owners contain the stipulation that respondents shall not be responsible for any loss or damage to the vehicles parked in respondents parking facilities. In 1999, the Senate Committees on Trade and Commerce and on Justice and Human Rights conducted a joint investigation for the following purposes: (1) to inquire into the legality of the prevalent practice of shopping malls of charging parking fees; (2) assuming arguendo that the collection of parking fees was legally authorized, to find out the basis and reasonableness of the parking rates charged by shopping malls; and (3) to determine the legality of the policy of shopping malls of denying liability in cases of theft, robbery, or carnapping, by invoking the waiver clause at the back of the parking tickets. Said Senate Committees invited the top executives of respondents, who operate the major malls in the country; the officials from the Department of Trade and Industry (DTI), Department of Public Works and Highways (DPWH), Metro Manila Development Authority (MMDA), and other local government officials; and the Philippine Motorists Association (PMA) as representative of the consumers group. After three public hearings held on 30 September, 3 November, and 1 December 1999, the afore-mentioned Senate Committees jointly issued Senate Committee Report No. 225 xliv [5] on 2 May 2000, in which they concluded: In view of the foregoing, the Committees find that the collection of parking fees by shopping malls is contrary to the National Building Code and is therefor [sic] illegal. While it is true that the Code merely requires malls to provide parking spaces, without specifying whether it is free or not, both Committees believe that the reasonable and logical interpretation of the Code is that the parking spaces are for free. This interpretation is not only reasonable and logical but finds support in the actual practice in other countries like the United States of America where parking spaces owned and operated by mall owners are free of charge. Figuratively speaking, the Code has expropriated the land for parking something similar to the subdivision law which require developers to devote so much of the land area for parks. Moreover, Article II of R.A. No. 9734 (Consumer Act of the Philippines) provides that it is the policy of the State to protect the interest of the consumers, promote the general welfare and establish standards of conduct for business and industry. Obviously, a contrary interpretation (i.e., justifying the

2.

3.

Respondent SM Prime thereafter received information that, pursuant to Senate Committee Report No. 225, the DPWH Secretary and the local building officials of Manila, Quezon City, and Las Pias intended to institute, through the OSG, an action to enjoin respondent SM Prime and similar establishments from collecting parking fees, and to impose upon said establishments penal sanctions under Presidential Decree No. 1096, otherwise known as the National Building Code of the Philippines (National Building Code), and its Implementing Rules and Regulations (IRR). With the threatened action against it, respondent SM Prime filed, on 3 October 2000, a Petition for Declaratory Reliefxlvii[8] under Rule 63 of the Revised Rules of Court, against the DPWH Secretary and local building officials of Manila, Quezon City, and Las Pias. Said Petition was docketed as Civil Case No. 00-1208 and assigned to the RTC of Makati City, Branch 138, presided over by Judge Sixto Marella, Jr. (Judge Marella). In its Petition, respondent SM Prime prayed for judgment:

a) Declaring Rule XIX of the Implementing Rules and Regulations of the National Building Code as ultra vires, hence, unconstitutional and void; b) Declaring [herein respondent SM Prime]s clear legal right to lease parking spaces appurtenant to its department stores, malls, shopping centers and other commercial establishments; and c) Declaring the National Building Code of the Philippines Implementing Rules and Regulations as ineffective, not having been published once a week for three (3) consecutive weeks in a newspaper of general circulation, as prescribed by Section 211 of Presidential Decree No. 1096. [Respondent SM Prime] further prays for such other reliefs as may be deemed just and equitable under the premises.xlviii[9] that: The very next day, 4 October 2000, the OSG filed a Petition for Declaratory Relief and Injunction (with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction)xlix[10] against respondents. This Petition was docketed as Civil Case No. 00-1210 and raffled to the RTC of Makati, Branch 135, presided over by Judge Francisco B. Ibay (Judge Ibay). Petitioner prayed that the RTC: 1. After summary hearing, a temporary restraining order and a writ of preliminary injunction be issued restraining respondents from collecting parking fees from their customers; and 2. After hearing, judgment be rendered declaring that the practice of respondents in charging parking fees is violative of the National Building Code and its Implementing Rules and Regulations and is therefore invalid, and making permanent any injunctive writ issued in this case. Other reliefs just and equitable under the premises are likewise prayed for.l[11]

controversy is between persons whose interests are adverse; (c) the party seeking the relief has a legal interest in the controversy; and (d) the issue involved is ripe for judicial determination. SM, the petitioner in Civil Case No. 001-1208 [sic] is a mall operator who stands to be affected directly by the position taken by the government officials sued namely the Secretary of Public Highways and the Building Officials of the local government units where it operates shopping malls. The OSG on the other hand acts on a matter of public interest and has taken a position adverse to that of the mall owners whom it sued. The construction of new and bigger malls has been announced, a matter which the Court can take judicial notice and the unsettled issue of whether mall operators should provide parking facilities, free of charge needs to be resolved.liv[15] As to the third and most contentious issue, the RTC pronounced

The Building Code, which is the enabling law and the Implementing Rules and Regulations do not impose that parking spaces shall be provided by the mall owners free of charge. Absent such directive[,] Ayala Land, Robinsons, Shangri-la and SM [Prime] are under no obligation to provide them for free. Article 1158 of the Civil Code is clear: Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book (1090).[] xxxx The provision on ratios of parking slots to several variables, like shopping floor area or customer area found in Rule XIX of the Implementing Rules and Regulations cannot be construed as a directive to provide free parking spaces, because the enabling law, the Building Code does not so provide. x x x. To compel Ayala Land, Robinsons, ShangriLa and SM [Prime] to provide parking spaces for free can be considered as an unlawful taking of property right without just compensation. Parking spaces in shopping malls are privately owned and for their use, the mall operators collect fees. The legal relationship could be either lease or deposit. In either case[,] the mall owners have the right to collect money which translates into income. Should parking spaces be made free, this right of mall owners shall be gone. This, without just compensation. Further, loss of effective control over their property will ensue which is frowned upon by law. The presence of parking spaces can be viewed in another light. They can be looked at as necessary facilities to entice the public to increase patronage of their malls because without parking spaces, going to their malls will be inconvenient. These are[,] however[,] business considerations which mall operators will have to decide for themselves. They are not sufficient to justify a legal conclusion, as the OSG would like the Court to adopt that it is the obligation of the mall owners to provide parking spaces for free.lv[16]

On 23 October 2000, Judge Ibay of the RTC of Makati City, Branch 135, issued an Order consolidating Civil Case No. 00-1210 with Civil Case No. 00-1208 pending before Judge Marella of RTC of Makati, Branch 138. As a result of the pre-trial conference held on the morning of 8 August 2001, the RTC issued a Pre-Trial Orderli[12] of even date which limited the issues to be resolved in Civil Cases No. 00-1208 and No. 00-1210 to the following: 1. Capacity of the plaintiff [OSG] in Civil Case No. 00-1210 to institute the present proceedings and relative thereto whether the controversy in the collection of parking fees by mall owners is a matter of public welfare. 2. Whether declaratory relief is proper.

3. Whether respondent Ayala Land, Robinsons, Shangri-La and SM Prime are obligated to provide parking spaces in their malls for the use of their patrons or the public in general, free of charge. 4. Entitlement of the parties of [sic] award of damages.lii[13] On 29 May 2002, the RTC rendered its Joint Decision in Civil Cases No. 00-1208 and No. 00-1210. The RTC resolved the first two issues affirmatively. It ruled that the OSG can initiate Civil Case No. 00-1210 under Presidential Decree No. 478 and the Administrative Code of 1987.liii[14] It also found that all the requisites for an action for declaratory relief were present, to wit: The requisites for an action for declaratory relief are: (a) there is a justiciable controversy; (b) the

The RTC then held that there was no sufficient evidence to justify any award for damages. The RTC finally decreed in its 29 May 2002 Joint Decision in Civil Cases No. 00-1208 and No. 00-1210 that:

FOR THE REASONS GIVEN, the Court declares that Ayala Land[,] Inc., Robinsons Land Corporation, Shangri-la Plaza Corporation and SM Prime Holdings[,] Inc. are not obligated to provide parking spaces in their malls for the use of their patrons or public in general, free of charge. All counterclaims in Civil Case No. 00-1210 are dismissed. No pronouncement as to costs.lvi[17] CA-G.R. CV No. 76298 involved the separate appeals of the OSGlvii[18] and respondent SM Primelviii[19] filed with the Court of Appeals. The sole assignment of error of the OSG in its Appellants Brief was: THE TRIAL COURT ERRED IN HOLDING THAT THE NATIONAL BUILDING CODE DID NOT INTEND MALL PARKING SPACES TO BE FREE OF CHARGE[;]lix[20] while the four errors assigned by respondent SM Prime in its Appellants Brief were: I THE TRIAL COURT ERRED IN FAILING TO DECLARE RULE XIX OF THE IMPLEMENTING RULES AS HAVING BEEN ENACTED ULTRA VIRES, HENCE, UNCONSTITUTIONAL AND VOID. II THE TRIAL COURT ERRED IN FAILING TO DECLARE THE IMPLEMENTING RULES INEFFECTIVE FOR NOT HAVING BEEN PUBLISHED AS REQUIRED BY LAW. III THE TRIAL COURT ERRED IN FAILING TO DISMISS THE OSGS PETITION FOR DECLARATORY RELIEF AND INJUNCTION FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES. IV THE TRIAL COURT ERRED IN FAILING TO DECLARE THAT THE OSG HAS NO LEGAL CAPACITY TO SUE AND/OR THAT IT IS NOT A REAL PARTY-ININTEREST IN THE INSTANT CASE.lx[21]

for Civil Cases No. 00-1208 and No. 00-1210. Issues cannot be raised for the first time on appeal. Furthermore, the appellate court found that the controversy could be settled on other grounds, without touching on the issue of the validity of the IRR. It referred to the settled rule that courts should refrain from passing upon the constitutionality of a law or implementing rules, because of the principle that bars judicial inquiry into a constitutional question, unless the resolution thereof is indispensable to the determination of the case. Lastly, the Court of Appeals declared that Section 803 of the National Building Code and Rule XIX of the IRR were clear and needed no further construction. Said provisions were only intended to control the occupancy or congestion of areas and structures. In the absence of any express and clear provision of law, respondents could not be obliged and expected to provide parking slots free of charge. The fallo of the 25 January 2007 Decision of the Court of Appeals reads: WHEREFORE, premises considered, the instant appeals are DENIED. Accordingly, appealed Decision is hereby AFFIRMED in toto.lxii[23]

In its Resolution issued on 14 March 2007, the Court of Appeals denied the Motion for Reconsideration of the OSG, finding that the grounds relied upon by the latter had already been carefully considered, evaluated, and passed upon by the appellate court, and there was no strong and cogent reason to modify much less reverse the assailed judgment. The OSG now comes before this Court, via the instant Petition for Review, with a single assignment of error: THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE RULING OF THE LOWER COURT THAT RESPONDENTS ARE NOT OBLIGED TO PROVIDE FREE PARKING SPACES TO THEIR CUSTOMERS OR THE PUBLIC.lxiii[24]

The OSG argues that respondents are mandated to provide free parking by Section 803 of the National Building Code and Rule XIX of the IRR. According to Section 803 of the National Building Code: SECTION Occupancy 803. Percentage of Site

(a) Maximum site occupancy shall be governed by the use, type of construction, and height of the building and the use, area, nature, and location of the site; and subject to the provisions of the local zoning requirements and in accordance with the rules and regulations promulgated by the Secretary.

Respondent Robinsons filed a Motion to Dismiss Appeal of the OSG on the ground that the lone issue raised therein involved a pure question of law, not reviewable by the Court of Appeals. The Court of Appeals promulgated its Decision in CA-G.R. CV No. 76298 on 25 January 2007. The appellate court agreed with respondent Robinsons that the appeal of the OSG should suffer the fate of dismissal, since the issue on whether or not the National Building Code and its implementing rules require shopping mall operators to provide parking facilities to the public for free was evidently a question of law. Even so, since CA-G.R. CV No. 76298 also included the appeal of respondent SM Prime, which raised issues worthy of consideration, and in order to satisfy the demands of substantial justice, the Court of Appeals proceeded to rule on the merits of the case. In its Decision, the Court of Appeals affirmed the capacity of the OSG to initiate Civil Case No. 00-1210 before the RTC as the legal representative of the government,lxi[22] and as the one deputized by the Senate of the Republic of the Philippines through Senate Committee Report No. 225. The Court of Appeals rejected the contention of respondent SM Prime that the OSG failed to exhaust administrative remedies. The appellate court explained that an administrative review is not a condition precedent to judicial relief where the question in dispute is purely a legal one, and nothing of an administrative nature is to be or can be done. The Court of Appeals likewise refused to rule on the validity of the IRR of the National Building Code, as such issue was not among those the parties had agreed to be resolved by the RTC during the pre-trial conference

In connection therewith, Rule XIX of the old IRR,lxiv[25] provides: RULE XIX PARKING AND LOADING SPACE REQUIREMENTS Pursuant to Section 803 of the National Building Code (PD 1096) providing for maximum site occupancy, the following provisions on parking and loading space requirements shall be observed: 1. The parking space ratings listed below are minimum off-street requirements for specific uses/occupancies for buildings/structures:

1.1 The size of an average automobile parking slot shall be computed as 2.4 meters by 5.00 meters for perpendicular or diagonal parking, 2.00 meters by 6.00 meters for parallel parking. A truck or bus parking/loading slot shall be computed at a minimum of 3.60 meters by 12.00 meters. The parking slot shall be drawn to scale and the total number of which shall be indicated on the plans and specified whether or not parking accommodations, are attendant-

managed. (See Section 2 for computation of parking requirements). xxxx 1.7 Neighborhood shopping center 1 slot/100 sq. m. of shopping floor area

and requirements for all buildings and structures, as set forth in the National Building Code, are complied with. Consequently, the OSG cannot claim that in addition to fixing the minimum requirements for parking spaces for buildings, Rule XIX of the IRR also mandates that such parking spaces be provided by building owners free of charge. If Rule XIX is not covered by the enabling law, then it cannot be added to or included in the implementing rules. The rule-making power of administrative agencies must be confined to details for regulating the mode or proceedings to carry into effect the law as it has been enacted, and it cannot be extended to amend or expand the statutory requirements or to embrace matters not covered by the statute. Administrative regulations must always be in harmony with the provisions of the law because any resulting discrepancy between the two will always be resolved in favor of the basic law.lxvi[27] From the RTC all the way to this Court, the OSG repeatedly referred to Republic v. Gonzales lxvii [28] and City of Ozamis v. Lumapas lxviii [29] to support its position that the State has the power to regulate parking spaces to promote the health, safety, and welfare of the public; and it is by virtue of said power that respondents may be required to provide free parking facilities. The OSG, though, failed to consider the substantial differences in the factual and legal backgrounds of these two cases from those of the Petition at bar. In Republic, the Municipality of Malabon sought to eject the occupants of two parcels of land of the public domain to give way to a roadwidening project. It was in this context that the Court pronounced: Indiscriminate parking along F. Sevilla Boulevard and other main thoroughfares was prevalent; this, of course, caused the build up of traffic in the surrounding area to the great discomfort and inconvenience of the public who use the streets. Traffic congestion constitutes a threat to the health, welfare, safety and convenience of the people and it can only be substantially relieved by widening streets and providing adequate parking areas.

The OSG avers that the aforequoted provisions should be read together with Section 102 of the National Building Code, which declares: SECTION 102. Declaration of Policy It is hereby declared to be the policy of the State to safeguard life, health, property, and public welfare, consistent with the principles of sound environmental management and control; and to this end, make it the purpose of this Code to provide for all buildings and structures, a framework of minimum standards and requirements to regulate and control their location, site, design, quality of materials, construction, use, occupancy, and maintenance.

The requirement of free-of-charge parking, the OSG argues, greatly contributes to the aim of safeguarding life, health, property, and public welfare, consistent with the principles of sound environmental management and control. Adequate parking spaces would contribute greatly to alleviating traffic congestion when complemented by quick and easy access thereto because of free-charge parking. Moreover, the power to regulate and control the use, occupancy, and maintenance of buildings and structures carries with it the power to impose fees and, conversely, to control -- partially or, as in this case, absolutely -- the imposition of such fees. The Court finds no merit in the present Petition. The explicit directive of the afore-quoted statutory and regulatory provisions, garnered from a plain reading thereof, is that respondents, as operators/lessors of neighborhood shopping centers, should provide parking and loading spaces, in accordance with the minimum ratio of one slot per 100 square meters of shopping floor area. There is nothing therein pertaining to the collection (or non-collection) of parking fees by respondents. In fact, the term parking fees cannot even be found at all in the entire National Building Code and its IRR. Statutory construction has it that if a statute is clear and unequivocal, it must be given its literal meaning and applied without any attempt at interpretation.lxv[26] Since Section 803 of the National Building Code and Rule XIX of its IRR do not mention parking fees, then simply, said provisions do not regulate the collection of the same. The RTC and the Court of Appeals correctly applied Article 1158 of the New Civil Code, which states: Art. 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book. (Emphasis ours.)

The Court, in City of Ozamis, declared that the City had been clothed with full power to control and regulate its streets for the purpose of promoting public health, safety and welfare. The City can regulate the time, place, and manner of parking in the streets and public places; and charge minimal fees for the street parking to cover the expenses for supervision, inspection and control, to ensure the smooth flow of traffic in the environs of the public market, and for the safety and convenience of the public. Republic and City of Ozamis involved parking in the local streets; in contrast, the present case deals with privately owned parking facilities available for use by the general public. In Republic and City of Ozamis, the concerned local governments regulated parking pursuant to their power to control and regulate their streets; in the instant case, the DPWH Secretary and local building officials regulate parking pursuant to their authority to ensure compliance with the minimum standards and requirements under the National Building Code and its IRR. With the difference in subject matters and the bases for the regulatory powers being invoked, Republic and City of Ozamis do not constitute precedents for this case. Indeed, Republic and City of Ozamis both contain pronouncements that weaken the position of the OSG in the case at bar. In Republic, the Court, instead of placing the burden on private persons to provide parking facilities to the general public, mentioned the trend in other jurisdictions wherein the municipal governments themselves took the initiative to make more parking spaces available so as to alleviate the traffic problems, thus: Under the Land Transportation and Traffic Code, parking in designated areas along public streets or highways is allowed which clearly indicates that provision for parking spaces serves a useful purpose. In other jurisdictions where traffic is at least as voluminous as here, the provision by municipal governments of parking space is not limited to parking along public streets or highways. There has been a marked trend to build off-street parking facilities with the view to removing parked cars from the streets. While the provision of off-street parking facilities or carparks has been commonly undertaken by private enterprise, municipal governments have been constrained to put up carparks in response to public necessity where private enterprise had failed to keep up with the growing public demand. American courts have upheld the right of municipal governments to construct off-street parking facilities as clearly redounding to the public benefit.lxix[30]

Hence, in order to bring the matter of parking fees within the ambit of the National Building Code and its IRR, the OSG had to resort to specious and feeble argumentation, in which the Court cannot concur. The OSG cannot rely on Section 102 of the National Building Code to expand the coverage of Section 803 of the same Code and Rule XIX of the IRR, so as to include the regulation of parking fees. The OSG limits its citation to the first part of Section 102 of the National Building Code declaring the policy of the State to safeguard life, health, property, and public welfare, consistent with the principles of sound environmental management and control; but totally ignores the second part of said provision, which reads, and to this end, make it the purpose of this Code to provide for all buildings and structures, a framework of minimum standards and requirements to regulate and control their location, site, design, quality of materials, construction, use, occupancy, and maintenance. While the first part of Section 102 of the National Building Code lays down the State policy, it is the second part thereof that explains how said policy shall be carried out in the Code. Section 102 of the National Building Code is not an all-encompassing grant of regulatory power to the DPWH Secretary and local building officials in the name of life, health, property, and public welfare. On the contrary, it limits the regulatory power of said officials to ensuring that the minimum standards

more vehicles without parking spaces in the malls and parked in the streets instead, causing even more traffic congestion. In City of Ozamis, the Court authorized the collection by the City of minimal fees for the parking of vehicles along the streets: so why then should the Court now preclude respondents from collecting from the public a fee for the use of the mall parking facilities? Undoubtedly, respondents also incur expenses in the maintenance and operation of the mall parking facilities, such as electric consumption, compensation for parking attendants and security, and upkeep of the physical structures. It is not sufficient for the OSG to claim that the power to regulate and control the use, occupancy, and maintenance of buildings and structures carries with it the power to impose fees and, conversely, to control, partially or, as in this case, absolutely, the imposition of such fees. Firstly, the fees within the power of regulatory agencies to impose are regulatory fees. It has been settled law in this jurisdiction that this broad and all-compassing governmental competence to restrict rights of liberty and property carries with it the undeniable power to collect a regulatory fee. It looks to the enactment of specific measures that govern the relations not only as between individuals but also as between private parties and the political society.lxx[31] True, if the regulatory agencies have the power to impose regulatory fees, then conversely, they also have the power to remove the same. Even so, it is worthy to note that the present case does not involve the imposition by the DPWH Secretary and local building officials of regulatory fees upon respondents; but the collection by respondents of parking fees from persons who use the mall parking facilities. Secondly, assuming arguendo that the DPWH Secretary and local building officials do have regulatory powers over the collection of parking fees for the use of privately owned parking facilities, they cannot allow or prohibit such collection arbitrarily or whimsically. Whether allowing or prohibiting the collection of such parking fees, the action of the DPWH Secretary and local building officials must pass the test of classic reasonableness and propriety of the measures or means in the promotion of the ends sought to be accomplished.lxxi[32] Keeping in mind the aforementioned test of reasonableness and propriety of measures or means, the Court notes that Section 803 of the National Building Code falls under Chapter 8 on Light and Ventilation. Evidently, the Code deems it necessary to regulate site occupancy to ensure that there is proper lighting and ventilation in every building. Pursuant thereto, Rule XIX of the IRR requires that a building, depending on its specific use and/or floor area, should provide a minimum number of parking spaces. The Court, however, fails to see the connection between regulating site occupancy to ensure proper light and ventilation in every building vis--vis regulating the collection by building owners of fees for the use of their parking spaces. Contrary to the averment of the OSG, the former does not necessarily include or imply the latter. It totally escapes this Court how lighting and ventilation conditions at the malls could be affected by the fact that parking facilities thereat are free or paid for. The OSG attempts to provide the missing link by arguing that: Under Section 803 of the National Building Code, complimentary parking spaces are required to enhance light and ventilation, that is, to avoid traffic congestion in areas surrounding the building, which certainly affects the ventilation within the building itself, which otherwise, the annexed parking spaces would have served. Free-of-charge parking avoids traffic congestion by ensuring quick and easy access of legitimate shoppers to off-street parking spaces annexed to the malls, and thereby removing the vehicles of these legitimate shoppers off the busy streets near the commercial establishments.lxxii[33] The Court is unconvinced. The National Building Code regulates buildings, by setting the minimum specifications and requirements for the same. It does not concern itself with traffic congestion in areas surrounding the building. It is already a stretch to say that the National Building Code and its IRR also intend to solve the problem of traffic congestion around the buildings so as to ensure that the said buildings shall have adequate lighting and ventilation. Moreover, the Court cannot simply assume, as the OSG has apparently done, that the traffic congestion in areas around the malls is due to the fact that respondents charge for their parking facilities, thus, forcing vehicle owners to just park in the streets. The Court notes that despite the fees charged by respondents, vehicle owners still use the mall parking facilities, which are even fully occupied on some days. Vehicle owners may be parking in the streets only because there are not enough parking spaces in the malls, and not because they are deterred by the parking fees charged by respondents. Free parking spaces at the malls may even have the opposite effect from what the OSG envisioned: more people may be encouraged by the free parking to bring their own vehicles, instead of taking public transport, to the malls; as a result, the parking facilities would become full sooner, leaving Without using the term outright, the OSG is actually invoking police power to justify the regulation by the State, through the DPWH Secretary and local building officials, of privately owned parking facilities, including the collection by the owners/operators of such facilities of parking fees from the public for the use thereof. The Court finds, however, that in totally prohibiting respondents from collecting parking fees from the public for the use of the mall parking facilities, the State would be acting beyond the bounds of police power. Police power is the power of promoting the public welfare by restraining and regulating the use of liberty and property. It is usually exerted in order to merely regulate the use and enjoyment of the property of the owner. The power to regulate, however, does not include the power to prohibit. A fortiori, the power to regulate does not include the power to confiscate. Police power does not involve the taking or confiscation of property, with the exception of a few cases where there is a necessity to confiscate private property in order to destroy it for the purpose of protecting peace and order and of promoting the general welfare; for instance, the confiscation of an illegally possessed article, such as opium and firearms. lxxiii[34] When there is a taking or confiscation of private property for public use, the State is no longer exercising police power, but another of its inherent powers, namely, eminent domain. Eminent domain enables the State to forcibly acquire private lands intended for public use upon payment of just compensation to the owner.lxxiv[35] Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why the said power may not be availed of only to impose a burden upon the owner of condemned property, without loss of title and possession.lxxv[36] It is a settled rule that neither acquisition of title nor total destruction of value is essential to taking. It is usually in cases where title remains with the private owner that inquiry should be made to determine whether the impairment of a property is merely regulated or amounts to a compensable taking. A regulation that deprives any person of the profitable use of his property constitutes a taking and entitles him to compensation, unless the invasion of rights is so slight as to permit the regulation to be justified under the police power. Similarly, a police regulation that unreasonably restricts the right to use business property for business purposes amounts to a taking of private property, and the owner may recover therefor.lxxvi[37] Although in the present case, title to and/or possession of the parking facilities remain/s with respondents, the prohibition against their collection of parking fees from the public, for the use of said facilities, is already tantamount to a taking or confiscation of their properties. The State is not only requiring that respondents devote a portion of the latters properties for use as parking spaces, but is also mandating that they give the public access to said parking spaces for free. Such is already an excessive intrusion into the property rights of respondents. Not only are they being deprived of the right to use a portion of their properties as they wish, they are further prohibited from profiting from its use or even just recovering therefrom the expenses for the maintenance and operation of the required parking facilities. The ruling of this Court in City Government of Quezon City v. Judge Erictalxxvii[38] is edifying. Therein, the City Government of Quezon City passed an ordinance obliging private cemeteries within its jurisdiction to set aside at least six percent of their total area for charity, that is, for burial grounds of deceased paupers. According to the Court, the ordinance in question was null and void, for it authorized the taking of private property without just compensation: There is no reasonable relation between the setting aside of at least six (6) percent of the total area of all private cemeteries for charity burial grounds of deceased paupers and the promotion of' health, morals, good order, safety, or the general welfare of the people. The ordinance is actually a taking without compensation of a certain area from a private cemetery to benefit paupers who are charges of the municipal corporation. Instead of' building or maintaining a public cemetery for this purpose, the city passes the burden to private cemeteries. 'The expropriation without compensation of a portion of private cemeteries is not covered by Section 12(t) of Republic Act 537, the Revised Charter of Quezon City which empowers the city council to prohibit the burial of the dead within the center of population of

the city and to provide for their burial in a proper place subject to the provisions of general law regulating burial grounds and cemeteries. When the Local Government Code, Batas Pambansa Blg. 337 provides in Section 177(q) that a sangguniang panlungsod may "provide for the burial of the dead in such place and in such manner as prescribed by law or ordinance" it simply authorizes the city to provide its own city owned land or to buy or expropriate private properties to construct public cemeteries. This has been the law, and practise in the past. It continues to the present. Expropriation, however, requires payment of just compensation. The questioned ordinance is different from laws and regulations requiring owners of subdivisions to set aside certain areas for streets, parks, playgrounds, and other public facilities from the land they sell to buyers of subdivision lots. The necessities of public safety, health, and convenience are very clear from said requirements which are intended to insure the development of communities with salubrious and wholesome environments. The beneficiaries of the regulation, in turn, are made to pay by the subdivision developer when individual lots are sold to homeowners.

The CIAC declared WGCC liable for the construction defects in the project.lxxxiii[5] WGCC filed a petition for review with the Court of Appeals (CA) which dismissed it for lack of merit.lxxxiv[6] Its motion for reconsideration was similarly denied.lxxxv[7] In this petition for review on certiorari, WGCC raises this main question of law: whether or not petitioner WGCC is liable for defects in the granitite wash-out finish that occurred after the lapse of the one-year defects liability period provided in Art. XI of the construction contract.lxxxvi[8] We rule in favor of WGCC. The controversy pivots on a provision in the construction contract referred to as the defects liability period: ARTICLE XI GUARANTEE Unless otherwise specified for specific works, and without prejudice to the rights and causes of action of the OWNER under Article 1723 of the Civil Code, the CONTRACTOR hereby guarantees the work stipulated in this Contract, and shall make good any defect in materials and workmanship which [becomes] evident within one (1) year after the final acceptance of the work. The CONTRACTOR shall leave the work in perfect order upon completion and present the final certificate to the ENGINEER promptly. If in the opinion of the OWNER and ENGINEER, the CONTRACTOR has failed to act promptly in rectifying any defect in the work which appears within the period mentioned above, the OWNER and the ENGINEER may, at their own discretion, using the Guarantee Bond amount for corrections, have the work done by another contractor at the expense of the CONTRACTOR or his bondsmen. However, nothing in this section shall in any way affect or relieve the CONTRACTORS responsibility to the OWNER. On the completion of the [w]orks, the CONTRACTOR shall clear away and remove from the site all constructional plant, surplus materials, rubbish and temporary works of every kind, and leave the whole of the [s]ite and [w]orks clean and in a workmanlike condition to the satisfaction of the ENGINEER and OWNER.lxxxvii[9] (emphasis ours)

In conclusion, the total prohibition against the collection by respondents of parking fees from persons who use the mall parking facilities has no basis in the National Building Code or its IRR. The State also cannot impose the same prohibition by generally invoking police power, since said prohibition amounts to a taking of respondents property without payment of just compensation. Given the foregoing, the Court finds no more need to address the issue persistently raised by respondent SM Prime concerning the unconstitutionality of Rule XIX of the IRR. In addition, the said issue was not among those that the parties, during the pre-trial conference for Civil Cases No. 12-08 and No. 00-1210, agreed to submit for resolution of the RTC. It is likewise axiomatic that the constitutionality of a law, a regulation, an ordinance or an act will not be resolved by courts if the controversy can be, as in this case it has been, settled on other grounds.lxxviii[39] WHEREFORE, the instant Petition for Review on Certiorari is hereby DENIED. The Decision dated 25 January 2007 and Resolution dated 14 March 2007 of the Court of Appeals in CA-G.R. CV No. 76298, affirming in toto the Joint Decision dated 29 May 2002 of the Regional Trial Court of Makati City, Branch 138, in Civil Cases No. 00-1208 and No. 00-1210 are hereby AFFIRMED. No costs. SO ORDERED.

William Golangco Construction Corporation vs Phil. Commercial Int. Bank The facts of this case are straightforward.lxxix[1] William Golangco Construction Corporation (WGCC) and the Philippine Commercial International Bank (PCIB) entered into a contract for the construction of the extension of PCIB Tower II (denominated as PCIB Tower II, Extension Project [project])lxxx[2] on October 20, 1989. The project included, among others, the application of a granitite wash-out finishlxxxi[3] on the exterior walls of the building. PCIB, with the concurrence of its consultant TCGI Engineers (TCGI), accepted the turnover of the completed work by WGCC in a letter dated June 1, 1992. To answer for any defect arising within a period of one year, WGCC submitted a guarantee bond dated July 1, 1992 issued by Malayan Insurance Company, Inc. in compliance with the construction contract.lxxxii[4] The controversy arose when portions of the granitite wash-out finish of the exterior of the building began peeling off and falling from the walls in 1993. WGCC made minor repairs after PCIB requested it to rectify the construction defects. In 1994, PCIB entered into another contract with Brains and Brawn Construction and Development Corporation to re-do the entire granitite wash-out finish after WGCC manifested that it was not in a position to do the new finishing work, though it was willing to share part of the cost. PCIB incurred expenses amounting to P11,665,000 for the repair work. PCIB filed a request for arbitration with the Construction Industry Arbitration Commission (CIAC) for the reimbursement of its expenses for the repairs made by another contractor. It complained of WGCCs alleged noncompliance with their contractual terms on materials and workmanship. WGCC interposed a counterclaim for P5,777,157.84 for material cost adjustment.

Although both parties based their arguments on the same stipulations, they reached conflicting conclusions. A careful reading of the stipulations, however, leads us to the conclusion that WGCCs arguments are more tenable. AUTONOMY OF CONTRACTS The autonomous nature of contracts is enunciated in Article 1306 of the Civil Code. Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. Obligations arising from contracts have the force of law between the parties and should be complied with in good faith. lxxxviii [10] In characterizing the contract as having the force of law between the parties, the law stresses the obligatory nature of a binding and valid agreement. The provision in the construction contract providing for a defects liability period was not shown as contrary to law, morals, good customs, pubic order or public policy. By the nature of the obligation in such contract, the provision limiting liability for defects and fixing specific guaranty periods was not only fair and equitable; it was also necessary. Without such limitation, the contractor would be expected to make a perpetual guarantee on all materials and workmanship. The adoption of a one-year guarantee, as done by WGCC and PCIB, is established usage in the Philippines for private and government construction contracts.lxxxix[11] The contract did not specify a different period for defects in the granitite wash-out finish; hence, any defect therein should have been brought to WGCCs attention within the one-year defects liability period in the contract.

We cannot countenance an interpretation that undermines a contractual stipulation freely and validly agreed upon. The courts will not relieve a party from the effects of an unwise or unfavorable contract freely entered into.xc[12] [T]he inclusion in a written contract for a piece of work [,] such as the one in question, of a provision defining a warranty period against defects, is not uncommon. This kind of a stipulation is of particular importance to the contractor, for as a general rule, after the lapse of the period agreed upon therein, he may no longer be held accountable for whatever defects, deficiencies or imperfections that may be discovered in the work executed by him.xci[13] INTERPRETATION OF CONTRACTS To challenge the guarantee period provided in Article XI of the contract, PCIB calls our attention to Article 62.2 which provides: 62.2 Unfulfilled Obligations Notwithstanding the issue of the Defects Liability Certificate[,] the Contractor and the Owner shall remain liable for the fulfillment of any obligation[,] incurred under the provisions of the Contract prior to the issue of the Defects Liability Certificate[,] which remains unperformed at the time such Defects Liability Certificate is issued[. And] for the purpose of determining the nature and extent of any such obligation, the Contract shall be deemed to remain in force between the parties of the Contract. (emphasis ours) The defects in the granitite wash-out finish were not the obligation contemplated in Article 62.2. It was not an obligation that remained unperformed or unfulfilled at the time the defects liability certificate was issued. The alleged defects occurred more than a year from the final acceptance by PCIB. An examination of Article 1719 of the Civil Code is enlightening: Art. 1719. Acceptance of the work by the employer relieves the contractor of liability for any defect in the work, unless: (1) The defect is hidden and the employer is not, by his special knowledge, expected to recognize the same; or The employer expressly reserves his rights against the contractor by reason of the defect.

made any express reservation of its rights against WGCC. Indeed, the contract should not be interpreted to favor the one who caused the confusion, if any. The contract was prepared by TCGI for PCIB.xciii[15] WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 41152 is ANNULED and SET ASIDE. SO ORDERED.

METROPOLITAN BANK AND TRUST COMPANY, PETITIONER, VS. LARRY MARINAS, RESPONDENT. This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to annul and set aside the Court of Appeals (CA) Decision[1] dated July 31, 2007, affirming with modification the Regional Trial Court (RTC) decision[2] dated October 14, 2004. The factual and procedural antecedents are as follows: Sometime in April 1998, respondent Larry Marias returned to the Philippines from the United States of America. He opened a personal dollar savings account[3] by depositing US$100,000.00 with petitioner Metropolitan Bank and Trust Company. On April 13, 1998, respondent obtained a loan from petitioner in the amount of P2,300,000.00, evidenced by Promissory Note No. 355873.[4] From the initial deposit of US$100,000.00, respondent withdrew[5] US$67,227.95,[6] then deposited it under Account No. 0-26400171-6 (Foreign Currency Deposit [FCD] No. 505671),[7] which he used as security[8] for the P2,300,000.00 loan. Respondent subsequently opened two more foreign currency accounts Account No. 0-26400244-5 (FCD No. 505688)[9] and Account No. 0-26400357-3 (FCD No. 739809)[10] depositing therein US$25,000.00 and US$17,000.00, respectively. On April 30, 1999, respondent obtained a second loan of P645,150.00,[11] secured[12] by Account No. 0-264-00357-3 (FCD No. 739809). When he inquired about his dollar deposits, respondent discovered that petitioner made deductions against the former's accounts. On May 31, 1999, respondent, through his counsel, demanded from petitioner a proper and complete accounting of his dollar deposits, and the restoration of his deposits to their proper amount without the deductions.[13] In response, petitioner explained that the deductions made from respondent's dollar accounts were used to pay the interest due on the latter's loan with the former. These deductions, according to petitioner, were authorized by respondent through the Deeds of Assignment with Power of Attorney voluntarily executed by respondent.[14] Unsatisfied, and believing that the deductions were unauthorized, respondent commenced an action for Damages against petitioner and its Kabihasnan, Paraaque City Branch Manager Expedito Fernandez (Fernandez) before the RTC, Las Pias City. The case was docketed as Civil Case No. 99-0172 and was raffled to Branch 255. While admitting the existence of the P2,300,000.00 and P645,150.00 loans, respondent claimed that when he signed the loan documents, they were all in blank and they were actually filled up by petitioner. Aside from the complete accounting of his dollar accounts and the restoration of the true amounts of his deposits, respondent sought the payment of P400,000.00 as moral damages, P100,000.00 as exemplary damages, and P100,000.00 as attorney's fees.[15] On its part, petitioner insisted that respondent freely and voluntarily signed the loan documents. While admitting the full payment of respondent's P2,300,000.00 and P645,150.00 loans, petitioner claimed that the payments were made using the former's US$67,227.95, US$25,000.00, and US$17,000.00 time deposits. Accordingly, there was nothing to account for and restore. By way of counterclaim, petitioner prayed for the payment of P200,000.00 as attorney's fees, P1,000,000.00 as moral damages, and P500,000.00 as exemplary damages.[16] As no amicable settlement was reached, trial on the merits ensued. On October 14, 2004, the RTC rendered a decision in favor of respondent, the dispositive portion of which reads: WHEREFORE, the foregoing considered, judgment is hereby rendered in favor of plaintiff Larry Mari[]as, and against the defendants Metropolitan Bank and Trust Company and Expedito Fernandez, ordering the said defendants to account for the dollar deposits of the plaintiff in the amounts of US$30,000.00 and US$25,000.00, respectively, and then return the same, including the interests due thereon reckoned from 31 May 1999 until fully paid. Likewise, the defendants are hereby directed to pay to the herein plaintiff the following amounts, to wit:

(2)

The lower courts conjectured that the peeling off of the granitite wash-out finish was probably due to defective materials and workmanship. This they characterized as hidden or latent defects. We, however, do not agree with the conclusion that the alleged defects were hidden. First, PCIBs team of expertsxcii[14] (who were specifically employed to detect such defects early on) supervised WGCCs workmanship. Second, WGCC regularly submitted progress reports and photographs. Third, WGCC worked under fair and transparent circumstances. PCIB had access to the site and it exercised reasonable supervision over WGCCs work. Fourth, PCIB issued several punch lists for WGCCs compliance before the issuance of PCIBs final certificate of acceptance. Fifth, PCIB supplied the materials for the granitite wash-out finish. And finally, PCIBs team of experts gave their concurrence to the turnover of the project. The purpose of the defects liability period was precisely to give PCIB additional, albeit limited, opportunity to oblige WGCC to make good any defect, hidden or otherwise, discovered within one year. Contrary to the CAs conclusion, the first sentence of the third paragraph of Article XI on guarantee previously quoted did not operate as a blanket exception to the one-year guarantee period under the first paragraph. Neither did it modify, extend, nullify or supersede the categorical terms of the defects liability period. Under the circumstances, there were no hidden defects for which WGCC could be held liable. Neither was there any other defect for which PCIB

1. 2. 3. 4.

P100,000.00 in moral damages; P50,000.00 in exemplary damages; P50,000.00 as and by way of attorney's fees; and Costs of suit.

SO ORDERED.[17] The RTC sustained the validity and regularity of the loan documents signed by respondent, and consequently the existence of the P2,300,000.00 and P645,150.00 loans obtained from petitioner. Acknowledging the full payment of both loans, the trial court found that the payments were made from respondent's foreign currency deposits, particularly Account Numbers 026400171-6 (FCD No. 505671) and 0-264-00357-3 (FCD No. 739809), amounting to US$67,227.95 and US$17,000.00, respectively. There is no doubt that respondent specifically assigned these accounts to secure the payment of his loans pursuant to the Deeds of Assignment with Power of Attorney. Hence, the deductions made from such accounts were valid. However, the RTC found that petitioner should account for and eventually return the US$30,000.00 and US$25,000.00 deposits of respondent since they were not assigned to answer for the latter's loans, and that any deductions made from these accounts were, therefore, illegal. Consequently, petitioner was made to answer for damages suffered by respondent.[18] Being the petitioner's Kabihasnan Branch Manager, Fernandez was declared solidarily liable with petitioner. On appeal, the CA modified the RTC decision by absolving Fernandez from liability. The appellate court held that Fernandez could not be made to answer for acts done in the performance of his duty absent any showing that he assented to patently unlawful acts of the corporation or was guilty of bad faith or gross negligence in directing its affairs, or that he agreed to hold himself personally and solidarily liable with the corporation.[19] No proof was adduced in this regard. Hence, the instant petition raising the following issues: 1. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN ORDERING PETITIONER TO ACCOUNT FOR AND RETURN TO RESPONDENT THE SUMS OF US$30,000.00 AND US$25,000.00. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN HOLDING PETITIONER LIABLE TO RESPONDENT FOR MORAL AND EXEMPLARY DAMAGES, AS WELL AS ATTORNEY'S FEES AND COSTS OF SUIT.[20]

It is likewise undisputed that respondent obtained two separate loans from petitioner in amounts of P2,300,000.00 and P645,150.00. These were evidenced by promissory notes and secured by respondent's two dollar accounts Account Numbers 0-26400171-6 (FCD No. 505671) and 0-26400357-3 (FCD No. 739809) for US$67,227.95 and US$17,000.00, respectively. Respondent's first loan of P2,300,000.00, obtained on April 13, 1998, was payable on April 8, 1999; while the second loan of P645,150.00, obtained on April 30, 1999, was payable on April 24, 2000. Records show that the first loan was paid on April 21, 1999, with the payment therefor taken from Account No. 0-26400171-6. The second loan, on the other hand, was paid on May 10, 1999, out of respondent's Account No. 0-264-00357-3. It should be clarified, though, that these payments referred only to the payment of the principal (P2,300,000.00 and P645,150.00) of respondent's loans, exclusive of interests stipulated in the promissory notes executed by the latter. Aside from obligating himself to pay P2,300,000.00 as principal, respondent also agreed to pay interest at the rate of 22.929% per annum (not monthly) from April 13, 1998 until full payment. As respondent made full payment of the principal on April 21, 1999, respondent was also obliged to pay interest until that date. As to the P645,150.00 loan, respondent agreed to pay interest at the rate of 16.987% per annum. Respondent later discovered that his accounts with petitioner were all depleted. Upon inquiry from petitioner, it explained that pursuant to the Deeds of Assignment with Power of Attorney executed by respondent, it deducted from respondent's accounts the interest due on his loans. Contrary to the conclusions of the RTC and the CA, we find that petitioner is empowered to make lawful deductions from respondent's accounts for such amounts due it. This is authorized in the Promissory Notes and Deeds of Assignment with Power of Attorney executed by respondent, to wit: I/We hereby give the Bank a general lien upon, and/or right of set-off and/or right to hold and/or apply to the loan account, or any claim of the Bank against any of us, all my/our rights, title and interest in and to the balance of every deposit account, money, negotiable instruments, commercial papers, notes, bonds, stocks, dividends, securities, interest, credits, chose in action, claims, demands, funds or any interest in any thereof, and in any other property, rights and interest of any of us or any evidence thereof, which have been, or at any time shall be delivered to, or otherwise come into the possession, control or custody of the Bank or any of its subsidiaries, affiliates, agents or correspondents now or anytime hereafter, for any purpose, whether or not accepted for the purpose or purposes for which they are delivered or intended. For this purpose, I/We hereby appoint the Bank as my/our irrevocable Attorney-in-fact with full power of substitution/delegation to sign or endorse any and all documents and perform any and all acts and things required or necessary in the premises.[26] Effective upon default in the payment of CREDIT, or any part thereof, the ASSIGNOR hereby grants to the ASSIGNEE, full power and authority to collect/withdraw the deposit/proceeds/receivables/ investments/securities and apply the collection/deposit to the payment of the outstanding principal, interest and other charges on the CREDIT. For this purpose, the ASSIGNOR hereby names, constitutes and appoints the ASSIGNEE as his/its true and lawful Attorney-in-Fact, with powers of substitution, to ask, demand, collect, sue for, recover and receive the deposit/proceeds/receivables/investments/securities or any part thereof, as well as to encash, negotiate and endorse checks, drafts and other commercial papers/instruments received by and paid to the ASSIGNEE, incident thereto and to execute all instruments and agreements connected therewith. A written Certification by the ASSIGNEE of the amount of its claims from the ASSIGNOR and/or the BORROWER shall be conclusive on the ASSIGNOR and/or the BORROWER absent manifest error.[27] As provided in Article 1159 of the Civil Code, "obligations arising from contract have the force of law between the contracting parties and should be complied with in good faith." Verily, parties may freely stipulate their duties and obligations which perforce would be binding on them. Not being repugnant to any legal proscription, the agreement entered into between petitioner and respondent must be respected and given the force of law between them. [28] Upon the maturity of the first loan on April 8, 1999, petitioner was authorized to automatically deduct, by way of offsetting, respondent's outstanding debt (including interests) to it from the latter's deposit accounts and their accumulated interest. Respondent did not object to the deduction made from the proceeds of Account No. 0-26400171-6, but would limit such deduction only to the payment of the principal of P2,300,000.00. However, it should be borne in mind that in addition to the authority to effect the said deduction for the principal loan amount, petitioner was authorized to make further deductions for interest payments at the rate of 22.929% per annum until April 21, 1999.

2.

Petitioner assails the CA Decision affirming the former's culpability for making unlawful deductions from respondent's dollar accounts without the latter's consent. Additionally, it questions the award of moral and exemplary damages, as well as attorney's fees. We agree with the CA's factual findings as to the deposits and withdrawals made and loans obtained by respondent. We do not, however, agree with its conclusion that petitioner absolutely lacked the authority to make deductions from respondent's deposits for the payment of his outstanding obligations. It is apt to stress the well-settled principle that factual findings of the trial court, affirmed by the CA, are binding and conclusive upon this Court.[21] In the absence of any showing that the findings complained of are totally devoid of support in the evidence on record, or that they are so glaringly erroneous as to constitute serious abuse of discretion, such findings must stand.[22] The Court is not a trier of facts, its jurisdiction being limited to reviewing only errors of law that may have been committed by the lower courts.[23] It is not the function of the Court to analyze or weigh all over again the evidence or premises supportive of such factual determination.[24] The law creating the CA was intended mainly to take away from the Supreme Court the work of examining the evidence, so that it may confine its task to the determination of questions which do not call for the reading and study of transcripts containing the testimony of witnesses.[25] In the present case, we find no justification to deviate from the factual findings of the trial court and the appellate court. Petitioner has utterly failed to convince us that the assailed findings are devoid of basis or are not supported by substantial evidence. It is noteworthy that respondent opened four accounts with petitioner: 1) Account No. 2264-00145-0 for US$100,000.00; 2) Account No. 0-26400171-6 (FCD No. 505671) for US$67,227.95; 3) Account No. 0-26400244-5 (FCD No. 505688) for US$25,000.00; and 4) Account No. 0-264-00357-3 (FCD No. 739809) for US$17,000.00. Admittedly, respondent withdrew $70,000.00 from Account No. 2264-00145-0, leaving a balance of $30,000.00.

With respect to the second loan, barely a month after the execution of the promissory note and definitely prior to the maturity date, respondent already paid the principal of P645,150.00 out of the deposited amount in Account No. 0-264-00357-3. Pursuant to the promissory note, respondent agreed to pay interest at the rate of 16.987% per annum. While it is conceded that petitioner had the right to offset the unpaid interests due it against the deposits of respondent, the issue of whether it acted judiciously is an entirely different matter.[29] As business affected with public interest, and because of the nature of their functions, banks are under obligation to treat the accounts of their depositors with meticulous care, always having in mind the fiduciary nature of their relationship.[30] Pursuant to the above disquisition, it is clear that despite such authority, petitioner should still account for whatever excess deductions made on respondent's deposits and return to respondent such amounts taken from him. To be sure, respondent had interest-earning deposits with petitioner in accordance with their agreement. On the other hand, after respondent paid the principal on April 21, 1999 and May 10, 1999 on the two loans which he obtained from petitioner, the latter had the authority to make deductions for the payment of interest as stipulated in respondent's promissory notes. When we consider the total amount of respondent's deposits in his dollar accounts inclusive of interests earned vis-a-vis his total obligations to petitioner, we find that the total depletion of his accounts is not warranted. Hence, we find no reason to disturb the CA conclusion on the award of damages. As aptly explained in Bank of the Philippine Islands v. Court of Appeals: For the above reasons, the Court finds no reason to disturb the award of damages granted by the CA against petitioner. This whole incident would have been avoided had petitioner adhered to the standard of diligence expected of one engaged in the banking business. A depositor has the right to recover reasonable moral damages even if the bank's negligence may not have been attended with malice and bad faith, if the former suffered mental anguish, serious anxiety, embarrassment and humiliation. Moral damages are not meant to enrich a complainant at the expense of defendant. It is only intended to alleviate the moral suffering she has undergone. The award of exemplary damages is justified, on the other hand, when the acts of the bank are attended by malice, bad faith or gross negligence. The award of reasonable attorney's fees is proper where exemplary damages are awarded. It is proper where depositors are compelled to litigate to protect their interest.[31] WHEREFORE, premises considered, the Court of Appeals Decision dated July 31, 2007 is hereby AFFIRMED with MODIFICATION. Petitioner is ordered to account for respondent's dollar deposits inclusive of interests, subject to its right to deduct from the said deposits his loan obligations amounting to P2,300,000.00, plus interest at 22.929% per annum until full payment on April 21, 1999; and P645,150.00, plus interest at 16.987% per annum until full payment on May 10, 1999. After such accounting, petitioner shall restore to respondent whatever excess amounts may have been deducted from such deposits, together with the earned interests. All other aspects of the assailed decision STAND. SO ORDERED. ______________________________________________________________ Petitioner Philippine Charter Insurance Corporation vs Phil. Nat. Construction Corp. Petitioner Philippine Charter Insurance Corporation (PCIC) submits the present motion for the reconsideration xciv [1] of our Resolution dated December 17, 2008, which denied due course to its petition for review on certiorari.xcv[2] It seeks to reinstate the petition and effect a reversal of the Court of Appeals (CA) Decisionxcvi[3] and Resolutionxcvii[4] dated January 7, 2008 and October 29, 2008, respectively, in CA-G.R. CV No. 86948. In its petition, the petitioner imputes reversible error on the appellate court for ruling that it is liable under PCIC Bond No. 27547 and under PCIC Bond No. 27546, as the latter bond was not covered by the complaint for collection of sum of money filed by respondent Philippine National Construction Corporation (PNCC).xcviii[5] The facts, as drawn from the records, are briefly summarized below. PNCC is engaged in the construction business and tollway operations. On October 16, 1997, PNCC conducted a public bidding for the supply of labor, materials, tools, supervision, equipment, and other incidentals necessary for the fabrication and delivery of 27 tollbooths to be used for the automation of toll collection along the expressways. Orlando Kalingo (Kalingo) won in the bidding and was awarded the contract. On November 13, 1997, PNCC issued in favor of Kalingo Purchase Order (P.O.) No. 71024L for 25 units of tollbooths for a total of P2,100,000.00, and P.O. No. 71025L for two units of tollbooths amounting to

P168,000.00. These issuances were subject to the condition, among others, that each P.O. shall be covered by a surety bond equivalent to 100% of the total down payment (50% of the total cost reflected on the P.O.), and that the surety bond shall continue in full force until the supplier shall have complied with all the undertakings and covenants to the full satisfaction of PNCC. Kalingo, hence, posted surety bonds Surety Bond Nos. 27546 and 27547 issued by the PCIC and whose terms and conditions read: Surety Bond No. 27546 To supply labor, materials, tools, supervision equipment, and other incidentals necessary for the fabrication and delivery of Two (2) Units Toll Booth at San Fernando Interchange SB Entry as per Purchase Order No. 71025L, copy of which is attached as Annex A. This bond also guarantees the repayment of the down payment or whatever balance thereof in the event of failure on the part of the Principal to finish the project due to his own fault. It is understood that the liability of the Surety under this bond shall in no case exceed the sum of P84,000.00, Philippine Currency.xcix[6] Surety Bond No. 27547 To supply labor, materials, tools, supervision equipment, and other incidentals necessary for the fabrication and delivery of Twenty-five (25) Units Toll Booth at designated Toll Plaza as per Purchase Order No. 71024L, copy of which is attached as Annex A. This bond also guarantees the repayment of the down payment or whatever balance thereof in the event of failure on the part of the Principal to finish the project due to his own fault. It is understood that the liability of the Surety under this bond shall in no case exceed the sum of P1,050,000.00, Philippine Currency.c[7] To illustrate, the PCIC surety bonds are in the amounts corresponding to down payments on each P.O., as follows: Surety Bond No. Purchase Order Units Covered Total Cost Surety Amount (equivalent to 50% down payment) P1,050,000 P 84,000

Bond No. 27547 Bond No. 27546

P.O. No. 71024L P.O. No. 71025L

25 2

P2,100,000 P 168,000

Both surety bonds also contain the following conditions: (1) the liability of PCIC under the bonds expires on March 16, 1998; and (2) a written extrajudicial demand must first be tendered to the surety, PCIC, within 15 days from the expiration date; otherwise PCIC shall not be liable thereunder and the obligee waives the right to claim or file any court action to collect on the bond. The following stipulation appears in the last paragraph of these bonds: The liability of PHILIPPINE CHARTER INSURANCE CORPORATION under this bond will expire on March 16, 1998. Furthermore, it is hereby agreed and understood that PHILIPPINE CHARTER INSURANCE CORPORATION will not be liable for any claim not presented to it in writing within FIFTEEN (15) DAYS from the expiration of this bond, and that the Obligee hereby waives its right to claim or file any court action against the Surety after the termination of FIFTEEN (15) DAYS from the time its cause of action accrues.ci[8] (Emphasis supplied.)

PNCC released two checks to Kalingo representing the down payment of 50% of the total project cost, which were properly receipted by Kalingo.cii[9] Kalingo in turn submitted the two PCIC surety bonds securing the down payments, which bonds were accepted by PNCC.

On March 3, 4, and 5, 1998, Kalingo made partial/initial delivery of four units of tollbooths under P.O. No. 71024L. However, the tollbooths delivered were incomplete or were not fabricated according to PNCC specifications. Kalingo failed to deliver the other 23 tollbooths up to the time of filing of the complaint; despite demands, he failed and refused to comply with his obligation under the POs. On March 9, 1998, six days before the expiration of the surety bonds and after the expiration of the delivery period provided for under the award, PNCC filed a written extrajudicial claim against PCIC notifying it of Kalingos default and demanding the repayment of the down payment on P.O. No. 71024L as secured by PCIC Bond No. 27547, in the amount of P1,050,000.00. The claim went unheeded despite repeated demands. For this reason, on April 24, 2001, PNCC filed with the Regional Trial Court (RTC), Mandaluyong City a complaint for collection of a sum of money against Kalingo and PCIC.ciii[10] PNCC's complaint against PCIC called solely on PCIC Bond No. 27547; it did not raise or plead collection under PCIC Bond No. 27546 which secured the down payment of P84,000.00 on P.O. No. 71025L. PCIC, in its answer, argued that the partial delivery of four out of the 25 units of tollbooth by Kalingo under P.O. No. 71024L should reduce Kalingo's obligation. The RTC, by Decision of October 31, 2005, ruled in favor of PNCC and ordered PCIC and Kalingo to jointly and severally pay the latter P1,050,000.00, representing the value of PCIC Bond No. 27547, plus legal interest from last demand, and P50,000.00 as attorney's fees. Reconsideration of the trial court's decision was denied. The trial court made no ruling on PCICs liability under PCIC Bond No. 27546, a claim that was not pleaded in the complaint. On appeal, the CA, by Decisionciv[11] of January 7, 2008, held that the RTC erred in ruling that PCIC's liability is limited only to the payment of P1,050,000.00 under PCIC Bond No. 27547 which secured the down payment on P.O. No. 71024L. The appellate court held that PCIC, as surety, is liable jointly and severally with Kalingo for the amount of the two bonds securing the two POs to Kalingo; thus, the CA also held PCIC liable under PCIC Bond No. 27546 which secured the P84,000.00 down payment on P.O. No. 71025L. Reconsideration having been denied by the appellate court in its Resolutioncv[12] of October 29, 2008, the PCIC lodged a petition for review on certioraricvi[13] before this Court. The Court, by Resolution of December 17, 2008, denied due course to the petition.cvii[14] Hence, the PCIC filed the present motion for reconsideration submitting the following issues for our resolution: I. WHETHER THE APPELLATE COURT ERRED IN RULING THAT PCIC SHOULD ALSO BE HELD LIABLE UNDER BOND NO. 27546, COLLECTION UNDER WHICH WAS NOT SUBJECT OF RESPONDENT PNCC's COMPLAINT FOR COLLECTION OF SUM OF MONEY; WHETHER THE CHECKS ISSUED IN 1997 BY RESPONDENT PNCC TO KALINGO WERE GIVEN 10 MONTHS PRIOR TO THE AWARD OF THE PROJECT AND AMOUNTS TO CONCEALMENT OF MATERIAL FACT VITIATING THE SURETY BONDS ISSUED BY THE PETITIONER; and

subject of respondent's complaint, on the ground that respondent was incorrect in not filing suit for Bond No. 27546, the Court of Appeals virtually acted as lawyer for respondent.cix[16] We find the PCICs position meritorious. The issue before us calls for a discussion of a courts basic appreciation of allegations in a complaint. The fundamental rule is that reliefs granted a litigant are limited to those specifically prayed for in the complaint; other reliefs prayed for may be granted only when related to the specific prayer(s) in the pleadings and supported by the evidence on record. Necessarily, any such relief may be granted only where a cause of action therefor exists, based on the complaint, the pleadings, and the evidence on record. Section 2, Rule 2 of the 1997 Rules of Civil Procedure defines a cause of action as the act or omission by which a party violates the right of another. It is the delict or the wrongful act or omission committed by the defendant in violation of the primary right of the plaintiff.cx[17] Its essential elements are as follows: 1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created; 2. An obligation on the part of the named defendant to respect or not to violate such right; and 3. Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief.cxi[18] Only upon the occurrence of the last element does a cause of action arise, giving the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief.cxii[19] Each of the surety bonds issued by PCIC created a right in favor of PNCC to collect the repayment of the bonded down payments made on the two POs if contractor Kalingo defaults on his obligation under the award to fabricate and deliver to PNCC the tollbooths contracted for. Concomitantly, PCIC, as surety, had the obligation to comply with its undertaking under the bonds to repay PNCC the down payments the latter made on the POs if Kalingo defaults. It must be borne in mind that each of the two bonds is a distinct contract by itself, subject to its own terms and conditions. They each contain a provision that the surety, PCIC, will not be liable for any claim not presented to it in writing within 15 days from the expiration of the bond, and that the obligee (PNCC) thereby waives its right to claim or file any court action against the surety (PCIC) after the termination of 15 days from the time its cause of action accrues. This written claim provision creates a condition precedent for the accrual of: (1) PCICs obligation to comply with its promise under the particular bond, and of (2) PNCC's right to collect or sue on these bonds. PCICs liability to repay the bonded down payments arises only upon PNCC's filing of a written claim notifying PCIC of principal Kalingos default and demanding collection under the bond within 15 days from the bonds expiry date. PNCCs failure to comply with the written claim provision has the effect of extinguishing PCICs liability and constitutes a waiver by PNCC of the right to claim or sue under the bond. Liability on a bond is contractual in nature and is ordinarily restricted to the obligation expressly assumed therein. We have repeatedly held that the extent of a surety's liability is determined only by the clause of the contract of suretyship and by the conditions stated in the bond. It cannot be extended by implication beyond the terms of the contract.cxiii[20] Equally basic is the principle that obligations arising from contracts have the force of law between the parties and should be complied with in good faith.cxiv[21] Nothing can stop the parties from establishing stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.cxv[22] Here, nothing in the records shows the invalidity of the written claim provision; therefore, the parties must strictly and in good faith comply with this requirement. The records reveal that PNCC complied with the written claim provision, but only with respect to PCIC Bond No. 27547. PNCC filed an extrajudicial demand with PCIC informing it of Kalingos default under the award and demanding the repayment of the bonded down payment on P.O. No. 71024L. Conversely, nothing in the records shows that PNCC ever complied with the provision with respect to PCIC Bond No. 27546. Why PNCC complied with the written claim provision with respect to PCIC Bond No. 27547, but not with respect to PCIC Bond No. 27546, has not been explained by PNCC. Under the circumstances, PNCCs cause of action

II.

III. WHETHER THE APPELLATE COURT ERRED IN HOLDING PETITIONER PCIC LIABLE FOR ATTORNEY'S FEES.

The second issue is a factual matter not proper in proceedings before this Court. The PCICs position that the checks were issued 10 months prior to the award had already been rejected by both the RTC and the CA; both found that the year 1997 appearing on the checks was a mere typographical error which should have been written as 1998. cviii [15] Consequently, we shall no longer discuss the PCIC's allegation of material concealment; the factual findings of the RTC, as affirmed by the CA, are conclusive on us. Our consideration shall focus on the remaining two issues. The PCIC presents, as its first issue, the argument that [w]hen the Court of Appeals rendered judgment on Bond No. 27546, which was not

with respect to PCIC Bond No. 27546 did not and cannot exist, such that no relief for collection thereunder may be validly awarded. Hence, the trial courts decision finding PCIC liable solely under PCIC Bond No. 27547 is correct not only because collection under the other bond, PCIC Bond No. 27546, was not raised or pleaded in the complaint, but for the more important reason that no cause of action arose in PNCCs favor with respect to this bond. Consequently, the appellate court was in error for including liability under PCIC Bond No. 27546. PNCC insists that conformably with the ruling of the CA, it should be entitled to collection under PCIC Bond No. 27546, although collection thereunder was not specifically raised or pleaded in its complaint, because the bond was attached to the complaint and formed part of the records. Also, considering that PCICs liability as surety has been duly proven before the trial and appellate courts, PNCC posits that it is entitled to repayment under PCIC Bond No. 27546. PNCC might be alluding to Section 2(c), Rule 7 of the Rules of Court, which provides that a pleading shall specify the relief sought, but may add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by the allegation and the proof even if it is not specifically sought by the injured party;cxvi [23] the inclusion of a general prayer may justify the grant of a remedy different from or together with the specific remedy sought,cxvii[24] if the facts alleged in the complaint and the evidence introduced so warrant.cxviii[25] We find PNCCs argument to be misplaced. A general prayer for other reliefs just and equitable appearing on a complaint or pleading normally enables the court to award reliefs supported by the complaint or other pleadings, by the facts admitted at the trial, and by the evidence adduced by the parties, even if these reliefs are not specifically prayed for in the complaint. We cannot, however, grant PNCC the other relief of recovering under PCIC Bond No. 27546 because of the respect due the contractual stipulations of the parties. While it is true that PCICs liability under PCIC Bond No. 27546 would have been clear under ordinary circumstances (considering that Kalingo's default under his contract with PNCC is now beyond dispute), it cannot be denied that the bond contains a written claim provision, and compliance with it is essential for the accrual of PCICs liability and PNCCs right to collect under the bond. As already discussed, this provision is the law between the parties on the matter of liability and collection under the bond. Knowing fully well that PCIC Bond No. 27546 is a matter of record, duly proven and susceptible of the courts scrutiny, the trial and appellate courts must respect the terms of the bond and cannot just disregard its terms and conditions in the absence of any showing that they are contrary to law, morals, good customs, public order, or public policy. For its failure to file a written claim with PCIC within 15 days from the bonds expiry date, PNCC clearly waived its right to collect under PCIC Bond No. 27546. That, wittingly or unwittingly, PNCC did not collect under one bond in favor of calling on the other creates no other conclusion than that the right to collect under the former had been lost. Consequently, PNCCs cause of action with respect to PCIC Bond No. 27546 cannot juridically exist and no relief therefore may be validly given. Hence, the CA invalidly rendered judgment with respect to PCIC Bond No. 27546, and its award based on this bond must be deleted. On the third issue, we hold that PCIC should be held liable for the attorney's fees PNCC incurred in bringing suit. PCICs unjust refusal to pay despite PNCCs written claim compelled the latter to hire the services of an attorney to collect on PCIC Bond No. 27547. WHEREFORE, premises considered, we SET ASIDE our Resolution of December 17, 2008 and GRANT the present motion for reconsideration. The petition for review on certiorari is PARTLY GRANTED. The assailed Court of Appeals Decision of January 7, 2008 and Resolution of October 29, 2008 are hereby AFFIRMED with MODIFICATION, deleting petitioner PCIC's liability under PCIC Bond No. 27546. All other matters in the assailed Court of Appeals decision and resolution are AFFIRMED. SO ORDERED. BENITO DE LOS REYES, plaintiff-appellant, vs. VERONICA ALOJADO, defendant-appellee. On or about January 22, 1905, Veronica Alojado received, as a loan, from Benito de los Reyes that the sum P67 .60, for the purpose of paying a debt she owed to Olimpia Zaballa. It was agreed between Alojado and Reyes that the debtor should remain as a servant in the house and in the service of her creditor, without any renumeration whatever, until she should find some one who would furnish her with the said sum where with to repeat the loan. The defendant, Veronica Alojado, afterwards left the house of the plaintiff, on

March 12, 1906, without having paid him her debt, nor did she do so at any subsequent date, notwithstanding his demands. The plaintiff, therefore, on the 15th of march, 1906, filed suit in the court of the justice of the peace of Santa Rosa, La Laguna, against Veronica Alojado to recover the said sum or, in a contrary case, to compel her to return to his service. The trial having been had, the justice of the peace, on April 14, 1906, rendered judgment whereby he sentenced the defendant to pay to the plaintiff the sum claimed and declared that, in case the debtor should be insolvent, she should be obliged to fulfill the agreement between her and the plaintiff. The costs of the trial were assessed against the defendant. The defendant appealed from the said judgment to the Court of First Instance to which the plaintiff, after the case had been docketed by the clerk of court, made a motion on May 4, 1906, requesting that the appeal interposed by the defendant be disallowed, with the costs of both instances against her. The grounds alleged in support of this motion. were that the appeal had been filed on the sixth day following that when judgment was rendered in the trial, on April 14th, and that it, therefore, did not come within the period of the five days prescribed by section 76 of the Code of Civil Procedure, as proven by the certificate issued by the justice of the peace of Santa Rosa. The Court of First Instance, however, by order of July 16, 1906, overruled the motion of the plaintiff-appellee, for the reasons therein stated, namely, that the defendant was not notified of the judgment rendered in the case on April 14th of that year until the 16th of the same month, and the appeal having been filed four days later, on the 20th, it could having seen that the five days specified by section 76 of the Code of Civil Procedure had not expired. The plaintiff was advised to reproduce his complaint within ten days, in order that due procedure might he had thereupon. The plaintiff took exception to the aforementioned order and at the same time reproduced the complaint he had filed in the court of the justice of the peace, in which, after relating to the facts hereinbefore stated, added that the defendant, besides the sum above-mentioned, had also received from the plaintiff, under the same conditions, various small amounts between the dates of January 22, 1905, and March 10, 1906, aggregating altogether P11.97, and that they had not been repaid to him. He therefore asked that judgment be rendered sentencing the defendant to comply with the said contract and to pay to the plaintiff the sums referred to, amounting in all to P79.57, and that until this amount should have been in paid, the defendant should remain gratuitously in the service of plaintiff's household, and that she should pay the costs of the trial. The defendant, in her written answer of August 15, 1906, to the aforesaid complaint, denied the allegations contained in paragraphs 1 and 2 of the complaint and alleged that, although she had left the plaintiff's service, it was because the latter had paid her no sum whatever for the services she had rendered in his house. The defendant likewise denied the conditions expressed in paragraph 4 of the complaint, averring that the effects purchased, to the amount of P11.97, were in the possession of the plaintiff, who refused to deliver them to her. She therefore asked that she be absolved from the complaint and that the plaintiff be absolved from the complaint the wages due her for the services she had rendered. The case came to trial on October 19, 1906, and, after the production of testimony by both parties, the judge, on November 21st of the same year, rendered judgment absolving the defendant from the complain, with the costs against the plaintiff, and sentencing the latter to pay to the former the sum of P2.43, the balance found to exist between the defendant's debt of P79.57 and the wages due her by the plaintiff, which amounted to P82. The plaintiff, on the 6th of December, filed a written exception to the judgment aforesaid through the regular channels, and moved for a new trial on the ground that the findings of fact set forth in the judgment were manifestly contrary to the weight of the evidence. This motion was overruled on the 17th of the same month, to which exception was taken by the appellant, who afterwards filed the proper bill of exceptions, which was approved, certified, and forwarded to the clerk of this court. The present suit, initiated in a justice of the peace court and appealed to the Court of First Instance of La Laguna at a time prior to the enactment of Act No. 1627, which went into effect on July 1, 1907, which limited to two instances the procedure to be observed in verbal actions, concerns the collection of certain sum received as a loan by the defendant from the plaintiff, and of the wages earned by the former for services rendered as a servant in the said plaintiff's house. Notwithstanding the denial of the defendant, it is a fact clearly proven, as found in the judgment appealed from, that the plaintiff did deliver to Hermenegildo de los Santos the sum of P67.60 to pay a debt was paid by De los Santos with the knowledge and in behalf of the said defendant who, of her

free will, entered the service of the plaintiff and promised to pay him as soon as she should find the money wherewith to do so. The duty to pay the said sum, as well as that of P11.97 delivered to the defendant in small amounts during the time that she was in the plaintiff's house, is unquestionable, inasmuch as it is a positive debt demandable of the defendant by her creditor. (Arts. 1754, 1170, Civil Code.) However, the reason alleged by the plaintiff as a basis for the loan is untenable, to wit, that the defendant was obliged to render service in his house as a servant without remuneration whatever and to remain therein so long as she had not paid her debt, inasmuch as this condition is contrary to law and morality. (Art. 1255, Civil Code.) Domestic services are always to be remunerated, and no agreement may subsist in law in which it is stipulated that any domestic service shall be absolutely gratuitous, unless it be admitted that slavery may be established in this country through a covenant entered into between the interested parties. Articles 1583, 1584, and 1585 of the Civil Code prescribe rules governing the hiring of services of domestics servants, the conditions of such hire, the term during which the service may rendered and the wages that accrue to the servant, also the duties of the latter and of the master. The first of the articles cited provides that a hiring for life by either of the contracting parties is void, and, according to the last of three articles just mentioned, besides what is prescribed in the preceding articles with regard to masters and servants, the provisions of special laws and local ordinances shall be observed. During the regime of the former sovereignty, the police regulations governing domestic service, of the date of September 9, 1848, were in force, article 19 of which it is ordered that all usurious conduct toward the servants and employees of every class is prohibited, and the master who, under pretext of an advance of pay or of having paid the debts or the taxes of his servant, shall have succeeded in retaining the latter in his service at his house, shall be compelled to pay to such servant all arrears due him and any damages he may have occasioned him, and the master shall also be fined. The aforementioned article 1585 of the Civil Code undoubtedly refers to the provisions of the regulations just cited. When legal regulations prohibit even a usurious contract and all abuses prejudicial to subordinates and servant, in connection with their salaries and wages, it will be understood at once that the compact whereby service rendered by a domestic servant in the house of any inhabitant of this country is to be gratuitous, is in all respects reprehensible and censurable; and consequently, the contention of the plaintiff, that until the defendant shall have paid him her debt she must serve him in his house gratuitously is absolutely inadmissible. The trial record discloses no legal reason for the rejection of the findings of fact and of law contained in the judgment appealed from, nor for an allowance of the errors attributed appealed from, nor for an allowance of the errors attributed thereto; on the contrary, the reasons hereinabove stated show the propriety of the said judgment. For the foregoing reasons, and accepting those set forth in the judgment appealed from, it is proper, in our opinion, to affirm and we hereby affirm the said judgment, with the costs against the appellant. RAFAEL MOLINA Y SALVADOR, petitioner, vs. ANTONIO DE LA RIVA, ET AL., respondents. In Molina vs. De la Riva (6 Phil., Rep., 12) a judgment in this case in favor of the plaintiff and against De la Riva was affirmed and the case remanded for execution of the judgment. Upon the return of the record to the court below, a motion was made that Somes and Spalding, the sureties upon the appeal bond, be cited to appear and show cause why execution should not be issued against them as well as against the defendant, De la Riva. They appeared and showed cause and a judgment or order was entered holding them liable upon the bond and ordering an execution to issue against them. From this order they appealed to this court, where the order was affirmed. (Molina vs. De la Riva, 7 Phil., Rep., 345.) The order made by this court upon that appeal is as follows: We accordingly affirm the order of the court below, with the costs of this instance. After the expiration of ten days let judgment be

entered in accordance herewith, and the case be remanded to the court below for execution. Judgment was entered in this court in accordance with such order and the case remanded to the court below on the 6th of February, 1907. The case is now before us upon a proceeding brought by Somes and Spalding, the sureties, under section 499 of the Code of Civil Procedure, for the purpose of compelling the judge of the court below to sign a bill of exceptions containing the proceedings which took place in the case after it was remanded in pursuance of the order of this court reported in 7 Phil. Rep., 345. An order was issued by this court requiring the judge of the court below to state his reasons for refusing to sign the bill of exceptions. The court has answered, stating its reasons, and the question to be determined is, whether such reasons are sufficient. An original suit in this court for a mandamus to compel that court to sign a bill of exceptions has been dismissed. (Somes et al., vs. Crossfield et al.,1 5 Off. Gaz., 462.) On the 6th day of February an order of that court was made directing an execution to issue against De la Riva and the sureties for the collection of the judgment. On the same day the defendant and the sureties made a motion for a modification of this order; this motion was granted on the 9th of February, and on the 26th of February the court, upon motion of the plaintiff, Molina, vacated its order of modification, and ordered an execution to issue against the sureties as directed by the judgment of this court. To this order Somes and Spalding excepted, and this is one of the exceptions which they claim the right to have reviewed by this court. In substance it is nothing more than an exception to the order of the Court of First Instance directing the execution of the judgment of this court. It is very apparent that no exception lies to such an order. If it did, a case could never end, for as often as an order for the execution of the judgment was made, it could be excepted to and the case brought here for review. On the 27th day of February, after the sureties had excepted to the order above mentioned, they presented a motion in which they claim that, by reason of acts executed by the creditor Molina, they had been relieved of their responsibility as sureties in accordance with the provisions of article 1852 of the Civil Code, and they asked that the order of the 26th of February be modified so as to declare that they had been released from all obligation upon the bond in question. This motion was denied, and to the order denying it the sureties excepted. This is the other exception which they seek now to have reviewed in this court. Their claim is that after a case has been tried in this court, a judgment ordered for the plaintiff, and the case remanded to the court below for the execution of the judgment, and an order made by that court such purpose, they can, by motion, present new issues of fact and law upon the question of whether they are liable at all or not upon their obligation and that stage of the case have a further trial upon such issues. This contention can not be sustained. Some of the facts set out in their motion took place before any judgment was rendered against the,. These facts they by amended or supplemental answer. Some the facts set out in the petition seem to have occurred after the judgment of this court dated in February, 1907. The Code of Civil Procedure (sec. 105) allows supplemental pleadings to be filed, by that section does not allow supplemental answer to be filed and a trial thereon had after the case has passed to final judgment and an order made for the execution of the sentence. In such circumstances a defendant must commence an original action asking that the proceedings for the execution of the sentence be enjoined. It is true that in this very case we allowed a bill of exceptions relating to matter occurring after final judgment had been entered herein against the defendant De la Riva, but that bill of exceptions related exclusively to the liability of the sureties Somes and Spalding, who were brought into case for the first time after the final judgment against De la Riva, and who, as we held, were entitled to have the question of their liability for this debt passed upon by court. That has been done and it has been finally determined that they are so liable. No further bill of exceptions relating to that liability can be allowed in this case. We hold that the reasons given by the court below for refusing to sign the bill of exceptions are sufficient, and this proceeding is hereby dismissed. So ordered. Arellano, C. J., Torres, Johnson, and Tracey, JJ., concur.