Eladio Alonso, plaintiff and appellee v. Tomas Villamor et al., defendants and appellants. G.R. No.

2352 FACTS: Defendants were members of the municipal board of the municipality of Placer. They wrote a letter addressed to the plaintiff who at that time was the priest in charge of the church. The contents of the letter basically stated that there was an order from the provincial fiscal saying that cemeteries, convents, and other buildings erected on land belonging to the town belong to the town. As such, they are notifying the priest that all revenues and products of the church must be turned over to the treasury of the municipality. All alms given by churchgoers and devotees to the image of St. Vicente lodged in the church should also be turned into the municipal treasury. Two weeks later, the defendants took possession of the church and all of the personal properties contained therein. The plaintiff, as the priest and as the person in charge thereof, made protests that went unheeded. Hence, an action was brought by him to recover from the defendants the value of the articles and the rental value of the church. The lower court ruled in favor of the plaintiff. In the defendants appeal, one of the defenses presented was that the plaint iff was not the real party in interest. The defendants assert that the court erred in permitting the action o be brought and continued in the name of the plaintiff, Tomas Villamor, instead of in the name of the bishop of the diocese within which the church was located or in the name of the Roman Catholic Apostolic Church. ISSUE: Whether or not the formal/technical defect raised by the defendant constitutes enough ground to reverse the decision of the court RULING/RATIO: No, the Court allowed the substitution of the plaintiff as the party in interest. Sec. 503 of the Code of Civil Procedure provides that No judgment shall be revered on formal or technical grounds, or for such error as has not prejudiced real rights of the excepting party. Sec. 110 of the same code also provides that in furtherance of justice, the court is empowered to allow a party to amend any pleading or proceeding at any stage of the action. In this case, it is undoubted that the bishop of the diocese or the Roman Catholic Apostolic Church itself is the real party in interest. The plaintiff asserted the same in the complaint, and maintained that assertion all through the record. He claimed no interest whatsoever in the litigation. The substitution, then, of the name of the bishop of the diocese as party plaintiff, is in reality not a substation of the identity of another but is simply to make the form express the substance that is already there. There is nothing sacred about processes or pleadings, their forms or contents. Their sole purpose is to facilitate the application of justice to the rival claims of contending parties. They were created, not to hinder and delay, but to facilitate and promote, the administration of justice. July 26, 1910

REPUBLIC OF THE PHILIPPINES, represented by the Land Registration Authority vs. KENRICK DEVELOPMENT CORPORATION, G.R. No. 149576 DATE: August 8, 2006 PONENTE: CORONA, J.: FACTS: This case stemmed from the construction by respondent Kenrick Development Corporation of a concrete perimeter fence around some parcels of land located behind the Civil Aviation Training Center of the Air Transportation Office (ATO) in 1996. As a result, the ATO was dispossessed of some 30,228 square meters of prime land. Respondent justified its action with a claim of ownership over the property. It presented Transfer Certificate of Title (TCT) issued in its name. ATO verified the authenticity of respondents titles with the Land Registration Authority (LRA). Atty. Jose Loriega, head of the Land Title Verification Task Force of the LRA, submitted his report. The Registrar of Deeds of Pasay City had no record of TCT and its ascendant title,. The land allegedly covered by respondents titles was also found to be within Villamor Air Base in Pasay City. By virtue of the report, the Office of the Solicitor General (OSG), filed a complaint for revocation, annulment and cancellation of certificates of title in behalf of the Republic of the Philippines (as represented by the LRA) against respondent and Alfonso Concepcion. It was raffled to Branch 114 of the Regional Trial Court of Pasay City. Respondent filed its answer which was purportedly signed by Atty. Onofre Garlitos, Jr. as counsel for respondent. Since Alfonso Concepcion could not be located and served with summons, the trial court ordered the issuance of an alias summons by publication against him. During the pendency of the case, the Senate Blue Ribbon Committee and Committee on Justice and Human Rights conducted a hearing in aid of legislation on the matter of land registration and titling. In particular, the legislative investigation looked into the issuance of fake titles and focused on how respondent was able to acquire TCTS. During the congressional hearing, one of those summoned was Atty. Garlitos, respondents former counsel. He testified that he prepared respondents answer and transmitted an unsigned draft to respondents president, Mr. Victor Ong. The signature appearing above his name was not his. He authorized no one to sign in his behalf either. And he did not know who finally signed it. With Atty. Garlitos revelation, the Republic promptly filed an urgent motion to declare respondent in default, 2 predicated on its failure to file a valid answer. The Republic argued that, since the person who signed the answer was neither authorized by Atty. Garlitos nor even known to him, the answer was effectively an unsigned pleading. Pursuant to Section 3, Rule 7 of the Rules of Court, 3 it was a mere scrap of paper and produced no legal effect. The trial court issued a resolution granting the Republics motion. 4 It found respondents answer to be sham and false and intended to defeat the purpose of the rules. The trial court ordered the answer stricken from the records, declared respondent in default and allowed the Republic to present its evidence ex parte. Respondent sought reconsideration of the resolution but the trial court denied it. Aggrieved, respondent elevated the matter to the Court of Appeals. Respondent contended that the trial court erred in declaring it in default for failure to file a valid and timely answer. The Court of Appeals found Atty. Garlitos statements in the legislative hearing to be unreliable since they were not subjected to cross-examination. The appellate court also scrutinized Atty. Garlitos acts after the filing of the answer 6 and concluded that he assented to the signing of the answer by somebody in his stead. This supposedly cured whatever defect the answer may have had. Hence, the appellate court granted respondents petition for certiorari. It directed the lifting of the order of de fault against respondent and ordered the trial court to proceed to trial with dispatch. The Republic moved for reconsideration but it was denied. ISSUE: WON Atty. Garlitos committed an act in violation of the ethics of the legal profession

HELD: Yes RATIO:The preparation and signing of a pleading constitute legal work involving practice of law which is reserved exclusively for the members of the legal profession. Counsel may delegate the signing of a pleading to another lawyer 17 but cannot do so in favor of one who is not. The Code of Professional Responsibility provides: Rule 9.01 A lawyer shall not delegate to any unqualified person the performance of any task which by law may only be performed by a member of the Bar in good standing. Moreover, a signature by agents of a lawyer amounts to signing by unqualified persons, 18 something the law strongly proscribes. Therefore, the blanket authority respondent claims Atty. Garlitos entrusted to just anyone was void. Any act taken pursuant to that authority was likewise void. There was no way it could have been cured or ratified by Atty. Garlitos subsequent acts. Moreover, the transcript of the November 26, 1998 Senate hearing shows that Atty. Garlitos consented to the signing of the answer by another "as long as it conformed to his draft." We give no value whatsoever to such self-serving statement. No doubt, Atty. Garlitos could not have validly given blanket authority for just anyone to sign the answer. The trial court correctly ruled that respondents answer was invalid and of no legal effect as it was an unsigned pleading. Respondent was properly declared in default and the Republic was rightly allowed to present evidence ex parte. The Court cannot close its eyes to the acts committed by Atty. Garlitos in violation of the ethics of the legal profession. Thus, he should be made to account for his possible misconduct.

De Leon vs Court of Appeals, 287 SCRA 94; GR No. 104796, March 6, 1998 Facts: Private respondents filed in the RTC of Quezon City a complaint for annulment or rescission of a contract of sale of two parcels of land against petitioners. Private respondents paid the docket fee of a flat rate of P400.00 as provided in Rule 141, par 7 (b)(1) of the Rules of Court. Petitioners moved for the dismissal of the complaint on the ground of lack of jurisdiction by the trial court by reason of private respond ents non-payment of the correct amount of docket fees. Petitioners argue that an action for annulment or rescission of a contract of sale of real property is a real action and, therefore, the amount of the docket fees to be paid by private respondent should be based either on the assessed value of the property, subject matter of the action, or its estimated value as alleged in the complaint, pursuant to the last paragraph of par 7(b) of Rule 141, as amended. On the other hand, private respondents counter that an action for annulment or rescission of a contract of sale of real property is incapable of pecuniary estimation and, so, the docket fees should be the fixed amount of P400.00 in Rule 141, par 7(b)(1). The trial court denied petitioners motion to dismiss but required private respondents to pay the amount of docket fees based on the estimated value of the parcels of land in litigation as stated in the complaint. The Court of Appeals held that an action for rescission or annulment of contract is not susceptible of pecuniary estimation and, therefore, the docket fees should not be based on the value of the real property, subject matter of the contract sought to be annulled or rescinded Issue: WON in assessing the docket fees to be paid for the filing of an action for annulment or rescission of a contract of sale, the value of the real property, should be used as basis. Held: No. The action for annulment or rescission is considered as one which is not capable of pecuniary estimation. A review of the jurisprudence of this Court indicates that in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, or where the money claim is purely incidental to, or a consequence of, the principal relief sought, like in suits to have the defendant perform his part of the contract (specific performance) and in actions for support, or for annulment of a judgment or to foreclose a mortgage, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance.

RUSSELL V VESTIL 304 SCRA 738 KAPUNAN; March 17, 1999 NATURE Petition for Certiorari FACTS - Petitioners filed a complaint against respondents, denominated "DECLARATION OF NULLITY AND PARTITION," with the RTC of Mandaue City - The complaint alleged that petitioners are co-owners of that parcel of land in Liloan, Cebu. The land was previously owned by the spouses Casimero Tautho and Cesaria Tautho. - Upon the death of said spouses, the property was inherited by their legal heirs, herein petitioners and private respondents. Since then, the lot had remained undivided until petitioners discovered a public document denominated "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF A PREVIOUS ORAL AGREEMENT OF PARTITION" - By virtue of this deed, respondents divided the property among themselves to the exclusion of petitioners. - The complaint prayed that the document be declared null and void and an order be issued to partition the land among all the heirs. - Respondents filed a Motion to Dismiss the complaint on the ground of lack of jurisdiction over the nature of the case as the action is one for re-partition and since the assessed value of the property as stated in the complaint is P5,000.00, then, the case falls within the jurisdiction of the MCTC of Liloan, Compostela, Cebu - Petitioners filed an Opposition to the Motion to Dismiss saying that the complaint is for the annulment of a document denominated as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION," which is clearly one incapable of pecuniary estimation, thus, cognizable by the RTC - The respondent judge issued an Order granting the Motion to Dismiss. - A Motion for Reconsideration of said order was filed by petitioners - Respondents did not oppose the motion for reconsideration.

- Respondent judge issued another Order denying the motion for reconsideration. - Hence, this petition ISSUE WON the RTC has jurisdiction to entertain the civil case. HELD YES. Ratio Singsong vs. Isabela Sawmill: In determining whether an action is one the subject matter of which is not capable of pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance Examples of actions incapable of pecuniary estimation are those for specific performance, support, or foreclosure of mortgage or annulment of judgment; also actions questioning the validity of a mortgage, annulling a deed of sale or conveyance and to recover the price paid and for rescission, which is a counterpart of specific performance. While actions under Sec. 33(3) of B.P. 129 are also incapable of pecuniary estimation, the law specifically mandates that they are cognizable by the MTC, METC, or MCTC where the assessed value of the real property involved does exceed P20,000.00 in Metro Manila, or P50,000.00, if located elsewhere. If the value exceeds P20,000.00 or P50,000.00 as the case may be, it is the Regional Trial Courts which have jurisdiction under Sec. 19(2). Reasoning The subject matter of the complaint in this case is annulment of a document denominated as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION." The main purpose of petitioners in filing the complaint is to declare null and void the document in which private respondents declared themselves as the only heirs of the late spouses Casimero Tautho and Cesaria Tautho and divided his property among themselves to the exclusion of petitioners who also claim to be legal heirs and entitled to the property. While the complaint also prays for the partition of the property, this is just incidental to the main action, which is the declaration of nullity of the document above-described. It is axiomatic that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein. Disposition The petition was GRANTED.

Brgy. San Roque, Talisay, Cebu vs Heirs of Franco Pastor on June 24, 2011 Municipal Corporation Eminent Domain Expropriation BP 129 In 1997, Brgy. San Roque filed for an expropriation suit before the MTC of Talisay. The MTC denied the suit because apparently under BP 129, MTCs do not have jurisdiction over expropriation cases as it is the RTCs that are lodged with the power to try such cases. So Brgy. San Roque filed it before RTC Talisay but then Judge Pastor denied the suit arguing that the action for eminent domain affected title to real property; hence, the value of the property to be expropriated would determine whether the case should be filed before the MTC or the RTC. Concluding that the action should have been filed before the MTC since the value of the subject property was less than P20,000. ISSUE: Whether or not the RTC should take cognizance of the expropriation case. HELD: Yes. Under Section 19 (1) of BP 129, which provides that RTCs shall exercise exclusive original jurisdiction over all civil actions in which the subject of the litigation is incapable of pecuniary estimation; . . . . . The present action involves the exercise of the right to eminent domain, and that such ri ght is incapable of pecuniary estimation. What are the two phases of expropriation cases? The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint. An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for thereafter as the Rules expressly state, in the proceedings before the Trial Court, no objection to the exercise of the right of co ndemnation (or the propriety thereof) shall be filed or heard. The second phase of the eminent domain action is concerned with the determination by the court of the just compensation for the property sought to be taken. This is done by the Court with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. . . . It should be stressed that the primary consideration in an expropriation suit is whether the government or any of its instrumentalities has complied with the requisites for the taking of private property. Hence, the courts determine the authority of the government entity, the necessity of the expropriation, and the observance of due process. In the main, the subject of an expropriation suit is the governments exercise of eminent domain, a matter that is incapable of pecuniary estimation.

G.R. No. L-14869

October 27, 1920

THE DIRECTOR OF LANDS, applicant-appelle, vs. THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, objector-appellant. JUSTA DE GUZMAN, ET AL., objectors-appellees. Hartigan and Welch for appellant. Gregorio C. Concepcion for appellees. MALCOLM, J.: In 1913, cadastral proceedings were begun to settle the title to a considerable tract of land situated in the Province of Rizal. Thirteen of the cadastral lots were claimed by the municipality of Cainta, Province of Rizal, the Roman Catholic Archbishop of Manila, and various private individuals. The judgment of the trial court adjudicated the parcels in question to

the private claimants. From this judgment both the Roman Catholic Archbishop of Manila and the municipality of Cainta appealed, but subsequently the appeal of the latter wad dismissed for failure to prosecute. The contest has thus narrowed down to one between the Church as appellant and various individuals as appellees. A ruling as to four of the lots can quickly be made. By stipulation during the trial, and by admission of counsel for appellant, Policarpio Buenviaje is conceded to have title to lot 2187. As to lot 2186, the only evidence before us, confirmed by the findings of the trial court, is, that Mamerta Roxas went into possession of the same in 1895; and when counsel for the Church made his offer to present rebuttal testimony, he failed to mention this lot. Likewise, as to lots 2213 and 2214, the only evidence before us, confirmed by the findings of the trial court, is, that Antonio, Benito, and Gervasio dela Paz went into possession of the same in 1896; the record states that "ambas partes dan por terminadas sus pruebas," while counsel for the Church in making his offer of rebuttal testimony again failed to include these two lots. A more difficult situation has arisen with reference to the nine remaining cadastral lots. To understand it, a brief narration of the course of the proceedings in the trial court will have to be made. The trial as to the land now before us opened with a stipulation to the effect that the composition title of the Church with the spanish Government included this land. The Church presented one witness and rested. The private oppositors then called their respective witnesses. Each endeavored to prove title by possession, best understood by the following table: Parcel No. 2176, 2191, 2182 2178, 2180, 2190 2184, 2185 2192 Oppositor. Justa de Guzman Melecio S. Buenaventura Justo S. Buenaventura Justo Javier Possession began 1895 1882 1885 1885 Acts of possession Planted rice; paid taxes Planted rice Cultivation and harvest Planted rice; harvested.

Counsel for the Church, thereupon, made an offer to present additional testimony with reference to lots 2176, 2178, 2180, 2182, 2184, 2185, 2190, 2191, and 2192, or the lots above enumerated in the table. Three witnesses were called to the stand, but each time, before any pertinent testimony could be secured from them, an objection was made by counsel for the oppositors that the proof related to the evidence in chief of the Church, and this was sustained by the court. To resolve the facts into their simplest terms, it is evident that when an admission was made of the royal title, the Church had shown that it was the legitimate owner of the land to which it refers. The most perfect title could, however, be lost by abandonments. When, therefore, the private oppositors showed possession for the prescriptive period, they had made their case, and the burden of proof had shifted. To overcome this burden, it was then incumbent upon the Church to demonstrate that such possession had been interrupted, or that it was merely possession through the tolerance of the Church. This brings us to the specific consideration of assignment of error No. 2 of the appellant to the effect that the court erred in refusing to admit evidence tendered by this claimant and appellant in answer to rival claims. A correct ruling can most appropriately be arrived at by a consideration of the nature of cadastral proceedings, with reference to the usual rules of trial practice and evidence. The object of a cadastral petition, as all know, is that the title to the various lots embraced in the survey may be settled and adjudicated. It is in the nature of a proceeding in rem, promoted by the Director of Lands, somewhat, akin to a judicial inquiry and investigation leading to a judicial decree. In one sense, there is no plaintiff and there is no defendant. In another sense, the Government is the plaintiff and all the claimants are defendants. (Act No. 2259, sec. 10.) The trial is conducted in the same manner as ordinary trials and proceedings in the Court of Land Registration. (Sec. 11.) As to this court, now abolished, the Land Registration Act provides that it "shall conform, as near as may be, to the practice in special proceedings in courts of first instance." (Act No. 496, sec. 2) The Code of Civil Procedure, which is thus brought into relation with the Cadastral Act, prescribes the order in which the trial must proceed. (Secs. 56, 132). The usual rules of practice, procedure, and evidence govern registration proceedings. Obviously, orderly procedure must be followed if injurious surprises and annoying delays in the administration of justice are to be avoided. Evidence cannot be given piecemeal. The strict rule is that the plaintiff must try his case out when he commences. Nevertheless, a relaxation of the rule is permitted in the sound discretion of the court. "The proper rule for the exercise of this discretion," it has been said by an eminent author, "is, that material testimony should not be excluded because offered by the plaintiff after the defendant has rested, although not in rebuttal, unless it has been kept back by a trick, and for the purpose of deceiving the defendant and affecting his case injuriously." (1 Thompson on Trials, sec. 346.)1awph!l.net These principles find their echo in Philippine remedial law. While the general rule is rightly recognized, the Code of Civil Procedure authorizes the judge "for special reasons," to change the order of the trial, and "for good reason, in the furtherance of justice," to permit the parties "to offer evidence upon their original case." (Sec. 132.) These exceptions are made stronger when one considers the character of registration proceedings and the fact that where so many parties are involved, and action is taken quickly and abruptly, conformity with precise legal rules should not always be expected. Even at the risk of violating legal formul, an opportunity should be given to parties to submit additional corroborative evidence in support of their claims of title, if the ends of justice so require. (Rodriquez vs. Director of Lands [1915], 31 Phil., 272; Government of the Philippine Islands vs. Abural [1919], 39 Phil., 996.) We believe that the offer of counsel for the Church could property be classified as evidence in denial of an affirmative fact; but that even if not technically rebuttal evidence, yet in the interest of justice and the ascertainment of the truth it should be received. Whether such evidence would be sufficient to overcome the case which exists in favor of the claimants of the nine lots cannot now be determined. In so far as the judgment relates to lots No. 2186, 2187, 2213, and 2214, it is affirmed, and in so far as it relates to lots Nos. 2176, 2178, 2180, 2182, 2184, 2185, 2190, 2191, and 2192, it is reversed, and the record shall be returned to the lower court for the taking of additional evidence under the offer of counsel for the Church found on page 83 of the stenographic notes. No finding as to costs is made in this instance. So ordered. Mapa, C.J., Johnson, Araullo, Avancea and Villamor, JJ., concur.

REPUBLIC V SANDIGANBAYAN CORONA; July 15, 2003 FACTS - Special Civil Action in the Supreme Court. Certiorari.

- Dec 17 1991, the Republic, through the Presidential Commission on Good Government or PCGG, filed a petition for forfeiture before the Sandiganbayan, entitled Republic of the Philippines vs. Ferdinand E. - Marcos, represented by his Estate/heirs and Imelda R. Marcos, pursuant to RA 13791. PCGG was created by virtue of Executive Order No. 1 issued on February 28, 1986 by then President Corazon Aquino, and was charged with the task of assisting the President in the recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his immediate family, relatives, subordinates and close associates, whether located in the Philippines or abroad, including the takeover or sequestration of all business enterprises and entities owned or controlled by them during is administration, directly or through nominees, by taking undue advantage of their public office and/or using their powers, authority, influence, connections or relationship.

- In said case, petitioner Republic, represented by the Office of the Solicitor General (OSG) sought: a. the declaration of the aggregate amount of US$356 million (estimated to be US$658 million inclusive of interest as of the time of decision) deposited in escrow2 in the Philippine National Bank (PNB), as ill-gotten wealth. *The ff account groups, using various foreign foundations in certain Swiss banks, previously held the funds: 1. Azio-Verso-Vibur Foundation accounts 2. Xandy-Wintrop: Charis-Scolari-Valamo-SpinusAvertina-Foundation accounts 3. Trinidad-Rayby-Palmy Foundation accounts 4. Rosalys-Aguamina Foundation accounts 5. Maler Foundation accounts b. the forfeiture of US$25 million and US$5 million in treasury notes which exceeded the Marcos couples salaries, other lawful income as well as income from legitimately acquired property. These treasury notes are frozen at the Bangko Sentral ng Pilipinas by virtue of freeze order issued by PCGG.

- Oct 18, 1993, respondents Imelda R Marcos, Ma. Imelda M Manotoc, Irene M Araneta and Ferdinand R Marcos, Jr. filed their answer. The General Agreement/Supplemental Agreements - Before case was set for pre-trial, a General Agreement and the Supplemental Agreements dated Dec 28, 1993 were executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global settlement of the assets of the Marcos family - The General Agreement/Supplemental Agreements sought to identify, collate, cause the inventory of and distribute all assets presumed to be owned by the Marcos family under the conditions contained therein. - It was stated in one of the whereas clauses the fact that petitioner Republic obtained a judgment from the Swiss Federal T ribunal on Dec 21 1990 that the US$356 million belongs in principle to the Republic of the Philippines provided certain conditions are met. The decision of the Swiss Federal Supreme Court affirmed the decision of Zurich District Attorney Peter Cosandey granting legal assistance to Republic. Cosandey declared the various deposits in the name of the foundations to be of illegal provenance and ordered that they be frozen to await the final verdict in favor of the parties entitled to restitution. - Sandiganbayan conducted hearings on the motion to approve the General/Supplemental Agreements.

- Oct 18 1996 petitioner filed a motion for summary judgment and/or judgment on the pleadings. Respondents filed their opposition. - Nov 20 1997 Sandiganbayan denied petitioners motion for summary judgment and/or judgment on the pleadings on the ground that the motion to approve the compromise agreement (took) precedence over the motion for summary judgment - May 26 1998 Mrs. Marcos filed manifestation claiming she was not a party to the motion for approval of the Compromise Agreement and that the owned 90% of the funds with the remaining 10% belonging to the Marcos estate. The Fund Transfer - Aug 10 1995 petitioner Republic filed with the District Attorney in Zurich, Switzerland an additional request for the immediate transfer of the deposits to an escrow account in PNB. This was granted. - Marcoses appealed, Swiss Federal Supreme Court affirmed ruling of District Attorney of Zurich, and funds were remitted to the Philippines in escrow in 1998. The Petition for Summary Judgment - Mar 10 2000 petitioner filed another motion for summary judgment pertaining to the forfeiture of the US$356 million, based on ff grounds: a. b. essential facts which warrant the forfeiture of the funds are admitted by respondents in their pleadings and other submissions made in the course of the proceeding respondents admission made during pre-trial that they do not have any interest or ownership over the funds tenders no genuine issue or controversy as to any material fact in the present action

- Mrs. Marcos filed her opposition, which was later adopted by co-respondents Marcos children. - Mar 24 2000 hearing on motion for summary judgment was conducted - Sep 19 2000 Sandiganbayan granted petitioners motion for summary judgment, stating that there is no issue of fact which calls for the presentation of evidence, and declared the funds, which were deemed unlawfully acquired as ill-gotten wealth, forfeited in favor of the State. - Mrs. Marcos filed motion for reconsideration on Sep 26 2000; Marcos children followed. - In Jan 31 2002 resolution, Sandiganbayan reversed its Sep 19 2000 decision, stating that the evidence offered for summary judgment of the case did not prove that the money in the Swiss Banks belonged to the Marcos spouses because no legal proof exists in the record as to the owners hip by the Marcoses of the funds, and thus denied petitioners motion for summary judgment. Hence, the present petition.

1
2

An Act Declaring Forfeiture In Favor of the State Any Property To Have Been Unlawfully Acquired By Any Public Officer or Employee and Providing For the Procedure Therefor. Money or a deed or other instrument deposited with a third person for a delivery to a given party upon the fulfillment of some condition. While in the keeping of the third party, th e money or instrument is said to be in escrow. (Random House Websters Legal Dictionary, Random House, New York, 1996)

- Petitioner asserts in the main that the Sandiganbayan committed grave abuse of discretion in reversing the decision on the ground that the original copies of the authenticated Swiss Federal Supreme Court decisions and their authenticated translations have not been submitted to the Court, when in fact the Sandiganbayan quoted extensively a portion of the Swiss decisions in denying a previous motion dated July 29 1999. Petitioner adds that nowhere in the respondents motions for reconsideration and suppleme ntal motion for reconsideration were the authenticity, accuracy and admissibility of the Swiss decisions ever challenged. - Respondents, of course, assert that the petition should be denied. Analysis of Respondents Legitimate Income - the Marcoses reported P16,408,442.00 or US$2,414,484.91 in total income over a period of 20 years from 1965 to 1984. - This amount includes Ferdinand Marcos salary as Senate President in 1965, (P15,935) and as President from 1966 to 1985 (1966 -1976 at P60,000/year; 1977-1985 at P100,000/year), Imelda Marcos salary as Minister of Human Settlements from 1976 to 1986 (P75,000/year), income from legal practice (P11,109,836), plus other sources. - Ferdinand Marcos made it appear that he had an extremely profitable legal practice before he became President, and that he was still receiving payments almost 20 years after

- Computations establish the total net worth of spouses Ferdinand and Imelda, for the years 1965 to 1984, in the amount of US$957,487.75. (assuming income from legal practice is valid) - The five group accounts have a total balance of US$356 million. ISSUES 1. WON petitioner Republics action for certiorari is proper. 2. WON respondents raised any genuine issue of fact which would either justify or negate summary judgment. 3. WON petitioner Republic was able to prove its case for forfeiture in accordance with Sections 2 and 3 of RA 1379. HELD 1. Ratio Where the case is undeniably ingrained with immense public interest, public policy and deep historical repercussions, certiorari is allowed notwithstanding the existence and availability of the remedy of appeal. Obiter Almost two decades have passed since the government initiated its search for and reversion of ill-gotten wealth. The definitive resolution of such cases on the merits is long overdue. 2. Ratio Mere denials, if unaccompanied by any fact which will be admissible in evidence at a hearing, are not sufficient to raise genuine issues of fact and will not defeat a motion for summary judgment Obiter Court held that respondent Marcoses failed to raise any genuine issue of fact in their pleadings. Summary judgment should take place as a matter of right. - a genuine issue is an issue of fact which calls for the presentation of evidence, as distinguished from an issue which is fictitious and contrived, set up in bad faith or patently lacking in substance. - Respondents failed to specifically deny each and every allegation contained in the petition for forfeiture in the manner required by the rules (Sec 10 Rule 8 1997 Rules of Civil Procedure). Their answers include they have no sufficient knowledge or they could not recall because it happened a long time ago or the funds were lawfully acquired without stating the basis of such assertions. - Question: Whether the kind of denial in respondents answer qualifies as the specific denial called for by the rules. No. The Court holds that if an allegation directly and specifically charges a party with having done, performed or committed a particular act which the latter did not in fact do, perform or commit, a categorical and express denial must be made. - The allegations for forfeiture on the existence of the Swiss bank deposits, not having been specifically denied by respondents in their answer, were deemed admitted pursuant to Sec 11 Rule 8 of 1997 Rules on Civil Procedure. a. Propriety of Summary Judgment

- Summary judgment is proper when there is clearly no genuine issue as to any material fact in the action. The Court is justified in dispensing with the trial and rendering summary judgment if it is demonstrated by affidavits, depositions or admissions that the issues are not genuine but sham or fictitious. - motion for summary judgment is premised on the assumption that the issues presented need not be tried either because these are patently devoid of substance or that there is no genuine issue as to any pertinent fact. - It is a procedural device for the prompt disposition of actions in which the pleadings raise only a legal issue, not a genuine issue as to any material fact. b. Whether petitioner Republic had bound itself to go to trial and had legally waived right it had to move for summary judgment.

- Court rules that petitioner could validly move for summary judgment any time after the respondents answer was filed or, for that matter, at any subsequent stage of the litigation. The fact that petitioner agreed to proceed to trial did not in any way prevent it from moving for summary judgment. c. Whether by the time motion for summary judgment was filed on Mar 10 2000, estoppel by laches had already set in against petitioner.

- Doctrine of estoppel or laches does not apply when government sues as a sovereign or asserts governmental rights. Nor can estoppel validate an act that contravenes law or public policy. - estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier, warranting a presumption that the person has abandoned his right or declined to assert it. - in invoking doctrine of estoppel by laches, respondents must show not only unjustified inaction but also that some unfair injury to them might result unless the action is barred. 3. Ratio The prima facie presumption raised by the law that a property is unlawfully acquired when the amount or value is manifestly disproportionate to the official salary and other lawful income of the public officer who owns it stands as proved unless defendant shows, and proves, that these were lawfully acquired and that there are other legitimate sources of income.

Obiter burden of proof was on respondents to dispute presumption and show by clear and convincing evidence that the Swiss deposits were lawfully acquired and that they had other legitimate sources of income. A presumption is prima facie proof of the fact presumed, and, unless the fact thus prima facie established by legal presumption is disproved, it must stand as proved. - the Court not only took into consideration that respondents themselves made admissions in their pleadings and testimonies, but that petitioner was able to present sworn statements of witnesses who had personal knowledge of the Marcoses participation in the illegal acquisition of funds.

Republic v. Sandiganbayan CORONA; November 18, 2003 RESOLUTION - SC: Respondents in their motions for reconsideration do not raise any new matters for the Court to resolve. Is summary judgment in forfeiture proceedings a violation of due process? - Respondents: RA 1379 is penal in substance and effect, hence they are entitled to constitutional safeguards enjoyed by accused. - SC: Due process of law has two aspects: substantive and procedural. There must be a compliance with both substantive and procedural requirements in order that a particular act may not be impugned as violative of the due process clause. - substantive due process refers to intrinsic validity of a law that interferes with the rights of a person to his property - there is no showing that RA 1379 is unfair, unreasonable or unjust. Respondents were not deprived of their property through forfeiture for arbitrary reasons. - procedural due process means compliance with procedures or steps, even periods, prescribed by the statute, in conformity with the standard of fair play and without arbitrariness on the part of those who are called upon to administer it. - forfeiture proceedings are actions in rem, thus civil in nature, contrary to respondents contention that they are penal in character. The proceedings under RA 1379 do not terminate in the imposition of penalty but merely in the forfeiture in favor of the State of properties illegally acquired. - Civil suits to recover unlawfully acquired property under RA 1379 may be proven by preponderance of evidence. The Government is required only to state the known lawful income of respondents for the prima facie presumption of illegal provenance to attach. Petitioner Republic having established this presumption, burden of proof shifted to respondents to show by clear and convincing evidence that the Swiss deposits were lawfully acquired and that they had other legitimate sources of income. Respondents failed on this part. - essence of due process is found in the reasonable opportunity to be heard and submit ones evidence in support of his defense - Respondents were repeatedly accorded full opportunity to present their case, defenses and pleadings. They obstinately refused to do so and have tried to confuse the issues and the Court and to delay the disposition of the case - the people and the State are entitled to favorable judgment, free from vexatious, capricious and oppressive delays, the salu tary objective being to restore the ownership of the Swiss deposits to the rightful owner that is, the Republic of the Philippines in the shortest possible time. Motions for reconsiderations denied with finality.

EL BANCO ESPAOL-FILINO v. PALANCA 37 Phil. 921 STREET; March 26, 1918 FACTS - A mortgage was executed by Palanca, as security for a debt owing to him to the bank. After the execution of this instrument, Palanca returned to China where he died. - As Palanca was a nonresident, it was necessary for the bank to give notice to him by publication pursuant to section 399 of the Code of Civil Procedure. An order for publication was accordingly obtained from the court, and publication was made in due form in a newspaper of the city of Manila. - The order of the court was entered directing that publication should be made in a newspaper, the court directed that the clerk of the court should deposit in the post office in a stamped envelope a copy of the summons and complaint directed to Palanca at his last place of residence. - The cause proceeded in the CFI and Palanca not having appeared, judgment was taken against him by default. It was ordered that Palanca should deliver said amount to the clerk of the court to be applied to the satisfaction of the judgment, and it was declared that in case of failure to satisfy the judgment, the mortgage property located in the city of Manila should be exposed to public sale. - Payment was never made and the court ordered the sale of the property. The property was brought in by the bank. - About seven years after the confirmation of this sale, a motion was made by Vicente Palanca, as administrator of the estate of the original defendant, wherein the applicant requested the court to set aside the order. ISSUE 1. WON the order of default and the judgment rendered thereon were void because the court had never acquired jurisdiction over the defendant or over the subject of the action. 2. WON the supposed irregularity in the proceedings was of such gravity as to amount to a denial of due process of law. RULING 1. NO. - The action to foreclose a mortgage is said to be a proceeding quasi in rem, by which is expressed the idea that while it is not strictly speaking an action in rem yet it partakes of that nature and is substantially such. The expression, "action in rem' is, in its narrow application, used only with reference to certain proceedings in courts of admiralty wherein the property

alone is treated as responsible for the claim or obligation upon which the proceedings are based. The action quasi in rem differs from the true action in rem in the circumstance that in the former an individual is named as defendant, and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the property. All proceedings having for their sole object the sale or other disposition of the property of the defendant, whether by attachment, foreclosure, or other form of remedy, are in general way thus designated. The judgment entered in these proceedings is conclusive only between the parties. - Several principles: (1) That the jurisdiction of the court is derived from the power which it possesses over the property; (II) that jurisdiction over the person is not acquired and is nonessential; (III) that the relief granted by the court must be limited to such as can be enforced against the property itself. - In a foreclosure proceeding against a nonresident owner it is necessary for the court, as in all cases of foreclosure, to ascertain the amount due, as prescribed in section 256 of the Code of Civil Procedure, and to make an order requiring the defendant to pay the money into court. This step is a necessary precursor of the order of sale. It is clearly intended merely as compliance with the requirement that the amount due shall be ascertained and that the defendant shall be required to pay it. As further evidence of this it may be observed that according to the Code of Civil Procedure a personal judgment against the debtor for the deficiency is not to be rendered until after the property has been sold and the proceeds applied to the mortgage debt (sec. 260) - Whatever may be the effect in other respects of the failure of the clerk of the CFI to mail the proper papers to the defendant in China, such irregularity could in no wise impair or defeat the jurisdiction of the court, for in our opinion that jurisdiction rests upon a basis much more secure than would be supplied by any form of notice that could be given to a resident of a foreign country. 2. NO. - In a foreclosure case, some notification of the proceedings to the nonresident owner, prescribing the time within which appearance must be made, is everywhere recognized as essential. To answer this necessity the statutes generally provide for publication, and usually in addition thereto, for the mailing of notice to the defendant, if his residence is known. It is merely a means provided by law whereby the owner may be admonished by his property is the subject of judicial proceedings and that it is incumbent upon him to take such steps as he sees fit to protect it. - This mode of notification does not involve any absolute assurance that the absent owner shall thereby receive actual notice. The idea upon which the law proceeds in recognizing the efficacy of a means of notification which may fall short of actual notice is apparently this: Property is always assumed to be in the possession of its owner, in person or by agent; and he may be safely held, under certain conditions, to be affected with knowledge that proceedings have been instituted for its condemnation and sale. - Failure of the clerk to mail the notice, if in fact he did so fail in his duty, is not such as irregularity as amounts to a denial of due process of law; and hence in our opinion that irregularity, if proved, would not avoid the judgment in this case. Notice was given by publication in a newspaper and this is the only form of notice which the law unconditionally requires. Separate Opinion MALCOLM; dissent - The fundamental idea of due process of law is that no man shall be condemned in his person or property without notice and an opportunity of being heard in his defense. - "A judgment which is void upon its face, and which requires only in inspection of the judgment roll to demonstrate it want of vitality is a dead limb upon the judicial tree, which should be lopped off, if the power so to do exists. It can bear no fruit to the plaintiff, but is a constant menace to the defendant."

DE MIDGELY VS FERANDOS 64 SCRA 23 AQUINO, May 13, 1975 NATURE Original Actions. Certiorari and contempt. FACTS - Quemada, allegedly the illegitimate son of Alvaro Pastor, Sr., was appointed as special administrator of the latters estate by the CFI of Cebu. As such, he filed a complaint against his half siblings, the spouses Alvaro Pastor, Jr. and Maria Elena Achaval, and Sofia Midgely, who were all at that time citizens of Spain and residing in that country. The suit also named Atlas Mining as co-respondent. The suit was to settle the question of ownership over certain properties and rights in some mining claims as Quemada believed that those properties belong to the estate of Alvaro Pastor, Sr. - Quemada, on his own, caused extraterritorial service of summons to be made through the Department of Foreign Affairs and the Philippine Embassy in Madrid, Spain, which effected the service of the summons through registered mail upon De Midgely and Pastor, Jr. at their respective addresses in Alicante and Barcelona. - Both De Midgely and Pastor entered a special appearance and filed a motion to dismiss on the ground of lack of jurisdiction as they are non-residents. They further alleged that earnest efforts toward a compromise have not been made as required in the Civil Code in suits between members of the same family, The motion was denied by Judge Ferandos and he ruled that the respondents were properly summoned. - The subsequent motion for reconsideration was denied by Ferandos indicating in the order that the action of Quemada was for the recovery of real property and real rights. The respondents were instructed to file their answer. - De Midgely filed this action with the Supreme Court. ISSUE/S WON Judge Ferandos gravely abused his discretion in denying De Midgelys motion to dismissed based on the lack of jurisdictio n over her person. HELD NO. The fact that she alleged as a ground for dismissal the lack of earnest effort to compromise is deemed as abandonment of her special appearance and as voluntary submission to the courts jurisdiction. Ratio. When the appearance is by motion for the purpose of objecting to the jurisdiction of the court over the person, it must be for the sole and separate purpose of objecting to the jurisdiction of the court. If the motion is for any other purpose than to object to the jurisdiction of the court over his person, he thereby submits himself to the jurisdiction of the court, Reasoning. Even if the lower court did not acquire jurisdiction over De Midgely, her motion to dismiss was properly denied because Quema das action against her maybe regarded as a quasi in rem where jurisdiction over the person of a non-resident defendant is not necessary and where the service of summons is required only for the purpose of complying with the requirement of due process. Quasi in rem is an action between parties where the direct object is to reach and dispose of property owed by the parties or of some interest therein.

- The SC cited the Perkins case as a precedent. In that case, it ruled that in a quasi in rem action jurisdiction over a non resident defendant is not essential. The service of summons by publication is required merely to satisfy the constitutional requirement of due process. The judgment of the court would settle the title to the properties and to that extent it partakes of the nature of judgment in rem. The judgment is confined to the res (properties) and no personal judgment could be rendered against the non resident. It should be noted that the civil case filed by Quemada is related to a testamentary proceeding as it was filed for the purpose of recovering the properties which in the understanding of Quemada, belonged to the estate of the Late Pastor, Sr. and which were held by De Midgely and her brother. Disposition. Petition is dismissed

G.R. No. 177598

October 17, 2008

ROBERT SAN PEDRO, petitioner, vs. WILLY ONG and NORMITA CABALLES, respondents. DECISION CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, filed by petitioner Robert San Pedro (San Pedro), seeking to reverse and set aside the Decision1 of the Court of Appeals dated 29 December 2006 and its Resolution 2 dated 13 April 2007 in CA-G.R. CV No. 79399. In its assailed Decision, the Court of Appeals reversed the Decision3 dated 21 February 2003 of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 19, in Civil Case No. 515-M-99, declaring, inter alia, that the deeds of real estate mortgage constituted on the subject properties are null and void; while, in its assailed Resolution, the appellate court den ied San Pedros Motion for Reconsideration. The factual and procedural antecedents of this case are as follows: On 3 April 1996, San Pedro purchased from the spouses Guillermo Narciso and Brigida Santiago (spouses Narciso) two parcels of land (subject properties) covered by Transfer Certificates of Title TCTs No. T-82381 and No. T-82382 of the Registry of Deeds of Bulacan, with areas of about 200 square meters and 150 square meters, respectively. San Pedro bought the subject properties for P35,000.00, as evidenced by Deeds of Sale executed in his favor by the spouses Narciso on 8 April 1996.4 In order to transfer in his name the TCTs covering the subject properties, and upon the spouses Narcisos recommendation, San Pedro hired the services of Adora Dela Pea (Dela Pea) who is known to be very familiar with the intricacies of real property transfers.5 After sometime, San Pedro inquired with the Registry of Deeds of Bulacan as to the status of his application for the issuance in his name of new TCTs for the subject properties. He was surprised to find out, however, that the subject properties were still registered in the names of the Narciso spouses and were mortgaged to Willy Ong (Ong).6 According to the annotation stamped at the back of TCTs No. T-82381 and No. T-82382, the spouses Narciso, on 23 July 1998, executed Special Powers of Attorney (SPAs) authorizing Dela Pea to mortgage the subject properties to Ong. The SPAs were procured by Dela Pea from the spouses Narciso with the help of one Rufino Landayan, a tricycle driver who accompanied Dela Pea to the spouses Narcisos residence. San Pedro found out that it was Normita Caballes (Caballes), Ongs agent, who caused the registration of the mortgages with the Registry of Deeds of Bulacan and the annotation thereof on the TCTs of the spouses Narciso.7 In order to free the subject properties from the said encumbrances, San Pedro filed with the RTC on 7 May 1999 a Petition for Nullification of Mortgage with Damages against the spouses Narciso, Dela Pea, Landayan, Ong, and Caballes, docketed as Civil Case No. 515-M-99. On 14 May 1991, the RTC issued summons to spouses Narciso, Dela Pea, Landayan, Ong, and Caballes, directing them to file their Answers to San Pedros Petition in Civil Case No. 515-M-99. On the same day, the Sheriff served the summons on all concerned as evidenced by the Sheriffs Return,8 which reads: SERVICE RETURN THIS IS TO CERTIFY that on 14th day of May 1999, the undersigned served a copies (sic) of Summons in connection in (sic) the above-entitled case accompanying (sic) by the Complaints with annexes attached thereto upon defendants, at their given address, to wit: Spouses Brigida Santiago & Guillermo Narciso thru their son Jaime Narciso/ Received & sign Adora Dela Pea thru her sister-in-law/ Received but refused to sign thru his son Christopher Landayan/received & sign thru Paul Caballes son of Normita Caballes/received & sign

Rufino Landayan

Normita Caballes & Willy Ong

The original copy of Summons is, therefore, respectfully returned DULY SERVED. While the spouses Narciso, Landayan, Ong, and Caballes separately filed their Answers in accordance with the summons, thereby voluntarily submitting themselves to the jurisdiction of the RTC, Dela Pea failed to do so and she was, thus, declared by the RTC to be in default. In their Answer,9 the spouses Narciso admitted to selling the subject properties to San Pedro, and denied authorizing the mortgage of the same to Ong. Their signatures on the SPAs were fraudulently secured by Dela Pea who misrepresented to them that such document was necessary to facilitate the transfer of the TCTs of the subject properties to San Pedro. The spouses Narciso denied that they participated in or benefited from the loan obligation obtained by Dela Pea from Ong. For their part, Caballes and Ong raised in their Joint Answer10 the defense of mortgagee-in-good-faith. They claimed that they both relied in good faith on the SPAs granting Dela Pea the authority to mortgage the subject properties since there was nothing on the face thereof which would have raised their suspicion as to the authenticity of the document. Ong alleged that the subject properties were used by Dela Pea as collateral for the loan, amounting to P170,000.00, which she obtained from Ong. Since the said loan obligation already became

due and demandable, Ong sought the foreclosure of the subject properties. During the auction sale, Ong emerged as the highest bidder but the TCTs of the subject properties were not yet transferred to his name. Landayan, in his Answer,11 denied any participation in the procurement of the SPAs or in the mortgage of the subject properties, except that he was hired by Dela Pea to bring her to the spouses Narcisos residence at the time the alleged SPAs were fraudulently procured. After the Pre-Trial Conference, trial on the merits ensued. During the trial, San Pedro presented Landayan to testify in his favor. According to Landayan, he came to know Dela Pea when the latter hired his tricycle. Landayan took Dela Pea and a woman, whom he identified as Caballes sister, to the residence of the spouses Narciso to secure Guillermo Narcisos si gnature on a certain document. While Dela Pea and Caballes sister were inside the spouses Narcisos house, Caballes was waiting for them outside in a white car. After a few minutes, Dela Pea and Caballes sister came out, and together with Caballes, they visited and inspected the subject properties; after which, Dela Pea and Caballes sister procee ded to a restaurant to try and secure Brigida Santiagos signature on the document they carried. After somebody signed the document for Brigida Santiago, Dela Pea asked Landayan to sign the same as witness, to which he obliged.12 San Pedro himself took the witness stand. He testified that he bought the subject properties from the spouses Narciso for P35,000.00. After the execution of the Deeds of Sale and payment of the purchase price to the spouses Narciso, possession of the subject properties were turned over to him. San Pedro started to build his dream house on the subject properties, spending about P2,000,000.00 thereon, only to find out later on that the subject properties on which his house was built was encumbered by Dela Pea to Ong on the strength of the SPAs executed by the spouses Narciso in Dela Peas favor. When San Pedro confronted the spouses Narciso about the mor tgages, they denied authorizing the same.13 San Pedros sister, Luz San Pedro Tominago (Tominago), narrated before the RTC that on 31 March 1991, she filed a complaint a gainst Dela Pea before the Philippine National Police (PNP) Station in Balagtas, Bulacan for the latters failure to effect the transfer of the TCTs of the subject properties in San Pedros name, as she was obliged to do. Tominago filed the complaint on behalf of San Pedro, who was working abroad.14 Finally, a document examiner and handwriting expert from the National Bureau of Investigation (NBI) was also presented as a witness for San Pedro. He confirmed that the signature of Guillermo Narciso on one of the SPAs was forged, while the signatures of his wife Brigida Santiago on both SPAs were spurious.15 After San Pedro presented his evidence, Ong and Caballes filed a demurrer to evidence, questioning the lack of jurisdiction of the RTC over the person of Dela Pea. Since Dela Pea was an indispensable party in the case, they claimed that no final determination of the same could be arrived at without the said court acquiring jurisdiction over Dela Pea.16 In an Order dated 24 August 2001, the RTC denied the demurrer to evidence filed by Ong and Caballes. Hence, trial proceeded with the presentation of evidence by the defense. Ong testified for the defense that Caballes informed him that she knew of two parcels of land in Bulacan that were being offered as collaterals for a loan. When Ong expressed interest in the subject properties, Caballes showed him copies of the SPA executed by the spouses Narciso in favor of Dela Pea. Ong then instructed Caballes to verify with the Registry of Deeds whether the spouses Narciso were the real owners of the subject properties and whether their TCTs were clean. Caballes returned with certified true copies of the TCTs which were in the names of the spouses Narciso and bore no encumbrances. Satisfied with the documents, Ong agreed to release the amount of P170,000.00 as loan, secured by the subject properties. Ong admitted that he was not able to personally talk to Dela Pea or to the spouses Narciso. All negotiations pertaining to the loan and mortgages were transacted through Caballes.17 Caballes also offered her testimony, in which she stated that she came to know Dela Pea because the latter was looking for someone who can grant her a loan with the subject properties as collateral. Dela Pea was armed with the SPAs from the spouses Narciso authorizing her to mortgage the subject properties. After Caballes examined the documents, she proceeded to the Registry of Deeds of Bulacan to verify the status and ownership of the subject properties. After she found out that the TCTs were in the name of the spouses Narciso and were clean, Caballes went to Ong who released the money for the loan. Dela Pea issued nine post-dated checks to Ong as payment for her loan obligation. All nine checks were dishonored by the drawee bank when presented for payment because Dela Peas account was already closed. Ong, thus, institute d before the Municipal Trial Court (MTC) of Balagtas, Bulacan, a case against Dela Pea for violation of Batas Pambansa Blg. 22.18 On 21 February 2003, the RTC rendered a Decision in Civil Case No. 515-M-99, declaring null and void the mortgages constituted over the subject properties in Ongs favor. According to the court a quo, Ong and Caballes failed to exercise reasonable degree of diligence before they entered into mortgage contracts with Dela Pea, who was not the registered owner of the properties being mortgaged and was only purportedly authorized by the registered owners thereof. The RTC, thus, ruled: WHEREFORE, judgment is hereby rendered as follows: 1. Declaring [San Pedro] the legal and rightful owner of the two (2) parcels of land subject of this litigation, covered by TCT No. T-82381 and TCT No. 82382 presently in the name of [the spouses Narciso]. 2. Adjudging the sale by [the spouses Narciso] to [San Pedro], legal, valid, subsisting and in all respect enforceable. 3. Resolving to declare the Special Power[s] of Attorney constituted in favor of [Dela Pea] null and void. 4. Declaring the Deeds of Mortgage purportedly executed by [Dela Pea] as Attorney-in-fact of [the spouses Narciso], in favor of [Ong] constituted in [sic] TCT No. T-82381 and TCT No. 82382 void ab initio. 5. Ordering the Registry of Deeds for the Province of Bulacan to cancel the recordings of mortgages in favor of Ong constituted in [sic] TCT No. 82381 and TCT No. 82382 as well as any annotation of foreclosure proceedings if there are any by [Ong]. 6. Ordering [Ong] to return to [San Pedro] the owners duplicate copy of TCT No. 82381 and TCT No. 82382 which are presently in his possession. 7. Ordering [Dela Pea] to pay [Ong] the sum of P245,000.00 plus legal interest from September, 1998 until the whole obligation is fully extinguished. All other claims, counterclaims and cross claims are ordered denied for lack of merit.19 Without filing any Motion for Reconsideration before the RTC, Ong and Caballes appealed the adverse RTC Decision to the Court of Appeals, assigning as error the lack of jurisdiction of the RTC over the person of Dela Pea which rendered all the proceedings held before said court fatally defective. Their appeal was docketed as CA-G.R. CV No. 79399. In a Decision20 dated 29 December 2006, the Court of Appeals granted the appeal of Ong and Caballes, and accordingly reversed the RTC Decision dated 21 February 2003. The appellate court justified its reversal of the ruling of the RTC on its finding that the service of summons on Dela Pea was invalid; thus, the RTC did not acquire jurisdiction over her person. The substituted service of summons employed by the Sheriff was ineffective for failure to comply with the statutory requirements before such mode of service could be resorted to. The Sheriff in the present case used substituted service without even showing that Dela Pea could not be served personally with the summons within reasonable time. Since Dela Pea was an indispensable party to the controversy, without her no final determination of the case can be had. Thus, the dispositive portion of the assailed Court of Appeals Decision reads: WHEREFORE, all the above premises considered, the Decision, dated February 21, 2003, of the Regional Trial Court of Malolos, Bulacan, Branch 19, is hereby set aside for want of jurisdiction. The instant case is hereby remanded to the court a quo for appropriate proceedings. No costs.21 The Motion for Reconsideration filed by San Pedro was denied by the Court of Appeals in its Resolution22 dated 13 April 2007 for the issues raised therein were already sufficiently threshed out in its Decision. San Pedro is now before this Court assailing the adverse decision rendered by the Court of Appeals.23 For the resolution of this Court are the following issues: I.

WHETHER OR NOT THE RTC HAS JURISDICTION TO HEAR AND DECIDE THE CASE FILED BY SAN PEDRO. II. WHETHER OR NOT DE LA PEA IS AN INDISPENSABLE PARTY TO THE CASE. III. WHETHER OR NOT ONG WAS MORTGAGEE-IN-GOOD FAITH. Vital to the resolution of the present controversy are the questions on whether there was a valid service of summons upon Dela Pea; and if there was none, whether the improper service of summons on Dela Pea invalidates the entire proceedings before the court a quo. Summons is a writ by which the defendant is notified of the action brought against him. Service of such writ is the means by which the court may acquire jurisdiction over his person. Any judgment without such service in the absence of a valid waiver is null and void.24 To provide perspective, it is crucial to determine first whether the action is in personam, in rem, or quasi in rembecause the rules on service of summons under Rule 14 of the Revised Rules of Court apply according to the nature of the action.25 In the case at bar, Civil Case No. 515-M-99, instituted by San Pedro, is anchored on his claim that he is the real and rightful owner of the subject properties, thus, no one else has the right to mortgage them. The real estate mortgages constituted on the subject properties in favor of Ong, annotated on their TCTs, are encumbrances on said properties, which may be considered a cloud on San Pedros title thereto. Such cloud may be removed or San Pedros title quieted under Article 476 of the Civil Code, which reads: Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein. (Emphasis ours.) San Pedro alleged in his Petition in Civil Case No. 515-M-99 that the mortgages in favor of Ong may, at first, appear valid and effective, but are actually invalid or voidable for having been made without the knowledge and authority of the spouses Narciso, the registered owners of the subject properties and San Pedros predecessors-in-interest. In asking the cancellation of the mortgages on the TCTs of the subject properties, San Pedro was ultimately asking the RTC to remove a cloud on his title to the same. It is, thus, irrefragable that Civil Case No. 515-M-99 is an action for quieting of title. Significantly, suits to quiet title are characterized as proceedings quasi in rem. Technically, they are neither in remnor in personam. In an action quasi in rem, an individual is named as defendant. However, unlike suits in rem, aquasi in rem judgment is conclusive only between the parties. A proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the discharge of the claims assailed. 26 In an action quasi in rem, an individual is named as defendant and the purpose of the proceeding is to subject his interests therein to the obligation or loan burdening the property. Actions quasi in rem deal with the status, ownership or liability of a particular property but which are intended to operate on these questions only as between the particular parties to the proceedings and not to ascertain or cut off the rights or interests of all possible claimants. The judgments therein are binding only upon the parties who joined in the action.27 According to Section 6, Rule 14 of the Revised Rules of Court, summons on the defendant in actions in personammust be served by handing a copy thereof to the defendant in person, or, if he refuses to receive it, by tendering it to him.28 Meanwhile, in actions in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction over the res, although summons must be served upon the defendant in order to satisfy the due process requirements.29 In Alba v. Court of Appeals, 30 the Court further elucidated that: In an action in personam, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. In a proceeding in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court, provided that the latter hasjurisdiction over the res. Jurisdiction over the res is acquired either (a) by the seizure of the property under legal process, whereby it is brought into actual custody of the law; or (b) as a result of the institution of legal proceedings, in which the power of the court is recognized and made effective. The service of summons or notice to the defendant is not for the purpose of vesting the court with jurisdiction but merely for satisfying the due process requirements. (Emphasis supplied.) Given that Civil Case No. 515-M-99 is a an action for quieting of title, settled to be quasi in rem, the RTC was not required to acquire jurisdiction over the persons of the defendants, it being sufficient for the said court to acquire jurisdiction over the subject matter of the case. By San Pedros institution o f Civil Case No. 515-M-99, the RTC already acquired jurisdiction over the subject properties the res. Therefore, the service of summons to the defendants in said case, including Dela Pea, did not affect the jurisdiction of the RTC to hear and decide Civil Case No. 515-M-99, and did not invalidate the proceedings held therein on the basis of jurisdiction. Admittedly, there was a defect in the service of the summons on Dela Pea. The Sheriff immediately resorted to substituted service of summons on Dela Pea without attempting first to effect personal service within reasonable time. The Sheriffs Return31 merely stated that he served a copy of the summons on Dela Peas sister-in-law who refused to sign the same. Personal service of summons is preferred to substitute service. Only if the former cannot be made promptly can the process server resort to the latter. Moreover, the proof of service of summons must (a) indicate the impossibility of service of summons within a reasonable time; (b) specify the efforts exerted to locate the defendant; and (c) state that the summons was served upon a person of sufficient age and discretion who is residing in the address, or who is in charge of the office or regular place of business, of the defendant. It is likewise required that the pertinent facts proving these circumstances be stated in the proof of service or in the officers return. The failure to comply faithful ly, strictly and fully with all the foregoing requirements of substituted service renders the service of summons ineffective.32 Indisputably, the Sheriff did not comply with any of the foregoing requirements, thus, rendering his service of summons on Dela Pea invalid. Nonetheless, the improper service of summons on Dela Pea did not void the proceedings conducted by the RTC in Civil Case No. 515-M-99, for lack of jurisdiction. As the Court has underscored herein, in quasi in remproceedings, the court need not acquire jurisdiction over the persons of the defendants, for as long as it has acquired jurisdiction over the res. The defect in the service of summons merely infringed Dela Peas right to due process that precluded the RTC from rendering a va lid judgment with respect to her personal liability. And since Dela Peas right to due process is personal and pertains to her alone, it could not be invoked by her other co -defendants in Civil Case No. 515-M-99 so as to escape the judgment of liability against them. Contrary to the pronouncement of the Court of Appeals, Dela Pea was not an indispensable party to this case, without whom, no final conclusion of the case can be arrived at. The Court defined indispensable party in Philippine National Bank v. Heirs of Estanislao Militar and Deogracias Militar, 33 as follows: An indispensable party is one whose interest will be affected by the court's action in the litigation, and without whom no final determination of the case can be had. The party's interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other parties' (sic) that his legal presence as a party to the proceeding is an absolute necessity. In his absence there cannot be a resolution of the dispute of the parties before the court which is effective, complete, or equitable. Conversely, a party is not indispensable to the suit if his interest in the controversy or subject matter is distinct and divisible from the interest of the other parties and will not necessarily be prejudiced by a judgment which does complete justice to the parties in court. He is not indispensable if his presence would merely permit complete relief between him and those already parties to the action or will simply avoid multiple litigation. (Emphasis supplied.)

Evidently, Dela Pea does not fall within the definition of an indispensable party. As the Court has explained, Civil Case No. 515-M-99 is an action for quieting of title, intended to remove any cloud upon San Pedros title to the subject properties. The real estate mortgages in favor of Ong annotated on the TCTs o f the subject properties constitute the cloud to be removed. Thus, the crux of the controversy is the title of San Pedro to the subject properties vis--vis that of Ong, for the determination of which, Dela Peas participation is not an absolute necessity. The judgment of the RTC upholding San Pedros title to the subject properties over Ongs, or even if it we re the other way around, would not have affected Dela Pea, because Dela Pea never claimed title to the subject properties; she only misrepresented that she had authority to mortgage the same on behalf of the registered owners, namely, the spouses Narciso. After she successfully, albeit, fraudulently, obtained the loan using the subject properties as mortgage, her interest in the same had ended. She may have perpetrated fraud for which she may be held liable but, clearly, these may be established in a separate and subsequent case. Her presence in the proceedings before the RTC would have only permitted complete relief since the said court could have already determined therein her liability for the damages she had caused to any of the parties, but it does not make her presence indispensable. San Pedros title proved to be superior to that of Ongs. The subject properties were sold to him prior to the mortgage of th e same to Ong. The spouses Narciso, registered owners of the subject properties, admitted the sale thereof to San Pedro and denied giving any authority to Dela Pea to mortgage the said properties. An expert witness affirmed that the signature of Guillermo Narciso on one of the purported SPAs in favor of Dela Pea was forged, while the signatures of his wife Brigida Santiago on both SPAs were spurious. Ong and Caballes cannot even point out any defect in San Pedros title to the subject properties. Ong can only assert better right to the same as allegedly a mortgagee in good faith. However, the well-entrenched legal principle in our jurisprudence requires a higher degree of diligence to be exercised by the mortgagee when he is not directly dealing with the registered owner of real property. As the Court enunciated in Abad v. Guimba34: While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for [one] to determine if there are any flaws in the title of the transferor, or in [the] capacity to transfer the land. Although the instant case does not involve a sale but only a mortgage, the same rule applies inasmuch as the law itself includes a mortgagee in the term "purchaser." The Court has stressed time and again that every person dealing with an agent is put upon inquiry, and must discover upon his peril the authority of the agent, and this is especially true where the act of the agent is of unusual nature. If a person makes no inquiry, he is chargeable with knowledge of the agents authority, and his ignorance of that authority will not be any excuse.35 In the more recent case of Bank of Commerce v. San Pablo, Jr.,36 the Court elucidated: The Bank of Commerce clearly failed to observe the required degree of caution in ascertaining the genuineness and extent of the authority of Santos to mortgage the subject property. It should not have simply relied on the face of the documents submitted by Santos, as its undertaking to lend a considerable amount of money required of it a greater degree of diligence. That the person applying for the loan is other than the registered owner of the real property being mortgaged should have already raised a red flag and which should have induced the Bank of Commerce to make inquiries into and confirm Santos authority to mortgage the Spouses San Pablos property. A person who deliberately ignores a significant fact that could create suspicion in an otherwise reasonable person is not an innocent purchaser for value(Emphasis ours.) Considering Ongs undue haste in granting the loan without inquiring into the ownership of the subject properties being mortg aged, as well as the authority of the supposed agent to constitute the mortgages on behalf of the owners, he cannot be considered a mortgagee-in-good-faith. Ongs averment that he exercised prudence in the loan-mortgage transaction is debunked by his own admission that he merely relied on Caballes representations thereon, without personally meeting or speaking with Dela Pea, the supposed agent, or the spouses Narciso, the registered owners of the subject properties. Although he instructed Caballes to check the TCTs of the subject properties, he did not bother to personally meet Dela Pea and ascertain the genuineness and authenticity of the latters authority to mortgage the same on behalf of the spouses Narciso es pecially considering that the one mortgaging the property is not the registered owner. The real estate mortgages constituted on the subject properties based on false and fraudulent SPAs are void ab initio. In Veloso and Rosales v. La Urbana,37 the Court ruled that forged powers of attorney are without force and effect and, thus, nullified the mortgage constituted on the strength thereof: In view of the forgoing facts, the court held that pursuant to Article 1714 of the Civil Code and under the Torrens Act in force in this jurisdiction, the forged powers of attorney prepared by Del Mar were without force and effect and that the registration of the mortgages constituted by virtue thereof were likewise null and void and without force and effect, and that they could not in any way prejudice the rights of the plaintiff as the registered owner of her participations in the properties in question. Consequently, the foreclosure proceedings on the mortgaged properties are likewise void ab initio. Since Ong cannot be deemed a mortgagee-in-good-faith nor an innocent purchaser for value of the subject properties at the auction sale thereof, his claim to the said properties cannot prevail over that of San Pedro. The Courts ruling, however, is without prejudice to the right of Ong to proceed against those who perpetrated the fraud to his prejudice. WHEREFORE, in view of the foregoing, the instant Petition is GRANTED. The Decision dated 29 December 2006 rendered by the Court of Appeals in CA-G.R. CV No. 79399 is REVERSED and SET ASIDE. The Decision dated 21 February 2003 of the Regional Trial Court of Malolos, Bulacan, Branch 19, in Civil Case No. 515-M-99, is hereby REINSTATED with the modification that the portion ordering Adora Dela Pea to pay Willy G. Ong the sum of P245,000.00 plus legal interest, is DELETED. SO ORDERED.

DOMAGAS vs. JENSEN GRN 158407 158407 January 17,2005 Callejo, Sr. J.: FACTS: Petitioner Domagas filed for a forcible entry case against Jensen. Summons and complaint were not served on respondent because the latter was apparently out of the country but it was received by respondents brother Oscar who was then at the respondents house. The trial court rendered a decision in favor of petitioner. Respondent did not appeal. August 20, 2000, respondent filed a complaint against petitioner for the annulment of the decision of MTC since the service of summons was ineffective, the respondent being out of the country. The RTC decided in favor of Jensen since there was no valid service of the complaint and summons. The CA affirmed the decision, ruling that the case was an ejectment case which is an action quasi in rem. ISSUE: Whether or not the action of petitioner in the MTC against respondent is an action in personam or quasi in rem. RULING: The action of the petitioner fro forcible entry is a real action and one in personam. The settled rule is that the aim and object of an action determine its character. Whether a proceeding is in rem or in personam or in quasi in rem is determined by its nature and purpose, and by these only. A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may involve his right, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with the mandate of the court. The purpose of a proceeding in personam is to impose, through the judgment of a court, some responsibility or liability directly upon the person of the defendant. Of this character are suits to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on him. An action in

personam is said to be one which has for its object a judgment against a person, as distinguished from a judgment against the proprietary to determine its state Actions for recovery of real property are in personam. Actions quasi in rem deal with the status, ownership or liability of a particular property but which are intended to operate on these questions only as between the particular parties to the proceedings and not to ascertain or cut off the rights or interest of all possible claimants. The judgments therein are binding only upon the parties who joined in the action. Spouses Yu vs. Pacleb (G.R. No. 172172, Feb. 24, 2009) FACTS: Baltazar Pacleb and his late first wife Angelita Chan are registered owners of an 18,000-square meter parcel of land in Barrio Langcaan, Dasmarias,Cavite, covered by TCT No. T-118375 (Langcaan Property). On Feb. 27, 1992, Spouses Baltazar Pacleb and Angelita Chan sold the property to Rebecca del Rosario. On May 7, 1992, the lot was thereafter sold to Ruperto Javier. On Nov. 10, 1992, a Contract to Sell was entered into between Javier and Spouses Yu wherein petitioner spouses agreed to pay Javier P200,000 as partial payment and P400,000 to be paid upon execution of the contract, and Javier undertook to deliver possession of the Langcaan Property and to sign a deed of absolute sale within 30 days from execution of contract. All the aforementioned sales were not registered. In 1993, spouses Yu filed a complaint with the RTC for specific performance and damages against Javier, contending that Javier represented to them that the Langcaan Property was not tenanted, but after they already paid P200,000 as initial payment and entered into the agreement of sale on Sept. 11, 1992, they discovered that it was tenanted by Ramon Pacleb, son of Baltazar Pacleb. Subsequently, spouses Yu demanded for the cancellation of the agreement and for the return of their initial payment. On March 10, 1995, spouses Yu, Ramon, and the latters wife executed a Kusangloob na Pagsasauli ng Lupang Sakahan at Pagpapahayag ng Pagtalikod sa Karapatan , where spouses Yu paid Ramon P500,000 in exchange for the waiver of his tenancy rights over the subject property. But on Oct. 12, 1995, Baltazar Pacleb filed a complaint for annulment of the deed of sale to Javier, alleging that the deed of sale executed between him and his late first wife Angelita was spurious as their signatures were forgeries. Meanwhile, on Nov. 23, 1995, spouses Yu filed an action for forcible entry against respondent with the MTC alleging that they had prior physical possession of the Langcaan Property through their trustee Ramon until the latter was ousted by respondent in Sept. 1995. MTC ruled in favor of spouses Yu, affirmed by the RTC, but set aside by CA. His first action for annulment of deed of sale having been dismissed, respondent filed action for removal of cloud from title on May 29, 1996, contending that the deed of sale between him and his late first wife and Rebecca del Rosario could not have been executed on Feb. 27, 1992, because on said date, he was residing in the U.S. and his late first wife died 20 years ago. During pendency of the case, respondent died, succeeded by his surviving spouse and representatives of children with his first wife. RTC held that spouses Yu are purchasers in good faith, but on appeal, CA reversed and set aside lower courts decision and ordered for the cancellation of the annotation in favor of spouses Yu on the TCT of Langcaan Property. ISSUE: Whether or not petitioner spouses are innocent purchasers for value and in good faith. HELD: Petitioner spouses are not innocent purchasers for value, and they are not in good faith. Several facts should have put petitioner spouses on inquiry as to the alleged rights of their vendor, Javier, over the Langcaan property. First, the property remains to be registered in the name of respondent despite the 2 Deeds of Absolute Sale from respondent to Del Rosario then from the latter to Javier, and both deeds were not even annotated in the title of the subject property. Second, the 2 deeds of absolute sale were executed only 2 months apart containing identical provisions. Third, the fact that the Langcaan Property is in the possession of Ramon, son of the registered owners, this should have made petitioner spouses suspicious as to the veracity of the alleged title of their vendor, Javier. Petitioner spouses could have easily verified the true status of the subject property from Ramons wife, since the latter is their relative. The law protects to a greater degree a purchaser who buys from the registered owner himself. Corollarily, it requires a higher degree of prudence from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land. Therefore, petitioner spouses cannot be considered as innocent purchasers in good faith, and respondent has a better right over the Langcaan Property as the true owner thereof.