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ANTONIO V REGISTER OF DEEDS

Nature of the Case


This is a petition for review under Rule 45 of the
Rules of Court, assailing the Decision[1] dated May 26,
2008 and Resolution[2] dated December 5, 2008 of the
Court of Appeals (CA) in CA-G.R. SP No. 89145.
Factual Antecedents
Since March 21, 1978, petitioner Remedios
Antonino (Antonino) had been leasing a residential
property located at Makati Cityand owned by private
respondent Tan Tian Su (Su). Under the governing lease
contract, Antonino was accorded with the right of first
refusal in the event Su would decide to sell the subject
property.[3]
On July 7, 2004, the parties executed a document
denominated as Undertaking Agreement[4] where Su
agreed to sell to Antonino the subject property
for P39,500,000.00. However, in view of a disagreement
as to who between them would shoulder the payment of
the capital gains tax, the sale did not proceed as
intended.[5]
On July 9, 2004, Antonino filed a complaint
against Su with the Regional Trial Court (RTC)
of Makati City, for the reimbursement of the cost of
repairs on the subject property and payment of
damages. The complaint was raffled to Branch 149 and
docketed as Civil Case No. 04-802.[6] Later that same
day, Antonino filed an amended complaint to enforce the
Undertaking Agreement and compel Su to sell to her the
subject property.[7]
In an Order[8] dated December 8, 2004, the RTC
dismissed Antoninos complaint on the grounds of
improper venue and non-payment of the appropriate
docket fees. According to the RTC, Antoninos complaint is
one for specific performance, damages and sum of
money, which are personal actions that should have been
filed in the court of the place where any of the parties
resides. Antonino and Su reside in Muntinlupa
and Manila, respectively, thus Makati City is not the
proper venue. Specifically:
The instant case is an action
for specific performance with damages,
a personal action, which may be
commenced and tried where the
plaintiff or any of the principal plaintiffs
resides, or where the defendant or any
of the principal defendants resides
(Section 2, Rule 5 of the Rules of
Court). Records show that plaintiff is a
resident of 706 Acacia
Avenue, Ayala AlabangVillage, Muntinlu
pa City while defendant is a resident of
550 Sto. Cristo St.,
Binondo, Manila. Hence, the instant
case should have been filed in the place
of residence of either the plaintiff or
defendant, at the election of the
plaintiff. Contrary to the claim of
plaintiff, the alleged written agreements
presented by the plaintiff in her
Amended Complaint do not contain any
stipulation as to the venue of actions. x
x x[9]
The RTC also ruled that it did not acquire
jurisdiction over Antoninos complaint in view of her
failure to pay the correct amount of docket
fees. Citing Manchester Development Corporation v.
Court of Appeals,[10] the RTC ruled that:

Anent the non-payment of


filing fees on the Amended Complaint,
plaintiff alleges that no new assessment
was made when the Amended
Complaint was filed since there [were]
no additional damages prayed
for. The Manchester decision has been
recently relaxed as to allow additional
payment of the necessary fees if the
Honorable Court so orders an
assessment thereof.
The Court is not persuaded.
The Amended Complaint,
which the Court notes to have been
filed at 4:00 oclock in the afternoon or
few hours after the initial complaint was
filed, further prays that judgment be
rendered ordering defendant to sell his
property located at 1623 Cypress,
Dasmarias Village, Makati City covered
by TCT No. 426900 to plaintiff in
accordance with the terms and
conditions stipulated in their agreement
dated July 7, 2004 and ordering
defendant to desist from selling his
property to any other party other than
plaintiff., which makes the instant case
also an action for Specific Performance
in addition to the claim for
Damages. However, the value of the
described property was not stated in
the prayer and no docket fees were
paid. Thus, following the ruling of the
Supreme Court in the case of
Manchester Development Corporation
vs. Court of Appeals, G.R. No. 75919,
May 7, 1987, that the Court acquires
jurisdiction over any case only upon the
payment of the prescribed docket fee,
the instant case is hereby dismissed.[11]
On December 23, 2004, Su filed an Omnibus
Motion,[12] praying for the cancellation of the notice of lis
pendens, which Antonino caused to be annotated on the
title covering the subject property and the issuance of a
summary judgment on his counterclaims. Su, among
others, alleged the propriety of cancelling the notice of lis
pendens in view of the dismissal of the complaint and
Antoninos failure to appeal therefrom.
On January 3, 2005, Antonino filed a Motion for
Reconsideration,[13] claiming that her complaint is a real
action and the location of the subject property is
determinative of its venue. Alternatively, she submitted
a certification issued by the Commission on Elections,
stating that she is a resident of Makati City. She then
prayed for the reinstatement of her complaint and
issuance of an order directing the clerk of court to assess
the proper docket fees. This was denied by the RTC in an
Order[14] dated January 6, 2005, holding that there was
non-compliance with Sections 4 and 5 of Rule 15 of the
Rules of Court.
Antonino thus filed a Motion for
Reconsideration[15] dated January 21, 2005, claiming that
there was due observance of the rules on
motions. Antonino alleged that her motion for
reconsideration from the RTCs December 8, 2004 was set
for hearing on January 7, 2005 and Su received a copy
thereof on January 6, 2005. Antonino pleaded for a liberal
interpretation of the rules as Su was notified of her
motion before the hearing thereon and was not in any
way prejudiced. She also reiterated her arguments for
the reinstatement of her complaint.

In a Joint Resolution[16] dated February 24, 2005,


the RTC denied Sus Omnibus Motion and Antoninos
January 21, 2005 Motion for Reconsideration. The RTC
refused to cancel the notice of lis pendens, holding that:
It is quite clear that the
dismissal of the Amended Complaint
was anchored on two grounds, e.g. (1)
for improper venue and (2) for nonpayment of docket fee. It is elementary
that when a complaint was dismissed
based on these grounds[,] the court did
not resolve the case on the merits.
Moreover, a court cannot acquire
jurisdiction over the subject matter of a
case unless the docket fees are paid x
x x. Thus, the cause of action laid down
in the complaint remains unresolved for
proper re-filing before the proper
court. Furthermore, the Supreme Court
said: The cancellation of such a
precautionary notice is therefore also a
mere incident in the action, and may be
ordered by the Court having jurisdiction
of it at any given time. x x x[17]
The RTC maintained its earlier ruling that
Antoninos Motion for Reconsideration from the December
8, 2004 Order is pro-forma and did not suspend the
running of the period to file an appeal. The RTC also
reiterated that Antoninos complaint is a personal action
such that the proper venue therefore is either the City
of Manila or MuntinlupaCity.
On April 1, 2005, Antonino filed with the CA a
petition for annulment of judgment.[18] Antonino prayed
for the nullification of the RTCs Order dated December 8,
2004 dismissing her complaint, Order dated January 6,
2005 denying her motion for reconsideration and Joint
Resolution dated February 24, 2005 denying her motion
for reconsideration of the January 6, 2005
Order. According to Antonino, the RTC committed grave
abuse of discretion amounting to lack of jurisdiction when
it ruled that her action for the enforcement of the
Undertaking Agreement is personal and when it deprived
her of an opportunity to pay the correct amount of docket
fees. The RTCs grave abuse of discretion, Antonino
posited, was likewise exhibited by its strict application of
the rules on motions and summary denial of her motion
for reconsideration.
In its Decision[19] dated May 26, 2008, the CA
dismissed Antoninos petition. While the CA recognized
Antoninos faulty choice of remedy, it proceeded to
resolve the issues she raised relative to the dismissal of
her complaint. Thus:
It should be stressed that in
this case, there is neither allegation in
the petition, nor sufficient proof
adduced showing highly exceptional
circumstance to justify the failure of
petitioner to avail of the remedies of
appeal, petition for relief or other
appropriate remedy through no fault
attributable to [her] before filing this
petition for annulment of judgment. In
Manipor v. Ricafort, the Supreme Court
held, thus:
If the
petitioner failed to
avail of such
remedies without
sufficient justification,
he cannot avail of an
action for annulment
because, otherwise,

he would benefit from


his own inaction or
negligence.
Notwithstanding the foregoing
procedural infirmity, and in the interest
of justice, we shall look into the issues
raised and decide the case on the
merit.
xxxx
A perusal of the allegations of
the complaint unambiguously shows
that petitioner seeks to enforce the
commitment of private respondent to
sell his property in accordance with the
terms and conditions of their purported
agreement dated July 7, 2004. By
implication, petitioner does not
question the ownership of private
respondent over the property nor does
she claim, by any color of title, right to
possess the property or to its
recovery. The action is simply for the
enforcement of a supposed contract,
and thus, unmistakably a personal
action.
xxxx
Guided by the above rule
(Section 2 of the 1997 Rules of Court),
petitioner should have filed the case
either in Muntinlupa City, where she
resides, or in Manila, where private
respondent maintains his
residence. Other than filing the
complaint in any of these places,
petitioner proceeds with the risk of a
possible dismissal of her
case. Unfortunately for petitioner,
private respondent forthwith raised
improper venue as an affirmative
defense and his stand was sustained by
trial court, thus, resulting to the
dismissal of the case.
Further, it is important to note
that in a petition for annulment of
judgment based on lack of jurisdiction,
the petitioner must show not merely an
abuse of jurisdictional discretion but an
absolute lack of jurisdiction. The
concept of lack of jurisdiction as a
ground to annul a judgment does not
embrace abuse of
discretion. Petitioner, by claiming
grave abuse of discretion on the part of
the trial court, actually concedes and
presupposes the jurisdiction of the
court to take cognizance of the
case. She only assails the manner in
which the trial court formulated its
judgment in the exercise of its
jurisdiction. It follows that petitioner
cannot use lack of jurisdiction as
ground to annul the judgment by
claiming grave abuse of discretion. In
this case where the court refused to
exercise jurisdiction due to improper
venue, neither lack of jurisdiction nor
grave abuse of discretion is available to
challenge the assailed order of
dismissal of the trial court.[20] (Citations
omitted)

Antonino filed a motion for reconsideration, which


was denied by the CA in its Resolution dated December 5,
2008. [21]

A petition for annulment of judgment


cannot serve as a substitute for the lost remedy of
an appeal.

Issue
The sole issue for the resolution of this Court is the
propriety of Antoninos use of the remedy of a petition for
annulment of judgment as against the final and executory
orders of the RTC.
Our Ruling
In Ramos v. Judge Combong, Jr.,[22] this Court
expounded that the remedy of annulment of judgment is
only available under certain exceptional circumstances as
this is adverse to the concept of immutability of final
judgments:
Annulment of judgment is a
recourse equitable in character, allowed
only in exceptional cases as where
there is no available or other adequate
remedy. Rule 47 of the 1997 Rules of
Civil Procedure, as amended, governs
actions for annulment of judgments or
final orders and resolutions, and Section
2 thereof explicitly provides only two
grounds for annulment of
judgment, i.e., extrinsic fraud and lack
of jurisdiction. The underlying reason is
traceable to the notion that annulling
final judgments goes against the grain
of finality of judgment. Litigation must
end and terminate sometime and
somewhere, and it is essential to an
effective administration of justice that
once a judgment has become final, the
issue or cause involved therein should
be laid to rest. The basic rule of finality
of judgment is grounded on the
fundamental principle of public policy
and sound practice that at the risk of
occasional error, the judgment of courts
and the award of quasi-judicial agencies
must become final at some definite
date fixed by law.[23] (Citations omitted)
In Barco v. Court of Appeals,[24] this Court
emphasized that only void judgments, by reason of
extrinsic fraud or the courts lack of jurisdiction, are
susceptible to being annulled.
The law sanctions the
annulment of certain judgments which,
though final, are ultimately
void. Annulment of judgment is an
equitable principle not because it allows
a party-litigant another opportunity to
reopen a judgment that has long lapsed
into finality but because it enables him
to be discharged from the burden of
being bound to a judgment that is an
absolute nullity to begin with.[25]
Apart from the requirement that the existence of
extrinsic fraud or lack of jurisdiction should be amply
demonstrated, one who desires to avail this remedy must
convince that the ordinary and other appropriate
remedies, such as an appeal, are no longer available for
causes not attributable to him. This is clearly provided
under Section 1, Rule 47 of the Rules of Court.
Antoninos recourse to annulment of judgment is
seriously flawed and the reasons are patent. There is
therefore no reason to disturb the questioned issuances
of the RTC that are already final and executory.

First, Antonino cannot pursue the annulment of


the various issuances of the RTC, primary of which is the
Order dated December 8, 2004, in order to avoid the
adverse consequences of their becoming final and
executory because of her neglect in utilizing the ordinary
remedies available. Antonino did not proffer any
explanation for her failure to appeal the RTCs Order
dated December 8, 2004 and, thereafter, the Order dated
January 6, 2005, denying her Motion for Reconsideration
dated January 3, 2005. Knowledge of rudimentary
remedial rules immediately indicates that an appeal was
already available from the Order dated December 8,
2004, as this is a final order as contemplated under
Sections 2, 3 and 5 of Rule 41 of the Rules of Court, and
there was no legal compulsion for Antonino to move for
reconsideration. Nonetheless, since there is no bar for
her to file a motion for reconsideration so as to give the
RTC opportunity to reverse itself before elevating the
matter for the appellate courts review, appeal is the
prescribed remedy from the denial of such motion and
not another motion for reconsideration. While Section 1
of Rule 41 of the Rules of Court includes an order
denying a motion for new trial or reconsideration in the
enumeration of unappealable matters, this Court clarified
in Quelnan v. VHF Philippines, Inc.[26] that such refers to a
motion for reconsideration of an interlocutory order and
the denial of a motion for reconsideration of an order of
dismissal is a final order, therefore,
appealable. Moreover, a second motion for
reconsideration from a final judgment or order is
prohibited, hence, can never interrupt the period to
perfect an appeal.
The RTC may have been overly strict in the
observance of the three-day notice rule under Section 4,
Rule 15 of the Rules of Court contrary to liberal stance
taken by this Court in cases when the purpose of such
rule can be achieved by giving the opposing party
sufficient time to study and controvert the motion.
[27]
Justice and equity would thus suggest that the fifteenday period within which Antonino can appeal should be
counted from her receipt on January 7, 2005[28] of the
Order dated January 6, 2005 denying her Motion for
Reconsideration dated January 3, 2005. Unfortunately,
even liberality proved to be inadequate to neutralize the
adverse consequences of Antoninos negligence as she
allowed such period to lapse without filing an appeal,
erroneously believing that a second motion for
reconsideration is the proper remedy. While a second
motion for reconsideration is not prohibited insofar as
interlocutory orders are concerned,[29] the Orders dated
December 8, 2004 and January 6, 2005 are final orders.
In fact, even if the period to appeal would be
counted from Antoninos receipt of the Order dated
February 24, 2005 denying her second motion for
reconsideration, she interposed no appeal and filed a
petition for annulment of judgment on April 1, 2005
instead. This, for sure, constitutes a categorical
admission that the assailed issuances of the RTC had
already become final and executory in view of her
omission to perfect an appeal within the mandated
period. By no means can her petition for annulment of
judgment prosper as that would, in effect, sanction her
blatant negligence or sheer obliviousness to proper
procedure.
Let it be stressed at the outset
that before a party can avail of the
reliefs provided for by Rule 47, i.e.,
annulment of judgments, final orders,
and resolutions, it is a condition sine
qua nonthat one must have failed to
move for new trial in, or appeal from, or

file a petition for relief against said


issuances or take other appropriate
remedies thereon, through no fault
attributable to him. If he failed to avail
of those cited remedies without
sufficient justification, he cannot resort
to the action for annulment provided in
Rule 47, for otherwise he would benefit
from his own inaction or negligence.
[30]
(Citation omitted)
Grave abuse of
discretion is not a ground to annul
a final and executory judgment.
Second, a petition for annulment of judgment can
only be based on extrinsic fraud and lack of
jurisdiction and cannot prosper on the basis of grave
abuse of discretion. By anchoring her petition on the
alleged grave abuse of discretion that attended the
dismissal of her complaint and the denial of her two (2)
motions for reconsideration, Antonino, is, in effect,
enlarging the concept of lack of jurisdiction. As this
Court previously clarified in Republic of the Philippines v.
G Holdings, Inc.,[31] lack of jurisdiction as a ground for
the annulment of judgments pertains to lack of
jurisdiction over the person of the defending party or over
the subject matter of the claim. It does not contemplate
grave abuse of discretion considering that jurisdiction
is different from the exercise thereof. As ruled in Tolentino
v. Judge Leviste:[32]
Jurisdiction is not the same as the
exercise of jurisdiction. As
distinguished from the exercise of
jurisdiction, jurisdiction is the authority
to decide a cause, and not the decision
rendered therein. Where there is
jurisdiction over the person and the
subject matter, the decision on all other
questions arising in the case is but an
exercise of the jurisdiction. And the
errors which the court may commit in
the exercise of jurisdiction are merely
errors of judgment which are the proper
subject of an appeal.[33] (Citation
omitted)
In fact, the RTC did not gravely abuse its discretion
or err in dismissing Antoninos complaint. The RTC was
correct in classifying Antoninos cause of action as
personal and in holding that it was instituted in the wrong
venue. Personal action is one that is founded on privity of
contracts between the parties; and in which the plaintiff
usually seeks the recovery of personal property, the
enforcement of a contract, or recovery of damages. Real
action, on the other hand, is one anchored on the privity
of real estate, where the plaintiff seeks the recovery of
ownership or possession of real property or interest in it.
[34]
Antoninos following allegations in her amended
complaint show that one of her causes of action is one for
the enforcement or consummation of a contract, hence, a
personal action:
XII
On July 7, 2004, plaintiff and
defendant executed a document
entitled Undertaking Agreement
(copy of which is hereto attached as
Annex H) wherein defendant agreed to
sell said property to plaintiff who has
leased said property since March
21, 1978 up to the present with the
plaintiff paying a downpayment of
$50,000.00 US dollars the following
day, July 8, 2004.

xxxx
XIV
Defendant also refused to accept the
$50,000.00 US Dollars and was about to
tear up the document they previously
signed the day before when plaintiff
prevented him from doing so.
XV
Consequently, plaintiff
discovered that defendant was already
negotiating to sell the said property to
another Chinese national who
incidentally is also one of plaintiffs
buyers.
xxxx
Premises considered, in the
interest of substantial justice, it is most
respectfully prayed that after due
hearing that judgment be rendered:
1.
Ordering defendant to
sell his property located at
1623 Cypress, Dasmarias Village, Mak
ati City covered by TCT No. 426900 to
plaintiff in accordance with the terms
and conditions stipulated in their
agreement dated July 7, 2004.
x x x x[35]
Antoninos cause of action is premised on her claim
that there has already been a perfected contract of sale
by virtue of their execution of the Undertaking Agreement
and Su had refused to comply with his obligations as
seller. However, by claiming the existence of a perfected
contract of sale, it does not mean that Antonino acquired
title to the subject property. She does not allege
otherwise and tacitly acknowledges Sus title to the
subject property by asking for the consummation of the
sale.
That there is a private document supposedly
evidencing the alleged sale does not confer to Antonino
title to the subject property. Ownership is transferred
when there is actual or constructive delivery and the
thing is considered delivered when it is placed in the
control or possession of the buyer or when the sale is
made through a public instrument and the contrary does
not appear or cannot be clearly inferred.[36] In other
words, Antoninos complaint is not in the nature of a real
action as ownership of the subject property is not at
issue.
Moreover, that the object of the alleged sale is a
real property does not make Antoninos complaint real in
nature in the absence of a contrary claim of title. After a
contract of sale is perfected, the right of the parties to
reciprocally demand performance, thus consummation,
arises the vendee may require the vendor to compel the
transfer the title to the object of the sale[37] and the
vendor may require the payment of the purchase price.
[38]
The action to cause the consummation of a sale does
not involve an adverse claim of ownership as the
vendors title is recognized and the vendor is simply
being asked to perform an act, specifically, the transfer of
such title by any of the recognized modes of delivery.
Considering that the filing of the complaint in a
wrong venue sufficed for the dismissal thereof, it would
be superfluous to discuss if Antoninos non-payment of
the correct docket fees likewise warranted it.

CIVIL CASE NO. Q01At any rate, even if the RTC erred in ordering the
dismissal of her complaint, such had already become final
and executory and will not be disturbed as it had
jurisdiction and it was not alleged, much less, proved that
there was extrinsic fraud. Moreover, annulment of the
assailed orders of the RTC will not issue if ordinary
remedies, such as an appeal, were lost and were not
availed of because of Antoninos fault. Litigation should
end and terminate sometime and somewhere. It is
essential to an effective and efficient administration of
justice that, once a judgment has become final, the
winning party should not be deprived of the fruits of the
verdict.[39]
WHEREFORE, premises considered, the petition
is DENIED for lack of merit and the Decision dated May
26, 2008 and Resolution dated December 5, 2008 of the
Court of Appeals in CA-G.R. SP No. 89145 are
hereby AFFIRMED

Sps. Abrenica V Law Firm of Abrenica

The present case is a continuation of G.R. No.


169420[1] decided by this Court on 22 September 2006.
For brevity, we quote the relevant facts narrated in that
case:
Petitioner Atty. Erlando A.
Abrenica was a partner of individual
respondents, Attys. Danilo N. Tungol
and Abelardo M. Tibayan, in the Law
Firm of Abrenica, Tungol and Tibayan
(the firm).

1.
Ordering the
respondent Atty. Erlando
Abrenica to render full
accounting of the amounts he
received as profits from the
sale and resale of the Lemery
property in the amount of
4,524,000.00;
2.
Ordering the
respondent Atty. Erlando
Abrenica to remit to the law
firm the said amount of
4,524,000.00 plus interest of
12% per annum from the time
he received the same and
converted the same to his own
personal use or from
September 1997 until fully
paid; and
3.
costs of suit.

42959

To pay the

CIVIL CASE NO. Q01-

1.
Ordering Atty.
Erlando Abrenica to render a
full accounting of the amounts
he received under the retainer
agreement between the law
firm and Atlanta Industries Inc.
and Atlanta Land Corporation
in the amount of 320,000.00.

In 1998, respondents filed with


the Securities and Exchange
Commission (SEC) two cases against
petitioner. The first was SEC Case No.
05-98-5959, for Accounting and Return
and Transfer of Partnership Funds With
Damages and Application for Issuance
of Preliminary Attachment, where they
alleged that petitioner refused to return
partnership funds representing profits
from the sale of a parcel of land in
Lemery, Batangas. The second was SEC
Case No. 10-98-6123, also for
Accounting and Return and Transfer of
Partnership Funds where respondents
sought to recover from petitioner
retainer fees that he received from two
clients of the firm and the balance of
the cash advance that he obtained in
1997.

2.
Ordering Atty.
Erlando Abrenica to remit to
the law firm the amount
received by him under the
Retainer Agreement with
Atlanta Industries, Inc. and
Atlanta Land Corporation in
the amount of 320,000.00
plus interests of 12% per
annum from June 1998 until
fully paid;

The SEC initially heard the


cases but they were later transferred to
the Regional Trial Court of Quezon City
pursuant to Republic Act No. 8799,
which transferred jurisdiction over intracorporate controversies from the SEC to
the courts. In a Consolidated Decision
dated November 23, 2004, the Regional
Trial Court of Quezon City, Branch 226,
held that:

4.
costs of suit.

WHEREFORE, in view
of all the foregoing, judgment
is hereby rendered as follows:

42948

3.
Ordering Atty.
Erlando Abrenica to pay the
law firm his balance on his
cash advance in the amount of
25,000.00 with interest of
12% per annum from the date
this decision becomes final;
and
To pay the

SO ORDERED.
Petitioner received a copy of
the decision on December 17, 2004. On
December 21, 2004, he filed a notice of
appeal under Rule 41 and paid the
required appeal fees.
Two days later, respondents
filed a Motion for Issuance of Writ of
Execution pursuant to A.M. 01-2-04-SC,
which provides that decisions in intracorporate disputes are immediately

executory and not subject to appeal


unless stayed by an appellate court.
On January 7, 2005,
respondents filed an Opposition (To
Defendant's Notice of Appeal) on the
ground that it violated A.M. No. 04-907-SC[2] prescribing appeal
by certiorari under Rule 43 as the
correct mode of appeal from the trial
courts decisions on intra-corporate
disputes.
Petitioner thereafter filed a
Reply with Manifestation (To the
Opposition to Defendant's Notice of
Appeal) and an Opposition to
respondents motion for execution.
On May 11, 2005, the trial
court issued an Order requiring
petitioner to show cause why it should
take cognizance of the notice of appeal
in view of A.M. No. 04-9-07-SC.
Petitioner did not comply with the said
Order. Instead, on June 10, 2005, he
filed with the Court of Appeals a Motion
for Leave of Court to Admit Attached
Petition for Review under Rule 43 of the
Revised Rules of Court. Respondents
opposed the motion.

vested right in the effects of the finality


of the decision, which should not be
disturbed any longer.
WHEREFORE, the petition
is DENIED. The Court of Appeals
Resolutions dated June 29, 2005 and
August 23, 2005 in CA-G.R. SP No.
90076 denying admission of petitioners
Petition for Review are AFFIRMED.

Thus, respondents sought the execution of the


judgment. On 11 April 2007, G.R. No. 169420 became
final and executory.[4]
Apparently not wanting to be bound by this
Courts Decision in G.R. No. 169420, petitioners Erlando
and Joena subsequently filed with the Court of Appeals
(CA) a Petition for Annulment of Judgment with prayer for
the issuance of a writ of preliminary injunction and/or
temporary restraining order, docketed as CA-G.R. SP No.
98679. The Petition for Annulment of Judgment assailed
the merits of the RTCs Decision in Civil Case Nos. Q-0142948 and Q-01-42959, subject of G.R. No. 169420. In
that Petition for Annulment, Petitioners raised the
following grounds:

I.

The lower court erred in


concluding that both
petitioners and respondents
did not present direct
documentary evidence to
substantiate [their] respective
claims.

II.

The lower court erred in


concluding that both
petitioners and respondents
relied mainly on testimonial
evidence to prove their
respective position[s].

III.

The lower court erred in not


ruling that the real estate
transaction entered into by
said petitioners and spouses
Roman and Amalia Aguzar was
a personal transaction and not
a law partnership transaction.

IV.

The lower court erred in


ruling that the testimonies of
the respondents are credible.

V.

The lower court erred in


ruling that the purchase price
for the lot involved was 3
million and not 8 million.

VI.

The lower court erred in


ruling that petitioners retainer
agreement with Atlanta
Industries, Inc. was a law
partnership transaction.

VII.

The lower court erred when it


failed to rule on said
petitioners permissive
counterclaim relative to the
various personal loans secured
by respondents.

The Court of Appeals denied


petitioner's motion in its assailed
Resolution dated June 29, 2005 x x x.

x
x

xx

xx
xxx

The Court of Appeals also


denied petitioner's motion for
reconsideration in its August 23, 2005
Resolution.

Given the foregoing facts, we dismissed the


Petition in G.R. No. 169420 on the ground that the appeal
filed by petitioner was the wrong remedy. For that reason,
we held as follows:[3]
Time and again, this Court has
upheld dismissals of incorrect appeals,
even if these were timely filed.
In Lanzaderas v. Amethyst Security and
General Services, Inc., this Court
affirmed the dismissal by the Court of
Appeals of a petition for review under
Rule 43 to question a decision because
the proper mode of appeal should have
been a petition for certiorari under Rule
65. x x x.

xxx

xxx

xx

Indeed, litigations should, and


do, come to an end. Public interest
demands an end to every litigation and
a belated effort to reopen a case that
has already attained finality will serve
no purpose other than to delay the
administration of justice. In the instant
case, the trial court's decision became
final and executory on January 3, 2005.
Respondents had already acquired a

VIII.

The lower court not only erred


in the exercise of its
jurisdiction but more
importantly it acted without
jurisdiction or with lack of
jurisdiction. [5]

respective claims, as it
relied purely on the gist
of what its personnel did
as regards the transcript
of stenographic notes the
latter [sic] in collusion
with the respondents.
II.

We note that petitioners were married on 28 May


1998. The cases filed with the Securities and Exchange
Commission (SEC) on 6 May 1998 and 15 October 1998
were filed against petitioner Erlando only. It was with the
filing of CA-G.R. SP No. 98679 on 24 April 2007 that Joena
joined Erlando as a co-petitioner.
On 26 April 2007, the CA issued a
Resolution[6] dismissing the Petition. First, it reasoned
that the remedy of annulment of judgment under Rule 47
of the Rules of Court is available only when the ordinary
remedies of new trial, appeal, petition for relief or other
appropriate remedies are no longer available through no
fault of petitioners.[7]Considering that the dismissal of the
appeal was directly attributable to them, the remedy
under Rule 47 was no longer available.

III. The lower court deliberately


erred in not ruling that the
real estate transaction
entered into by said
petitioners and spouses
Roman and Amalia Aguzar
was a personal transaction
and not a law partnership
transaction for the same
reasons as stated in Nos.
1 and II above.

Second, the CA stated that the grounds alleged


in the Petition delved on the merits of the case and the
appreciation by the trial court of the evidence presented
to the latter. Under Rule 47, the grounds for annulment
are limited only to extrinsic fraud and lack of jurisdiction.

IV. The lower court deliberately


erred in ruling that the
testimonies of the
respondents are credible
as against the petitioner
Erlando Abrenica and his
witnesses for the same
reasons as stated in Nos. I
and II above.

Lastly, the CA held that the fact that the trial


court was not designated as a special commercial court
did not mean that the latter had no jurisdiction over the
case. The appellate court stated that, in any event,
petitioners could have raised this matter on appeal or
through a petition for certiorari under Rule 65, but they
did not do so.

Petitioners filed an Amended Petition for


Annulment of Judgment dated 2 May 2007, but the CA
had by then already issued the 26 April 2007 Resolution
dismissing the Petition.

V.

On 24 May 2007, the 26 April 2007 Resolution in


CA-G.R. SP No. 98679 became final and executory. [8]

Petitioners did not give up. They once again filed


a 105-page Petition for Annulment of Judgment with the
CA dated 25 May 2007[9] docketed as CA-G.R. SP No.
99719. This time, they injected the ground of extrinsic
fraud into what appeared to be substantially the same
issues raised in CA-G.R. SP No. 98679. The following
were the grounds raised in CA-G.R. SP No. 99719:
A.

The lower court


deliberately erred in
concluding that both
petitioners and
respondents did not
present direct
documentary evidence to
substantiate their

The lower court


deliberately erred in ruling
that the purchase price for
the lot involved was 3
million and not 8
million for the same
reasons as stated in Nos.
1 and II above.

VI. The lower court deliberately


erred in ruling that
petitioners retainer
agreement with Atlanta
Industries, Inc. was a law
partnership transaction for
the same reasons as
stated in Nos. 1 and II
above.

Extrinsic fraud and/or collusion


attended the rendition of the
Consolidated Decision x x x based
on the following badges of fraud
and/or glaring errors deliberately
committed, to wit:
I.

The lower court


deliberately erred in
concluding that both
petitioners and
respondents relied mainly
on testimonial evidence to
prove their respective
positions by relying totally
on what was presented to
it by its personnel who
drafted the Consolidated
Decision in collusion with
the respondents.

VII. The lower court deliberately


erred when it failed to rule
on said petitioners
permissive counterclaim
relative to the various
personal loans secured by
respondents also for the
same reasons as the
above.
B.

As an incident of the extrinsic


fraud[,] the lower court[,] despite
full knowledge of its incapacity[,]
rendered/promulgated the assailed

Consolidated Decision x x x without


jurisdiction or with lack of
jurisdiction.[10] (Underscoring in the
original.)

On 2 August 2007, the CA issued the first


assailed Resolution[11] dismissing the Petition in CA-G.R.
SP No. 99719, which held the Petition to be insufficient in
form and substance. It noted the following:

x x x. Readily noticeable
is that CA-G.R. SP No. 90076
practically contained the prayer for
the annulment of the subject
consolidated Decision premised on
the very same allegations, grounds
or issues as the present annulment
of judgment case.
xxx
x

xx
xx
xxx

x x x. In the case at bar, not


only has the court a quo jurisdiction
over the subject matter and over the
persons of the parties, what petitioner
is truly complaining [of] here is only a
possible error in the exercise of
jurisdiction, not on the issue of
jurisdiction itself. Where there is
jurisdiction over the person and the
subject matter (as in this case), the
decision on all other questions arising in
the case is but an exercise of the
jurisdiction. And the errors which the
court may commit in the exercise of
jurisdiction are merely errors of
judgment which are the proper subject
of
an appeal (Republic vs. G Holdings,
supra, citing Tolentino vs. Leviste,
supra). (Emphasis supplied.)

Subsequently, petitioners filed a Humble Motion


for Reconsideration[12] on 28 August 2007.

While the 28 August 2007 motion was pending,


on 13 September 2007, petitioner Erlando filed an Urgent
Omnibus Motion[13] with Branch 226, alleging that the
sheriff had levied on properties belonging to his children
and petitioner Joena. In addition, Erlando alleged that the

On the same day, Joena filed an Affidavit of Third


Party Claim[14] also with Branch 226 of the RTC of Quezon
City, alleging that she[15] and her stepchildren[16] owned a
number of the personal properties sought to be levied.
She also insisted that she owned half of the two (2) motor
vehicles as well as the house and lot covered by Transfer
Certificate of Title (TCT) No. 216818, which formed part of
the absolute community of property. She likewise alleged
that the real property, being a family home, and the
furniture and the utensils necessary for housekeeping
having a depreciated combined value of one hundred
thousand pesos (100,000) were exempt from execution
pursuant to Rule 39, Section 13 of the Rules of Court.
Thus, she sought their discharge and release and likewise
the immediate remittance to her of half of the proceeds,
if any.

xx
xxx

Annulment of judgment is a
recourse equitable in character, allowed
only in exceptional cases as where
there is no available or other adequate
remedy (Espinosa vs. Court of Appeals,
430 SCRA 96[2004]). Under Section 2 of
Rule 47 of the Revised Rules of Court,
the only grounds for an annulment of
judgment are extrinsic fraud and lack of
jurisdiction (Cerezo vs. Tuazon, 426
SCRA 167 [2004]). Extrinsic fraud shall
not be a valid ground if it was availed
of, or could have been availed of, in a
motion for new trial or petition for relief.

x
x

trial court still had to determine the manner of


distribution of the firms assets and the value of the
levied properties. Lastly, he insisted that the RTC still had
to determine the issue of whether the Rule 41 appeal was
the correct remedy.

Accordingly, the RTC scheduled[17] a hearing on


the motion. On 17 October 2007, however, petitioner
Erlando moved to withdraw his motion on account of
ongoing negotiations with respondents.[18]
Thereafter, petitioner Erlando and respondent
Abelardo Tibayan, witnessed by Sheriff Nardo de Guzman,
Jr. of Branch 226 of the RTC of Quezon City, executed an
agreement to postpone the auction sale of the property
covered by TCT No. 216818 in anticipation of an amicable
settlement of the money judgment.[19]
Finally, on 30 October 2007, the CA in CA-G.R. SP
No. 99719 issued the second assailed
Resolution[20] denying petitioners Motion for
Reconsideration for having been filed out of time, as the
last day for filing was on 27 August 2007. Moreover, the
CA found that the grounds stated in the motion were
merely recycled and rehashed propositions, which had
already been dispensed with.
Petitioners are now assailing the CA Resolutions
dated 2 August 2007 and 30 October 2007, respectively,
in CA-G.R. SP No. 99719. They insist that there is still a
pending issue that has not been resolved by the RTC.
That issue arose from the Order [21] given by the trial
court to petitioner Erlando to explain why it should take
cognizance of the Notice of Appeal when the proper
remedy was a petition for review under Rule 43 of the
Rules of Court.

Further, petitioners blame the trial and the


appellate courts for the dismissal of their appeal despite
this Courts explanation in G.R. No. 169420 that the
appeal was the wrong remedy and was thus correctly
dismissed by the CA. Instead of complying with the showcause Order issued by the RTC, petitioners went directly
to the CA and insisted that the remedy they had
undertaken was correct.

Petitioners also contend that there was extrinsic


fraud in the appreciation of the merits of the case. They
raise in the present Petition the grounds they cited in the
three (3) Petitions for Annulment of Judgment (including
the Amended Petition) quoted above.

Next, they assert that petitioner Joenas right to


due process was also violated when she was not made a
party-in-interest to the proceedings in the lower courts,
even if her half of the absolute community of property
was included in the execution of the judgment rendered
by Branch 226 of the RTC of Quezon City.
Finally, they insist that their Humble Motion for
Reconsideration was filed on time, since 27 August 2007
was a holiday. Therefore, they had until 28 August 2007
to file their motion.
Since then, it appears that a Sheriffs Certificate
of Sale was issued on 3 January 2008 in favor of the law
firm for the sum of 5 million for the property covered by
TCT No. 216818.

On 18 March 2009, while the case was pending


with this Court, petitioners filed a Complaint[22] with a
prayer for the issuance of a writ of preliminary injunction
before the RTC of Marikina City against herein
respondents and Sheriff Nardo I. de Guzman, Jr. of Branch
226 of the RTC of Quezon City. The case was docketed as
Civil Case No. 09-1323-MK and was raffled to Branch 273
of the RTC of Marikina City.[23] Petitioners sought the
nullification of the sheriffs sale on execution of the
Decision in the consolidated cases rendered by Branch
226, as well as the payment of damages. They alleged
that the process of the execution sale was conducted
irregularly, unlawfully, and in violation of their right to
due process.

On 2 July 2009, Branch 273 of the RTC of


Marikina City issued a Writ of Preliminary Injunction
enjoining respondents and/or their agents, and the
Register of Deeds of Marikina City from consolidating TCT
No. 216818.[24]
The filing of the Complaint with the RTC of
Marikina City prompted respondents to file a
Motion[25] before us to cite for contempt petitioner
spouses and their counsel, Atty. Antonio R. Bautista. This
Motion was on the ground that petitioners committed
forum shopping when they filed the Complaint pending
with Branch 273 of the RTC of Marikina City, while the
present case was also still pending.
Meanwhile, on 22 September 2009, respondents
filed before Branch 226 an Ex Parte Motion for Issuance of
Writ of Possession.[26] That Motion was granted by Branch
226 through a Resolution[27] issued on 10 November 2011.
This Resolution then became the subject of a Petition for
Certiorari[28] under Rule 65 filed by petitioners before the
CA docketed as CA-G.R. SP No. 123164.

Soon after, on 6 March 2012, petitioners filed


with the CA an Urgent Motion for Issuance of Temporary
Restraining Order (T.R.O.)[29] after Sheriff De Guzman, Jr.
served on them a Notice to Vacate within five days from
receipt or until 11 March 2012. As of the writing of this
Decision, the CA has not resolved the issue raised in the
Petition in CA-G.R. SP No. 123164.

Our Ruling

Petitioners elevated this case to this Court,


because they were allegedly denied due process when
the CA rejected their second attempt at the annulment of
the Decision of the RTC and their Humble Motion for
Reconsideration.

We DENY petitioners claims.

The rules of procedure were formulated to


achieve the ends of justice, not to thwart them.
Petitioners may not defy the pronouncement of this Court
in G.R. No. 169420 by pursuing remedies that are no
longer available to them. Twice, the CA correctly ruled
that the remedy of annulment of judgment was no longer
available to them, because they had already filed an
appeal under Rule 41. Due to their own actions, that
appeal was dismissed.

It must be emphasized that the RTC Decision


became final and executory through the fault of
petitioners themselves when petitioner Erlando (1) filed
an appeal under Rule 41 instead of Rule 43; and (2) filed
a Petition for Review directly with the CA, without waiting
for the resolution by the RTC of the issues still pending
before the trial court.

In Enriquez v. Court of Appeals,[30] we said:

It is true that the Rules should


be interpreted so as to give litigants
ample opportunity to prove their
respective claims and that a possible
denial of substantial justice due to legal
technicalities should be avoided. But it
is equally true that an appeal being
a purely statutory right, an
appealing party must strictly
comply with the requisites laid
down in the Rules of Court. In other
words, he who seeks to avail of the
right to appeal must play by the
rules. x x x. (Emphasis supplied.)

With regard to the allegation of petitioner Joena


that her right to due process was violated, it must be
recalled that after she filed her Affidavit of Third Party
Claim on 13 September 2007 and petitioner Erlando filed
his Urgent Omnibus Motion raising the same issues
contained in that third-party claim, he subsequently filed
two Motions withdrawing his Urgent Omnibus Motion.
Petitioner Joena, meanwhile, no longer pursued her thirdparty claim or any other remedy available to her. Her
failure to act gives this Court the impression that she was
no longer interested in her case. Thus, it was through her
own fault that she was not able to ventilate her claim.

Furthermore, it appears from the records that


petitioner Erlando was first married to a certain Ma. Aline
Lovejoy Padua on 13 October 1983. They had three
children: Patrik Erlando (born on 14 April 1985), Maria
Monica Erline (born on 9 September 1986), and Patrik
Randel (born on 12 April 1990).

After the dissolution of the first marriage of


Erlando, he and Joena got married on 28 May 1998.[31] In
her Affidavit, Joena alleged that she represented her
stepchildren; that the levied personal properties in
particular, a piano with a chair, computer equipment and

a computer table were owned by the latter. We note


that two of these stepchildren were already of legal age
when Joena filed her Affidavit. As to Patrik Randel,
parental authority over him belongs to his parents.
Absent any special power of attorney authorizing Joena to
represent Erlandos children, her claim cannot be
sustained.

Petitioner Joena also asserted that the two (2)


motor vehicles purchased in 1992 and 1997, as well as
the house and lot covered by TCT No. 216818 formed part
of the absolute community regime. However, Art. 92, par.
(3) of the Family Code excludes from the community
property the property acquired before the marriage of
a spouse who has legitimate descendants by a former
marriage; and the fruits and the income, if any, of that
property. Neither these two vehicles nor the house and
lot belong to the second marriage.

We now proceed to discuss the Motion for


contempt filed by respondents.

August 2007 and 30 October 2007 issued by the Court of


Appeals in CA-G.R. SP No. 99719 are AFFIRMED.
SO ORDERED.
Sps Manila v Sps Manzo

This resolves the petition for review on certiorari under


Rule 45 of the 1997 Rules of Civil Procedure, as amended,
assailing the Decision[1] dated February 27, 2004 and
Resolution[2] dated May 14, 2004 of the Court of Appeals
(CA) in CA-G.R. SP No. 49998 which granted the petition
for annulment of judgment filed by the respondents.
The controversy stemmed from an action for
ejectment[3] filed by the respondents, spouses Ederlinda
Gallardo-Manzo and Daniel Manzo, against the
petitioners, spouses Ramon and Eulogia Manila, before
the Metropolitan Trial Court (MeTC) of Las Pias City,
Branch 79 (Civil Case No. 3537). The facts as
summarized by the said court are as follows:

Respondents claim that petitioners and their


present counsel, Atty. Antonio R. Bautista, were guilty of
forum shopping when the latter filed Civil Case No. 091323-MK with the RTC of Marikina City while the case was
still pending before us. In Executive Secretary v. Gordon,
[32]
we explained forum shopping in this wise:

On June 30, 1982, Ederlinda


Gallardo leased two (2) parcels of land
situated along Real St., Manuyo, Las
Pias, Metro Manila, to Eulogia Manila
for a period of ten (10) years at a
monthly rental(s) of P2,000.00 for the
first two years, and thereafter an
increase of ten (10) percent every after
two years. They also agreed that the
lessee shall have the option to buy the
property within two (2) years from the
date of execution of the contract of
lease at a fair market value of One
Hundred and Fifty Thousand Pesos
(P150,000.00)

Forum-shopping consists of
filing multiple suits involving the same
parties for the same cause of action,
either simultaneously or successively,
for the purpose of obtaining a favorable
judgment. Thus, it has been held that
there is forum-shopping
(1) whenever as a result of an
adverse decision in one forum, a party
seeks a favorable decision (other than
by appeal or certiorari) in another, or

The contract of lease expired


on July 1, 1992 but the lessee continued
in possession of the property despite a
formal demand letter dated August 8,
1992, to vacate the same and pay the
rental arrearages. In a letter reply
dated August 12, 1992, herein
defendant claimed that no rental fee is
due because she allegedly became the
owner of the property at the time she
communicated to the plaintiff her desire
to exercise the option to buy the said
property.

(2) if, after he has filed a


petition before the Supreme Court, a
party files another before the Court of
Appeals since in such case he
deliberately splits appeals in the hope
that even as one case in which a
particular remedy is sought is
dismissed, another case (offering a
similar remedy) would still be open, or

Their disagreement was later


brought to the Barangay for conciliation
but the parties failed to reach a
compromise, hence the present action.

(3) where a party attempts to


obtain a preliminary injunction in
another court after failing to obtain the
same from the original court.

Civil Case No. 09-1323-MK was filed to question


the proceedings undertaken by the sheriff in executing
the judgment in Civil Case Nos. Q01-42948 and Q0142959. On the other hand, the present case questions the
merits of the Decision itself in Civil Case Nos. Q01-42948
and Q01-42959. These cases have different causes of
action. Thus, it cannot be said that petitioners were
clearly guilty of forum shopping when they filed the
Complaint before the RTC of Marikina City.

WHEREFORE, in view of the foregoing, the


Petition is hereby DENIED. The Resolutions dated 2

10

[4]

[5]

On July 14, 1993, the MeTC rendered its decision,


the dispositive portion of which reads:
WHEREFORE, a judgment is
rendered in favor of the plaintiffs
ordering the defendants:
1)

To vacate the subject


parcels of land and
surrender possession
thereof upon the payment
by the plaintiff of one-half
of the value of the
building constructed by

the lessee. Should the


lessor refuse to reimburse
the aforesaid amount, the
lessee shall have the
option to exercise her
right under Article 1678 of
the New Civil Code;
2)

To pay rental arrearages


up to July 1, 1992 in the
amount of Two Hundred
Twenty Eight Thousand
and Forty Four 80/100
Pesos (P228,044.80);

3)

To pay, as reasonable
compensation for their
continued withholding of
possession of the subject
lots, the sum of Three
Thousand Two Hundred
and Twenty One Pesos
(P3,221.00) every month,
commencing July 2, 1992
up to such time that they
finally yield possession
thereof to the plaintiffs,
subject to an increase of
ten percent (10%) after
every two (2) years from
said date; and

4)

To pay plaintiffs
attorneys fees in the sum
of Five Thousand Pesos
(P5,000.00)

No pronouncement as to costs.
SO ORDERED.[6]
Petitioners appealed to the Regional Trial Court
(RTC) of Makati City, Branch 63 (Civil Case No. 93-3733)
which reversed the MeTC. The RTC found that petitioners
have in fact exercised their option to buy the leased
property but the respondents refused to honor the
same. It noted that respondents even informed the
petitioners about foreclosure proceedings on their
property, whereupon the petitioners tried to intervene by
tendering rental payments but the respondents advised
them to withhold such payments until the appeal of
respondents in the case they filed against the Rural Bank
of Bombon (Camarines Sur), Inc. (Civil Case No. 6062) is
resolved. It further noted that respondents intention to
sell the lot to petitioners is confirmed by the fact that the
former allowed the latter to construct a building of strong
materials on the premises. The RTC thus decreed:
IN THE LIGHT OF THE
FOREGOING, judgment is hereby
rendered reversing the decision of the
lower court dated July 14, 1993 and
ordering as follows:

11

1)

That plaintiffs execute a


deed of absolute sale over
that parcel of land subject
of the Contract of Lease
dated June 30, 1982 after
full payment of
defendants of the
purchase price of
P150,000.00;

2)

That plaintiffs pay the


costs of suit.

SO ORDERED.[7]
Respondents filed a motion for reconsideration on
December 23, 1994. In its Order dated March 24, 1995,
the RTC denied the motion for having been filed beyond
the fifteen (15)-day period considering that respondents
received a copy of the decision on December 7, 1994.
[8]
Consequently, the November 18, 1994 decision of the
RTC became final and executory.[9]
On December 22, 1998, respondents filed a
petition for annulment of the RTC decision in the CA.
Respondents assailed the RTC for ordering them to sell
their property to petitioners arguing that said courts
appellate jurisdiction in ejectment cases is limited to the
determination of who is entitled to the physical
possession of real property and the only judgment it can
render in favor of the defendant is to recover his costs,
which judgment is conclusive only on the issue of
possession and does not affect the ownership of the
land. They contended that the sale of real property by
one party to another may be ordered by the RTC only in a
case for specific performance falling under its original
exclusive jurisdiction, not in the exercise of its appellate
jurisdiction in an ejectment case. Respondents also
alleged that the petition for annulment is the only remedy
available to them because the ordinary remedies of new
trial, appeal, petition for relief or other appropriate
remedies are no longer available through no fault on their
part.
By Decision dated February 27, 2004, the CA
granted the petition, annulled the November 18, 1994
RTC decision and reinstated the July 14, 1993 MeTC
decision. On the issue of lack of jurisdiction raised by the
respondents, the CA ruled as follows:
It must be stressed that the
main action before the Metropolitan
Trial Court is one for ejectment
grounded on the expiration of the
parties contract of lease. And said
court, finding that petitioners have a
valid right to ask for the ejectment of
private respondents, ordered the latter
to vacate the premises and to pay their
rentals in arrears. To Our mind, what
the respondent court should have
done in the exercise of its appellate
jurisdiction, was to confine itself to
the issue of whether or not petitioners
have a valid cause of action for
ejectment against the private
respondents.
Unfortunately, in the decision
herein sought to be annulled, the
respondent court went further than
what is required of it as an appellate
court when it ordered the petitioners to
sell their properties to the private
respondents. In a very real sense, the
respondent court materially
changed the nature of petitioners
cause of action by deciding the
question of ownership even as the
appealed case involves only the
issue of prior physical possession
which, in every ejectment suit, is
the only question to be
resolved. As it were, the respondent
court converted the issue to one for
specific performance which falls under
its original, not appellate
jurisdiction. Sad to say, this cannot be
done by the respondent court in an

appealed ejectment case because the


essential criterion of appellate
jurisdiction is that it revises and
corrects the proceedings in a cause
already instituted and does not create
that cause (Marbury v. Madison, 1
Cranch (U.S.), 137, 172, 2 L. edition 60,
cited in 15 Corpus Juris 727).
It follows that the respondent
Regional Trial Court clearly acted
without jurisdiction when it ordered the
petitioners to sell their properties to the
private respondents. The order to sell
can be made only by the respondent
court in an action for specific
performance under its exclusive original
jurisdiction, and not in the exercise of
its appellate jurisdiction in an
appealed ejectment suit, as in this case.
Worse, the relief granted by the same
court was not even prayed for by the
private respondents in their Answer and
position paper before the MTC, whereat
they only asked for the dismissal of the
complaint filed against them.
[10]
(Emphasis supplied.)

With the denial of their motion for reconsideration,


petitioners filed the present petition raising the following
issues:
A
WHETHER THE COURT OF APPEALS
COMMITTED A GRAVE ERROR IN
ANNULLING THE JUDGMENT BY THE
REGIONAL TRIAL COURT OF MAKATI
CITY NOTWITHSTANDING THE FINDING
THAT THE ORDINARY REMEDIES OF
NEW TRIAL, APPEAL, PETITION FOR
RELIEF OR OTHER APPROPRIATE
REMEDIES WERE LOST THROUGH THE
FAULT OF THE RESPONDENTS
B
WHETHER THE COURT OF APPEALS
COMMITTED A GRAVE ERROR IN
ANNULLING THE JUDGMENT BY THE
REGIONAL TRIAL COURT OF MAKATI
CITY ON THE GROUND OF LACK OF
JURISDICTION WHEN IT HAS NOT BEEN
SHOWN THAT THE REGIONAL TRIAL
COURT OF MAKATI CITY HAD NO
JURISDICTION OVER THE PERSON OF
THE RESPONDENTS OR THE SUBJECT
MATTER OF THE CLAIM[11]

The petition is meritorious.


A petition for annulment of judgments or final
orders of a Regional Trial Court in civil actions can only be
availed of where the ordinary remedies of new trial,
appeal, petition for relief or other appropriate remedies
are no longer available through no fault of the
petitioner.[12] It is a remedy granted only under
exceptional circumstances and such action is never
resorted to as a substitute for a partys own neglect in
not promptly availing of the ordinary or other appropriate
remedies.[13] The only grounds provided in Sec. 2, Rule
47 are extrinsic fraud and lack of jurisdiction.

12

In this case, respondents alleged that the loss of


remedies against the RTC decision was attributable to their
former counsels late filing of their motion for
reconsideration and failure to file any proper petition to set
aside the said decision. They claimed that they had been
constantly following up the status of the case with their
counsel, Atty. Jose Atienza, who repeatedly assured them
he was on top of the situation and would even get angry if
repeatedly asked about the case. Out of their long and
close relationship with Atty. Atienza and due regard for his
poor health due to his numerous and chronic illnesses
which required frequent prolonged confinement at the
hospital, respondents likewise desisted from hiring the
services of another lawyer to assist Atty. Atienza, until the
latters death on September 10, 1998. Thus, it was only on
November 1998 that respondents engaged the services of
their new counsel who filed the petition for annulment of
judgment in the CA.
We are not persuaded by respondents
asseveration. They could have directly followed up the
status of their case with the RTC especially during the
period of Atty. Atienzas hospital confinement. As party
litigants, they should have constantly monitored the
progress of their case. Having completely entrusted their
case to their former counsel and believing his word that
everything is alright, they have no one to blame but
themselves when it turned out that their opportunity to
appeal and other remedies from the adverse ruling of the
RTC could no longer be availed of due to their counsels
neglect. That respondents continued to rely on the
services of their counsel notwithstanding his chronic
ailments that had him confined for long periods at the
hospital is unthinkable. Such negligence of counsel is
binding on the client, especially when the latter offered
no plausible explanation for his own inaction. The Court
has held that when a party retains the services of a
lawyer, he is bound by his counsels actions and decisions
regarding the conduct of the case. This is true especially
where he does not complain against the manner his
counsel handles the suit.[14] The oft-repeated principle is
that an action for annulment of judgment cannot and is
not a substitute for the lost remedy of appeal.[15]
In any event, the petition for annulment was
based not on fraudulent assurances or negligent acts of
their counsel, but on lack of jurisdiction.
Petitioners assail the CA in holding that the RTC
decision is void because it granted a relief inconsistent
with the nature of an ejectment suit and not even prayed
for by the respondents in their answer. They contend
that whatever maybe questionable in the decision is a
ground for assignment of errors on appeal or in certain
cases, as ground for a special civil action for certiorari
under Rule 65 and not as ground for its annulment. On
the other hand, respondents assert that the CA, being a
higher court, has the power to adopt, reverse or modify
the findings of the RTC in this case. They point out that
the CA in the exercise of its sound discretion found the
RTCs findings unsupported by the evidence on record
which also indicated that the loss of ordinary remedies of
appeal, new trial and petition for review was not due to
the fault of the respondents.
We agree with the petitioners.
Lack of jurisdiction as a ground for annulment of
judgment refers to either lack of jurisdiction over the
person of the defending party or over the subject matter
of the claim.[16] In a petition for annulment of judgment
based on lack of jurisdiction, petitioner must show not
merely an abuse of jurisdictional discretion but an
absolute lack of jurisdiction. Lack of jurisdiction means
absence of or no jurisdiction, that is, the court should not

have taken cognizance of the petition because the law


does not vest it with jurisdiction over the subject
matter. Jurisdiction over the nature of the action or
subject matter is conferred by law.[17]
There is no dispute that the RTC is vested with
appellate jurisdiction over ejectment cases decided by
the MeTC, MTC or MCTC. We note that petitioners attack
on the validity of the RTC decision pertains to a relief
erroneously granted on appeal, and beyond the scope of
judgment provided in Section 6 (now Section 17) of Rule
70.[18] While the court in an ejectment case may delve on
the issue of ownership or possession de jure solely for the
purpose of resolving the issue of possession de facto, it
has no jurisdiction to settle with finality the issue of
ownership[19] and any pronouncement made by it on the
question of ownership is provisional in nature.[20] A
judgment in a forcible entry or detainer case disposes of
no other issue than possession and establishes only who
has the right of possession, but by no means constitutes
a bar to an action for determination of who has the right
or title of ownership.[21] We have held that although it
was proper for the RTC, on appeal in the ejectment suit,
to delve on the issue of ownership and receive evidence
on possession de jure, it cannot adjudicate with
semblance of finality the ownership of the property to
either party by ordering the cancellation of the TCT.[22]
In this case, the RTC acted in excess of its
jurisdiction in deciding the appeal of respondents when,
instead of simply dismissing the complaint and awarding
any counterclaim for costs due to the defendants
(petitioners), it ordered the respondents-lessors to
execute a deed of absolute sale in favor of the
petitioners-lessees, on the basis of its own interpretation
of the Contract of Lease which granted petitioners the
option to buy the leased premises within a certain period
(two years from date of execution) and for a fixed price
(P150,000.00).[23] This cannot be done in an ejectment
case where the only issue for resolution is who between
the parties is entitled to the physical possession of the
property.
Such erroneous grant of relief to the defendants
on appeal, however, is but an exercise of jurisdiction by
the RTC. Jurisdiction is not the same as the exercise of
jurisdiction. As distinguished from the exercise of
jurisdiction, jurisdiction is the authority to decide a cause,
and not the decision rendered therein.[24] The ground for
annulment of the decision is absence of, or no,
jurisdiction; that is, the court should not have taken
cognizance of the petition because the law does not vest
it with jurisdiction over the subject matter. [25]
Thus, while respondents assailed the content of
the RTC decision, they failed to show that the RTC did not
have the authority to decide the case on appeal. As we
held in Ybaez v. Court of Appeals:[26]
On the first issue, we feel that
respondent court acted inadvertently
when it set aside the RTC ruling relative
to the validity of the substituted service
of summons over the persons of the
petitioners in the MTC level. We must
not lose sight of the fact that what was
filed before respondent court is an
action to annul the RTC judgment and
not a petition for review. Annulment of
judgment may either be based on the
ground that a judgment is void for want
of jurisdiction or that the judgment was
obtained by extrinsic fraud. There is
nothing in the records that could
cogently show that the RTC lacked

13

jurisdiction. Chiefly, Section 22 of B.P.


Blg. 129, otherwise known as the
Judiciary Reorganization Act of 1980,
vests upon the RTC the exercise of an
appellate jurisdiction over all cases
decided by the Metropolitan Trial
Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts in their
respective territorial jurisdictions.
Clearly then, when the RTC took
cognizance of petitioners appeal
from the adverse decision of the
MTC in the ejectment suit, it (RTC)
was unquestionably exercising its
appellate jurisdiction as mandated
by law. Perforce, its decision may
not be annulled on the basis of lack
of jurisdiction as it has, beyond
cavil, jurisdiction to decide the
appeal.[27] (Emphasis supplied.)

The CA therefore erred in annulling the November


18, 1994 RTC decision on the ground of lack of jurisdiction
as said court had jurisdiction to take cognizance of
petitioners appeal.
On the timeliness of the petition for annulment
of judgment filed with the CA, Section 3, Rule 47 of the
Rules of Court provides that a petition for annulment of
judgment based on extrinsic fraud must be filed within
four years from its discovery; and if based on lack of
jurisdiction, before it is barred by laches or estoppel. The
principle of laches or stale demands ordains that the
failure or neglect, for an unreasonable and unexplained
length of time, to do that which by exercising due
diligence could or should have been done earlier
negligence or omission to assert a right within a
reasonable time, warrants a presumption that the party
entitled to assert it has abandoned it or declined to assert
it.[28] There is no absolute rule as to what constitutes
laches or staleness of demand; each case is to be
determined according to its particular circumstances.[29]
Here, respondents failure to assail the RTC
ruling in a petition for review or certiorari before the CA,
rendered the same final and executory. Having lost these
remedies due to their lethargy for three and a half years,
they cannot now be permitted to assail anew the said
ruling rendered by the RTC in the exercise of its appellate
jurisdiction. Their inaction and neglect to pursue available
remedies to set aside the RTC decision for such length of
time, without any acceptable explanation other than the
word of a former counsel who already passed away,
constitutes unreasonable delay warranting the
presumption that they have declined to assert their right
over the leased premises which continued to be in the
possession of the petitioners. Clearly, respondents
petition to annul the final RTC decision is barred under
the equitable doctrine of laches.
WHEREFORE, the petition for review on certiorari
is GRANTED. The Decision dated February 27, 2004 and
Resolution dated May 14, 2004 of the Court of Appeals in
CA-G.R. SP No. 49998 are SET ASIDE. The petition for
annulment of judgment filed by herein respondents
is DISMISSED.
No costs.
SO ORDERED.
Navida V Dizon

Before the Court are consolidated Petitions for Review


on Certiorari under Rule 45 of the Rules of Court, which
arose out of two civil cases that were filed in different
courts but whose factual background and issues are
closely intertwined.

actions in his home


country or the country in
which his injury
occurred. Any plaintiff
desiring to bring such an
action will do so within 30
days after the entry of
this Memorandum and
Order;

The petitions in G.R. Nos.


125078[1] and 125598[2] both assail the Order[3] dated
May 20, 1996 of the Regional Trial Court (RTC)
of General Santos City, Branch 37, in Civil Case No.
5617. The said Order decreed the dismissal of the case in
view of the perceived lack of jurisdiction of the RTC over
the subject matter of the complaint. The petition in G.R.
No. 125598 also challenges the Orders dated June 4,
1996[4] and July 9, 1996,[5] which held that the RTC of
General Santos City no longer had jurisdiction to proceed
with Civil Case No. 5617.
On the other hand, the petitions in G.R. Nos.
126654,[6] 127856,[7] and 128398[8] seek the reversal of
the Order[9] dated October 1, 1996 of the RTC of Davao
City, Branch 16, in Civil Case No. 24,251-96, which also
dismissed the case on the ground of lack of
jurisdiction.

(3)

waived within 40 days


after the entry of this
Memorandum and Order
any limitations-based
defense that has matured
since the commencement
of these actions in the
courts ofTexas;

(4)

stipulated within 40 days


after the entry of this
Memorandum and Order
that any discovery
conducted during the
pendency of these actions
may be used in any
foreign proceeding to the
same extent as if it had
been conducted in
proceedings initiated
there; and

(5)

submitted within 40 days


after the entry of this
Memorandum and Order
an agreement binding
them to satisfy any final
judgment rendered in
favor of plaintiffs by a
foreign court.

G.R. Nos. 125078, 125598, 126654, 127856, and


128398 were consolidated in the Resolutions dated
February 10, 1997,[10] April 28, 1997[11] and March 10,
1999.[12]
The factual antecedents of the petitions are as
follows:
Proceedings before the Texas Courts
Beginning 1993, a number of personal injury suits
were filed in different Texas state courts by citizens of
twelve foreign countries, including the Philippines. The
thousands of plaintiffs sought damages for injuries they
allegedly sustained from their exposure
to dibromochloropropane (DBCP), a chemical used to kill
nematodes (worms), while working on farms in 23 foreign
countries. The cases were eventually transferred to, and
consolidated in, the Federal District Court for the
Southern District of Texas, Houston Division. The cases
therein that involved plaintiffs from the Philippines were
Jorge Colindres Carcamo, et al. v. Shell Oil Co., et al.,
which was docketed as Civil Action No. H-94-1359, and
Juan Ramon Valdez, et al. v. Shell Oil Co., et al., which
was docketed as Civil Action No. H-95-1356. The
defendants in the consolidated cases prayed for the
dismissal of all the actions under the doctrine of forum
non conveniens.
In a Memorandum and Order dated July 11,
1995, the Federal District Court conditionally granted the
defendants motion to dismiss. Pertinently, the court
ordered that:
Delgado, Jorge
Carcamo, Valdez and Isae Carcamo will
be dismissed 90 days after the entry of
this Memorandum and Order provided
that defendants and third- and fourthparty defendants have:
(1)

(2)

14

participated in expedited
discovery in the United
States xxx;
either waived or
accepted service of
process and waived any
other jurisdictional
defense within 40 days
after the entry of this
Memorandum and Order
in any action commenced
by a plaintiff in these

xxxx
Notwithstanding the dismissals
that may result from this Memorandum
and Order, in the event that the highest
court of any foreign country finally
affirms the dismissal for lack of
jurisdiction of an action commenced by
a plaintiff in these actions in his home
country or the country in which he was
injured, that plaintiff may return to this
court and, upon proper motion, the
court will resume jurisdiction over the
action as if the case had never been
dismissed for [forum non conveniens].
[13]

Civil Case No. 5617 befre


the RTC
of General Santos City and
G.R. Nos. 125078 and
125598
In accordance with the above Memorandum and
Order, a total of 336 plaintiffs from General Santos City
(the petitioners in G.R. No. 125078, hereinafter referred
to as NAVIDA, et al.) filed a Joint Complaint[14] in the RTC
of General Santos City on August 10, 1995. The case was
docketed as Civil Case No. 5617. Named as defendants
therein were: Shell Oil Co. (SHELL); Dow Chemical Co.
(DOW); Occidental Chemical Corp. (OCCIDENTAL); Dole
Food Co., Inc., Dole Fresh Fruit Co., Standard Fruit Co.,
Standard Fruit and Steamship Co. (hereinafter collectively
referred to as DOLE); Chiquita Brands, Inc. and Chiquita
Brands International, Inc. (CHIQUITA); Del Monte Fresh

Produce N.A. and Del Monte Tropical Fruit Co. (hereinafter


collectively referred to as DEL MONTE); Dead Sea
Bromine Co., Ltd.; Ameribrom, Inc.; Bromine Compounds,
Ltd.; and Amvac Chemical Corp. (The aforementioned
defendants are hereinafter collectively referred to as
defendant companies.)
NAVIDA, et al., prayed for the payment of
damages in view of the illnesses and injuries to the
reproductive systems which they allegedly suffered
because of their exposure to DBCP. They claimed, among
others, that they were exposed to this chemical during
the early 1970s up to the early 1980s when they used
the same in the banana plantations where they worked
at; and/or when they resided within the agricultural area
where such chemical was used. NAVIDA, et al., claimed
that their illnesses and injuries were due to the fault or
negligence of each of the defendant companies in that
they produced, sold and/or otherwise put into the stream
of commerce DBCP-containing products. According to
NAVIDA, et al., they were allowed to be exposed to the
said products, which the defendant companies knew, or
ought to have known, were highly injurious to the
formers health and well-being.
Instead of answering the complaint, most of the
defendant companies respectively filed their Motions for
Bill of Particulars.[15] During the pendency of the motions,
on March 13, 1996, NAVIDA, et al., filed an Amended
Joint Complaint,[16] excluding Dead Sea Bromine Co.,
Ltd., Ameribrom, Inc., Bromine Compounds, Ltd. and
Amvac Chemical Corp. as party defendants.
Again, the remaining defendant companies filed
their various Motions for Bill of Particulars.[17] On May 15,
1996, DOW filed an Answer with Counterclaim.[18]
On May 20, 1996, without resolving the motions
filed by the parties, the RTC of General Santos City issued
an Order dismissing the complaint. First, the trial court
determined that it did not have jurisdiction to hear the
case, to wit:
THE COMPLAINT FOR DAMAGES FILED WITH THE
REGIONAL TRIAL COURT SHOULD BE DISMISSED FOR
LACK OF JURISDICTION
xxxx
The substance of the cause of
action as stated in the complaint
against the defendant foreign
companies cites activity on their part
which took place abroad and had
occurred outside and beyond the
territorial domain of
the Philippines. These acts of
defendants cited in the complaint
included the manufacture of pesticides,
their packaging in containers, their
distribution through sale or other
disposition, resulting in their becoming
part of the stream of commerce.
Accordingly, the subject matter
stated in the complaint and which is
uniquely particular to the present case,
consisted of activity or course of
conduct engaged in by foreign
defendants outside Philippine territory,
hence, outside and beyond the
jurisdiction of Philippine Courts,
including the present Regional Trial
Court.[19]
Second, the RTC of General Santos City declared
that the tort alleged by NAVIDA, et al., in their complaint

15

is a tort category that is not recognized in Philippine


laws. Said the trial court:
THE TORT ASSERTED IN THE PRESENT
COMPLAINT AGAINST DEFENDANT FOREIGN COMPANIES
IS NOT WITHIN THE SUBJECT MATTER JURISDICTION OF
THE REGIONAL TRIAL COURT, BECAUSE IT IS NOT A TORT
CATEGORY WITHIN THE PURVIEW OF THE PHILIPPINE LAW
The specific tort asserted
against defendant foreign companies in
the present complaint is product
liability tort. When the averments in
the present complaint are examined in
terms of the particular categories of tort
recognized in the Philippine Civil Code,
it becomes stark clear that such
averments describe and identify the
category of specific tort known
as product liabilitytort. This is
necessarily so, because it is
the product manufactured by defendant
foreign companies, which is asserted to
be the proximate cause of the damages
sustained by the plaintiff workers, and
the liability of the defendant foreign
companies, is premised on being
the manufacturer of the pesticides.
It is clear, therefore, that the
Regional Trial Court has jurisdiction over
the present case, if and only if the Civil
Code of the Philippines, or a suppletory
special law prescribes a product liability
tort, inclusive of and comprehending
the specific tort described in the
complaint of the plaintiff workers.[20]
Third, the RTC of General Santos City adjudged
that NAVIDA, et al., were coerced into submitting their
case to the Philippine courts, viz:
FILING OF CASES IN THE PHILIPPINES - COERCED
AND ANOMALOUS
The Court views that the
plaintiffs did not freely choose to file
the instant action, but rather were
coerced to do so, merely to comply with
the U.S. District Courts Order dated
July 11, 1995, and in order to keep open
to the plaintiffs the opportunity to
return to the U.S. District Court.[21]
Fourth, the trial court ascribed little significance
to the voluntary appearance of the defendant companies
therein, thus:
THE DEFENDANTS SUBMISSION TO
JURISDICTION IS CONDITIONAL AS IT IS ILLUSORY
Defendants have appointed
their agents authorized to accept
service of summons/processes in
the Philippines pursuant to the
agreement in the U.S. court that
defendants will voluntarily submit to
the jurisdiction of this court. While it is
true that this court acquires jurisdiction
over persons of the defendants through
their voluntary appearance, it appears
that such voluntary appearance of the
defendants in this case is
conditional. Thus in the Defendants
Amended Agreement Regarding
Conditions of Dismissal for Forum Non
Conveniens (Annex to the Complaint)
filed with the U.S. District Court,
defendants declared that (t)he
authority of each designated

representative to accept service of


process will become effective upon final
dismissal of these actions by the
Court. The decision of the U.S. District
Court dismissing the case is not yet
final and executory since both the
plaintiffs and defendants appealed
therefrom (par. 3(h), 3(i), Amended
Complaint). Consequently, since the
authority of the agent of the defendants
in the Philippines is conditioned on the
final adjudication of the case pending
with the U.S. courts, the acquisition of
jurisdiction by this court over the
persons of the defendants is also
conditional. x x x.
The appointment of agents by
the defendants, being subject to a
suspensive condition, thus produces no
legal effect and is ineffective at the
moment.[22]
Fifth, the RTC of General Santos City ruled that
the act of NAVIDA, et al., of filing the case in the
Philippine courts violated the rules on forum shopping
and litis pendencia. The trial court expounded:
THE JURISDICTION FROWNS UPON AND
PROHIBITS FORUM SHOPPING
This court frowns upon the fact
that the parties herein are both
vigorously pursuing their appeal of the
decision of the U.S. District court
dismissing the case filed thereat. To
allow the parties to litigate in this court
when they are actively pursuing the
same cases in another forum, violates
the rule on forum shopping so
abhorred in this jurisdiction. x x x.
xxxx
THE FILING OF THE CASE
IN U.S. DIVESTED THIS COURT OF ITS
OWN JURISDICTION
Moreover, the filing of the case
in the U.S. courts divested this court of
its own jurisdiction. This court takes
note that the U.S. District Court did not
decline jurisdiction over the cause of
action. The case was dismissed on the
ground of forum non conveniens, which
is really a matter of venue. By taking
cognizance of the case, the U.S. District
Court has, in essence, concurrent
jurisdiction with this court over the
subject matter of this case. It is settled
that initial acquisition of jurisdiction
divests another of its own jurisdiction. x
x x.
xxxx
THIS CASE IS BARRED BY THE RULE OF
LITIS PENDENCIA
Furthermore, the case filed in
the U.S. court involves the same
parties, same rights and interests, as in
this case. There exists litis
pendencia since there are two cases
involving the same parties and
interests. The court would like to
emphasize that in accordance with the
rule on litis pendencia x x x; the
subsequent case must be
dismissed. Applying the foregoing
[precept] to the case-at-bar, this court

16

concludes that since the case between


the parties in the U.S. is still pending,
then this case is barred by the rule on
litis pendencia.[23]
In fine, the trial court held that:
It behooves this Court, then to
dismiss this case. For to continue with
these proceedings, would be violative of
the constitutional provision on the Bill
of Rights guaranteeing speedy
disposition of cases (Ref. Sec. 16,
Article III, Constitution). The court has
no other choice. To insist on further
proceedings with this case, as it is now
presented, might accord this court a
charming appearance. But the same
insistence would actually thwart the
very ends of justice which it seeks to
achieve.
This evaluation and action is
made not on account of but rather with
due consideration to the fact that the
dismissal of this case does not
necessarily deprive the parties
especially the plaintiffs of their
possible remedies. The court is
cognizant that the Federal Court may
resume proceedings of that earlier case
between the herein parties involving
the same acts or omissions as in this
case.
WHEREFORE, in view of the
foregoing considerations, this case is
now considered DISMISSED.[24]
On June 4, 1996, the RTC of General Santos City
likewise issued an Order,[25] dismissing DOWs Answer
with Counterclaim.
CHIQUITA, DEL MONTE and SHELL each filed a
motion for reconsideration[26] of the RTC Order dated May
20, 1996, while DOW filed a motion for
reconsideration[27] of the RTC Order dated June 4,
1996. Subsequently, DOW and OCCIDENTAL also filed a
Joint Motion for Reconsideration[28] of the RTC Order dated
May 20, 1996.
In an Order[29] dated July 9, 1996, the RTC of
General Santos City declared that it had already lost its
jurisdiction over the case as it took into consideration the
Manifestation of the counsel of NAVIDA, et al., which
stated that the latter had already filed a petition for
review on certiorari before this Court.
CHIQUITA and SHELL filed their motions for
reconsideration[30] of the above order.
On July 11, 1996, NAVIDA, et al., filed a Petition
for Review on Certiorari in order to assail the RTC Order
dated May 20, 1996, which was docketed as G.R. No.
125078.
The RTC of General Santos City then issued
an Order[31] dated August 14, 1996, which merely noted
the incidents still pending in Civil Case No. 5617 and
reiterated that it no longer had any jurisdiction over the
case.
On August 30, 1996, DOW and OCCIDENTAL filed
their Petition for Review on Certiorari,[32] challenging the
orders of the RTC of General Santos City dated May 20,
1996, June 4, 1996 and July 9, 1996. Their petition was
docketed as G.R. No. 125598.

In their petition, DOW and OCCIDENTAL aver that


the RTC of General Santos City erred in ruling that it has
no jurisdiction over the subject matter of the case as well
as the persons of the defendant companies.
In a Resolution[33] dated October 7, 1996, this
Court resolved to consolidate G.R. No. 125598 with G.R.
No. 125078.
CHIQUITA filed a Petition for Review
on Certiorari,[34] which sought the reversal of the RTC
Orders dated May 20, 1996, July 9, 1996 and August 14,
1996. The petition was docketed as G.R. No. 126018. In
a Resolution[35] dated November 13, 1996, the Court
dismissed the aforesaid petition for failure of CHIQUITA to
show that the RTC committed grave abuse of
discretion. CHIQUITA filed a Motion for Reconsideration,
[36]
but the same was denied through a
Resolution[37] dated January 27, 1997.
Civil Case No. 24,251-96 before the RTC
of Davao City and G.R. Nos. 126654, 127856, and
128398
Another joint complaint for damages against
SHELL, DOW, OCCIDENTAL, DOLE, DEL MONTE, and
CHIQUITA was filed before Branch 16 of the RTC of Davao
City by 155 plaintiffs from Davao City. This case was
docketed as Civil Case No. 24,251-96. These plaintiffs
(the petitioners in G.R. No. 126654, hereinafter referred
to as ABELLA, et al.) amended their Joint-Complaint on
May 21, 1996.[38]
Similar to the complaint of NAVIDA, et al.,
ABELLA, et al., alleged that, as workers in the banana
plantation and/or as residents near the said plantation,
they were made to use and/or were exposed to
nematocides, which contained the chemical
DBCP. According to ABELLA, et al., such exposure
resulted in serious and permanent injuries to their
health, including, but not limited to, sterility and severe
injuries to their reproductive capacities.[39] ABELLA, et
al., claimed that the defendant companies manufactured,
produced, sold, distributed, used, and/or made available
in commerce, DBCP without warning the users of its
hazardous effects on health, and without providing
instructions on its proper use and application, which the
defendant companies knew or ought to have known, had
they exercised ordinary care and prudence.
Except for DOW, the other defendant companies
filed their respective motions for bill of particulars to
which ABELLA, et al., filed their opposition. DOW and DEL
MONTE filed their respective Answers dated May 17, 1996
and June 24, 1996.
The RTC of Davao City, however, junked Civil Case
No. 24,251-96 in its Order dated October 1, 1996, which,
in its entirety, reads:
Upon a thorough review of the
Complaint and Amended Complaint For:
Damages filed by the plaintiffs against
the defendants Shell Oil Company,
DOW Chemicals Company, Occidental
Chemical Corporation, Standard Fruit
Company, Standard Fruit and
Steamship, DOLE Food Company, DOLE
Fresh Fruit Company, Chiquita Brands,
Inc., Chiquita Brands International, Del
Monte Fresh Produce, N.A. and Del
Monte Tropical Fruits Co., all foreign
corporations with Philippine
Representatives, the Court, as correctly
pointed out by one of the defendants, is
convinced that plaintiffs would have
this Honorable Court dismiss the case
to pave the way for their getting an
affirmance by the Supreme Court (#10

17

of Defendants Del Monte Fresh


Produce, N.A. and Del Monte Tropical
Fruit Co., Reply to Opposition dated July
22, 1996). Consider these:
1)
In the
original Joint
Complaint, plaintiffs
state that: defendants
have no properties in
the Philippines; they
have no agents as
well (par. 18);
plaintiffs are suing the
defendants for
tortuous acts
committed by these
foreign corporations
on their respective
countries, as
plaintiffs, after having
elected to sue in the
place of defendants
residence, are now
compelled by a
decision of a Texas
District Court to file
cases under torts in
this jurisdiction
for causes of actions
which occurred
abroad (par. 19); a
petition was filed by
same plaintiffs
against same
defendants in the
Courts of Texas, USA,
plaintiffs seeking for
payment of
damages based on
negligence, strict
liability, conspiracy
and international tort
theories (par. 27);
upon defendants
Motion to Dismiss on
Forum non
[conveniens], said
petition was
provisionally
dismissed on
condition that these
cases be filed in the
Philippines or before
11 August 1995
(Philippine date;
Should the Philippine
Courts refuse or deny
jurisdiction, the U. S.
Courts will reassume
jurisdiction.)
11. In the Amended Joint Complaint,
plaintiffs aver that: on 11 July 1995,
the Federal District Court issued a
Memorandum and Order conditionally
dismissing several of the consolidated
actions including those filed by the
Filipino complainants. One of the
conditions imposed was for the
plaintiffs to file actions in their home
countries or the countries in which they
were injured x x x. Notwithstanding, the
Memorandum and [O]rder further
provided that should the highest court
of any foreign country affirm the
dismissal for lack of jurisdictions over
these actions filed by the plaintiffs in
their home countries [or] the countries

where they were injured, the said


plaintiffs may return to that court and,
upon proper motion, the Court will
resume jurisdiction as if the case had
never been dismissed for forum non
conveniens.
The Court however is
constrained to dismiss the case at bar
not solely on the basis of the above but
because it shares the opinion of legal
experts given in the interview made by
the Inquirer in its Special report
Pesticide Cause Mass Sterility, to wit:
1.

2.

3.

SHELL, DOW, and CHIQUITA each filed their


respective motions for reconsideration of the Order dated
October 1, 1996 of the RTC of Davao City. DEL MONTE
also filed its motion for reconsideration, which contained
an additional motion for the inhibition of the presiding
judge.
The presiding judge of Branch 16 then issued an
Order[41] dated December 2, 1996, voluntarily inhibiting
himself from trying the case. Thus, the case was reraffled to Branch 13 of the RTC of Davao City.

Former Justice Secretary


Demetrio Demetria in a May
1995 opinion said: The
Philippines should be an
inconvenient forum to file this
kind of damage suit against
foreign companies since the
causes of action alleged in the
petition do not exist under
Philippine laws. There has
been no decided case in
Philippine Jurisprudence
awarding to those adversely
affected by DBCP. This means
there is no available evidence
which will prove and disprove
the relation between sterility
and DBCP.

In an Order[42] dated December 16, 1996, the


RTC of Davao City affirmed the Order dated October 1,
1996, and denied the respective motions for
reconsideration filed by defendant companies.

Retired Supreme Court Justice


Abraham Sarmiento opined
that while a class suit is
allowed in the Philippines the
device has been employed
strictly. Mass sterility will not
qualify as a class suit injury
within the contemplation of
Philippine statute.

Initially, this Court in its Resolution[43] dated July


28, 1997, dismissed the petition filed by CHIQUITA for
submitting a defective certificate against forum
shopping. CHIQUITA, however, filed a motion for
reconsideration, which was granted by this Court in the
Resolution[44] dated October 8, 1997.

Retired High Court Justice


Rodolfo Nocom stated that
there is simply an absence of
doctrine here that permits
these causes to be heard. No
product liability ever filed or
tried here.
Case ordered dismissed.[40]

Docketed as G.R. No. 126654, the petition for


review, filed on November 12, 1996 by ABELLA, et al.,
assails before this Court the above-quoted order of the
RTC of Davao City.
ABELLA, et al., claim that the RTC of Davao City
erred in dismissing Civil Case No. 24,251-96 on the
ground of lack of jurisdiction.
According to ABELLA, et al., the RTC of Davao
City has jurisdiction over the subject matter of the case
since Articles 2176 and 2187 of the Civil Code are broad
enough to cover the acts complained of and to support
their claims for damages.
ABELLA, et al., further aver that the dismissal of
the case, based on the opinions of legal luminaries
reported in a newspaper, by the RTC of Davao City is
bereft of basis. According to them, their cause of action is
based on quasi-delict under Article 2176 of the Civil
Code. They also maintain that the absence of
jurisprudence regarding the award of damages in favor of
those adversely affected by the DBCP does not preclude
them from presenting evidence to prove their allegations

18

that their exposure to DBCP caused their sterility and/or


infertility.

Thereafter, CHIQUITA filed a Petition for Review


dated March 5, 1997, questioning the Orders dated
October 1, 1996 and December 16, 1996 of the RTC of
Davao City. This case was docketed as G.R. No. 128398.
In its petition, CHIQUITA argues that the RTC of
Davao City erred in dismissing the case motu proprio as it
acquired jurisdiction over the subject matter of the case
as well as over the persons of the defendant companies
which voluntarily appeared before it. CHIQUITA also
claims that the RTC of Davao City cannot dismiss the case
simply on the basis of opinions of alleged legal experts
appearing in a newspaper article.

On March 7, 1997, DEL MONTE also filed its


petition for review on certiorari before this Court assailing
the above-mentioned orders of the RTC of Davao City. Its
petition was docketed as G.R. No. 127856.
DEL MONTE claims that the RTC of Davao City
has jurisdiction over Civil Case No. 24,251-96, as defined
under the law and that the said court already obtained
jurisdiction over its person by its voluntary appearance
and the filing of a motion for bill of particulars and, later,
an answer to the complaint. According to DEL MONTE,
the RTC of Davao City, therefore, acted beyond its
authority when it dismissed the case motu proprio or
without any motion to dismiss from any of the parties to
the case.
In the Resolutions dated February 10, 1997, April
28, 1997, and March 10, 1999, this Court consolidated
G.R. Nos. 125078, 125598, 126654, 127856, and
128398.
The Consolidated Motion to Drop DOW,
OCCIDENTAL, and SHELL as Party-Respodents filed
by NAVIDA, et al. and ABELLA, et al.
On September 26, 1997, NAVIDA, et al., and
ABELLA, et al., filed before this Court a Consolidated
Motion (to Drop Party-Respondents).[45] The plaintiff
claimants alleged that they had amicably settled their
cases with DOW, OCCIDENTAL, and SHELL sometime in
July 1997. This settlement agreement was evidenced by
facsimiles of the Compromise Settlement, Indemnity,
and Hold Harmless Agreement, which were attached to
the said motion. Pursuant to said agreement, the plaintiff
claimants sought to withdraw their petitions as against
DOW, OCCIDENTAL, and SHELL.
DOLE, DEL MONTE and CHIQUITA, however,
opposed the motion, as well as the settlement entered

into between the plaintiff claimants and DOW,


OCCIDENTAL, and SHELL.
The Memoranda of the Parties
Considering the allegations, issues, and
arguments adduced by the parties, this Court, in a
Resolution dated June 22, 1998,[46] required all the parties
to submit their respective memoranda.
CHIQUITA filed its Memorandum on August 28,
1998;[47] SHELL asked to be excused from the filing of a
memorandum alleging that it had already executed a
compromise agreement with the plaintiff claimants.
[48]
DOLE filed its Memorandum on October 12,
1998[49] while DEL MONTE filed on October 13, 1998.
[50]
NAVIDA, et al., and ABELLA, et al., filed their
Consolidated Memorandum on February 3, 1999;[51] and
DOW and OCCIDENTAL jointly filed a Memorandum on
December 23, 1999.[52]
The Motion to Withdraw Petition for Review in G.R.
No. 125598
On July 13, 2004, DOW and OCCIDENTAL filed a
Motion to Withdraw Petition for Review in G.R. No.
125598, [53] explaining that the said petition is already
moot and academic and no longer presents a justiciable
controversy since they have already entered into an
amicable settlement with NAVIDA, et al. DOW and
OCCIDENTAL added that they have fully complied with
their obligations set forth in the 1997 Compromise
Agreements.
DOLE filed its Manifestation dated September 6,
2004,[54] interposing no objection to the withdrawal of the
petition, and further stating that they maintain their
position that DOW and OCCIDENTAL, as well as other
settling defendant companies, should be retained as
defendants for purposes of prosecuting the cross-claims
of DOLE, in the event that the complaint below is
reinstated.
NAVIDA, et al., also filed their Comment dated
September 14, 2004,[55] stating that they agree with the
view of DOW and OCCIDENTAL that the petition in G.R.
No. 125598 has become moot and academic because
Civil Case No. 5617 had already been amicably settled by
the parties in 1997.
On September 27, 2004, DEL MONTE filed its
Comment on Motion to Withdraw Petition for Review Filed
by Petitioners in G.R. No. 125598,[56] stating that it has no
objections to the withdrawal of the petition filed by DOW
and OCCIDENTAL in G.R. No. 125598.
In a Resolution[57] dated October 11, 2004, this
Court granted, among others, the motion to withdraw
petition for review filed by DOW and OCCIDENTAL.
THE ISSUES
In their Consolidated Memorandum, NAVIDA, et al.,
and ABELLA, et al., presented the following issues for our
consideration:
IN REFUTATION
I.

THE COURT DISMISSED


THE CASE DUE TO LACK OF
JURISDICTION.
a)

19

The court did not simply


dismiss the case because it
was filed in bad faith with
petitioners intending to have
the same dismissed and
returned to the Texas court.

b)

The court dismissed the case


because it was convinced that
it did not have jurisdiction.

IN SUPPORT OF THE PETITION


II.

THE TRIAL COURT HAS


JURISDICTION OVER THE
SUBJECT MATTER OF THE
CASE.
a.

The acts complained of


occurred within Philippine
territory.

b.

Art. 2176 of the Civil Code of


the Philippines is broad
enough to cover the acts
complained of.

c.

Assumption of jurisdiction by
the U.S. District Court over
petitioner[s] claims did not
divest Philippine [c]ourts of
jurisdiction over the same.

d.

The Compromise Agreement


and the subsequent
Consolidated Motion to Drop
Party Respondents Dow,
Occidental and Shell does not
unjustifiably prejudice
remaining respondents Dole,
Del Monte and Chiquita.[58]

DISCUSSION
On the issue of jurisdiction
Essentially, the crux of the controversy in the
petitions at bar is whether the RTC of General Santos City
and the RTC of Davao City erred in dismissing Civil Case
Nos. 5617 and 24,251-96, respectively, for lack of
jurisdiction.
Remarkably, none of the parties to this case
claims that the courts a quo are bereft of jurisdiction to
determine and resolve the above-stated cases. All
parties contend that the RTC of General Santos City and
the RTC of Davao City have jurisdiction over the action for
damages, specifically for approximately P2.7 million for
each of the plaintiff claimants.
NAVIDA, et al., and ABELLA, et al., argue that the
allegedly tortious acts and/or omissions of defendant
companies occurred within Philippine
territory. Specifically, the use of and exposure to DBCP
that was manufactured, distributed or otherwise put into
the stream of commerce by defendant companies
happened in the Philippines. Said fact allegedly
constitutes reasonable basis for our courts to assume
jurisdiction over the case. Furthermore, NAVIDA, et al.,
and ABELLA, et al., assert that the provisions of Chapter 2
of the Preliminary Title of the Civil Code, as well as Article
2176 thereof, are broad enough to cover their claim for
damages. Thus, NAVIDA, et al., and ABELLA, et al., pray
that the respective rulings of the RTC of General Santos
City and the RTC of Davao City in Civil Case Nos. 5617
and 24,251-96 be reversed and that the said cases be
remanded to the courts a quo for further proceedings.
DOLE similarly maintains that the acts attributed
to defendant companies constitute a quasi-delict, which
falls under Article 2176 of the Civil Code. In addition,
DOLE states that if there were no actionable wrongs
committed under Philippine law, the courts a quo should
have dismissed the civil cases on the ground that the
Amended Joint-Complaints of NAVIDA, et al., and
ABELLA, et al., stated no cause of action against the

defendant companies. DOLE also argues that if indeed


there is no positive law defining the alleged acts of
defendant companies as actionable wrong, Article 9 of
the Civil Code dictates that a judge may not refuse to
render a decision on the ground of insufficiency of the
law. The court may still resolve the case, applying the
customs of the place and, in the absence thereof, the
general principles of law. DOLE posits that the Philippines
is thesitus of the tortious acts allegedly committed by
defendant companies as NAVIDA, et al., and ABELLA, et
al., point to their alleged exposure to DBCP which
occurred in the Philippines, as the cause of the sterility
and other reproductive system problems that they
allegedly suffered. Finally, DOLE adds that the RTC of
Davao City gravely erred in relying upon newspaper
reports in dismissing Civil Case No. 24,251-96 given that
newspaper articles are hearsay and without any
evidentiary value. Likewise, the alleged legal opinions
cited in the newspaper reports were taken judicial notice
of, without any notice to the parties. DOLE, however,
opines that the dismissal of Civil Case Nos. 5617 and
24,251-96 was proper, given that plaintiff claimants
merely prosecuted the cases with the sole intent of
securing a dismissal of the actions for the purpose of
convincing the U.S. Federal District Court to re-assume
jurisdiction over the cases.
In a similar vein, CHIQUITA argues that the
courts a quo had jurisdiction over the subject matter of
the cases filed before them. The Amended JointComplaints sought approximately P2.7 million in damages
for each plaintiff claimant, which amount falls within the
jurisdiction of the RTC. CHIQUITA avers that the pertinent
matter is the place of the alleged exposure to DBCP, not
the place of manufacture, packaging, distribution,
sale, etc., of the said chemical. This is in consonance
with the lex loci delicti commisitheory in determining
the situs of a tort, which states that the law of the place
where the alleged wrong was committed will govern the
action. CHIQUITA and the other defendant companies
also submitted themselves to the jurisdiction of the RTC
by making voluntary appearances and seeking for
affirmative reliefs during the course of the
proceedings. None of the defendant companies ever
objected to the exercise of jurisdiction by the courts a
quo over their persons. CHIQUITA, thus, prays for the
remand ofCivil Case Nos. 5617 and 24,251-96 to the RTC
of General Santos City and the RTC of Davao City,
respectively.
The RTC of General Santos City and the RTC of
Davao City have jurisdiction over Civil Case Nos.
5617 and 24,251-96, respectively
The rule is settled 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
plaintiffs are entitled to all or some of the claims asserted
therein.[59] Once vested by law, on a particular court or
body, the jurisdiction over the subject matter or nature of
the action cannot be dislodged by anybody other than by
the legislature through the enactment of a law.
At the time of the filing of the complaints, the
jurisdiction of the RTC in civil cases under Batas
Pambansa Blg. 129, as amended by Republic Act No.
7691, was:
SEC. 19. Jurisdiction in civil cases.
Regional Trial Courts shall exercise
exclusive original jurisdiction:
xxxx
(8)
In all other cases in
which the demand, exclusive of
interest, damages of whatever kind,
attorneys fees, litigation expenses, and

20

costs or the value of the property in


controversy exceeds One hundred
thousand pesos (P100,000.00) or, in
such other cases in Metro Manila, where
the demand, exclusive of the
abovementioned items exceeds Two
hundred thousand pesos (P200,000.00).
[60]

Corollary thereto, Supreme Court Administrative


Circular No. 09-94, states:
2. The exclusion of the term
damages of whatever kind in
determining the jurisdictional amount
under Section 19 (8) and Section 33 (1)
of B.P. Blg. 129, as amended by R.A. No.
7691, applies to cases where the
damages are merely incidental to or a
consequence of the main cause of
action. However, in cases where the
claim for damages is the main cause of
action, or one of the causes of action,
the amount of such claim shall be
considered in determining the
jurisdiction of the court.
Here, NAVIDA, et al., and ABELLA, et al., sought
in their similarly-worded Amended Joint-Complaints filed
before the courts a quo, the following prayer:
PRAYER
WHEREFORE, premises
considered, it is most respectfully
prayed that after hearing, judgment be
rendered in favor of the plaintiffs
ordering the defendants:
a)
TO PAY EACH
PLAINTIFF moral damages in the
amount of One Million Five Hundred
Thousand Pesos (P1,500,00.00);
b)
TO PAY EACH
PLAINTIFF nominal damages in the
amount of Four Hundred Thousand
Pesos (P400,000.00) each;
c)
TO PAY EACH
PLAINTIFF exemplary damages in the
amount of Six Hundred Thousand Pesos
(P600,000.00);
d)
TO PAY EACH
PLAINTIFF attorneys fees of Two
Hundred Thousand Pesos
(P200,000.00); and
e)
COSTS of the suit.[61]

TO PAY THE

From the foregoing, it is clear that the claim for


damages is the main cause of action and that the total
amount sought in the complaints is approximately P2.7
million for each of the plaintiff claimants. The RTCs
unmistakably have jurisdiction over the cases filed in
General Santos City and Davao City, as both claims by
NAVIDA, et al., and ABELLA, et al., fall within the purview
of the definition of the jurisdiction of the RTC under Batas
Pambansa Blg. 129.
Moreover, the allegations in both Amended JointComplaints narrate that:

THE CAUSES OF ACTION


4. The Defendants
manufactured, sold, distributed, used,
AND/OR MADE AVAILABLE IN
COMMERCE nematocides containing the
chemical dibromochloropropane,
commonly known as DBCP. THE
CHEMICAL WAS USED AGAINST the
parasite known as the nematode, which
plagued banana plantations, INCLUDING
THOSE in the Philippines. AS IT
TURNED OUT, DBCP not only destroyed
nematodes. IT ALSO CAUSED ILLEFFECTS ON THE HEALTH OF PERSONS
EXPOSED TO IT AFFECTING the human
reproductive system as well.
5. The plaintiffs were
exposed to DBCP in the 1970s up
to the early 1980s WHILE (a) they
used this product in the banana
plantations WHERE they were
employed, and/or (b) they resided
within the agricultural area WHERE
IT WAS USED. As a result of such
exposure, the plaintiffs suffered serious
and permanent injuries TO THEIR
HEALTH, including, but not limited to,
STERILITY and severe injuries to their
reproductive capacities.
6. THE DEFENDANTS WERE
AT FAULT OR WERE NEGLIGENT IN
THAT THEY MANUFACTURED,
produced, sold, and/or USED DBCP
and/or otherwise, PUT THE SAME
into the stream of commerce,
WITHOUT INFORMING THE USERS
OF ITS HAZARDOUS EFFECTS ON
HEALTH AND/OR WITHOUT
INSTRUCTIONS ON ITS PROPER USE
AND APPLICATION. THEY allowed
Plaintiffs to be exposed to, DBCPcontaining materials which THEY knew,
or in the exercise of ordinary care and
prudence ought to have known, were
highly harmful and injurious to the
Plaintiffs health and well-being.
7. The Defendants WHO
MANUFACTURED, PRODUCED, SOLD,
DISTRIBUTED, MADE AVAILABLE OR PUT
DBCP INTO THE STREAM OF COMMERCE
were negligent OR AT FAULT in that
they, AMONG OTHERS:
a.

b.

21

Failed to
adequately warn
Plaintiffs of the
dangerous
characteristics of
DBCP, or to cause
their subsidiaries or
affiliates to so warn
plaintiffs;
Failed to provide
plaintiffs with
information as to
what should be
reasonably safe and
sufficient clothing and
proper protective
equipment and
appliances, if any, to
protect plaintiffs from
the harmful effects of
exposure to DBCP, or

to cause their
subsidiaries or
affiliates to do so;
c.

Failed to place
adequate warnings, in
a language
understandable to the
worker, on containers
of DBCP-containing
materials to warn of
the dangers to health
of coming into
contact with DBCP, or
to cause their
subsidiaries or
affiliates to do so;

d.

Failed to take
reasonable precaution
or to exercise
reasonable care to
publish, adopt and
enforce a safety plan
and a safe method of
handling and applying
DBCP, or to cause
their subsidiaries or
affiliates to do so;

e.

Failed to test
DBCP prior to
releasing these
products for sale, or
to cause their
subsidiaries or
affiliates to do so; and

f.

Failed to reveal
the results of tests
conducted on DBCP to
each plaintiff,
governmental
agencies and the
public, or to cause
their subsidiaries or
affiliate to do so.

8. The illnesses and injuries of


each plaintiff are also due to the FAULT
or negligence of defendants Standard
Fruit Company, Dole Fresh Fruit
Company, Dole Food Company, Inc.,
Chiquita Brands, Inc. and Chiquita
Brands International, Inc. in that they
failed to exercise reasonable care to
prevent each plaintiffs harmful
exposure to DBCP-containing products
which defendants knew or should have
known were hazardous to each plaintiff
in that they, AMONG OTHERS:
a.

Failed to
adequately supervise
and instruct Plaintiffs
in the safe and proper
application of DBCPcontaining products;

b.

Failed to
implement proper
methods and
techniques of
application of said
products, or to cause
such to be
implemented;

c.

Failed to warn
Plaintiffs of the
hazards of exposure
to said products or to
cause them to be so
warned;

d.

Failed to test
said products for
adverse health
effects, or to cause
said products to be
tested;

e.

Concealed from
Plaintiffs information
concerning the
observed effects of
said products on
Plaintiffs;

f.

Failed to monitor
the health of plaintiffs
exposed to said
products;

g.

Failed to place
adequate labels on
containers of said
products to warn
them of the damages
of said products; and

h.

Failed to use
substitute
nematocides for said
products or to cause
such substitutes to
[be] used.
[62]
(Emphasis
supplied and words in
brackets ours.)

Quite evidently, the allegations in the Amended


Joint-Complaints of NAVIDA, et al., and ABELLA, et al.,
attribute to defendant companies certain acts and/or
omissions which led to their exposure to nematocides
containing the chemical DBCP. According to NAVIDA, et
al., and ABELLA, et al., such exposure to the said
chemical caused ill effects, injuries and illnesses,
specifically to their reproductive system.
Thus, these allegations in the complaints
constitute the cause of action of plaintiff claimants a
quasi-delict, which under the Civil Code is defined as an
act, or omission which causes damage to another, there
being fault or negligence. To be precise, Article 2176 of
the Civil Code provides:
Article 2176. Whoever by act
or omission causes damage to another,
there being fault or negligence, is
obliged to pay for the damage
done. Such fault or negligence, if there
is no pre-existing contractual relation
between the parties, is called a quasidelict and is governed by the provisions
of this Chapter.
As specifically enumerated in the amended
complaints, NAVIDA, et al., and ABELLA, et al., point to
the acts and/or omissions of the defendant companies in
manufacturing, producing, selling, using, and/or
otherwise putting into the stream of commerce,
nematocides which contain DBCP, without informing the
users of its hazardous effects on health and/or without
instructions on its proper use and application. [63]

22

Verily, in Citibank, N.A. v. Court of Appeals,


this Court has always reminded that jurisdiction of the
court over the subject matter of the action is determined
by the allegations of the complaint, irrespective of
whether or not the plaintiffs are entitled to recover upon
all or some of the claims asserted therein. The
jurisdiction of the court cannot be made to depend upon
the defenses set up in the answer or upon the motion to
dismiss, for otherwise, the question of jurisdiction would
almost entirely depend upon the defendants. What
determines the jurisdiction of the court is the nature of
the action pleaded as appearing from the allegations in
the complaint. The averments therein and the character
of the relief sought are the ones to be consulted.
[64]

Clearly then, the acts and/or omissions


attributed to the defendant companies constitute a quasidelict which is the basis for the claim for damages filed by
NAVIDA, et al., and ABELLA, et al., with individual claims
of approximately P2.7 million for each plaintiff claimant,
which obviously falls within the purview of the civil action
jurisdiction of the RTCs.
Moreover, the injuries and illnesses, which
NAVIDA, et al., and ABELLA, et al., allegedly suffered
resulted from their exposure to DBCP while they were
employed in the banana plantations located in
the Philippines or while they were residing within the
agricultural areas also located in the Philippines. The
factual allegations in the Amended Joint-Complaints all
point to their cause of action, which undeniably occurred
in the Philippines. The RTC of General Santos City and
the RTC of Davao City obviously have reasonable basis to
assume jurisdiction over the cases.
It is, therefore, error on the part of the courts a
quo when they dismissed the cases on the ground of lack
of jurisdiction on the mistaken assumption that the cause
of action narrated by NAVIDA, et al., and ABELLA, et al.,
took place abroad and had occurred outside and
beyond the territorial boundaries of the Philippines, i.e.,
the manufacture of the pesticides, their packaging in
containers, their distribution through sale or other
disposition, resulting in their becoming part of the stream
of commerce,[65] and, hence, outside the jurisdiction of
the RTCs.
Certainly, the cases below are not criminal cases
where territoriality, or the situs of the act complained of,
would be determinative of jurisdiction and venue for trial
of cases. In personal civil actions, such as claims for
payment of damages, the Rules of Court allow the action
to be commenced and tried in the appropriate court,
where any of the plaintiffs or defendants resides, or in the
case of a non-resident defendant, where he may be
found, at the election of the plaintiff.[66]
In a very real sense, most of the evidence
required to prove the claims of NAVIDA, et al., and
ABELLA, et al., are available only in the Philippines. First,
plaintiff claimants are all residents of the Philippines,
either in General Santos City or in Davao City. Second,
the specific areas where they were allegedly exposed to
the chemical DBCP are within the territorial jurisdiction of
the courts a quo wherein NAVIDA, et al., and ABELLA, et
al., initially filed their claims for damages. Third, the
testimonial and documentary evidence from important
witnesses, such as doctors, co-workers, family members
and other members of the community, would be easier to
gather in thePhilippines. Considering the great number of
plaintiff claimants involved in this case, it is not farfetched to assume that voluminous records are involved
in the presentation of evidence to support the claim of
plaintiff claimants. Thus, these additional factors,
coupled with the fact that the alleged cause of action of
NAVIDA, et al., and ABELLA, et al., against the defendant
companies for damages occurred in the Philippines,
demonstrate that, apart from the RTC of General Santos
City and the RTC of Davao City having jurisdiction over

the subject matter in the instant civil cases, they are,


indeed, the convenient fora for trying these cases.[67]
The RTC of General Santos City and the
RTC of Davao City validly acquired jurisdiction over
the persons of all the defendant companies
It is well to stress again that none of the parties
claims that the courts a quo lack jurisdiction over the
cases filed before them. All parties are one in asserting
that the RTC of General Santos City and the RTC of Davao
City have validly acquired jurisdiction over the persons of
the defendant companies in the action below. All parties
voluntarily, unconditionally and knowingly appeared and
submitted themselves to the jurisdiction of the courts a
quo.
Rule 14, Section 20 of the 1997 Rules of Civil
Procedure provides that [t]he defendants voluntary
appearance in the action shall be equivalent to service of
summons. In this connection, all the defendant
companies designated and authorized representatives to
receive summons and to represent them in the
proceedings before the courts a quo. All the defendant
companies submitted themselves to the jurisdiction of the
courts a quo by making several voluntary appearances,
by praying for various affirmative reliefs, and by actively
participating during the course of the proceedings
below.
In line herewith, this Court, in Meat Packing
Corporation of the Philippines v. Sandiganbayan,[68] held
that jurisdiction over the person of the defendant in civil
cases is acquired either by his voluntary appearance in
court and his submission to its authority or by service of
summons. Furthermore, the active participation of a
party in the proceedings is tantamount to an invocation
of the courts jurisdiction and a willingness to abide by
the resolution of the case, and will bar said party from
later on impugning the court or bodys jurisdiction. [69]
Thus, the RTC of General Santos City and the
RTC of Davao City have validly acquired jurisdiction over
the persons of the defendant companies, as well as over
the subject matter of the instant case. What is more, this
jurisdiction, which has been acquired and has been
vested on the courts a quo, continues until the
termination of the proceedings.
It may also be pertinently stressed that
jurisdiction is different from the exercise of
jurisdiction. Jurisdiction refers to the authority to decide
a case, not the orders or the decision rendered
therein. Accordingly, where a court has jurisdiction over
the persons of the defendants and the subject matter, as
in the case of the courts a quo, the decision on all
questions arising therefrom is but an exercise of such
jurisdiction. Any error that the court may commit in the
exercise of its jurisdiction is merely an error of judgment,
which does not affect its authority to decide the case,
much less divest the court of the jurisdiction over the
case.[70]
Plaintiffs purported bad faith in filing the subject
civil cases in Philippine courts
Anent the insinuation by DOLE that the plaintiff
claimants filed their cases in bad faith merely to procure
a dismissal of the same and to allow them to return to the
forum of their choice, this Court finds such argument
much too speculative to deserve any merit.
It must be remembered that this Court does not
rule on allegations that are unsupported by evidence on
record. This Court does not rule on allegations which are
manifestly conjectural, as these may not exist at all. This
Court deals with facts, not fancies; on realities, not
appearances. When this Court acts on appearances
instead of realities, justice and law will be short-lived.

23

[71]

This is especially true with respect to allegations of


bad faith, in line with the basic rule that good faith is
always presumed and bad faith must be proved.[72]
In sum, considering the fact that the RTC of
General Santos City and the RTC of Davao City have
jurisdiction over the subject matter of the amended
complaints filed by NAVIDA, et al., and ABELLA, et al., and
that the courts a quo have also acquired jurisdiction over
the persons of all the defendant companies, it therefore,
behooves this Court to order the remand of Civil Case
Nos. 5617 and 24,251-96 to the RTC of General Santos
City and the RTC of Davao City, respectively.
On the issue of the dropping of DOW,
OCCIDENTAL and SHELL as respondents in view of
their amicable settlement with NAVIDA, et al., and
ABELLA, et al.
NAVIDA, et al., and ABELLA, et al., are further
praying that DOW, OCCIDENTAL and SHELL be dropped as
respondents in G.R. Nos. 125078 and 126654, as well as
in Civil Case Nos. 5617 and 24,251-96. The non-settling
defendants allegedly manifested that they intended to
file their cross-claims against their co-defendants who
entered into compromise agreements. NAVIDA, et al.,
and ABELLA, et al., argue that the non-settling
defendants did not aver any cross-claim in their answers
to the complaint and that they subsequently sought to
amend their answers to plead their cross-claims only after
the settlement between the plaintiff claimants and DOW,
OCCIDENTAL, and SHELL were executed. NAVIDA, et al.,
and ABELLA, et al., therefore, assert that the cross-claims
are already barred.
In their Memoranda, CHIQUITA and DOLE are
opposing the above motion of NAVIDA, et al., and
ABELLA, et al., since the latters Amended Complaints
cited several instances of tortious conduct that were
allegedly committed jointly and severally by the
defendant companies. This solidary obligation on the
part of all the defendants allegedly gives any codefendant the statutory right to proceed against the
other co-defendants for the payment of their respective
shares. Should the subject motion of NAVIDA, et al., and
ABELLA, et al., be granted, and the Court subsequently
orders the remand of the action to the trial court for
continuance, CHIQUITA and DOLE would allegedly be
deprived of their right to prosecute their cross-claims
against their other co-defendants. Moreover, a third
party complaint or a separate trial, according to
CHIQUITA, would only unduly delay and complicate the
proceedings. CHIQUITA and DOLE similarly insist that the
motion of NAVIDA, et al., and ABELLA, et al., to drop
DOW, SHELL and OCCIDENTAL as respondents in G.R.
Nos. 125078 and 126654, as well as in Civil Case Nos.
5617 and 24,251-96, be denied.
Incidentally, on April 2, 2007, after the parties
have submitted their respective memoranda, DEL MONTE
filed a Manifestation and Motion[73] before the Court,
stating that similar settlement agreements were allegedly
executed by the plaintiff claimants with DEL MONTE and
CHIQUITA sometime in 1999. Purportedly included in the
agreements were Civil Case Nos. 5617 and 24,25196. Attached to the said manifestation were copies of the
Compromise Settlement, Indemnity, and Hold Harmless
Agreement between DEL MONTE and the settling
plaintiffs, as well as the Release in Full executed by the
latter.[74] DEL MONTE specified therein that there were
only four (4) plaintiffs in Civil Case No. 5617 who are
claiming against the Del Monte parties[75] and that the
latter have executed amicable settlements which
completely satisfied any claims against DEL MONTE. In
accordance with the alleged compromise agreements
with the four plaintiffs in Civil Case No. 5617, DEL MONTE
sought the dismissal of the Amended Joint-Complaint in
the said civil case. Furthermore, in view of the above
settlement agreements with ABELLA, et al., in Civil Case

No. 24,251-96, DEL MONTE stated that it no longer


wished to pursue its petition in G.R. No. 127856 and
accordingly prayed that it be allowed to withdraw the
same.
Having adjudged that Civil Case Nos. 5617 and
24,251-96 should be remanded to the RTC of General
Santos City and the RTC of Davao City, respectively, the
Court deems that the Consolidated Motions (to Drop
Party-Respondents) filed by NAVIDA, et al., and
ABELLA, et al., should likewise be referred to the said trial
courts for appropriate disposition.
Under Article 2028 of the Civil Code, [a]
compromise is a contract whereby the parties, by making
reciprocal concessions, avoid a litigation or put an end to
one already commenced. Like any other contract, an
extrajudicial compromise agreement is not excepted from
rules and principles of a contract. It is a consensual
contract, perfected by mere consent, the latter being
manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to
constitute the contract.[76] Judicial approval is not
required for its perfection.[77] A compromise has upon the
parties the effect and authority of res judicata[78] and this
holds true even if the agreement has not been judicially
approved.[79] In addition, as a binding contract, a
compromise agreement determines the rights and
obligations of only the parties to it.[80]
In light of the foregoing legal precepts, the RTC of
General Santos City and the RTC of Davao City should
first receive in evidence and examine all of the alleged
compromise settlements involved in the cases at bar to
determine the propriety of dropping any party as a
defendant therefrom.
The Court notes that the Consolidated Motions
(to Drop Party-Respondents) that was filed by NAVIDA, et
al., and ABELLA, et al., only pertained to DOW,
OCCIDENTAL and SHELL in view of the latter companies
alleged compromise agreements with the plaintiff
claimants. However, in subsequent developments, DEL
MONTE and CHIQUITA supposedly reached their own
amicable settlements with the plaintiff claimants, but DEL
MONTE qualified that it entered into a settlement
agreement with only four of the plaintiff claimants in Civil
Case No. 5617. These four plaintiff claimants were
allegedly the only ones who were asserting claims against
DEL MONTE. However, the said allegation of DEL MONTE
was simply stipulated in their Compromise Settlement,
Indemnity, and Hold Harmless Agreement and its truth
could not be verified with certainty based on the records
elevated to this Court. Significantly, the 336 plaintiff
claimants in Civil Case No. 5617 jointly filed a complaint
without individually specifying their claims against DEL
MONTE or any of the other defendant
companies. Furthermore, not one plaintiff claimant filed a
motion for the removal of either DEL MONTE or CHIQUITA
as defendants in Civil Case Nos. 5617 and 24,251-96.
There is, thus, a primary need to establish who
the specific parties to the alleged compromise
agreements are, as well as their corresponding rights and
obligations therein. For this purpose, the courts a
quo may require the presentation of additional evidence
from the parties. Thereafter, on the basis of the records
of the cases at bar and the additional evidence submitted
by the parties, if any, the trial courts can then determine
who among the defendants may be dropped from the
said cases.
It is true that, under Article 2194 of the Civil
Code, the responsibility of two or more persons who are
liable for the same quasi-delict is solidary. A solidary
obligation is one in which each of the debtors is liable for
the entire obligation, and each of the creditors is entitled
to demand the satisfaction of the whole obligation from
any or all of the debtors.[81]

24

In solidary obligations, the paying debtors right


of reimbursement is provided for under Article 1217 of
the Civil Code, to wit:
Art. 1217. Payment made by
one of the solidary debtors extinguishes
the obligation. If two or more solidary
debtors offer to pay, the creditor may
choose which offer to accept.
He who made the payment
may claim from his co-debtors only the
share which corresponds to each, with
the interest for the payment already
made. If the payment is made before
the debt is due, no interest for the
intervening period may be demanded.
When one of the solidary
debtors cannot, because of his
insolvency, reimburse his share to the
debtor paying the obligation, such
share shall be borne by all his codebtors, in proportion to the debt of
each.
The above right of reimbursement of a paying
debtor, and the corresponding liability of the co-debtors
to reimburse, will only arise, however, if a solidary debtor
who is made to answer for an obligation actually delivers
payment to the creditor. As succinctly held in Lapanday
Agricultural Development Corporation v. Court of Appeals,
[82]
[p]ayment, which means not only the delivery of
money but also the performance, in any other manner, of
the obligation, is the operative fact which will entitle
either of the solidary debtors to seek reimbursement for
the share which corresponds to each of the [other]
debtors.[83]
In the cases at bar, there is no right of
reimbursement to speak of as yet. A trial on the
merits must necessarily be conducted first in order
to establish whether or not defendant companies
are liable for the claims for damages filed by the
plaintiff claimants, which would necessarily give
rise to an obligation to pay on the part of the
defendants.
At the point in time where the proceedings
below were prematurely halted, no cross-claims have
been interposed by any defendant against another
defendant. If and when such a cross-claim is made by a
non-settling defendant against a settling defendant, it is
within the discretion of the trial court to determine the
propriety of allowing such a cross-claim and if the settling
defendant must remain a party to the case purely in
relation to the cross claim.
In Armed Forces of the Philippines Mutual
Benefit Association, Inc. v. Court of Appeals,[84] the Court
had the occasion to state that where there are, along
with the parties to the compromise, other persons
involved in the litigation who have not taken part in
concluding the compromise agreement but are adversely
affected or feel prejudiced thereby, should not be
precluded from invoking in the same proceedings an
adequate relief therefor.[85]
Relevantly, in Philippine International Surety Co.,
Inc. v. Gonzales,[86] the Court upheld the ruling of the trial
court that, in a joint and solidary obligation, the paying
debtor may file a third-party complaint and/or a crossclaim to enforce his right to seek contribution from his codebtors.
Hence, the right of the remaining defendant(s)
to seek reimbursement in the above situation, if proper, is

not affected by the compromise agreements allegedly


entered into by NAVIDA, et al., and ABELLA, et al., with
some of the defendant companies.
WHEREFORE, the Court hereby GRANTS the
petitions for review on certiorari in G.R. Nos. 125078,
126654, and 128398. We REVERSE and SET ASIDE the
Order dated May 20, 1996 of the Regional Trial Court of
General Santos City, Branch 37, in Civil Case No. 5617,
and the Order dated October 1, 1996 of the Regional Trial
Court of Davao City, Branch 16, and its subsequent Order
dated December 16, 1996 denying reconsideration in
Civil Case No. 24,251-96, and REMAND the records of
this case to the respective Regional Trial Courts of origin
for further and appropriate proceedings in line with the
ruling herein that said courts have jurisdiction over the
subject matter of the amended complaints in Civil Case
Nos. 5617 and 24,251-96.
The Court likewise GRANTS the motion filed by
Del Monte to withdraw its petition in G.R. No. 127856. In
view of the previous grant of the motion to withdraw the
petition in G.R. No. 125598, both G.R. Nos. 127856 and
125598 are considered CLOSED AND TERMINATED.
No pronouncement as to costs.

Certificate of Title (OCT) No. P-14423. The real estate


mortgages bore the signatures of the spouses Biaco.
When Ernesto failed to settle the above-mentioned loans
on its due date, respondent bank through counsel sent
him a written demand on September 28, 1999. The
amount due as of September 30, 1999 had already
reached ONE MILLION EIGHTY THOUSAND SIX HUNDRED
SEVENTY SIX AND FIFTY CENTAVOS (P1,080,676.50).
The written demand, however, proved futile.
On February 22, 2000, respondent bank filed a complaint
for foreclosure of mortgage against the spouses Ernesto
and Teresa Biaco before the RTC of Misamis Oriental.
Summons was served to the spouses Biaco through
Ernesto at his office (Export and Industry Bank) located at
Jofelmor Bldg., Mortola Street, Cagayan de Oro City.
Ernesto received the summons but for unknown reasons,
he failed to file an answer. Hence, the spouses Biaco were
declared in default upon motion of the respondent bank.
The respondent bank was allowed to present its
evidence ex parte before the Branch Clerk of Court who
was then appointed by the court as Commissioner.

SO ORDERED.

G.R. No. 161417

February 8, 2007

MA. TERESA CHAVES BIACO, Petitioner,


vs.
PHILIPPINE COUNTRYSIDE RURAL BANK, Respondent.

Arturo Toring, the branch manager of the respondent


bank, testified that the spouses Biaco had been obtaining
loans from the bank since 1996 to 1998. The loans for the
years 1996-1997 had already been paid by the spouses
Biaco, leaving behind a balance of P1,260,304.33
representing the 1998 loans. The amount being claimed
is inclusive of interests, penalties and service charges as
agreed upon by the parties. The appraisal value of the
land subject of the mortgage is only P150,000.00 as
reported by the Assessors Office.

DECISION
Based on the report of the Commissioner, the respondent
judge ordered as follows:

TINGA, J.:
Petitioner, Ma. Teresa Chaves Biaco, seeks a review of the
Decision1 of the Court of Appeals in CA-G.R. No. 67489
dated August 27, 2003, which denied her petition for
annulment of judgment, and the Resolution2 dated
December 15, 2003 which denied her motion for
reconsideration.
The facts as succinctly stated by the Court of Appeals are
as follows:
Ernesto Biaco is the husband of petitioner Ma. Teresa
Chaves Biaco. While employed in the Philippine
Countryside Rural Bank (PCRB) as branch manager,
Ernesto obtained several loans from the respondent bank
as evidenced by the following promissory notes:
Feb. 17, 1998

P 65,000.00

Mar. 18, 1998

30,000.00

May 6, 1998

60,000.00

May 20, 1998

350,000.00

July 30, 1998

155,000.00

Sept. 8, 1998

40,000.00

In case of non-payment within the period, the Sheriff of


this Court is ordered to sell at public auction the
mortgaged Lot, a parcel of registered land (Lot 35802,
Cad. 237 {Lot No. 12388-B, Csd-10-002342-D}), located
at Gasi, Laguindingan, Misamis Oriental and covered by
TCT No. P-14423 to satisfy the mortgage debt, and the
surplus if there be any should be delivered to the
defendants spouses ERNESTO and MA. THERESA
[CHAVES] BIACO. In the event however[,] that the
proceeds of the auction sale of the mortgage[d] property
is not enough to pay the outstanding obligation, the
defendants are ordered to pay any deficiency of the
judgment as their personal liability.

Sept. 8, 1998

120,000.00

SO ORDERED.

As security for the payment of the said loans, Ernesto


executed a real estate mortgage in favor of the bank
covering the parcel of land described in Original

25

WHEREFORE, judgment is hereby rendered ordering


defendants spouses ERNESTO R. BIACO and MA. THERESA
[CHAVES] BIACO to pay plaintiff bank within a period of
not less than ninety (90) days nor more than one hundred
(100) days from receipt of this decision the loan of ONE
MILLION TWO HUNDRED SIXTY THOUSAND THREE
HUNDRED FOUR PESOS and THIRTY THREE CENTAVOS
(P1,260,304.33) plus litigation expenses in the amount of
SEVEN THOUSAND SIX HUNDRED FORTY PESOS
(P7,640.00) and attorneys fees in the amount of TWO
HUNDRED FIFTY TWO THOUSAND THIRTY PESOS and
FORTY THREE CENTAVOS (P252,030.43) and cost of this
suit.

On July 12, 2000, the sheriff personally served the abovementioned judgment to Ernesto Biaco at his office at
Export and Industry Bank. The spouses Biaco did not
appeal from the adverse decision of the trial court. On

October 13, 2000, the respondent bank filed an ex


parte motion for execution to direct the sheriff to sell the
mortgaged lot at public auction. The respondent bank
alleged that the order of the court requiring the spouses
Biaco to pay within a period of 90 days had passed, thus
making it necessary to sell the mortgaged lot at public
auction, as previously mentioned in the order of the
court. The motion for execution was granted by the trial
court per Order dated October 20, 2000.
On October 31, 2000, the sheriff served a copy of the writ
of execution to the spouses Biaco at their residence in
#92 9th Street, Nazareth, Cagayan de Oro City. The writ
of execution was personally received by Ernesto. By
virtue of the writ of execution issued by the trial court,
the mortgaged property was sold at public auction in
favor of the respondent bank in the amount of ONE
HUNDRED FIFTY THOUSAND PESOS (P150,000.00).
The amount of the property sold at public auction being
insufficient to cover the full amount of the obligation, the
respondent bank filed an "ex parte motion for judgment"
praying for the issuance of a writ of execution against the
other properties of the spouses Biaco for the full
settlement of the remaining obligation. Granting the
motion, the court ordered that a writ of execution be
issued against the spouses Biaco to enforce and satisfy
the judgment of the court for the balance of ONE MILLION
THREE HUNDRED SIXTY NINE THOUSAND NINE HUNDRED
SEVENTY FOUR PESOS AND SEVENTY CENTAVOS
(P1,369,974.70).
The sheriff executed two (2) notices of levy against
properties registered under the name of petitioner Ma.
Teresa Chaves Biaco. However, the notices of levy were
denied registration because Ma. Teresa had already sold
the two (2) properties to her daughters on April 11,
2001.3
Petitioner sought the annulment of the Regional Trial
Court decision contending that extrinsic fraud prevented
her from participating in the judicial foreclosure
proceedings. According to her, she came to know about
the judgment in the case only after the lapse of more
than six (6) months after its finality. She claimed that
extrinsic fraud was perpetrated against her because the
bank failed to verify the authenticity of her signature on
the real estate mortgage and did not inquire into the
reason for the absence of her signature on the promissory
notes. She moreover asserted that the trial court failed to
acquire jurisdiction because summons were served on her
through her husband without any explanation as to why
personal service could not be made.
The Court of Appeals considered the two circumstances
that kept petitioner in the dark about the judicial
foreclosure proceedings: (1) the failure of the sheriff to
personally serve summons on petitioner; and (2)
petitioners husbands concealment of his knowledge of
the foreclosure proceedings. On the validity of the service
of summons, the appellate court ruled that judicial
foreclosure proceedings are actions quasi in rem. As such,
jurisdiction over the person of the defendant is not
essential as long as the court acquires jurisdiction over
the res.Noting that the spouses Biaco were not opposing
parties in the case, the Court of Appeals further ruled that
the fraud committed by one against the other cannot be
considered extrinsic fraud.
Her motion for reconsideration having been denied,
petitioner filed the instant Petition for Review,4 asserting
that even if the action is quasi in rem, personal service of
summons is essential in order to afford her due process.
The substituted service made by the sheriff at her
husbands office cannot be deemed proper service absent
any explanation that efforts had been made to personally

26

serve summons upon her but that such efforts failed.


Petitioner contends that extrinsic fraud was perpetrated
not so much by her husband, who did not inform her of
the judicial foreclosure proceedings, but by the sheriff
who allegedly connived with her husband to just leave a
copy of the summons intended for her at the latters
office.
Petitioner further argues that the deficiency judgment is a
personal judgment which should be deemed void for lack
of jurisdiction over her person.
Respondent PCRB filed its Comment,5 essentially
reiterating the appellate courts ruling. Respondent avers
that service of summons upon the defendant is not
necessary in actions quasi in rem it being sufficient that
the court acquire jurisdiction over the res. As regards the
alleged conspiracy between petitioners husband and the
sheriff, respondent counters that this is a new argument
which cannot be raised for the first time in the instant
petition.
We required the parties to file their respective
memoranda in the Resolution6 dated August 18, 2004.
Accordingly, petitioner filed her Memorandum7 dated
October 10, 2004, while respondent filed its
Memorandum for Respondent8 dated September 9, 2004.
Annulment of judgment is a recourse equitable in
character, allowed only in exceptional cases as where
there is no available or other adequate remedy.
Jurisprudence and Sec. 2, Rule 47 of the 1997 Rules of
Civil Procedure (Rules of Court) provide that judgments
may be annulled only on grounds of extrinsic fraud and
lack of jurisdiction or denial of due process.9
Petitioner asserts that extrinsic fraud consisted in her
husbands concealment of the loans which he obtained
from respondent PCRB; the filing of the complaint for
judicial foreclosure of mortgage; service of summons;
rendition of judgment by default; and all other
proceedings which took place until the writ of
garnishment was served.10
Extrinsic fraud exists when there is a fraudulent act
committed by the prevailing party outside of the trial of
the case, whereby the defeated party was prevented
from presenting fully his side of the case by fraud or
deception practiced on him by the prevailing
party.11 Extrinsic fraud is present where the unsuccessful
party had been prevented from exhibiting fully his case,
by fraud or deception practiced on him by
his opponent, as by keeping him away from court, a false
promise of a compromise; or where the defendant never
had knowledge of the suit, being kept in ignorance by the
acts of the plaintiff; or where an attorney fraudulently or
without authority assumes to represent a party and
connives at his defeat; or where the attorney regularly
employed corruptly sells out his clients interest to the
other side. The overriding consideration is that the
fraudulent scheme of the prevailing litigant prevented a
party from having his day in court.12
With these considerations, the appellate court acted well
in ruling that there was no fraud perpetrated by
respondent bank upon petitioner, noting that the spouses
Biaco were co-defendants in the case and shared the
same interest. Whatever fact or circumstance concealed
by the husband from the wife cannot be attributed to
respondent bank.
Moreover, petitioners allegation that her signature on the
promissory notes was forged does not evince extrinsic
fraud. It is well-settled that the use of forged instruments
during trial is not extrinsic fraud because such evidence

does not preclude the participation of any party in the


proceedings.13
The question of whether the trial court has jurisdiction
depends on the nature of the action, i.e., whether the
action is in personam, in rem, or quasi in rem. The rules
on service of summons under Rule 14 of the Rules of
Court likewise apply according to the nature of the action.
An action in personam is an action against a person on
the basis of his personal liability. An action in rem is an
action against the thing itself instead of against the
person. An action quasi in rem is one wherein 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.14
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 court acquires jurisdiction over the res.
Jurisdiction over the res is acquired either (1) by the
seizure of the property under legal process, whereby it is
brought into actual custody of the law; or (2) as a result
of the institution of legal proceedings, in which the power
of the court is recognized and made effective.15
Nonetheless, summons must be served upon the
defendant not for the purpose of vesting the court with
jurisdiction but merely for satisfying the due process
requirements.16
A resident defendant who does not voluntarily appear in
court, such as petitioner in this case, must be personally
served with summons as provided under Sec. 6, Rule 14
of the Rules of Court. If she cannot be personally served
with summons within a reasonable time, substituted
service may be effected (1) by leaving copies of the
summons at the defendants residence with some person
of suitable age and discretion then residing therein, or (2)
by leaving the copies at defendants office or regular
place of business with some competent person in charge
thereof in accordance with Sec. 7, Rule 14 of the Rules of
Court.
In this case, the judicial foreclosure proceeding instituted
by respondent PCRB undoubtedly vested the trial court
with jurisdiction over the res. A judicial foreclosure
proceeding is an action quasi in rem. As such, jurisdiction
over the person of petitioner is not required, it being
sufficient that the trial court is vested with jurisdiction
over the subject matter.
There is a dimension to this case though that needs to be
delved into. Petitioner avers that she was not personally
served summons. Instead, summons was served to her
through her husband at his office without any explanation
as to why the particular surrogate service was resorted
to. The Sheriffs Return of Service dated March 21, 2000
states:
xxxx
That on March 16, 2000, the undersigned served the
copies of Summons, complaint and its annexes to the
defendants Sps. Ernesto R. & Ma. Teresa Ch. Biaco thru
Ernesto R. Biaco[,] defendant of the above-entitled case
at his office EXPORT & INDUSTRY BANK, Jofelmore Bldg.[,]
Mortola St., Cagayan de Oro City and he acknowledged
receipt thereof as evidenced with his signature appearing
on the original copy of the Summons.17[Emphasis
supplied]

27

Without ruling on petitioners allegation that her husband


and the sheriff connived to prevent summons from being
served upon her personally, we can see that petitioner
was denied due process and was not able to participate in
the judicial foreclosure proceedings as a consequence.
The violation of petitioners constitutional right to due
process arising from want of valid service of summons on
her warrants the annulment of the judgment of the trial
court.
There is more, the trial court granted respondent
PCRBs ex-parte motion for deficiency judgment and
ordered the issuance of a writ of execution against the
spouses Biaco to satisfy the remaining balance of the
award. In short, the trial court went beyond its jurisdiction
over the res and rendered a personal judgment against
the spouses Biaco. This cannot be
countenanced.1awphil.net
In Sahagun v. Court of Appeals,18 suit was brought against
a non-resident defendant, Abelardo Sahagun, and a writ
of attachment was issued and subsequently levied on a
house and lot registered in his name. Claiming ownership
of the house, his wife, Carmelita Sahagun, filed a motion
to intervene. For failure of plaintiff to serve summons
extraterritorially upon Abelardo, the complaint was
dismissed without prejudice.
Subsequently, plaintiff filed a motion for leave to serve
summons by publication upon Abelardo. The trial court
granted the motion. Plaintiff later filed an amended
complaint against Abelardo, this time impleading
Carmelita and Rallye as additional defendants. Summons
was served on Abelardo through publication in the Manila
Evening Post. Abelardo failed to file an answer and was
declared in default. Carmelita went on certiorari to the
Court of Appeals assailing as grave abuse of discretion
the declaration of default of Abelardo. The Court of
Appeals dismissed the petition and denied
reconsideration.
In her petition with this Court, Carmelita raised the issue
of whether the trial court acquired jurisdiction over her
husband, a non-resident defendant, by the publication of
summons in a newspaper of general circulation in the
Philippines. The Court sustained the correctness of
extrajudicial service of summons by publication in such
newspaper.
The Court explained, citing El Banco Espaol-Filipino v.
Palanca,19 that foreclosure and attachment proceedings
are both actions quasi in rem. As such, jurisdiction over
the person of the (non-resident) defendant is not
essential. Service of summons on a non-resident
defendant who is not found in the country is required, not
for purposes of physically acquiring jurisdiction over his
person but simply in pursuance of the requirements of
fair play, so that he may be informed of the pendency of
the action against him and the possibility that property
belonging to him or in which he has an interest may be
subjected to a judgment in favor of a resident, and that
he may thereby be accorded an opportunity to defend in
the action, should he be so minded.
Significantly, the Court went on to rule, citing De Midgely
v. Ferandos, et. al.20 and Perkins v. Dizon, et al.21 that in a
proceeding in rem or quasi in rem, the only relief that
may be granted by the court against a defendant over
whose person it has not acquired jurisdiction either by
valid service of summons or by voluntary submission to
its jurisdiction, is limited to the res.
Similarly, in this case, while the trial court acquired
jurisdiction over the res, its jurisdiction is limited to a
rendition of judgment on the res. It cannot extend its
jurisdiction beyond the res and issue a judgment

enforcing petitioners personal liability. In doing so


without first having acquired jurisdiction over the person
of petitioner, as it did, the trial court violated her
constitutional right to due process, warranting the
annulment of the judgment rendered in the case.
WHEREFORE, the instant petition is GRANTED. The
Decision dated August 27, 2003 and the Resolution dated
December 15, 2003 of the Court of Appeals in CA-G.R. SP
No. 67489 are SET ASIDE. The Judgment dated July 11,
2000 and Order dated February 9, 2001 of the Regional
Trial Court of Cagayan de Oro City, Branch 20, are
likewise SET ASIDE.
SO ORDERED.

G.R. No. 199199

August 27, 2013

MARICRIS D. DOLOT, CHAIRMAN OF THE BAGONG


ALYANSANG MAKABAYAN-SORSOGON, PETITIONER
vs.
HON. RAMON PAJE, IN HIS CAPACITY AS THE
SECRETARY OF THE DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES,
REYNULFO A. JUAN, REGIONAL DIRECTOR, MINES
AND GEOSCIENCES BUREAU, DENR, HON. RAUL R.
LEE, GOVERNOR, PROVINCE OF SORSOGON,
ANTONIO C. OCAMPO, JR., VICTORIA A. AJERO,
ALFREDO M. AGUILAR, AND JUAN M. AGUILAR,
ANTONES ENTERPRISES, GLOBAL SUMMIT MINES
DEV'T CORP., AND TR ORE, RESPONDENTS.
DECISION

the people of Matnog;5 and (7) the respondents violated


Republic Act (R.A.) No. 7076 or the Peoples Small-Scale
Mining Act of 1991, R.A. No. 7942 or the Philippine Mining
Act of 1995, and the Local Government Code.6 Thus, they
prayed for the following reliefs: (1) the issuance of a writ
commanding the respondents to immediately stop the
mining operations in the Municipality of Matnog; (2) the
issuance of a temporary environment protection order or
TEPO; (3) the creation of an inter-agency group to
undertake the rehabilitation of the mining site; (4) award
of damages; and (5) return of the iron ore, among others.7
The case was referred by the Executive Judge to the RTC
of Sorsogon, Branch 53 being the designated
environmental court.8 In the Order9 dated September 16,
2011, the case was summarily dismissed for lack of
jurisdiction.
The petitioners filed a motion for reconsideration but it
was denied in the Resolution10 dated October 18, 2011.
Aside from sustaining the dismissal of the case for lack of
jurisdiction, the RTC11 further ruled that: (1) there was no
final court decree, order or decision yet that the public
officials allegedly failed to act on, which is a condition for
the issuance of the writ of continuing mandamus; (2) the
case was prematurely filed as the petitioners therein
failed to exhaust their administrative remedies; and (3)
they also failed to attach judicial affidavits and furnish a
copy of the complaint to the government or appropriate
agency, as required by the rules.12
Petitioner Dolot went straight to this Court on pure
questions of law.
Issues

REYES, J.:
1

This is a petition for review on certiorari under Rule 45 of


theRules of Court assailing the Order2 dated September
16, 2011 and Resolution3 dated October 18, 2011 issued
by the Regional Trial Court (RTC) of Sorsogon, Branch 53.
The assailed issuances dismissed Civil Case No. 20118338 for Continuing Mandamus, Damages and Attorneys
Fees with Prayer for the Issuance of a
Temporary Environment Protection Order.
Antecedent Facts
On September 15, 2011, petitioner Maricris D. Dolot
(Dolot), together with the parish priest of the Holy Infant
Jesus Parish and the officers of Alyansa Laban sa Mina sa
Matnog (petitioners), filed a petition for continuing
mandamus, damages and attorneys fees with the RTC of
Sorsogon, docketed as Civil Case No. 2011-8338. 4The
petition contained the following pertinent allegations: (1)
sometime in 2009, they protested the iron ore mining
operations being conducted by Antones
Enterprises, Global Summit Mines Development
Corporation and TR Ore in Barangays Balocawe and Bonot Daco, located in the Municipality of Matnog, to no
avail; (2) Matnog is located in the southern tip of Luzon
and there is a need to protect, preserve and maintain the
geological foundation of the municipality; (3) Matnog is
susceptible to flooding and landslides, and confronted
with the environmental dangers of flood hazard,
liquefaction, ground settlement, ground subsidence and
landslide hazard; (4) after investigation, they learned that
the mining operators did not have the required permit to
operate; (5) Sorsogon Governor Raul Lee and his
predecessor Sally Lee issued to the operators a smallscale mining permit, which they did not have authority to
issue; (6) the representatives of the
Presidential Management Staff and theDepartment of
Environment and Natural Resources (DENR), despite
knowledge, did not do anything to protect the interest of

28

The main issue in this case is whether the RTC-Branch 53


has jurisdiction to resolve Civil Case No. 2011-8338. The
other issue is whether the petition is dismissible on the
grounds that: (1) there is no final court decree, order or
decision that the public officials allegedly failed to act on;
(2) the case was prematurely filed for failure to exhaust
administrative remedies; and (3) the petitioners failed to
attach judicial affidavits and furnish a copy of the
complaint to the government or appropriate agency.
Ruling of the Court
Jurisdiction and Venue
In dismissing the petition for lack of jurisdiction, the RTC,
in its Order dated September 16, 2011, apparently relied
on SC Administrative Order (A.O.) No. 7 defining the
territorial areas of the Regional Trial Courts in Regions 1
to 12, and Administrative Circular (Admin. Circular) No.
23-2008,13 designating the environmental courts "to try
and decide violations of environmental laws x x x
committed within their respective territorial
jurisdictions."14 Thus, it ruled that its territorial jurisdiction
was limited within the boundaries of Sorsogon City and
the neighboring municipalities of Donsol, Pilar, Castilla,
Casiguran and Juban and that it was "bereft of jurisdiction
to entertain, hear and decide [the] case, as such
authority rests before another co-equal court." 15
Such reasoning is plainly erroneous. The RTC cannot
solely rely on SC A.O. No. 7 and Admin. Circular No. 232008 and confine itself within its four corners in
determining whether it had jurisdiction over the action
filed by the petitioners.
None is more well-settled than the rule that jurisdiction,
which is the power and authority of the court to hear, try
and decide a case, is conferred by law.16 It may either be

over the nature of the action, over the subject matter,


over the person of the defendants or over the issues
framed in the pleadings.17 By virtue of Batas Pambansa
(B.P.) Blg. 129 or the Judiciary Reorganization Act of 1980,
jurisdiction over special civil actions for certiorari,
prohibition and mandamus is vested in the RTC.
Particularly, Section 21(1) thereof provides that the RTCs
shall exercise original jurisdiction
in the issuance of writs of certiorari, prohibition,
mandamus, quo warranto, habeas corpus and injunction
which may be enforced in any part of their respective
regions. (Emphasis ours)
A.O. No. 7 and Admin. Circular No. 23-2008 was issued
pursuant to Section 18 of B.P. Blg. 129, which gave the
Court authority to define the territory over which a
branch of the RTC shall exercise its authority. These
administrative orders and circulars issued by the Court
merely provide for the venue where an action may be
filed. The Court does not have the power to confer
jurisdiction on any court or tribunal as the allocation of
jurisdiction is lodged solely in Congress.18 It also cannot
be delegated to another office or agency of the
Government.19 Section 18 of B.P. Blg. 129, in fact,
explicitly states that the territory thus defined shall be
deemed to be the territorial area of the branch concerned
for purposes of determining the venue of all suits,
proceedings or actions. It was also clarified in Office of
the Court Administrator v. Judge Matas20 that
Administrative Order No. 3 [defining the territorial
jurisdiction of the Regional Trial Courts in the National
Capital Judicial Region] and, in like manner, Circular Nos.
13 and 19, did not per se confer jurisdiction on the
covered regional trial courts or its branches, such that
non-observance thereof would nullify their judicial acts.
The administrative order merely defines the limits of the
administrative area within which a branch of the court
may exercise its authority pursuant to the jurisdiction
conferred by Batas Pambansa Blg. 129.21
The RTC need not be reminded that venue relates only to
the place of trial or the geographical location in which an
action or proceeding should be brought and does not
equate to the jurisdiction of the court. It is intended to
accord convenience to the parties, as it relates to the
place of trial, and does not restrict their access to the
courts.22 Consequently, the RTCs motu proprio dismissal
of Civil Case No. 2011-8338 on the ground of lack of
jurisdiction is patently incorrect.
At most, the error committed by the petitioners in filing
the case with the RTC of Sorsogon was that of improper
venue. A.M. No. 09-6-8-SC or the Rules of Procedure for
Environmental Cases (Rules) specifically states that a
special civil action for continuing mandamus shall be filed
with the "[RTC] exercising jurisdiction over the territory
where the actionable neglect or omission occurred x x
x."23 In this case, it appears that the alleged actionable
neglect or omission occurred in the Municipality of
Matnog and as such, the petition should have been filed
in the RTC of Irosin.24 But even then, it does not warrant
the outright dismissal of the petition by the RTC as venue
may be waived.25 Moreover, the action filed by the
petitioners is not criminal in nature where venue is an
essential element of jurisdiction.26 In Gomez-Castillo v.
Commission on Elections,27 the Court even expressed that
what the RTC should have done under the circumstances
was to transfer the case (an election protest) to the
proper branch. Similarly, it would serve the higher
interest of justice28 if the Court orders the transfer of Civil
Case No. 2011 8338 to the RTC of Irosin for proper and
speedy resolution, with the RTC applying the Rules in its
disposition of the case.

29

At this juncture, the Court affirms the continuing


applicability of Admin. Circular No. 23-2008 constituting
the different "green courts" in the country and setting the
administrative guidelines in the raffle and disposition of
environmental cases. While the designation and
guidelines were made in 2008, the same should operate
in conjunction with the Rules.
A.M. No. 09-6-8-SC: Rules of Procedure for Environmental
Cases
In its Resolution dated October 18, 2011, which resolved
the petitioners motion for reconsideration of the order of
dismissal, the RTC further ruled that the petition was
dismissible on the following grounds: (1) there is no final
court decree, order or decision yet that the public officials
allegedly failed to act on; (2) the case was prematurely
filed for failure to exhaust administrative remedies; and
(3) there was failure to attach judicial affidavits and
furnish a copy of the complaint to the government or
appropriate agency.29 The respondents, and even the
Office of the Solicitor General, in behalf of the public
respondents, all concur with the view of the RTC.
The concept of continuing mandamus was first introduced
in Metropolitan Manila Development Authority v.
Concerned Residents of Manila Bay.30 Now cast in stone
under Rule 8 of the Rules, the writ of continuing
mandamus enjoys a distinct procedure than that of
ordinary civil actions for the enforcement/violation of
environmental laws, which are covered by Part II (Civil
Procedure). Similar to the procedure under Rule 65 of the
Rules of Court for special civil actions for certiorari,
prohibition and mandamus, Section 4, Rule 8 of the Rules
requires that the petition filed should be sufficient in form
and substance before a court may take further action;
otherwise, the court may dismiss the petition outright.
Courts must be cautioned, however, that the
determination to give due course to the petition or
dismiss it outright is an exercise of discretion that must
be applied in a reasonable manner in consonance with
the spirit of the law and always with the view in mind of
seeing to it that justice is served.31
Sufficiency in form and substance refers to the contents
of the petitionufiled under Rule 8, Section 1:
When any agency or instrumentality of the government
or officer thereof unlawfully neglects the performance of
an act which the law specifically enjoins as a duty
resulting from an office, trust or station in connection with
the enforcement or violation of an environmental law rule
or regulation or a right therein, or unlawfully excludes
another from the use or enjoyment of such right and
there is no other plain, speedy and adequate remedy in
the ordinary course of law, the person aggrieved thereby
may file a verified petition in the proper court, alleging
the facts with certainty, attaching thereto supporting
evidence, specifying that the petition concerns an
environmental law, rule or regulation, and praying that
judgment be rendered commanding the respondent to do
an act or series of acts until the judgment is fully
satisfied, and to pay damages sustained by the petitioner
by reason of the malicious neglect to perform the duties
of the respondent, under the law, rules or regulations.
The petition shall also contain a sworn certification of
non-forum shopping.1wphi1
On matters of form, the petition must be verified and
must contain supporting evidence as well as a sworn
certification of non-forum shopping. It is also necessary
that the petitioner must be one who is aggrieved by an
act or omission of the government agency,
instrumentality or its officer concerned. Sufficiency of
substance, on the other hand, necessitates that the
petition must contain substantive allegations specifically

constituting an actionable neglect or omission and must


establish, at the very least, a prima facie basis for the
issuance of the writ, viz: (1) an agency or instrumentality
of government or its officer unlawfully neglects the
performance of an act or unlawfully excludes another
from the use or enjoyment of a right; (2) the act to be
performed by the government agency, instrumentality or
its officer is specifically enjoined by law as a duty; (3)
such duty results from an office, trust or station in
connection with the enforcement or violation of an
environmental law, rule or regulation or a right therein;
and (4) there is no other plain, speedy and adequate
remedy in the course of law.32
The writ of continuing mandamus is a special civil action
that may be availed of "to compel the performance of an
act specifically enjoined by law." 33 The petition should
mainly involve an environmental and other related law,
rule or regulation or a right therein. The RTCs mistaken
notion on the need for a final judgment, decree or order is
apparently based on the definition of the writ of
continuing mandamus under Section 4, Rule 1 of the
Rules, to wit:
(c) Continuing mandamus is a writ issued by a court in an
environmental case directing any agency or
instrumentality of the government or officer thereof to
perform an act or series of acts decreed by final judgment
which shall remain effective until judgment is fully
satisfied. (Emphasis ours)
The final court decree, order or decision erroneously
alluded to by the RTC actually pertains to the judgment or
decree that a court would eventually render in an
environmental case for continuing mandamus and which
judgment or decree shall subsequently become final.
Under the Rules, after the court has rendered a judgment
in conformity with Rule 8, Section 7 and such judgment
has become final, the issuing court still retains jurisdiction
over the case to ensure that the government agency
concerned is performing its tasks as mandated by law
and to monitor the effective performance of said tasks. It
is only upon full satisfaction of the final judgment, order
or decision that a final return of the writ shall be made to
the court and if the court finds that the judgment has
been fully implemented, the satisfaction of judgment
shall be entered in the court docket.34 A writ of continuing
mandamus is, in essence, a command of continuing
compliance with a final judgment as it "permits the court
to retain jurisdiction after judgment in order to ensure the
successful implementation of the reliefs mandated under
the courts decision."35
The Court, likewise, cannot sustain the argument that the
petitioners should have first filed a case with the Panel of
Arbitrators (Panel), which has jurisdiction over mining
disputes under R.A. No. 7942.
Indeed, as pointed out by the respondents, the Panel has
jurisdiction over mining disputes.36 But the petition filed
below does not involve a mining dispute. What was being
protested are the alleged negative environmental impact
of the small-scale mining operation being conducted by
Antones Enterprises, Global Summit Mines Development
Corporation and TR Ore in the Municipality of Matnog; the
authority of the Governor of Sorsogon to issue mining
permits in favor of these entities; and the perceived
indifference of the DENR and local government officials

30

over the issue. Resolution of these matters does not


entail the technical knowledge and expertise of the
members of the Panel but requires an exercise of judicial
function. Thus, in Olympic Mines and Development Corp.
v. Platinum Group Metals Corporation,37 the Court stated
Arbitration before the Panel of Arbitrators is proper only
when there is a disagreement between the parties as to
some provisions of the contract between them, which
needs the interpretation and the application of that
particular knowledge and expertise possessed by
members of that Panel. It is not proper when one of the
parties repudiates the existence or validity of such
contract or agreement on the ground of fraud or
oppression as in this case. The validity of the contract
cannot be subject of arbitration proceedings. Allegations
of fraud and duress in the execution of a contract are
matters within the jurisdiction of the ordinary courts of
law. These questions are legal in nature and require the
application and interpretation of laws and jurisprudence
which is necessarily a judicial function.38 (Emphasis
supplied in the former and ours in the latter)
Consequently, resort to the Panel would be completely
useless and unnecessary.
The Court also finds that the RTC erred in ruling that the
petition is infirm for failure to attach judicial affidavits. As
previously stated, Rule 8 requires that the petition should
be verified, contain supporting evidence and must be
accompanied by a sworn certification of non-forum
shopping. There is nothing in Rule 8 that compels the
inclusion of judicial affidavits, albeit not prohibited. It is
only if the evidence of the petitioner would consist of
testimony of witnesses that it would be the time that
judicial affidavits (affidavits of witnesses in the question
and answer form) must be attached to the
petition/complaint.39
Finally, failure to furnish a copy of the petition to the
respondents is not a fatal defect such that the case
should be dismissed. The RTC could have just required
the petitioners to furnish a copy of the petition to the
respondents. It should be remembered that "courts are
not enslaved by technicalities, and they have the
prerogative to relax compliance with procedural rules of
even the most mandatory character, mindful of the duty
to reconcile both the need to speedily put an end to
litigation and the parties right to an opportunity to be
heard."40
WHEREFORE, the petition is GRANTED. The Order dated
September 16, 2011 and Resolution dated October 18,
2011 issued by the Regional Trial Court of Sorsogon,
Branch 53, dismissing Civil Case No. 2011-8338 are
NULLIFIED AND SET ASIDE. The Executive Judge of the
Regional Trial Court of Sorsogon is DIRECTED to transfer
the case to the Regional Trial Court of Irosin, Branch 55,
for further proceedings with dispatch. Petitioner Maricris
D. Dolot is also ORDERED to furnish the respondents with
a copy of the petition and its annexes within ten (10)
days from receipt of this Decision and to submit its
Compliance with the RTC of Irosin.
SO ORDERED.
Wala pang ANG V ANG

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