Contents

RULE 10- AMENDED AND SUPPLEMENTAL PLEADINGS...............................................3

Sec. 1. Amendments in general..............................................................................3
Wallem v. S.R. Farms, G.R. No. 161849, July 9, 2010...........................................3
Spouses Dionisio v. Linsangan, G.R. No. 178159, March 2, 2011.........................8
Sec. 2. Amendments as a matter of right..............................................................11
Araneta v. Court of Appeals, G.R. No. 154096, August 22. 2008 (Supra.)..........11
Sante v. Hon. Claravall, G.R. No. 173915, February 22, 2010............................20
Sec. 3. Amendments by leave of court..................................................................25
Tiu v. PBCOm, G.R. No. 151932, August 19, 2009..............................................25
Philippine Ports Authority v. WGA, G.R. No. 158401, January 28, 2008..............31
Sec. 4. Formal amendments.................................................................................. 34
Sec. 5. Amendment to conform to or authorize presentation of evidence...........34
Azolla Farms v. Court of Appeals, G.R. No. 138085, November 11, 2004...........34
Spouses Dela Cruz v. Concepcion, G.R. No. 172825, October 11, 2012.............38
Sec. 6. Supplemental pleadings............................................................................ 44
Delbros Hotel v. IAC, G.R. No. L-72566, April 12, 1988......................................44
Barba v. Liceo de Cagayan, G.R. No. 193857, November 28, 2012....................53
Sec. 7. Filing of amended pleadings......................................................................53
Sec. 8. Effect of amended pleadings....................................................................53
Air Ads v. TADECO, G.R. No. 160736, March 23, 2011........................................54
RULE 11- WHEN TO FILE RESPONSIVE PLEADINGS...................................................60
Sec. 1. Answer to complaint.................................................................................. 60
Atty. Fernandez v. Court of Appeals, G.R. No. 131094, May 16, 2005................61
Victoria v. Court of Appeals, G.R. No. 147550, January 26, 2005.......................65
Sec. 2. Answer of a defendant foreign private juridical entity...............................78
Sec. 3. Answer to amended complaint..................................................................78
Sec. 4. Answer to counterclaim or cross-claim......................................................78
Sec. 5. Answer to third (fourth, etc.)-party complaint...........................................78
Sec. 6. Reply may be filed within tem (10) days from service of the pleadings
responded to......................................................................................................... 78
Sec. 7. Answer to supplemental complaint...........................................................78
Sec. 8. Existing counterclaim or cross-claim.........................................................78
Sec. 9. Counterclaim or cross-claim arising after answer......................................78
Sec. 10. Omitted counterclaim or cross-claim.......................................................78
Sec. 11. Extension of time to plead.......................................................................78
RULE 12- BILL OF PARTICULARS................................................................................78
Sec. 1. When applied for purpose.........................................................................78
Republic v. Sandiganbayan, G.R. No. 148154, December 17, 2007...................78

Salita v. Hon. Magtolis, G.R. No. 106429, June 13, 1994 (Supra.).......................90
Sec. 2. Action by the court................................................................................... 90
Sec. 3. Compliance with order..............................................................................90
Sec. 4. Effect of non-compliance..........................................................................90
Sec. 5. Stay of period to file responsive pleading.................................................90
Sec. 6. Bill a part of pleading................................................................................ 90
RULE 13- FILING AND SERVICE OF PLEADINGS, JUDGMENTS AND OTHER PAPERS. . .90
Sec. 1. Coverage................................................................................................... 91
Sec. 2. Filing and service, defined.........................................................................91
Garrucho v. Court of Appeals, G.R. No. 143791, January 14, 2005.....................91
Phil. Radiant Products v. Metrobank, G.R. No. 163569, December 9, 2005........94
Grand Placement v. Court of Appeals, G.R. No. 142358, January 31, 2006......106
Salting v. Velez, G.R. No. 181930, January 10, 2011........................................113
Sec. 3. Manner of filing........................................................................................ 117
Russel v. Austria, G.R. No. 184542, April 23, 2010...........................................117
Heirs of Miranda v. Miranda, G.R. No. 179638, July 8, 2013.............................120
PNB v. CIR, G.R. No. 172458, December 14, 2011...........................................125
Sec. 4. Papers required to be filed and served....................................................133
Sec. 5. Modes of service...................................................................................... 133
Aberca v. Ver, G.R. No. 166216, March 14, 2012..............................................133
Sec. 6. Personal service....................................................................................... 146
Garrucho v. Court of Appeals, G.R. No. 143791, January 14, 2005 (Supra.).....146
Sec. 7. Service by mail........................................................................................ 149
Sec. 8. Substituted service.................................................................................. 149
Thermochem v. Naval, G.R. No. 131541, October 20, 2000.............................149
Cubar v. Mendoza, G.R. No. 55035, February 23, 1983....................................151
Garrucho v. Court of Appeals, G.R. No. 143791, January 14, 2005 (Supra.).....153
Mojar v. Agro Commercial Security, G.R. No. 187188, June 27, 2012...............153
Sec. 9. Service of judgments, final orders, or resolutions....................................161
Aberca v. Ver, G.R. No. 166216, March 14, 2012 (Supra.)................................161
Sec. 10. Completeness of service........................................................................173
Bernarte v. PBA, G.R. No. 192084, September 14, 2011..................................173
Sec. 11. Priorities in modes of service and filing.................................................180
Solar Entertainment v. Ricafort, G.R. No. 132007, August 5, 1998..................180
Lim v. NPC, G.R. No. 178789, November 14, 2012...........................................184
Sec. 12. Proof of filing.......................................................................................... 186
Spouses Dela Cruz v. Ramiscal, G.R. No. 137882, February 4, 2005................186
Sec. 13. Proof of service...................................................................................... 191
Po v. DOJ, G.R. No. 195198, February 11, 2013................................................191
PNB v. CIR, G.R. No. 172458, December 14, 2011 (Supra.)..............................196

Sec. 14. Notice of lis pendens............................................................................. 204

Cunanan v. Jumping Jap, G.R. No. 173834, April 24, 2009................................204
Gagoomal v. Spouses Villacorta, G.R. No. 192813, January 18, 2012...............208

RULE 10- AMENDED AND SUPPLEMENTAL PLEADINGS

Sec. 1. Amendments in general
See: Sec. 5, Rule 1
Wallem v. S.R. Farms, G.R. No. 161849, July 9, 2010
Republic of the Philippines
Supreme Court
Manila
SECOND DIVISION
WALLEM PHILIPPINES SHIPPING,
INC.,

G.R. No. 161849

Present:

Petitioner,
CARPIO, J., Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.

- versus -

Promulgated:
July 9, 2010
S.R. FARMS, INC.,
Respondent.
x --------------------------------------------------x
DECISION
PERALTA, J.:
Assailed in the present petition for review on certiorari are the Decision[1] and
Resolution[2] of the Court of Appeals (CA) dated June 2, 2003 and January 15, 2004,
respectively, in CA-G.R. CV No. 65857. The CA Decision reversed and set aside the
Decision[3] dated October 8, 1999 of the Regional Trial Court (RTC) of Manila, Branch
11, in Civil Case No. 93-65021, while the CA Resolution denied petitioners Motion
for Reconsideration.

The facts of the case, as found by the RTC and affirmed by the CA, are as
follows:
x x x On March 25, 1992, Continental Enterprises, Ltd. loaded on
board the vessel M/V Hui Yang, at Bedi Bunder, India, a shipment of
Indian Soya Bean Meal, for transportation and delivery to Manila, with
plaintiff [herein respondent] as consignee/notify party. The said
shipment is said to weigh 1,100 metric tons and covered by Bill of
Lading No. BEDI 4 dated March 25, 1992 (Exhibit A; also Exhibit I). The
vessel is owned and operated by defendant Conti-Feed, with defendant
[herein petitioner] Wallem as its ship agent.
The subject cargo is part of the entire shipment of Indian Soya
Bean Meal/India Rapeseed Meal loaded in bulk on board the said vessel
for delivery to several consignees. Among the consignees were San
Miguel Corporation and Vitarich Corporation, including the herein
plaintiff (Exhibit A; Exhibits 1 to 6; TSN, p. 13, June 28, 1996).
On April 11, 1992, the said vessel, M/V Hui Yang arrived at
the port of Manila, Pier 7 South Harbor. Thereafter, the shipment was
discharged and transferred into the custody of the receiving barges,
the NorthFront-333 and NorthFront-444. The offloading of the shipment
went on until April 15, 1992 and was handled by [Ocean Terminal
Services, Inc.] OTSI using its own manpower and equipment and
without the participation of the crew members of the vessel. All
throughout the entire period of unloading operation, good and fair
weather condition prevailed.
At the instance of the plaintiff, a cargo check of the subject
shipment was made by one Lorenzo Bituin of Erne Maritime and Allied
Services, Co. Inc., who noted a shortage in the shipment which was
placed at 80.467 metric tons based on draft survey made on the
NorthFront-33 and NorthFront-444 showing that the quantity of cargo
unloaded from the vessel was only 1019.53 metric tons. Thus, per the
bill of lading, there was an estimated shortage of 80.467.
Upon discovery thereof, the vessel chief officer was immediately
notified of the said short shipment by the cargo surveyor, who
accordingly issued the corresponding Certificate of Discharge dated
April 15, 1992 (Exhibit D). The survey conducted and the resultant
findings thereon are embodied in the Report of Superintendence dated
April 21, 1992 (Exhibits C to C-2) and in the Barge Survey Report both
submitted by Lorenzo Bituin (Exhibits C-3 and C-4). As testified to by
Lorenzo Bituin, this alleged shortage of 80.467 metric tons was arrived
at using the draft survey method which calls for the measurement of
the light and loaded condition of the barge in relation to the weight of
the water supposedly displaced.[4]
Petitioner then filed a Complaint for damages against Conti-Feed & Maritime
Pvt. Ltd., a foreign corporation doing business in the Philippines and the owner
of M/V Hui Yang; RCS Shipping Agencies, Inc., the ship agent of Conti-Feed; Ocean
Terminal Services, Inc. (OTSI), the arrastre operator at Anchorage No. 7, South
Harbor, Manila; and Cargo Trade, the customs broker. [5]
On June 7, 1993, respondent filed an Amended Complaint impleading herein
petitioner as defendant alleging that the latter, and not RCS, was the one which, in
fact, acted as Conti-Feeds ship agent. [6]

On June 22,
1993, the complaint against Cargo Trade was dismissed at
the instance of respondent on the ground that it has no cause of action against the
former.[7]
Subsequently, upon motion of RCS, the case against it was likewise dismissed
for lack of cause of action.[8]
Meanwhile, defendant OTSI filed its Answer with Counterclaim and
Crossclaim[9] denying the material allegations of the Complaint and alleging that it
exercised due care and diligence in the handling of the shipment from the carrying
vessel unto the lighters; no damage or loss whatsoever was sustained by the cargo
in question while being discharged by OTSI; petitioners claim had been waived,
abandoned or barred by laches or estoppels; liability, if any, is attributable to its codefendants.
For its part, petitioner denied the allegations of respondent claiming, among
others, that it is not accountable nor responsible for any alleged shortage sustained
by the shipment while in the possession of its co-defendants; the alleged shortage
was due to negligent or faulty loading or unloading of the cargo by the
stevedores/shipper/consignee; the shortage, if any, was due to pre-shipment
damage, inherent nature, vice or defect of the cargo for which herein petitioner is
not liable; respondents claim is already barred by laches and/or prescription. [10]
Conti-Feed did not file an Answer.
Pre-Trial Conference was conducted, after which trial ensued.
On October 8, 1999, the RTC rendered its Decision [11] dismissing respondents
complaint, as well as the opposing parties counterclaims and crossclaims.
Aggrieved by the RTC Decision, respondent filed an appeal with the CA.
On June 2, 2003, the CA rendered its presently assailed Decision disposing as
follows:
WHEREFORE, the decision appealed from is hereby REVERSED
and SET ASIDE and another one entered ordering defendants-appellees
Conti-Feed and Maritime Pvt. Ltd. and Wallem Philippines Shipping,
Inc., to pay the sum representing the value of the 80.467 metric tons
of Indian Soya Beans shortdelivered, with legal interest from the time
the judgment becomes final until full payment, plus attorneys fees and
expenses of litigation of P10,000.00, as well as the cost of suit.
SO ORDERED.[12]
Petitioner filed a Motion for Reconsideration.
On July 8, 2003, respondent filed a Motion for a More Definite Dispositive
Portion[13] praying that the value of the 80.467 metric tons of Indian Soya Beans,
which petitioner and Conti-Feed were ordered to pay, be specified in the dispositive
portion of the CA Decision.
Petitioner filed its Comment/Opposition[14] to private respondents Motion.
On January 15, 2004, the CA issued a Resolution denying petitioners Motion
for Reconsideration and modifying the dispositive portion of its Decision, thus:
WHEREFORE, the decision appealed from is hereby REVERSED
and SET ASIDE and another one entered ordering defendants-appellees
Conti-Feed and Maritime Pvt. Ltd. and Wallem Shipping, Inc., to pay the
sum of $19,070.06 representing the value of the 80.467 metric tons of

Indian Soya Beans shortdelivered, with legal interest from the time the
judgment becomes final until full payment, plus attorneys fees and
expenses of litigation of P10,000.00, as well as the costs of suit.
SO ORDERED.[15]
Hence, the instant petition based on the following Assignment of Errors:
I
THE COURT OF APPEALS ERRED IN APPLYING THE PRESUMPTION OF
NEGLIGENCE UNDER ARTICLE 1735 OF THE CIVIL CODE. THIS
PROVISION DOES NOT APPLY IN THIS CASE BECAUSE THERE WAS NO
LOSS OR SHORTAGE OR SHORTDELIVERY.
II
THE COURT OF APPEALS ERRED IN GIVING DUE COURSE TO THE CASE
CONSIDERING THAT:
A.
THE CLAIM WAS ALREADY TIME-BARRED WHEN
THE CASE WAS FILED AGAINST HEREIN PETITIONER ON 8
MAY 1993, AS PROVIDED IN SECTION 3 (6) OF THE COGSA.
THE ONE-YEAR PRESCRIPTIVE PERIOD COMMENCED ON 15
APRIL 1992 WHEN THE SUBJECT SHIPMENT WAS
DELIVERED TO PRIVATE RESPONDENT AND LAPSED ON 15
APRIL 1993; AND
B.
[RESPONDENT] WAIVED ITS RIGHT OF ACTION
WHEN IT DID NOT GIVE A WRITTEN NOTICE OF LOSS TO
THE PETITIONER WITHIN THREE (3) DAYS FROM
DISCHARGE OF THE SUBJECT SHIPMENT AS PROVIDED IN
SECTION 3 (6) OF THE COGSA.
III
IN THE REMOTE POSSIBILITY OF LOSS OR SHORTAGE OR
SHORTDELIVERY, THE COURT OF APPEALS ERRED IN IMPUTING
NEGLIGENCE AGAINST THE PETITIONER WHICH WAS NOT RESPONSIBLE
IN LOADING AND/OR DISCHARGING THE SUBJECT SHIPMENT.
IV
THE COURT OF APPEALS ERRED IN GRANTING [RESPONDENTS]
MOTION FOR A MORE DEFINITE DISPOSITIVE PORTION WITHOUT
STATING IN THE DECISION, THE LEGAL BASES FOR DOING SO.
V
THE COURT OF APPEALS ERRED IN GRANTING THE MOTION FOR A
MORE DEFINITE DISPOSITIVE PORTION BECAUSE [RESPONDENT] FILED
SAID MOTION MORE THAN FIFTEEN (15) DAYS AFTER [RESPONDENT]
RECEIVED THE DECISION OF THE COURT OF APPEALS. THE COURT OF
APPEALS FURTHER ERRED IN INSERTING A DEFINITE MONETARY VALUE
OF THE ALLEGED SHORTAGE BECAUSE THERE WAS NO FACTUAL
FINDING, BOTH IN THE TRIAL COURT AND IN THE COURT OF APPEALS,
AS TO THE SPECIFIC AMOUNT OF THE ALLEGED SHORTDELIVERED
CARGO.[16]

The Court finds it proper to resolve first the question of whether the claim
against petitioner was timely filed.
With respect to the prescriptive period involving claims arising from shortage,
loss of or damage to cargoes sustained during transit, the law that governs the
instant case is the Carriage of Goods by Sea Act [17] (COGSA), Section 3 (6) of which
provides:
Unless notice of loss or damage and the general nature of such
loss or damage be given in writing to the carrier or his agent at the
port of discharge or at the time of the removal of the goods into the
custody of the person entitled to delivery thereof under the contract of
carriage, such removal shall be prima facie evidence of the delivery by
the carrier of the goods as described in the bill of lading. If the loss or
damage is not apparent, the notice must be given within three days of
delivery.
Said notice of loss or damage may be endorsed upon the
receipt for the goods given by the person taking delivery thereof.
The notice in writing need not be given if the state of the goods
has at the time of their receipt been the subject of joint survey or
inspection.
In any event, the carrier and the ship shall be discharged from
all liability in respect of loss or damage unless suit is brought
within one year after delivery of the goods or the date when the goods
should have been delivered; Provided, That, if a notice of loss or
damage, either apparent or concealed, is not given as provided for in
this section, that fact shall not affect or prejudice the right of the
shipper to bring suit within one year after the delivery of the goods or
the date when the goods should have been delivered.
In the case of any actual or apprehended loss or damage, the
carrier and the receiver shall give all reasonable facilities to each other
for inspecting and tallying the goods.
Petitioner claims that pursuant to the above-cited provision, respondent
should have filed its Notice of Loss within three days from delivery. It asserts that
the cargo was fully discharged from the vessel on April 15, 1992, but that
respondent failed to file any written notice of claim. Petitioner also avers that,
pursuant to the same provision of the COGSA, respondents claim had already
prescribed because the complaint for damages was filed more than one year after
the shipment was discharged.
The Court agrees.
Under Section 3 (6) of the COGSA, notice of loss or damages must be filed
within three days of delivery. Admittedly, respondent did not comply with this
provision.
Under the same provision, however, a failure to file a notice of claim within
three days will not bar recovery if a suit is nonetheless filed within one year from
delivery of the goods or from the date when the goods should have been delivered.
[18]

In Loadstar Shipping Co., Inc. v. Court of Appeals, [19] the Court ruled that a
claim is not barred by prescription as long as the one-year period has not
lapsed. Thus, in the words of the ponente, Chief Justice Hilario G. Davide Jr.:

Inasmuch as neither the Civil Code nor the Code of Commerce

states a specific prescriptive period on the matter, the Carriage of
Goods by Sea Act (COGSA) -- which provides for a one-year period of
limitation on claims for loss of, or damage to, cargoes sustained during
transit -- may be applied suppletorily to the case at bar. [20]
In the instant case, the Court is not persuaded by respondents claim that the
complaint against petitioner was timely filed. Respondent argues that the suit for
damages was filed on March 11, 1993, which is within one year from the time the
vessel carrying the subject cargo arrived at the Port of Manila on April 11, 1993, or
from the time the shipment was completely discharged from the vessel on April 15,
1992.
There is no dispute that the vessel carrying the shipment arrived at
the Port of Manila on April 11, 1992 and that the cargo was completely discharged
therefrom on April 15, 1992. However, respondent erred in arguing that the
complaint for damages, insofar as the petitioner is concerned, was filed on March
11, 1993.
As the records would show, petitioner was not impleaded as a defendant in
the original complaint filed on March 11, 1993. [21]It was only on June 7, 1993 that
the Amended Complaint, impleading petitioner as defendant, was filed.
Respondent cannot argue that the filing of the Amended Complaint against
petitioner should retroact to the date of the filing of the original complaint.
The settled rule is that the filing of an amended pleading does not retroact to
the date of the filing of the original; hence, the statute of limitation runs until the
submission of the amendment.[22] It is true that, as an exception, this Court has held
that an amendment which merely supplements and amplifies facts originally
alleged in the complaint relates back to the date of the commencement of the
action and is not barred by the statute of limitations which expired after the service
of the original complaint.[23] The exception, however, would not apply to the
party impleaded for the first time in the amended complaint. [24]
The rule on the non-applicability of the curative and retroactive effect of an
amended complaint, insofar as newly impleaded defendants are concerned, has
been established as early as in the case of Aetna Insurance Co. v. Luzon
Stevedoring Corporation.[25] In the said case, the defendant Barber Lines Far East
Service was impleaded for the first time in the amended complaint which was filed
after the one-year period of prescription. The order of the lower court dismissing
the amended complaint against the said defendant on ground of prescription was
affirmed by this Court.
In the instant case, petitioner was only impleaded in the amended Complaint
of June 7, 1993, or one (1) year, one (1) month and twenty-three (23) days from
April 15, 1992, the date when the subject cargo was fully unloaded from the vessel.
Hence, reckoned from April 15, 1992, the one-year prescriptive period had already
lapsed.
Having ruled that the action against petitioner had already prescribed, the
Court no longer finds it necessary to address the other issues raised in the present
petition.
WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of
Appeals dated June 2, 2003 and its Resolution dated January 15, 2004 in CA-G.R. CV

No. 65857 are MODIFIED by dismissing the complaint against petitioner. In all
other respects, the challenged Decision and Resolution of the CA are AFFIRMED.
SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

Spouses Dionisio v. Linsangan, G.R. No. 178159, March 2, 2011

G.R. No. 178159
March 2, 2011
SPS.
VICENTE
DIONISIO
AND
vs.
WILFREDO LINSANGAN, Respondent.

ANITA

DIONISIO, Petitioner,

DECISION
ABAD, J.:
The case is about a) amendments in the complaint that do not alter the cause of
action and b) the effect in an unlawful detainer action of the tolerated possessors
assignment of his possession to the defendant.
The Facts and the Case
Gorgonio M. Cruz (Cruz) owned agricultural lands in San Rafael, Bulacan, that his
tenant, Romualdo San Mateo (Romualdo) cultivated. Upon Romualdos death, his
widow, Emiliana, got Cruzs permission to stay on the property provided she would
vacate it upon demand.
In September 1989 spouses Vicente and Anita Dionisio (the Dionisios) bought the
property from Cruz.1 In April 2002, the Dionisios found out that Emiliana had left the
property and that it was already Wilfredo Linsangan (Wilfredo) who occupied it
under the strength of a "Kasunduan ng Bilihan ng Karapatan"2 dated April 7, 1977.
The Dionisios wrote Wilfredo on April 22, 2002, demanding that he vacate the land
but the latter declined, prompting the Dionisios to file an eviction suit 3 against him
before the Municipal Trial Court (MTC) of San Rafael, Bulacan. Wilfredo filed an
answer with counterclaims in which he declared that he had been a tenant of the
land as early as 1977.
At the pre-trial, the Dionisios orally asked leave to amend their complaint. Despite
initial misgivings over the amended complaint, Wilfredo asked for time to respond to
it. The Dionisios filed their amended complaint on August 5, 2003; Wilfredo
maintained his original answer.
The MTC issued a pre-trial order 4 specifying the issues. For the plaintiffs: (1) whether
or not the defendant can be ejected from the property and (2) whether or not the
plaintiffs are entitled to reasonable rent for the use of the property, damages, and
attorneys fees. For the defendant: (1) whether or not the MTC has jurisdiction to try
this case; (2) whether or not the defendant can be ejected from the questioned

property; and (3) whether or not the defendant is entitled to damages and
attorneys fees.
On May 3, 2004 the MTC rendered judgment, ordering Wilfredo to vacate the land
and remove his house from it. Further, the MTC ordered Wilfredo to pay the
Dionisios P3,000.00 a month as reasonable compensation for the use of the land
andP20,000.00 as attorneys fees and to pay the cost of suit.
On appeal,5 the Regional Trial Court (RTC) of Malolos, Bulacan, affirmed the MTC
decision, holding that the case was one for forcible entry. On review, 6 however, the
Court of Appeals (CA) rendered judgment on July 6, 2006, reversing the decisions of
the courts below, and ordering the dismissal of the Dionisios action. The CA held
that, by amending their complaint, the Dionisios effectively changed their cause of
action from unlawful detainer to recovery of possession which fell outside the
jurisdiction of the MTC. Further, since the amendment introduced a new cause of
action, its filing on August 5, 2003 marked the passage of the one year limit from
demand required in ejectment suits. More, since jurisdiction over actions for
possession depended on the assessed value of the property and since such
assessed value was not alleged, the CA cannot determine what court has
jurisdiction over the action.
The Issues Presented
The issues presented in this case are:
1. Whether or not the Dionisios amendment of their complaint effectively
changed their cause of action from one of ejectment to one of recovery of
possession; and
2. Whether or not the MTC had jurisdiction over the action before it.
The Rulings of the Court
One. An amended complaint that changes the plaintiffs cause of action is
technically a new complaint. Consequently, the action is deemed filed on the date
of the filing of such amended pleading, not on the date of the filing of its original
version. Thus, the statute of limitation resumes its run until it is arrested by the
filing of the amended pleading. The Court acknowledges, however, that an
amendment which does not alter the cause of action but merely supplements or
amplifies the facts previously alleged, does not affect the reckoning date of filing
based on the original complaint. The cause of action, unchanged, is not barred by
the statute of limitations that expired after the filing of the original complaint. 7
Here, the original complaint alleges that the Dionisios bought the land from Cruz on
September 30, 1989; that Romualdo used to be the lands tenant; that when he
died, the Dionisios allowed his widow, Emiliana, to stay under a promise that she
would leave the land upon demand; that in April 2002 the Dionisios discovered on
visit to the land that Emiliana had left it and that Wilfredo now occupied it under a
claim that he bought the right to stay from Emiliana under a "Kasunduan ng Bilihan
ng Karapatan;" that the Dionisios did not know of and gave no consent to this sale
which had not been annotated on their title; that the Dionisios verbally told Wilfredo
to leave the property by April 31, 2002; that their lawyer reiterated such demand in
writing on April 22, 2002; that Wilfredo did not heed the demand; that the Dionisios
wanted to get possession so they could till the land and demolish Wilfredos house

10

on it; that Wilfredo did not give the Dionisios just share in the harvest; and that the
Dionisios were compelled to get the services of counsel for P100,000.00.
The amended complaint has essentially identical allegations. The only new ones are
that the Dionisios allowed Emiliana, Romualdos widow to stay "out of their
kindness, tolerance, and generosity;" that they went to the land in April 2002, after
deciding to occupy it, to tell Emiliana of their plan; that Wilfredo cannot deny that
Cruz was the previous registered owner and that he sold the land to the Dionisios;
and that a person occupying anothers land by the latters tolerance or permission,
without contract, is bound by an implied promise to leave upon demand, failing
which a summary action for ejectment is the proper remedy.
To determine if an amendment introduces a different cause of action, the test is
whether such amendment now requires the defendant to answer for a liability or
obligation which is completely different from that stated in the original
complaint.8Here, both the original and the amended complaint required Wilfredo to
defend his possession based on the allegation that he had stayed on the land after
Emiliana left out of the owners mere tolerance and that the latter had demanded
that he leave. Indeed, Wilfredo did not find the need to file a new answer.
Two. Wilfredo points out that the MTC has no jurisdiction to hear and decide the
case since it involved tenancy relation which comes under the jurisdiction of the
DARAB.9 But the jurisdiction of the court over the subject matter of the action is
determined by the allegations of the complaint. 10 Besides, the records show that
Wilfredo failed to substantiate his claim that he was a tenant of the land. The MTC
records show that aside from the assertion that he is a tenant, he did not present
any evidence to prove the same. To consider evidence presented only during appeal
is offensive to the idea of fair play.
The remaining question is the nature of the action based on the allegations of the
complaint. The RTC characterized it as an action for forcible entry, Wilfredo having
entered the property and taken over from widow Emiliana on the sly. The problem
with this characterization is that the complaint contained no allegation that the
Dionisios were in possession of the property before Wilfredo occupied it either by
force, intimidation, threat, strategy, or stealth, an element of that kind of eviction
suit.11 Nowhere in the recitation of the amended complaint did the Dionisios assert
that they were in prior possession of the land and were ousted from such possession
by Wilfredos unlawful occupation of the property.
Is the action one for unlawful detainer? An action is for unlawful detainer if the
complaint sufficiently alleges the following: (1) initially, the defendant has
possession of property by contract with or by tolerance of the plaintiff; (2)
eventually, however, such possession became illegal upon plaintiffs notice to
defendant, terminating the latters right of possession; (3) still, the defendant
remains in possession, depriving the plaintiff of the enjoyment of his property; and
(4) within a year from plaintiffs last demand that defendant vacate the property,
the plaintiff files a complaint for defendants ejectment. 12 If the defendant had
possession of the land upon mere tolerance of the owner, such tolerance must be
present at the beginning of defendants possession. 13
Here, based on the allegations of the amended complaint, the Dionisios allowed
Emiliana, tenant Romualdos widow, to stay on the land for the meantime and leave
when asked to do so. But, without the knowledge or consent of the Dionisios, she
sold her "right of tenancy" to Wilfredo. When the Dionisios visited the land in April

11

2002 and found Wilfredo there, they demanded that he leave the land. They did so
in writing on April 22, 2002 but he refused to leave. The Dionisios filed their eviction
suit within the year.
It is pointed out that the original complaint did not allege that the Dionisios
"tolerated" Emilianas possession of the land after her husband died, much less did
it allege that they "tolerated" Wilfredos possession after he took over from
Emiliana. But the rules do not require the plaintiff in an eviction suit to use the exact
language of such rules. The Dionisios alleged that Romualdo used to be the lands
tenant and that when he died, the Dionisios allowed his widow, Emiliana, to stay
under a promise that she would leave upon demand. These allegations clearly imply
the Dionisios "tolerance" of her stay meantime that they did not yet need the land.
As for Wilfredo, it is clear from the allegations of the complaint that Emiliana
assigned to him her right to occupy the property. In fact that assignment was in
writing. Consequently, his claim to the land was based on the Dionisios "tolerance"
of the possession of Emiliana and, impliedly, of all persons claiming right under her.
True, the "Kasunduan ng Bilihan ng Karapatan" under which Emiliana transferred her
tenancy right to Wilfredo appears to have been executed in 1977, years before Cruz
sold the land to the Dionisios, implying that Wilfredo had already been in possession
of the property before the sale. But what is controlling in ascertaining the
jurisdiction of the court are the allegations of the complaint. The Dionisios alleged in
their complaint that they were the ones who allowed Emiliana (and all persons
claiming right under her) to stay on the land meantime that they did not need it.
The MTC and the RTC gave credence to the Dionisios version. The Court will respect
their judgment on a question of fact.
WHEREFORE, the Court GRANTS the petition, REVERSES and SETS ASIDE the
Decision of the Court of Appeals in CA-G.R. SP 92643 dated July 6, 2006, and
REINSTATES the Decision of the Municipal Trial Court of San Rafael, Bulacan, in Civil
Case 1160-SRB-2003 dated May 3, 2004.
SO ORDERED.
ROBERTO
Associate Justice

A.

ABAD

Sec. 2. Amendments as a matter of right

Araneta v. Court of Appeals, G.R. No. 154096, August 22. 2008 (Supra.)
/---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\
[2008V939] IRENE MARCOS-ARANETA, DANIEL RUBIO, ORLANDO G. RESLIN, and
JOSE G. RESLIN, Petitioners, versus COURT OF APPEALS, JULITA C. BENEDICTO, and
FRANCISCA BENEDICTO-PAULINO, Respondents.2008 Aug 222nd DivisionG.R. No.
154096D E C I S I O N
VELASCO, JR., J.:
The Case
12

This Petition for Review on Certiorari under Rule 45 assails and seeks to nullify the
Decision[1] dated October 17, 2001 of the Court of Appeals (CA) in CA-G.R. SP No.
64246 and its Resolution[2] of June 20, 2002 denying petitioners motion for
reconsideration. The assailed CA decision annulled and set aside the Orders dated
October 9, 2000, December 18, 2000, and March 15, 2001 of the Regional Trial
Court (RTC), Branch 17 in Batac, Ilocos Norte which admitted petitioners amended
complaint in Civil Case Nos. 3341-17 and 3342-17.
The Facts
Sometime in 1968 and 1972, Ambassador Roberto S. Benedicto, now deceased, and
his business associates (Benedicto Group) organized Far East Managers and
Investors, Inc. (FEMII) and Universal Equity Corporation (UEC), respectively. As
petitioner Irene Marcos-Araneta would later allege, both corporations were
organized pursuant to a contract or arrangement whereby Benedicto, as trustor,
placed in his name and in the name of his associates, as trustees, the shares of
stocks of FEMII and UEC with the obligation to hold those shares and their fruits in
trust and for the benefit of Irene to the extent of 65% of such shares. Several years
after, Irene, through her trustee-husband, Gregorio Ma. Araneta III, demanded the
reconveyance of said 65% stockholdings, but the Benedicto Group refused to oblige.
In March 2000, Irene thereupon instituted before the RTC two similar complaints for
conveyance of shares of stock, accounting and receivership against the Benedicto
Group with prayer for the issuance of a temporary restraining order (TRO). The first,
docketed as Civil Case No. 3341-17, covered the UEC shares and named Benedicto,
his daughter, and at least 20 other individuals as defendants. The second, docketed
as Civil Case No. 3342-17, sought the recovery to the extent of 65% of FEMII shares
held by Benedicto and the other defendants named therein.
Respondent Francisca Benedicto-Paulino,[3] Benedictos daughter, filed a Motion to
Dismiss Civil Case No. 3341-17, followed later by an Amended Motion to Dismiss.
Benedicto, on the other hand, moved to dismiss[4] Civil Case No. 3342-17, adopting
in toto the five (5) grounds raised by Francisca in her amended motion to dismiss.
Among these were: (1) the cases involved an intra-corporate dispute over which the
Securities and Exchange Commission, not the RTC, has jurisdiction; (2) venue was
improperly laid; and (3) the complaint failed to state a cause of action, as there was
no allegation therein that plaintiff, as beneficiary of the purported trust, has
accepted the trust created in her favor.
To the motions to dismiss, Irene filed a Consolidated Opposition, which Benedicto
and Francisca countered with a Joint Reply to Opposition.
Upon Benedictos motion, both cases were consolidated.
During the preliminary proceedings on their motions to dismiss, Benedicto and
Francisca, by way of bolstering their contentions on improper venue, presented the
Joint Affidavit[5] of Gilmia B. Valdez, Catalino A. Bactat, and Conchita R. Rasco who
all attested being employed as household staff at the Marcos Mansion in Brgy.
Lacub, Batac, Ilocos Norte and that Irene did not maintain residence in said place as
she in fact only visited the mansion twice in 1999; that she did not vote in Batac in
the 1998 national elections; and that she was staying at her husbands house in
Makati City.

13

Against the aforesaid unrebutted joint affidavit, Irene presented her PhP 5
community tax certificate[6] (CTC) issued on 11/07/99 in Curimao, Ilocos Norte to
support her claimed residency in Batac, Ilocos Norte.
In the meantime, on May 15, 2000, Benedicto died and was substituted by his wife,
Julita C. Benedicto, and Francisca.
On June 29, 2000, the RTC dismissed both complaints, stating that these partly
constituted real action, and that Irene did not actually reside in Ilocos Norte, and,
therefore, venue was improperly laid. In its dismissal order,[7] the court also
declared all the other issues raised in the different Motions to Dismiss x x x moot
and academic.
From the above order, Irene interposed a Motion for Reconsideration[8] which Julita
and Francisca duly opposed.
Pending resolution of her motion for reconsideration, Irene filed on July 17, 2000 a
Motion (to Admit Amended Complaint),[9] attaching therewith a copy of the
Amended Complaint[10] dated July 14, 2000 in which the names of Daniel Rubio,
Orlando G. Reslin, and Jose G. Reslin appeared as additional plaintiffs. As stated in
the amended complaint, the added plaintiffs, all from Ilocos Norte, were Irenes new
trustees. Parenthetically, the amended complaint stated practically the same cause
of action but, as couched, sought the reconveyance of the FEMII shares only.
During the August 25, 2000 hearing, the RTC dictated in open court an order
denying Irenes motion for reconsideration aforementioned, but deferred action on
her motion to admit amended complaint and the opposition thereto.[11]
On October 9, 2000, the RTC issued an Order[12] entertaining the amended
complaint, dispositively stating:
WHEREFORE, the admission of the Amended Complaint being tenable and legal, the
same is GRANTED.
Let copies of the Amended Complaint be served to the defendants who are ordered
to answer within the reglementary period provided by the rules.
The RTC predicated its order on the following premises:
(1) Pursuant to Section 2, Rule 10 of the Rules of Court,[13] Irene may opt to file, as
a matter of right, an amended complaint.
(2) The inclusion of additional plaintiffs, one of whom was a Batac, an Ilocos Norte
resident, in the amended complaint setting out the same cause of action cured the
defect of improper venue.
(3) Secs. 2 and 3 of Rule 3 in relation to Sec. 2 of Rule 4 allow the filing of the
amended complaint in question in the place of residence of any of Irenes coplaintiffs.
In time, Julita and Francisca moved to dismiss the amended complaint, but
the RTC, by Order[14] dated December 18, 2000, denied the motion and reiterated
its directive for the two to answer the amended complaint.
In said order, the RTC stood pat on its holding on the rule on amendments of
pleadings. And scoffing at the argument about there being no complaint to amend
in the first place as of October 9, 2000 (when the RTC granted the motion to amend)
14

as the original complaints were dismissed with finality earlier, i.e., on August 25,
2000 when the court denied Irenes motion for reconsideration of the June 29, 2000
order dismissing the original complaints, the court stated thusly: there was actually
no need to act on Irenes motion to admit, it being her right as plaintiff to amend
her complaints absent any responsive pleading thereto. Pushing its point, the RTC
added the observation that the filing of the amended complaint on July 17, 2000
ipso facto superseded the original complaints, the dismissal of which, per the June
29, 2000 Order, had not yet become final at the time of the filing of the amended
complaint.
Following the denial on March 15, 2001 of their motion for the RTC to reconsider its
December 18, 2000 order aforestated, Julita and Francisca, in a bid to evade being
declared in default, filed on April 10, 2001 their Answer to the amended complaint.
[15]
But on the same day, they went to the CA via a petition for certiorari,
docketed as CA-G.R. SP No. 64246, seeking to nullify the following RTC orders: the
first, admitting the amended complaint; the second, denying their motion to dismiss
the amended complaint; and the third, denying their motion for reconsideration of
the second issuance.
Inasmuch as the verification portion of the joint petition and the certification on
non-forum shopping bore only Franciscas signature, the CA required the joint
petitioners to submit x x x either the written authority of Julita C. Benedicto to
Francisca B. Paulino authorizing the latter to represent her in these proceedings, or
a supplemental verification and certification duly signed by x x x Julita C.
Benedicto.[16] Records show the submission of the corresponding authorizing
Affidavit[17] executed by Julita in favor of Francisca.
Later developments saw the CA issuing a TRO[18] and then a writ of preliminary
injunction[19] enjoining the RTC from conducting further proceedings on the subject
civil cases.
On October 17, 2001, the CA rendered a Decision, setting aside the assailed RTC
orders and dismissing the amended complaints in Civil Case Nos. 3341-17 and
3342-17. The fallo of the CA decision reads:
WHEREFORE, based on the foregoing premises, the petition is hereby GRANTED.
The assailed Orders admitting the amended complaints are SET ASIDE for being null
and void, and the amended complaints a quo are, accordingly, DISMISSED.[20]
Irene and her new trustees motion for reconsideration of the assailed decision was
denied through the equally assailed June 20, 2002 CA Resolution. Hence, this
petition for review is before us.
The Issues
Petitioners urge the setting aside and annulment of the assailed CA decision and
resolution on the following submissions that the appellate court erred in: (1)
allowing the submission of an affidavit by Julita as sufficient compliance with the
requirement on verification and certification of non-forum shopping; (2) ruling on
the merits of the trust issue which involves factual and evidentiary determination,
processes not proper in a petition for certiorari under Rule 65 of the Rules of Court;
(3) ruling that the amended complaints in the lower court should be dismissed
because, at the time it was filed, there was no more original complaint to amend;
(4) ruling that the respondents did not waive improper venue; and (5) ruling that
15

petitioner Irene was not a resident of Batac, Ilocos Norte and that none of the
principal parties are residents of Ilocos Norte.[21]
The Courts Ruling
We affirm, but not for all the reasons set out in, the CAs decision.
First Issue: Substantial Compliance with the Rule
on Verification and Certification of Non-Forum Shopping
Petitioners tag private respondents petition in CA-G.R. SP No. 64246 as defective
for non-compliance with the requirements of Secs. 4[22] and 5[23] of Rule 7 of the
Rules of Court at least with regard to Julita, who failed to sign the verification and
certification of non-forum shopping. Petitioners thus fault the appellate court for
directing Julitas counsel to submit a written authority for Francisca to represent
Julita in the certiorari proceedings.
We are not persuaded.
Verification not Jurisdictional; May be Corrected
Verification is, under the Rules, not a jurisdictional but merely a formal requirement
which the court may motu proprio direct a party to comply with or correct, as the
case may be. As the Court articulated in Kimberly Independent Labor Union for
Solidarity, Activism and Nationalism (KILUSAN)-Organized Labor Associations in Line
Industries and Agriculture (OLALIA) v. Court of Appeals:
[V]erification is a formal, not a jurisdictional requisite, as it is mainly intended to
secure an assurance that the allegations therein made are done in good faith or are
true and correct and not mere speculation. The Court may order the correction of
the pleading, if not verified, or act on the unverified pleading if the attending
circumstances are such that a strict compliance with the rule may be dispensed
with in order that the ends of justice may be served.[24]
Given this consideration, the CA acted within its sound discretion in ordering the
submission of proof of Franciscas authority to sign on Julitas behalf and represent
her in the proceedings before the appellate court.
Signature by Any of the Principal Petitioners is Substantial Compliance
Regarding the certificate of non-forum shopping, the general rule is that all the
petitioners or plaintiffs in a case should sign it.[25] However, the Court has time and
again stressed that the rules on forum shopping, which were designed to promote
the orderly administration of justice, do not interdict substantial compliance with its
provisions under justifiable circumstances.[26] As has been ruled by the Court, the
signature of any of the principal petitioners[27] or principal parties,[28] as Francisca
is in this case, would constitute a substantial compliance with the rule on
verification and certification of non-forum shopping. It cannot be overemphasized
that Francisca herself was a principal party in Civil Case No. 3341-17 before the RTC
and in the certiorari proceedings before the CA. Besides being an heir of Benedicto,
Francisca, with her mother, Julita, was substituted for Benedicto in the instant case
after his demise.
And should there exist a commonality of interest among the parties, or where the
parties filed the case as a collective, raising only one common cause of action or
presenting a common defense, then the signature of one of the petitioners or
16

complainants, acting as representative, is sufficient compliance. We said so in

Cavile v. Heirs of Clarita Cavile.[29] Like Thomas Cavile, Sr. and the other petitioners
in Cavile, Francisca and Julita, as petitioners before the CA, had filed their petition as
a collective, sharing a common interest and having a common single defense to
protect their rights over the shares of stocks in question.
Second Issue: Merits of the Case cannot be Resolved
on Certiorari under Rule 65
Petitioners posture on the second issue is correct. As they aptly pointed out, the
CA, in the exercise of its certiorari jurisdiction under Rule 65, is limited to reviewing
and correcting errors of jurisdiction only. It cannot validly delve into the issue of
trust which, under the premises, cannot be judiciously resolved without first
establishing certain facts based on evidence.
Whether a determinative question is one of law or of fact depends on the nature of
the dispute. A question of law exists when the doubt or controversy concerns the
correct application of law or jurisprudence to a certain given set of facts; or when
the issue does not call for an examination of the probative value of the evidence
presented, the truth or falsehood of facts being admitted. A question of fact obtains
when the doubt or difference arises as to the truth or falsehood of facts or when the
query invites the calibration of the whole evidence considering mainly the credibility
of the witnesses, the existence and relevancy of specific surrounding circumstances,
as well as their relation to each other and to the whole, and the probability of the
situation.[30]
Clearly then, the CA overstepped its boundaries when, in disposing of private
respondents petition for certiorari, it did not confine itself to determining whether
or not lack of jurisdiction or grave abuse of discretion tainted the issuance of the
assailed RTC orders, but proceeded to pass on the factual issue of the existence
and enforceability of the asserted trust. In the process, the CA virtually resolved
petitioner Irenes case for reconveyance on its substantive merits even before
evidence on the matter could be adduced. Civil Case Nos. 3341-17 and 3342-17 in
fact have not even reached the pre-trial stage. To stress, the nature of the trust
allegedly constituted in Irenes favor and its enforceability, being evidentiary in
nature, are best determined by the trial court. The original complaints and the
amended complaint certainly do not even clearly indicate whether the asserted
trust is implied or express. To be sure, an express trust differs from the implied
variety in terms of the manner of proving its existence.[31] Surely, the onus of
factually determining whether the trust allegedly established in favor of Irene, if one
was indeed established, was implied or express properly pertains, at the first
instance, to the trial court and not to the appellate court in a special civil action for
certiorari, as here. In the absence of evidence to prove or disprove the constitution
and necessarily the existence of the trust agreement between Irene, on one hand,
and the Benedicto Group, on the other, the appellate court cannot intelligently pass
upon the issue of trust. A pronouncement on said issue of trust rooted on
speculation and conjecture, if properly challenged, must be struck down. So it must
be here.
Third Issue: Admission of Amended Complaint Proper
As may be recalled, the CA veritably declared as reversibly erroneous the admission
of the amended complaint. The flaw in the RTCs act of admitting the amended
complaint lies, so the CA held, in the fact that the filing of the amended complaint
17

on July 17, 2000 came after the RTC had ordered with finality the dismissal of the
original complaints. According to petitioners, scoring the CA for its declaration
adverted to and debunking its posture on the finality of the said RTC order, the CA
failed to take stock of their motion for reconsideration of the said dismissal order.
We agree with petitioners and turn to the governing Sec. 2 of Rule 10 of the Rules of
Court which provides:
SEC. 2. Amendments as a matter of right. A party may amend his pleading
once as a matter of right at any time before a responsive pleading is served or in
the case of a reply, at any time within ten (10) days after it is served.
As the aforequoted provision makes it abundantly clear that the plaintiff may amend
his complaint once as a matter of right, i.e., without leave of court, before any
responsive pleading is filed or served. Responsive pleadings are those which seek
affirmative relief and/or set up defenses,[32] like an answer. A motion to dismiss is
not a responsive pleading for purposes of Sec. 2 of Rule 10.[33] Assayed against
the foregoing perspective, the RTC did not err in admitting petitioners amended
complaint, Julita and Francisca not having yet answered the original complaints
when the amended complaint was filed. At that precise moment, Irene, by force of
said Sec. 2 of Rule 10, had, as a matter of right, the option of amending her
underlying reconveyance complaints. As aptly observed by the RTC, Irenes motion
to admit amended complaint was not even necessary. The Court notes though that
the RTC has not offered an explanation why it saw fit to grant the motion to admit in
the first place.
In Alpine Lending Investors v. Corpuz, the Court, expounding on the propriety of
admitting an amended complaint before a responsive pleading is filed, wrote:
[W]hat petitioner Alpine filed in Civil Case No. C-20124 was a motion to dismiss, not
an answer. Settled is the rule that a motion to dismiss is not a responsive pleading
for purposes of Section 2, Rule 10. As no responsive pleading had been filed,
respondent could amend her complaint in Civil Case No. C-20124 as a matter of
right. Following this Courts ruling in Breslin v. Luzon Stevedoring Co. considering
that respondent has the right to amend her complaint, it is the correlative duty of
the trial court to accept the amended complaint; otherwise, mandamus would lie
against it. In other words, the trial courts duty to admit the amended complaint
was purely ministerial. In fact, respondent should not have filed a motion to admit
her amended complaint.[34]
It may be argued that the original complaints had been dismissed through the June
29, 2000 RTC order. It should be pointed out, however, that the finality of such
dismissal order had not set in when Irene filed the amended complaint on July 17,
2000, she having meanwhile seasonably sought reconsideration thereof. Irenes
motion for reconsideration was only resolved on August 25, 2000. Thus, when Irene
filed the amended complaint on July 17, 2000, the order of dismissal was not yet
final, implying that there was strictly no legal impediment to her amending her
original complaints.[35]
Fourth Issue: Private Respondents did not Waive Improper Venue
Petitioners maintain that Julita and Francisca were effectively precluded from raising
the matter of improper venue by their subsequent acts of filing numerous pleadings.

18

To petitioners, these pleadings, taken together, signify a waiver of private

respondents initial objection to improper venue.
This contention is without basis and, at best, tenuous. Venue essentially concerns a
rule of procedure which, in personal actions, is fixed for the greatest convenience
possible of the plaintiff and his witnesses. The ground of improperly laid venue
must be raised seasonably, else it is deemed waived. Where the defendant failed to
either file a motion to dismiss on the ground of improper venue or include the same
as an affirmative defense, he is deemed to have waived his right to object to
improper venue.[36] In the case at bench, Benedicto and Francisca raised at the
earliest time possible, meaning within the time for but before filing the answer to
the complaint,[37] the matter of improper venue. They would thereafter reiterate
and pursue their objection on venue, first, in their answer to the amended
complaints and then in their petition for certiorari before the CA. Any suggestion,
therefore, that Francisca and Benedicto or his substitutes abandoned along the way
improper venue as ground to defeat Irenes claim before the RTC has to be rejected.
Fifth Issue: The RTC Has No Jurisdiction
on the Ground of Improper Venue
Subject Civil Cases are Personal Actions
It is the posture of Julita and Francisca that the venue was in this case improperly
laid since the suit in question partakes of a real action involving real properties
located outside the territorial jurisdiction of the RTC in Batac.
This contention is not well-taken. In a personal action, the plaintiff seeks the
recovery of personal property, the enforcement of a contract, or the recovery of
damages.[38] Real actions, on the other hand, are those affecting title to or
possession of real property, or interest therein. In accordance with the wordings of
Sec. 1 of Rule 4, the venue of real actions shall be the proper court which has
territorial jurisdiction over the area wherein the real property involved, or a portion
thereof, is situated. The venue of personal actions is the court where the plaintiff or
any of the principal plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in the case of a non-resident defendant where he may be
found, at the election of the plaintiff.[39]
In the instant case, petitioners are basically asking Benedicto and his Group, as
defendants a quo, to acknowledge holding in trust Irenes purported 65%
stockownership of UEC and FEMII, inclusive of the fruits of the trust, and to execute
in Irenes favor the necessary conveying deed over the said 65% shareholdings. In
other words, Irene seeks to compel recognition of the trust arrangement she has
with the Benedicto Group. The fact that FEMIIs assets include real properties does
not materially change the nature of the action, for the ownership interest of a
stockholder over corporate assets is only inchoate as the corporation, as a juridical
person, solely owns such assets. It is only upon the liquidation of the corporation
that the stockholders, depending on the type and nature of their stockownership,
may have a real inchoate right over the corporate assets, but then only to the
extent of their stockownership.
The amended complaint is an action in personam, it being a suit against Francisca
and the late Benedicto (now represented by Julita and Francisca), on the basis of
their alleged personal liability to Irene upon an alleged trust constituted in 1968
and/or 1972. They are not actions in rem where the actions are against the real
19

properties instead of against persons.[40] We particularly note that possession or

title to the real properties of FEMII and UEC is not being disputed, albeit part of the
assets of the corporation happens to be real properties.
Given the foregoing perspective, we now tackle the determinative question of
venue in the light of the inclusion of additional plaintiffs in the amended complaint.
Interpretation of Secs. 2 and 3 of Rule 3; and Sec. 2 of Rule 4
We point out at the outset that Irene, as categorically and peremptorily found by the
RTC after a hearing, is not a resident of Batac, Ilocos Norte, as she claimed. The
Court perceives no compelling reason to disturb, in the confines of this case, the
factual determination of the trial court and the premises holding it together.
Accordingly, Irene cannot, in a personal action, contextually opt for Batac as venue
of her reconveyance complaint. As to her, Batac, Ilocos Norte is not what Sec. 2,
Rule 4 of the Rules of Court adverts to as the place where the plaintiff or any of the
principal plaintiffs resides at the time she filed her amended complaint. That Irene
holds CTC No. 17019451[41] issued sometime in June 2000 in Batac, Ilocos Norte
and in which she indicated her address as Brgy. Lacub, Batac, Ilocos is really of no
moment. Let alone the fact that one can easily secure a basic residence certificate
practically anytime in any Bureau of Internal Revenue or treasurers office and
dictate whatever relevant data one desires entered, Irene procured CTC No.
17019451 and appended the same to her motion for reconsideration following the
RTCs pronouncement against her being a resident of Batac.
Petitioners, in an attempt to establish that the RTC in Batac, Ilocos Norte is the
proper court venue, asseverate that Batac, Ilocos Norte is where the principal
parties reside.
Pivotal to the resolution of the venue issue is a determination of the status of Irenes
co-plaintiffs in the context of Secs. 2 and 3 of Rule 3 in relation to Sec. 2 of Rule 4,
which pertinently provide as follows:
Rule 3
PARTIES TO CIVIL ACTIONS
SEC. 2. Parties in interest. A real party in interest is the party who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the avails of
the suit. Unless otherwise authorized by law or these Rules, every action must be
prosecuted or defended in the name of the real party in interest.
SEC. 3. Representatives as parties. Where the action is allowed to be
prosecuted or defended by a representative or someone acting in a fiduciary
capacity, the beneficiary shall be included in the title of the case and shall be
deemed to be the real party in interest. A representative may be a trustee of an
express trust, a guardian, an executor or administrator, or a party authorized by law
or these Rules. An agent acting in his own name and for the benefit of an
undisclosed principal may sue or be sued without joining the principal except when
the contract involves things belonging to the principal.
Rule 4
VENUE OF ACTIONS

20

SEC. 2. Venue of personal actions. All other actions 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, or in the case of a nonresident defendant where he may be found, at the election of the plaintiff.
Venue is Improperly Laid
There can be no serious dispute that the real party-in-interest plaintiff is Irene. As
self-styled beneficiary of the disputed trust, she stands to be benefited or entitled to
the avails of the present suit. It is undisputed too that petitioners Daniel Rubio,
Orlando G. Reslin, and Jose G. Reslin, all from Ilocos Norte, were included as coplaintiffs in the amended complaint as Irenes new designated trustees. As trustees,
they can only serve as mere representatives of Irene.
Upon the foregoing consideration, the resolution of the crucial issue of whether or
not venue had properly been laid should not be difficult.
Sec. 2 of Rule 4 indicates quite clearly that when there is more than one plaintiff in
a personal action case, the residences of the principal parties should be the basis
for determining proper venue. According to the late Justice Jose Y. Feria, the word
principal has been added [in the uniform procedure rule] in order to prevent the
plaintiff from choosing the residence of a minor plaintiff or defendant as the
venue.[42] Eliminate the qualifying term principal and the purpose of the Rule
would, to borrow from Justice Regalado, be defeated where a nominal or formal
party is impleaded in the action since the latter would not have the degree of
interest in the subject of the action which would warrant and entail the desirably
active participation expected of litigants in a case.[43]
Before the RTC in Batac, in Civil Case Nos. 3341-17 and 3342-17, Irene stands
undisputedly as the principal plaintiff, the real party-in-interest. Following Sec. 2 of
Rule 4, the subject civil cases ought to be commenced and prosecuted at the place
where Irene resides.
Principal Plaintiff not a Resident in Venue of Action
As earlier stated, no less than the RTC in Batac declared Irene as not a resident of
Batac, Ilocos Norte. Withal, that court was an improper venue for her conveyance
action.
The Court can concede that Irenes three co-plaintiffs are all residents of Batac,
Ilocos Norte. But it ought to be stressed in this regard that not one of the three can
be considered as principal party-plaintiffs in Civil Case Nos. 3341-17 and 3342-17,
included as they were in the amended complaint as trustees of the principal
plaintiff. As trustees, they may be accorded, by virtue of Sec. 3 of Rule 3, the right
to prosecute a suit, but only on behalf of the beneficiary who must be included in
the title of the case and shall be deemed to be the real party-in-interest. In the final
analysis, the residences of Irenes co-plaintiffs cannot be made the basis in
determining the venue of the subject suit. This conclusion becomes all the more
forceful considering that Irene herself initiated and was actively prosecuting her
claim against Benedicto, his heirs, assigns, or associates, virtually rendering the
impleading of the trustees unnecessary.
And this brings us to the final point. Irene was a resident during the period material
of Forbes Park, Makati City. She was not a resident of Brgy. Lacub, Batac, Ilocos
21

Norte, although jurisprudence[44] has it that one can have several residences, if
such were the established fact. The Court will not speculate on the reason why
petitioner Irene, for all the inconvenience and expenses she and her adversaries
would have to endure by a Batac trial, preferred that her case be heard and decided
by the RTC in Batac. On the heels of the dismissal of the original complaints on the
ground of improper venue, three new personalities were added to the complaint
doubtless to insure, but in vain as it turned out, that the case stays with the RTC in
Batac.
Litigants ought to bank on the righteousness of their causes, the superiority of their
cases, and the persuasiveness of arguments to secure a favorable verdict. It is high
time that courts, judges, and those who come to court for redress keep this ideal in
mind.
WHEREFORE, the instant petition is hereby DISMISSED. The Decision and Resolution
dated October 17, 2001 and June 20, 2002, respectively, of the CA in CA-G.R. SP No.
64246, insofar as they nullified the assailed orders of the RTC, Branch 17 in Batac,
Ilocos Norte in Civil Case Nos. 3341-17 and 3342-17 on the ground of lack of
jurisdiction due to improper venue, are hereby AFFIRMED. The Orders dated October
9, 2000, December 18, 2000, and March 15, 2001 of the RTC in Civil Case Nos.
3341-17 and 3342-17 are accordingly ANNULLED and SET ASIDE and said civil cases
are DISMISSED.
Costs against petitioners.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice

Sante v. Hon. Claravall, G.R. No. 173915, February 22, 2010

FIRST DIVISION

IRENE SANTE AND REYNALDO

SANTE,
Petitioners,

G.R. No. 173915

- versus -

Present:

HON. EDILBERTO T. CLARAVALL, in

his capacity as Presiding Judge of
Branch 60, Regional Trial Court of

22

Baguio City, and VITA N. KALASHIAN,

PUNO, C.J., Chairperson,
Respondents.
CARPIO MORALES,
LEONARDO-DE CASTRO,
BERSAMIN, and
VILLARAMA, JR., JJ.

Promulgated:
February 22, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
VILLARAMA, JR., J.:
Before this Court is a petition for certiorari[1] under Rule 65 of the 1997 Rules of
Civil Procedure, as amended, filed by petitioners Irene and Reynaldo Sante assailing
the Decision[2] dated January 31, 2006 and the Resolution[3] dated June 23, 2006 of
the Seventeenth Division of the Court of Appeals in CA-G.R. SP No. 87563. The
assailed decision affirmed the orders of the Regional Trial Court (RTC) of Baguio City,
Branch 60, denying their motion to dismiss the complaint for damages filed by
respondent Vita Kalashian against them.
The facts, culled from the records, are as follows:
On April 5, 2004, respondent filed before the RTC of Baguio City a complaint
for damages[4] against petitioners. In her complaint, docketed as Civil Case No.
5794-R, respondent alleged that while she was inside the Police Station of
Natividad, Pangasinan, and in the presence of other persons and police officers,
petitioner Irene Sante uttered words, which when translated in English are as
follows, How many rounds of sex did you have last night with your boss, Bert? You
fuckin bitch! Bert refers to Albert Gacusan, respondents friend and one (1) of her
hired personal security guards detained at the said station and who is a suspect in
the killing of petitioners close relative. Petitioners also allegedly went around
Natividad, Pangasinan telling people that she is protecting and cuddling the
suspects in the aforesaid killing. Thus, respondent prayed that petitioners be held
liable to pay moral damages in the amount of P300,000.00; P50,000.00 as
exemplary damages; P50,000.00 attorneys fees; P20,000.00 litigation expenses;
and costs of suit.
Petitioners filed a Motion to Dismiss [5] on the ground that it was the Municipal
Trial Court in Cities (MTCC) and not the RTC of Baguio, that had jurisdiction over the
case. They argued that the amount of the claim for moral damages was not more
than the jurisdictional amount of P300,000.00, because the claim for exemplary
damages should be excluded in computing the total claim.
On June 24, 2004,[6] the trial court denied the motion to dismiss citing our
ruling in Movers-Baseco Integrated Port Services, Inc. v. Cyborg Leasing
Corporation.[7] The trial court held that the total claim of respondent amounted
to P420,000.00 which was above the jurisdictional amount for MTCCs outside Metro
Manila. The trial court also later issued Orders on July 7, 2004 [8] and July 19, 2004,
[9]
respectively reiterating its denial of the motion to dismiss and denying
petitioners motion for reconsideration.
23

Aggrieved, petitioners filed on August 2, 2004, a Petition for Certiorari and

Prohibition,[10] docketed as CA-G.R. SP No. 85465, before the Court of Appeals.
Meanwhile, on July 14, 2004, respondent and her husband filed an Amended
Complaint[11]increasing the claim for moral damages from P300,000.00
to P1,000,000.00. Petitioners filed a Motion to Dismiss with Answer Ad
Cautelam and Counterclaim, but the trial court denied their motion in an
Order[12] dated September 17, 2004.
Hence, petitioners again filed a Petition for Certiorari and Prohibition [13] before
the Court of Appeals, docketed as CA-G.R. SP No. 87563, claiming that the trial
court committed grave abuse of discretion in allowing the amendment of the
complaint to increase the amount of moral damages from P300,000.00
to P1,000,000.00. The case was raffled to the Seventeenth Division of the Court of
Appeals.
On January 23, 2006, the Court of Appeals, Seventh Division, promulgated a
decision in CA-G.R. SP No. 85465, as follows:
WHEREFORE, finding grave abuse of discretion on the part of
[the] Regional Trial Court of Baguio, Branch 60, in rendering the
assailed Orders dated June 24, 2004 and July [19], 2004 in Civil Case
No. 5794-R the instant petition for certiorari is GRANTED. The assailed
Orders are hereby
ANNULLED and SET ASIDE. Civil Case No.
5794-R for damages is ordered DISMISSED for lack of
jurisdiction.
SO ORDERED.[14]
The Court of Appeals held that the case clearly falls under the jurisdiction of the
MTCC as the allegations show that plaintiff was seeking to recover moral damages in
the amount of P300,000.00, which amount was well within the jurisdictional amount of
the MTCC. The Court of Appeals added that the totality of claim rule used for
determining which court had jurisdiction could not be applied to the instant case
because plaintiffs claim for exemplary damages was not a separate and distinct cause
of action from her claim of moral damages, but merely incidental to it. Thus, the
prayer for exemplary damages should be excluded in computing the total amount of
the claim.
On January 31, 2006, the Court of Appeals, this time in CA-G.R. SP No. 87563,
rendered a decision affirming the September 17, 2004 Order of the RTC denying
petitioners Motion to Dismiss Ad Cautelam. In the said decision, the appellate court
held that the total or aggregate amount demanded in the complaint constitutes the
basis of jurisdiction. The Court of Appeals did not find merit in petitioners posture
that the claims for exemplary damages and attorneys fees are merely incidental to
the main cause and should not be included in the computation of the total claim.
The Court of Appeals additionally ruled that respondent can amend her
complaint by increasing the amount of moral damages from P300,000.00
to P1,000,000.00, on the ground that the trial court has jurisdiction over the original
complaint and respondent is entitled to amend her complaint as a matter of right
under the Rules.
Unable to accept the decision, petitioners are now before us raising the
following issues:
I.
WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION ON THE PART OF
THE (FORMER) SEVENTEENTH DIVISION OF THE HONORABLE COURT OF
APPEALS WHEN IT RESOLVED THAT THE REGIONAL TRIAL COURT OF

24

BAGUIO CITY BRANCH 60 HAS JURISDICTION OVER THE SUBJECT

MATTER OF THE CASE FOR DAMAGES AMOUNTING TO P300,000.00;
II.
WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION ON THE
PART OF THE HONORABLE RESPONDENT JUDGE OF THE REGIONAL
TRIAL COURT OF BAGUIO BRANCH 60 FOR ALLOWING THE
COMPLAINANT TO AMEND THE COMPLAINT (INCREASING THE AMOUNT
OF DAMAGES TO 1,000,000.00 TO CONFER JURISDICTION OVER THE
SUBJECT MATTER OF THE CASE DESPITE THE PENDENCY OF A PETITION
FOR CERTIORARI FILED AT THE COURT OF APPEALS, SEVENTH DIVISION,
DOCKETED AS CA G.R. NO. 85465.[15]
In essence, the basic issues for our resolution are:
1)
2)

Did the RTC acquire jurisdiction over the case? and

Did the RTC commit grave abuse of discretion in allowing the
amendment of the complaint?

Petitioners insist that the complaint falls under the exclusive jurisdiction of
the MTCC. They maintain that the claim for moral damages, in the amount
of P300,000.00 in the original complaint, is the main action. The exemplary
damages being discretionary should not be included in the computation of the
jurisdictional amount. And having no jurisdiction over the subject matter of the
case, the RTC acted with grave abuse of discretion when it allowed the amendment
of the complaint to increase the claim for moral damages in order to confer
jurisdiction.
In her Comment,[16] respondent averred that the nature of her complaint is for
recovery of damages. As such, the totality of the claim for damages, including the
exemplary damages as well as the other damages alleged and prayed in the
complaint, such as attorneys fees and litigation expenses, should be included in
determining jurisdiction. The total claim being P420,000.00, the RTC has jurisdiction
over the complaint.
We deny the petition, which although denominated as a petition for certiorari,
we treat as a petition for review on certiorari under Rule 45 in view of the issues
raised.
Section 19(8) of Batas Pambansa Blg. 129,[17] as amended by Republic Act No.
7691,[18] states:
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
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).
Section 5 of Rep. Act No. 7691 further provides:
SEC. 5. After five (5) years from the effectivity of this Act, the
jurisdictional amounts mentioned in Sec. 19(3), (4), and (8); and Sec.
25

33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be

adjusted to Two hundred thousand pesos (P200,000.00). Five (5) years
thereafter, such jurisdictional amounts shall be adjusted further to
Three hundred thousand pesos (P300,000.00): Provided, however, That
in the case of Metro
Manila, the abovementioned jurisdictional
amounts shall be adjusted after five (5) years from the effectivity of
this Act to Four hundred thousand pesos (P400,000.00).
Relatedly, Supreme Court Circular No. 21-99 was issued declaring that the
first adjustment in jurisdictional amount of first level courts outside of Metro Manila
from P100,000.00 to P200,000.00 took effect on March 20, 1999. Meanwhile, the
second adjustment from P200,000.00 to P300,000.00 became effective on February
22, 2004 in accordance with OCA Circular No. 65-2004 issued by the Office of the
Court Administrator on May 13, 2004.
Based on the foregoing, there is no question that at the time of the filing of
the complaint on April 5, 2004, the MTCCs jurisdictional amount has been adjusted
to P300,000.00.
But where damages is the main cause of action, should the amount of moral
damages prayed for in the complaint be the sole basis for determining which court
has jurisdiction or should the total amount of all the damages claimed regardless of
kind and nature, such as exemplary damages, nominal damages, and attorneys
fees, etc., be used?
In this regard, Administrative Circular No. 09-94[19] is instructive:
xxxx
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. (Emphasis ours.)
In the instant case, the complaint filed in Civil Case No. 5794-R is for the
recovery of damages for the alleged malicious acts of petitioners. The complaint
principally sought an award of moral and exemplary damages, as well as attorneys
fees and litigation expenses, for the alleged shame and injury suffered by respondent
by reason of petitioners utterance while they were at a police station in Pangasinan. It
is settled that jurisdiction is conferred by law based on the facts alleged in the
complaint since the latter comprises a concise statement of the ultimate facts
constituting the plaintiffs causes of action.[20] It is clear, based on the allegations of
the complaint, that respondents main action is for damages. Hence, the other forms
of damages being claimed by respondent, e.g., exemplary damages, attorneys fees
and litigation expenses, are not merely incidental to or consequences of the main
action but constitute the primary relief prayed for in the complaint.
In Mendoza v. Soriano,[21] it was held that 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. In the

26

said case, the respondents claim of P929,000.06 in damages and P25,000

attorneys fees plus P500 per court appearance was held to represent the monetary
equivalent for compensation of the alleged injury. The Court therein held that the
total amount of monetary claims including the claims for damages was the basis to
determine the jurisdictional amount.
Also, in Iniego v. Purganan,[22] the Court has held:
The amount of damages claimed is within the jurisdiction of
the RTC, since it is the claim for all kinds of damages that is the basis
of determining the jurisdiction of courts, whether the claims for
damages arise from the same or from different causes of action.
xxxx
Considering that the total amount of damages claimed was P420,000.00, the
Court of Appeals was correct in ruling that the RTC had jurisdiction over the case.
Lastly, we find no error, much less grave abuse of discretion, on the part of
the Court of Appeals in affirming the RTCs order allowing the amendment of the
original complaint from P300,000.00 to P1,000,000.00 despite the pendency of a
petition for certiorari filed before the Court of Appeals. While it is a basic
jurisprudential principle that an amendment cannot be allowed when the court has
no jurisdiction over the original complaint and the purpose of the amendment is to
confer jurisdiction on the court, [23] here, the RTC clearly had jurisdiction over the
original complaint and amendment of the complaint was then still a matter of right.
[24]

WHEREFORE, the petition is DENIED, for lack of merit. The Decision and
Resolution of the Court of Appeals dated January 31, 2006 and June 23, 2006,
respectively, are AFFIRMED. The Regional Trial Court of Baguio City, Branch 60
isDIRECTED to continue with the trial proceedings in Civil Case No. 5794-R with
deliberate dispatch.
No costs.
SO ORDERED.

MARTIN S. VILLARAMA, JR.

Associate Justice

Sec. 3. Amendments by leave of court

Tiu v. PBCOm, G.R. No. 151932, August 19, 2009
THIRD DIVISION

27

HENRY
CHING
CHRISTOPHER HALIN
GEORGE CO,
Petitioners,

GO,

TIU,
and

G.R. No. 151932

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

- versus -

PHILIPPINE
BANK
COMMUNICATIONS,
Respondent.

OF

Promulgated:
August 19, 2009

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
PERALTA, J.:
This is a petition for review on certiorari, under Rule 45 of the Rules of Court,
seeking to annul and set aside the Decision [1]dated September 28, 2001, rendered
by the Court of Appeals (CA) in CA-G.R. SP No. 57732, dismissing the petition and
affirming the assailed Orders of the Regional Trial Court (RTC) of Cagayan de Oro
City, Branch 21 in Civil Case No. 99-352, dated December 14, 1999 and January 11,
2000.
The factual and procedural antecedents are as follows:
In June 1993, Asian Water Resources, Inc. (AWRI), represented by herein
petitioners, applied for a real estate loan with the Philippine Bank of
Communications (PBCOM) to fund its purified water distribution business. In
support of the loan application, petitioners submitted a Board Resolution [2] dated
June 7, 1993. The loan was guaranteed by collateral over the property covered by
Transfer Certificate of Title No. T-13020.[3] The loan was eventually approved.[4]
In August 1996, AWRI applied for a bigger loan from PBCOM for additional
capitalization using the same Board Resolution, but without any additional real
estate collateral. Considering that the proposed additional loan was unsecured,
PBCOM required all the members of the Board of Directors of AWRI to become
sureties. Thus, on August 16, 1996, a Surety Agreement [5] was executed by its
Directors and acknowledged by a notary public on the same date. All copies of the
Surety Agreement, except two, were kept by PBCOM. Of the two copies kept by the
notary public, one copy was retained for his notarial file and the other was sent to
the Records Management and Archives Office, through the Office of the RTC Clerk of
Court.[6]
Thereafter, on December 16, 1998, AWRI informed the bank of its desire to
surrender and/or assign in its favor, all the present properties of the former to apply
as dacion en pago for AWRIs existing loan obligation to the bank. [7] On January 11,
1999, PBCOM sent a reply denying the request. On May 12, 1999, PBCOM sent a
letter to petitioners demanding full payment of its obligation to the bank. [8]
Its demands having remained unheeded, PBCOM instructed its counsel to file
a complaint for collection against petitioners. The case was docketed as Civil Case
No. 99-352.

28

On July 3, 1999, petitioners filed their Answer. It alleged, among other things,
that they were not personally liable on the promissory notes, because they signed
the Surety Agreement in their capacities as officers of AWRI. They claimed that the
Surety Agreement attached to the complaint as Annexes A to A-2 [9] were
falsified, considering that when they signed the same, the words In his personal
capacity did not yet appear in the document and were merely intercalated thereon
without their knowledge and consent.[10]
In support of their allegations, petitioners attached to their Answer a certified
photocopy of the Surety Agreement issued on March 25, 1999 by the Records
Management and Archives Office in Davao City, [11] showing that the words In his
personal capacity were not found at the foot of page two of the document where
their signatures appeared.[12]
Because of this development, PBCOMs counsel searched for and retrieved
the file copy of the Surety Agreement. The notarial copy showed that the words In
his personal capacity did not appear on page two of the Surety Agreement. [13]
Petitioners counsel then asked PBCOM to explain the alteration appearing on
the agreement. PBCOM subsequently discovered that the insertion was ordered by
the bank auditor. It alleged that when the Surety Agreement was inspected by the
bank auditor, he called the attention of the loans clerk, Kenneth Cabahug, as to why
the words In his personal capacity were not indicated under the signature of each
surety, in accordance with bank standard operating procedures. The auditor then
ordered Mr. Cabahug to type the words In his personal capacity below the second
signatures of petitioners. However, the notary public was never informed of the
insertion.[14] Mr. Cabahug subsequently executed an affidavit [15] attesting to the
circumstances why the insertion was made.
PBCOM then filed a Reply and Answer to Counterclaim with Motion for Leave
of Court to Substitute Annex A of the Complaint, [16] wherein it attached the
duplicate original copy retrieved from the file of the notary public. PBCOM also
admitted its mistake in making the insertion and explained that it was made without
the knowledge and consent of the notary public. PBCOM maintained that the
insertion was not a falsification, but was made only to speak the truth of the parties
intentions. PBCOM also contended that petitioners were already primarily liable on
the Surety Agreement whether or not the insertion was made, having admitted in
their pleadings that they voluntarily executed and signed the Surety Agreement in
the original form. PBCOM, invoking a liberal application of the Rules, emphasized
that the motion incorporated in the pleading can be treated as a motion for leave of
court to amend and admit the amended complaint pursuant to Section 3, Rule 10 of
the Rules of Court.
On December 14, 1999, the RTC issued an Order [17] allowing the substitution
of the altered document with the original Surety Agreement, the pertinent portion of
which reads:
August 16, 1996 attached as Annexes A to A-2 of the reply and
answer Resolving the Motion to Substitute Annexes A to A-2 of the
complaint and the opposition thereto by the defendant, this Court, in
the interest of justice, hereby allows the substitution of said Annexes
A to A-2 of the complaint with the duplicate original of notarial copy
of the Agreement dated to counter-claim.
SO ORDERED.
Petitioners filed a motion for reconsideration, [18] but it was denied in the
Order[19] dated January 11, 2000, to wit:

29

Resolving the motion for reconsideration and the opposition

thereto, the Court finds the motion substantially a reiteration of the
opposition to plaintiffs motion.
Additionally, the instant motion for reconsideration treats on
evidentiary matter which can be properly ventilated in the trial proper,
hence, there is no cogent reason to disturb the Courts order of
December 14, 1999.
SO ORDERED.
Aggrieved, petitioners sought recourse before the CA via a petition
for certiorari under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No. 57732.
Petitioners claimed that the RTC acted without or in excess of jurisdiction, or
with grave abuse of discretion amounting to lack or excess of jurisdiction in denying
their motion for reconsideration and in allowing PBCOM to substitute the altered
copy of the Surety Agreement with the duplicate original notarial copy thereof
considering that the latters cause of action was solely and principally founded on
the falsified document marked as Annexes A to A-2. [20]
On September 28, 2001, the CA rendered a Decision dismissing the petition
for lack of merit, the decretal portion of which reads:
WHEREFORE, foregoing considered, the instant petition is
hereby DENIED DUE COURSE and, accordingly, DISMISSED for lack
of merit. The assailed Orders dated December 14, 1999 and January
11, 2000 of the Regional Trial Court of Cagayan de Oro City, Branch 21,
are hereby AFFIRMED in toto.
SO ORDERED.[21]
Hence, the petition assigning the following errors:
I
THE COURT COMMITTED A REVERSIBLE ERROR IN AFFIRMING IN TOTO
THE ORDER OF THE LOWER COURT ALLOWING THE SUBSTITUTION OF
THE FALSIFIED DOCUMENT BY RELYING ON THE PROVISION OF SECTION
3, RULE 10 OF THE RULES OF COURT.
II
ACTING AS THE COURT ON THE PETITION FOR CERTIORARI, THE COURT
COMMITTED A REVERSIBLE ERROR HAVING NO JURISDICTION TO RULE
ON THE OBLIGATION OF THE PETITIONERS BASED ON THE FALSIFIED
DOCUMENT
III
THE COURT ERRED IN GIVING CREDENCE TO THE ALLEGATION OF
RESPONDENT BANK THAT FROM AUGUST 15 TO DECEMBER 9, 1997
ASIAN WATER RESOURCES INC. OBTAINED SEVERAL AVAILMENTS
OF NEW
BIGGER
AND
ADDITIONAL
LOANS
TOTALLING P2,030,000.00 EVIDENCED BY 4 PROMISSORY NOTES
MARKED AS ANNEXES B, B-1, B-2 AND B-3.
IV
THE COURT FAILED TO CONSIDER THE MISAPPLICATION OF THE
PRINCIPLE OF EQUITY COMMITTED BY THE LOWER COURT IN ORDERING
THE SUBSTITUTION OF THE FALSIFIED DOCUMENT.[22]

30

Petitioners argue that the CA committed a reversible error in affirming the

Order of the RTC allowing the substitution of the document by relying on Section 3,
Rule 10 of the Rules of Court. Petitioners assert that the Rules do not allow the
withdrawal and substitution of a falsified document once discovered by the
opposing party.
Petitioners maintain that PBCOMs cause of action was solely and principally
founded on the alleged falsified document originally marked as
Annexes A to A-2. Thus, the withdrawal of the document results in the
automatic withdrawal of the whole complaint on the ground that there is no more
cause of action to be maintained or enforced by plaintiff against petitioners. Also,
petitioners argue that if the substitution will be allowed, their defenses that were
anchored on Annexes A to A-2 would be gravely affected. Moreover, considering
that the said document was already removed, withdrawn, and disregarded by the
RTC, the withdrawal and substitution of the document would prevent petitioners
from introducing the falsified documents during the trial as part of their evidence. [23]
Petitioners submit that the RTC misapplied the principle of equity when it
allowed PBCOM to substitute the document with the original agreement. Petitioners
also claim that the remedy of appeal after the termination of the case in the RTC
would become ineffective and inadequate if the Order of the RTC allowing the
withdrawal and substitution of the document would not be nullified, because the
falsified document would no longer be found in the records of the case during the
appeal.[24]
Petitioners contend that the CA went beyond the issue raised before it when
it interpreted the provisions of the Surety Agreement, particularly paragraph 4
thereof, and then ruled on the obligations of the parties based on
the document. Petitioners posit that the CA prematurely ruled on petitioners
obligations, considering that their obligations should be determined during trial on
the merits, after the parties have been given the opportunity to present their
evidence in support of their respective claims. Petitioners stress that the CA went
into the merit of the case when it gave credence to the statement of fact of PBCOM
that From August 15 to December 9, 1997, Asian Water Resources, Inc. obtained
several availments on its additional loans totalling P2,030,000.00 as evidenced by 4
promissory notes marked as Annexes B, B-1, B-2, and B-3. Thus, the conclusion of
the CA in declaring the petitioners liable as sureties violated their right to due
process.[25]
For its part, PBCOM argues that since the complaint is based on an actionable
document, i.e., the surety agreement, the original or a copy thereof should be
attached to the pleading as an exhibit, which shall be deemed part of the
pleading. Considering that the surety agreement is annexed to the complaint, it is
an integral part thereof and its substitution with another copy is in the nature of a
substantial amendment, which is allowed by the Rules, but with prior leave of court.
Moreover, PBCOM alleges that since the Rules provides that substantial
amendments may be made upon leave of court, the authority of the RTC to allow
the amendment is discretionary. Thus, the CA correctly held that the act of granting
the said substitution was within the clear and proper discretion of the RTC.
The petition is without merit.
As to the substitution of the earlier surety agreement that was annexed to
the complaint with the original thereof, this Court finds that the RTC did not err in
allowing the substitution.
The pertinent rule on actionable documents is found in Section 7, Rule 8 of
the Rules of Court, which provides that when the cause of action is anchored on a
document, its substance must be set forth, and the original or a copy thereof shall
be attached to the pleading as an exhibit and deemed a part thereof, to wit:

31

Section 7. Action or defense based on document. Whenever an

action or defense is based upon a written instrument or document, the
substance of such instrument or document shall be set forth in the
pleading, and the original or a copy thereof shall be attached to the
pleading as an exhibit, which shall be deemed to be a part of the
pleading, or said copy may with like effect be set forth in the pleading.
With respect to PBCOMs right to amend its complaint, including the
documents annexed thereto, after petitioners have filed their answer, Section 3,
Rule 10 of the Rules of Court specifically allows amendment by leave of court. The
said Section states:
SECTION 3. Amendments by leave of court. Except as provided in
the next preceding section, substantial amendments may be made
only upon leave of court. But such leave may be refused if it appears to
the court that the motion was made with intent to delay. Orders of the
court upon the matters provided in this section shall be made upon
motion filed in court, and after notice to the adverse party, and an
opportunity to be heard.
This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules
of Civil Procedure in Valenzuela v. Court of Appeals,[26] thus:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil
Procedure amended the former rule in such manner that the phrase or
that the cause of action or defense is substantially altered was
stricken-off and not retained in the new rules. The clear import of such
amendment in Section 3, Rule 10 is that under the new rules, the
amendment may (now) substantially alter the cause of action or
defense. This should only be true, however, when despite a
substantial change or alteration in the cause of action or defense, the
amendments sought to be made shall serve the higher interests of
substantial justice, and prevent delay and equally promote the
laudable objective of the rules which is to secure a just, speedy and
inexpensive disposition of every action and proceeding. [27]
The granting of leave to file amended pleading is a matter particularly
addressed to the sound discretion of the trial court; and that discretion is broad,
subject only to the limitations that the amendments should not substantially change
the cause of action or alter the theory of the case, or that it was not made to delay
the action.[28] Nevertheless, as enunciated in Valenzuela, even if the amendment
substantially alters the cause of action or defense, such amendment could still be
allowed when it is sought to serve the higher interest of substantial justice; prevent
delay; and secure a just, speedy and inexpensive disposition of actions and
proceedings.
The courts should be liberal in allowing amendments to pleadings to avoid a
multiplicity of suits and in order that the real controversies between the parties are
presented, their rights determined, and the case decided on the merits without
unnecessary delay. This liberality is greatest in the early stages of a lawsuit,
especially in this case where the amendment was made before the trial of the case,
thereby giving the petitioners all the time allowed by law to answer and to prepare
for trial.[29]
Furthermore, amendments to pleadings are generally favored and should be
liberally allowed in furtherance of justice in order that every case, may so far as
possible, be determined on its real facts and in order to speed up the trial of the
case or prevent the circuity of action and unnecessary expense. That is, unless

32

there are circumstances such as inexcusable delay or the taking of the adverse
party by surprise or the like, which might justify a refusal of permission to amend. [30]
In the present case, there was no fraudulent intent on the part of PBCOM in
submitting the altered surety agreement. In fact, the bank admitted that it was a
mistake on their part to have submitted it in the first place instead of the original
agreement. It also admitted that, through inadvertence, the copy that was attached
to the complaint was the copy wherein the words IN HIS PERSONAL CAPACITY
were inserted to conform to the banks standard practice. This alteration was made
without the knowledge of the notary public. PBCOMs counsel had no idea that what
it submitted was the altered document, thereby necessitating the substitution of the
surety agreement with the original thereof, in order that the case would be
judiciously resolved.
Verily, it is a cardinal rule of evidence, not just one of technicality but of
substance, that the written document is the best evidence of its own contents. It is
also a matter of both principle and policy that when the written contract is
established as the repository of the parties stipulations, any other evidence is
excluded, and the same cannot be used to substitute for such contract, or even to
alter or contradict the latter.[31] The original surety agreement is the best evidence
that could establish the parties respective rights and obligations. In effect, the RTC
merely allowed the amendment of the complaint, which consequently included the
substitution of the altered surety agreement with a copy of the original.
It is well to remember at this point that rules of procedure are but mere tools
designed to facilitate the attainment of justice. Their strict and rigid application that
would result in technicalities that tend to frustrate rather than promote substantial
justice must always be avoided. [32] Applied to the instant case, this not only assures
that it would be resolved based on real facts, but would also aid in the speedy
disposition of the case by utilizing the best evidence possible to determine the
rights and obligations of the party- litigants.
Moreover, contrary to petitioners contention, they could not be prejudiced by
the substitution since they can still present the substituted documents, Annexes A
to A-2, as part of the evidence of their affirmative defenses. The substitution did
not prejudice petitioners or delay the action. On the contrary, it tended to expedite
the determination of the controversy. Besides, the petitioners are not precluded
from filing the appropriate criminal action against PBCOM for attaching the altered
copy of the surety agreement to the complaint. The substitution of the documents
would not, in any way, erase the existence of falsification, if any. The case before
the RTC is civil in nature, while the alleged falsification is criminal, which is separate
and distinct from another. Thus, the RTC committed no reversible error when it
allowed the substitution of the altered surety agreement with that of the original.
A Petition for Certiorari under Rule 65 of the Rules of Court is intended for the
correction of errors of jurisdiction only or grave abuse of discretion amounting to
lack or excess of jurisdiction. Its principal office is only to keep the inferior court
within the parameters of its jurisdiction or to prevent it from committing such a
grave abuse of discretion amounting to lack or excess of jurisdiction. [33]
For a petition for certiorari to prosper, the essential requisites that have to
concur are: (1) the writ is directed against a tribunal, a board or any officer
exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has
acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain,
speedy and adequate remedy in the ordinary course of law. [34]
The phrase without jurisdiction means that the court acted with absolute lack
of authority or want of legal power, right or authority to hear and determine a cause
or causes, considered either in general or with reference to a particular matter. It
means lack of power to exercise authority. Excess of jurisdiction occurs when the

33

court transcends its power or acts without any statutory authority; or results
when an act, though within the general power of a tribunal, board or officer (to do)
is not authorized, and is invalid with respect to the particular proceeding, because
the conditions which alone authorize the exercise of the general power in respect of
it are wanting. Grave abuse of discretion implies such capricious and whimsical
exercise of judgment as to be equivalent to lack or excess of jurisdiction; simply put,
power is exercised in an arbitrary or despotic manner by reason of passion,
prejudice, or personal hostility; and such exercise is so patent or so gross as to
amount to an evasion of a positive duty or to a virtual refusal either to perform the
duty enjoined or to act at all in contemplation of law. [35]
The present case failed to comply with the above-stated requisites. In the
instant case, the soundness of the RTCs Order allowing the substitution of the
document involves a matter of judgment and discretion, which cannot be the proper
subject of a petition for certiorari under Rule 65. This rule is only intended to
correct defects of jurisdiction and not to correct errors of procedure or matters in
the trial courts findings or conclusions.
However, this Court agrees with the petitioners contention that the CA
should not have made determinations as regards the parties respective rights
based on the surety agreement. The CA went beyond the issues brought before it
and effectively preempted the RTC in making its own determinations. It is to be
noted that the present case is still pending determination by the RTC. The CA
should have been more cautious and not have gone beyond the issues submitted
before it in the petition for certiorari; instead, it should have squarely addressed
whether or not there was grave abuse of discretion on the part of the RTC in issuing
the Orders dated December 14, 1999 and January 11, 2000.
WHEREFORE, premises considered, the petition is DENIED. Subject to the
above disquisitions, the Decision of the Court of Appeals in CA-G.R. SP No. 57732,
dated September 28, 2001, and the Orders of the Regional Trial Court of Cagayan de
Oro City, Branch 21, in Civil Case No. 99-352, dated December 14, 1999 and January
11, 2000, are AFFIRMED.
SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

Philippine Ports Authority v. WGA, G.R. No. 158401, January 28, 2008
/---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\
[2008V45] PHILIPPINE PORTS AUTHORITY, Petitioner, versus WILLIAM GOTHONG &
ABOITIZ (WG&A), INC., Respondent.2008 Jan 283rd DivisionG.R. No. 158401D E C I S
ION

AUSTRIA-MARTINEZ, J.:
This resolves the Petition for Review on Certiorari filed by the Philippine Ports
Authority (petitioner) seeking the reversal of the Decision[1] of the Court of Appeals
(CA) promulgated on October 24, 2002 and its Resolution dated May 15, 2003.

34

The antecedent facts are accurately narrated by the CA as follows:

Petitioner William Gothong & Aboitiz, Inc. (WG&A for brevity), is a duly
organized domestic corporation engaged in the shipping industry. Respondent
Philippine Ports Authority (PPA for brevity), upon the other hand, is a governmentowned and controlled company created and existing by virtue of the provisions of
P.D. No. 87 and mandated under its charter to operate and administer the country's
sea port and port facilities.
After the expiration of the lease contract of Veterans Shipping Corporation
over the Marine Slip Way in the North Harbor on December 31, 2000, petitioner
WG&A requested respondent PPA for it to be allowed to lease and operate the said
facility. Thereafter, then President Estrada issued a memorandum dated December
18, 2000 addressed to the Secretary of the Department of Transportation and
Communication (DOTC) and the General Manager of PPA, stating to the effect that in
its meeting held on December 13, 2000, the Economic Coordinating Council (ECC)
has approved the request of petitioner WG&A to lease the Marine Slip Way from
January 1 to June 30, 2001 or until such time that respondent PPA turns over its
operations to the winning bidder for the North Harbor Modernization Project.
Pursuant to the said Memorandum, a Contract of Lease was prepared by
respondent PPA containing the following terms:
1.
The lease of the area shall take effect on January 1 to June 30, 2001 or until
such time that PPA turns over its operation to the winning bidder for the North
Harbor modernization;
2.
You shall pay a monthly rental rate of P12.15 per square meter or an
aggregate monthly rental amount of P886,950.00;
3.
All structures/improvements introduced in the leased premises shall be turned
over to PPA;
4.
Water, electricity, telephone and other utility expenses shall be for the
account of William, Gothong & Aboitiz, Inc.;
5.
Real Estate tax/insurance and other government dues and charges shall be
borne by WG&A.
The said contract was eventually conformed to and signed by the petitioner
company, through its President/Chief Executive Officer Endika Aboitiz, Jr.
Thereafter, in accordance with the stipulations made in the lease agreement, PPA
surrendered possession of the Marine Slip Way in favor of the petitioner.
However, believing that the said lease already expired on June 30, 2001,
respondent PPA subsequently sent a letter to petitioner WG&A dated November 12,
2001 directing the latter to vacate the contested premises not later than November
30, 2001 and to turnover the improvements made therein pursuant to the terms
and conditions agreed upon in the contract.
In response, petitioner WG&A wrote PPA on November 27, 2001 urging the
latter to reconsider its decision to eject the former. Said request was denied by the
PPA via a letter dated November 29, 2001.

35

On November 28, 2001, petitioner WG&A commenced an Injunction suit

before the Regional Trial Court of Manila. Petitioner claims that the PPA unjustly,
illegally and prematurely terminated the lease contract. It likewise prayed for the
issuance of a temporary restraining order to arrest the evacuation.
In its
complaint, petitioner also sought recovery of damages for breach of contract and
attorney's fees.
On December 11, 2001, petitioner WG&A amended its complaint for the first
time. The complaint was still denominated as one for Injunction with prayer for
TRO. In the said amended pleading, the petitioner incorporated statements to the
effect that PPA is already estopped from denying that the correct period of lease is
until such time that the North Harbor Modernization Project has been bidded out to
and operations turned over to the winning bidder. It likewise included, as its third
cause of action, the additional relief in its prayer, that should the petitioner be
forced to vacate the said facility, it should be deemed as entitled to be refunded of
the value of the improvements it introduced in the leased property.
Following the first amendment in the petitioner's complaint, respondent PPA
submitted its answer on January 23, 2002. Meanwhile, the TRO sought by the
former was denied by the trial court by way of an order dated January 16, 2002.
Petitioner later moved for the reconsideration of the said Order on February
11, 2002. Shortly thereafter, petitioner filed a Motion to Admit Attached Second
Amended Complaint. This time, however, the complaint was already captioned as
one for Injunction with Prayer for Temporary Restraining Order and/or Writ of
Preliminary Injunction and damages and/or for Reformation of Contract. Also, it
included as its fourth cause of action and additional relief in its prayer, the
reformation of the contract as it failed to express or embody the true intent of the
contracting parties.
The admission of the second amended complaint met strong opposition from
the respondent PPA. It postulated that the reformation sought for by the petitioner
constituted substantial amendment, which if granted, will substantially alter the
latter's cause of action and theory of the case.
On March 22, 2002, the respondent judge issued an Order denying the
Admission of the Second Amended Complaint.
Petitioner filed a motion for
reconsideration of the aforesaid order but the same was again denied in an order
dated April 26, 2002.[2]
Herein respondent WG&A then filed a petition for certiorari with the CA
seeking the nullification of the aforementioned RTC orders.
In its Decision dated October 24, 2002, the CA granted respondent's petition,
thereby setting aside the RTC orders and directing the RTC to admit respondent's
second amended complaint pursuant to Section 3, Rule 10 of the 1997 Rules of Civil
Procedure. Petitioner moved for reconsideration but the same was denied per
Resolution dated May 15, 2003.
Hence, the present petition where the only issue raised is whether the CA
erred in ruling that the RTC committed grave abuse of discretion when it denied the
admission of the second amended complaint.
The Court finds the petition without merit.
36

The CA did not err in finding that the RTC committed grave abuse of discretion in
issuing the Order dated March 22, 2002 denying the admission of respondent's
second amended complaint.
The RTC applied the old Section 3, Rule 10 of the Rules of Court:
Section 3. Amendments by leave of court. after the case is set for hearing,
substantial amendments may be made only upon leave of court. But such leave
may be refused if it appears to the court that the motion was made with intent to
delay the action or that the cause of action or defense is substantially altered.
Orders of the court upon the matters provided in this section shall be made upon
motion filed in court, and after notice to the adverse party, and an opportunity to be
heard.
instead of the provisions of the 1997 Rules of Civil Procedure, amending Section 3,
Rule 10, to wit:
SECTION 3. Amendments by leave of court. Except as provided in the next
preceding section, substantial amendments may be made only upon leave of court.
But such leave may be refused if it appears to the court that the motion was made
with intent to delay. Orders of the court upon the matters provided in this section
shall be made upon motion filed in court, and after notice to the adverse party, and
an opportunity to be heard.
The Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules
of Civil Procedure in Valenzuela v. Court of Appeals,[3] thus:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the
former rule in such manner that the phrase "or that the cause of action or defense
is substantially altered" was stricken-off and not retained in the new rules. The clear
import of such amendment in Section 3, Rule 10 is that under the new rules, "the
amendment may (now) substantially alter the cause of action or defense." This
should only be true, however, when despite a substantial change or alteration in the
cause of action or defense, the amendments sought to be made shall serve the
higher interests of substantial justice, and prevent delay and equally promote the
laudable objective of the rules which is to secure a just, speedy and inexpensive
disposition of every action and proceeding.[4]
The application of the old Rules by the RTC almost five years after its
amendment by the 1997 Rules of Civil Procedure patently constitutes grave abuse
of discretion.
WHEREFORE, the petition is DENIED for lack of merit. The Decision of the
Court of Appeals promulgated on October 24, 2002 and its Resolution dated May 15,
2003 are hereby AFFIRMED in toto.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice

37

Sec. 4. Formal amendments

Sec. 5. Amendment to conform to or authorize presentation of

evidence
Azolla Farms v. Court of Appeals, G.R. No. 138085, November 11, 2004
SECOND DIVISION

[G. R. No. 138085. November 11, 2004]

AZOLLA FARMS and FRANCISCO R. YUSECO, petitioners, vs. COURT OF

APPEALS and SAVINGS BANK OF MANILA, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court seeking the
reversal of the Decision dated February 19, 1999 rendered by the Court of
Appeals[1] in CA-G.R. CV No. 53076, which reversed and set aside the decision of the
trial court in Civil Case No. 83-20514, and the Resolution dated March 31, 1999,
denying petitioners motion for reconsideration.
Petitioner Francis R. Yuseco, Jr., is the Chairman, President and Chief Operating
Officer of petitioner Azolla Farms International Philippines (Azolla Farms), a
corporation duly organized under existing laws and engaged in the development,
exploitation, production, manufacturing, promotion, marketing, and sale of natural,
organic minerals, including its by-products, with the ultimate objective of utilizing
said products for the promotion of food production. [2]
In 1982, Azolla Farms undertook to participate in the National Azolla Production
Program wherein it will purchase all the Azolla produced by the Azolla beneficiaries
in the amount not exceeding the peso value of all the inputs provided to them. The
project also involves the then Ministry of Agriculture, the Kilusang Kabuhayan at
Kaunlaran, and the Kiwanis. To finance its participation, petitioners applied for a
loan with Credit Manila, Inc., which the latter endorsed to its sister company,
respondent Savings Bank of Manila (Savings Bank). The Board of Directors of Azolla
Farms, meanwhile, passed a board resolution on August 31, 1982, authorizing
Yuseco to borrow from Savings Bank in an amount not exceeding P2,200,000.00.[3]
The loan having been approved, Yuseco executed a promissory note on
September 13, 1982, promising to pay Savings Bank the sum ofP1,400,000.00 on or
before September 13, 1983.[4] The net proceeds of P1,225,443.31 was released to
FNCB Finance, the mortgagee of a 548- square meter lot with residential house
owned by Yuseco. With the release of the proceeds, FNCB Finance released the
mortgage,[5] and in turn, the property was mortgaged to Savings Bank as collateral
for the loan.[6] Yuseco and Francisco Bargas also executed an assignment of their
shares of stock in Azolla Farms as additional security. [7] Yuseco then executed two
other promissory notes on September 27, 1982 [8] and January 4, 1983,[9] both for the
amount of P300,000.00.
However, the Azolla Farms project collapsed. Blaming Savings Bank, petitioners
Yuseco and Azolla Farms filed on October 3, 1983 with the Regional Trial Court of
Manila (Branch 25), a complaint for damages. In essence, their complaint alleges
that
Savings
Bank
unjustifiably
refused
to
promptly
release
the

38

remaining P300,000.00 which impaired the timetable of the project and inevitably
affected the viability of the project resulting in its collapse, and resulted in their
failure to pay off the loan. Thus, petitioners pray for P1,000,000.00 as actual
damages, among others.[10]
Respondent Savings Bank filed its Answer denying the allegations in the
complaint. It contends that there was evidence that Yuseco was using the loan
proceeds for expenses totally unrelated to the project and they decided to withhold
the remaining amount until Yuseco gave the assurance that the diversion of the
funds will be stopped. Respondent bank believed that the 90-day interval between
the two tranches could not have impaired the operation of the project, and
petitioners subsequent receipt of the proceeds confirmed their agreement to the
terms of the loan.
Trial ensued. After respondent, as defendant, rested its case, petitioners filed a
Motion to Admit Amended Complaint alleging that the testimony of defense witness
Jesus Venturina raised the issue of the invalidity of the promissory notes and the
real estate mortgage.[11]Petitioners sought the amendment of the complaint to
conform to the issues and evidence presented. Their Amended Complaint contains
the following amendments:
That defendant bank acts in unilaterally reducing the agreed amount of FOUR
MILLION PESOS (P4,000,000.00) to TWO MILLION PESOS (P2,000,000.00) and in
unreasonably delay (sic) the release of THREE HUNDRED THOUSAND PESOS
(P300,000.00) novated the promissory notes nos. 2491, 2510 and 2669 and also
novated the real estate mortgage dated 6 September 1982 executed by plaintiff
Francis R. Yuseco, Jr.;[12]
and in their prayer, petitioners seek that the promissory notes and real estate
mortgage be declared novated, invalid and unenforceable. Petitioners also
amended the actual damages sought, increasing it to P5,000,000.00.[13]
Respondent objected to petitioners motion, [14] but the trial court nevertheless
admitted the Amended Complaint.[15]
On June 17, 1994, the trial court rendered its decision annulling the promissory
notes and real estate mortgage, and awarding damages to petitioners. The
dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered:
DECLARING -(a)
the promissory notes and real estate mortgage executed by plaintiff Yuseco
novated, if not unenforceable; (b) any subsequent foreclosure or sale of the real
estate property, without any binding effect;
ORDERING -(1) the defendants to return full, uninterrupted and complete possession and
ownership of the subject real estate property to plaintiff Francis R. Yuseco, Jr.; (2) the
defendant to pay plaintiffs: (a) P1,000,000.00 as actual damages; (b) P200,000.00,
as moral damages for the personal sufferings, mental anguish, serious anxiety,
social humiliation of plaintiff Yuseco; (c) P50,000.00, as reasonable attorneys fees;
and (d) legal interest on the actual damages herein awarded from date of filing the
Complaint until fully paid.
The Counterclaim interposed by the defendant in its Answer is hereby dismissed, for
lack of merit.
Costs against the defendant. [16]

39

Aggrieved, respondent elevated the case to the Court of Appeals.

Finding merit in respondents appeal, the Court of Appeals reversed and set
aside the trial courts decision per its Decision dated February 19, 1999, the
decretal portion of which reads:
WHEREFORE, premises considered, the decision of the trial court in Civil Case No.
83-20514 is hereby REVERSED and SET ASIDE and judgment is hereby entered
declaring the promissory notes and real estate mortgage executed in favor of
defendant-appellant, as well as the extrajudicial foreclosure and sale of the
mortgaged property, as valid and binding. Defendant-appellant is hereby ordered
to pay plaintiff Azolla Farms International Philippines, Inc. the amount of fifty
thousand pesos (P50,000.00) as nominal damages. No costs.
SO ORDERED.[17]
Hence, the herein petition filed before the Court, alleging that:
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT REVERSED
AND SET ASIDE THE DECISION OF THE COURT A QUO. [18]
Two issues are involved in this case: first, whether the trial court erred in
admitting petitioners amended complaint; and second, whether the trial court erred
in nullifying the promissory notes, the real estate mortgage, and its extrajudicial
foreclosure.
In their motion to amend complaint, petitioners allege that:
2.
During the direct examination of defendant banks witness Jesus Venturina,
he testified and identified various documents relating to the invalid and illegal
foreclosure on plaintiff Francis R. Yuseco, Jr.s real property subject of the real estate
mortgage dated September 7, 1982 and marked and adopted as Exhibit N for the
plaintiffs. Moreover, he testified and identified the promissory notes, marked and
adopted as Exhibits L, M and Q for the plaintiffs evidencing the incomplete and
invalid consideration of the said mortgage. As a result of the testimony thus given
and the documents adduced during said hearing, the issue of the foreclosure on
said property has been raised which, therefore, necessitates that the pleadings in
this case, the complaint, be amended to conform to the issues raised and the
evidence presented;[19]
The trial court granted the motion and admitted the Amended Complaint. The
Court of Appeals, however, ruled that the trial court should not have admitted the
Amended Complaint because it altered petitioners cause of action. Apparently, the
Court of Appeals treated petitioners amendment of the complaint as one involving
amendments after the case is set for hearing under Section 3, Rule 10 of the Rules
of Court,[20]which is not however applicable to the present case.
The amendment of the complaint was made pursuant to Section 5, Rule 10 of
the Rules of Court, governing amendment of pleadings to conform to evidence, to
wit:
SEC. 5. Amendment to conform to or authorize presentation of evidence .When
issues not raised by the pleadings are tried by express or implied consent of the
parties, they shall be treated in all respects, as if they had been raised in the
pleadings. Such amendment of the pleadings as may be necessary to cause them to
conform to the evidence and to raise these issues may be made upon motion of any
party at any time, even after judgment; but failure so to amend does not affect the
result of the trial of these issues. If evidence is objected to at the trial on the ground
that it is not within the issues made by the pleadings, the court may allow the
pleadings to be amended and shall do so freely when the presentation of the merits
of the action will be subserved thereby and the objecting party fails to satisfy the
court that the admission of such evidence would prejudice him in maintaining his

40

action or defense upon the merits. The court may grant a continuance to enable the
objecting party to meet such evidence.
In Mercader vs. Development Bank of the Phils. (Cebu Branch),[21] the Court
explained that the foregoing provision envisions two scenarios -- first, when
evidence is introduced on an issue not alleged in the pleadings and no objection
was interjected and second, when evidence is offered on an issue not alleged in the
pleadings but this time an objection was interpolated. In cases where an objection
is made, the court may nevertheless admit the evidence where the adverse party
fails to satisfy the court that the admission of the evidence would prejudice him in
maintaining his defense upon the merits, and the court may grant him a
continuance to enable him to meet the new situation created by the evidence.
As can be gleaned from the records, it was petitioners belief that respondents
evidence justified the amendment of their complaint. The trial court agreed thereto
and admitted the amended complaint. On this score, it should be noted that courts
are given the discretion to allow amendments of pleadings to conform to the
evidence presented during the trial. Thus, in Bank of America, NT and SA vs.
American Realty Corporation,[22] the Court stated:
There have been instances where the Court has held that even without the
necessary amendment, the amount proved at the trial may be validly awarded, as
in Tuazon v. Bolanos (95 Phil. 106), where we said that if the facts shown entitled
plaintiff to relief other than that asked for, no amendment to the complaint was
necessary, especially where defendant had himself raised the point on
which recovery was based.[23]The appellate court could treat the pleading as
amended to conform to the evidence although the pleadings were actually not
amended. Amendment is also unnecessary when only clerical error or non
substantial matters are involved, as we held in Bank of the Philippine Islands vs.
Laguna (48 Phil. 5). In Co Tiamco vs. Diaz (75 Phil. 672), we stressed that the rule
on amendment need not be applied rigidly, particularly where no surprise or
prejudice is caused the objecting party. And in the recent case of National Power
Corporation vs. Court of Appeals (113 SCRA 556), we held that where there is a
variance in the defendants pleadings and the evidence adduced by it at the trial,
the Court may treat the pleading as amended to conform with the evidence. [24]
Verily, the trial court cannot be faulted for admitting the amended complaint as
it had the discretion to do so.
However, whether the evidence introduced by respondent, indeed, supported
the finding that the promissory notes, the real estate mortgage and the foreclosure
sale, are invalid, is a different matter altogether.
As alleged by petitioners, the testimony of respondents witness, Jesus
Venturina, established the novation of the promissory notes and the real estate
mortgage, and the illegality of the foreclosure of petitioner Yusecos property. [25] The
trial court agreed with petitioners, ruling that there was a novation of the
promissory notes and real estate mortgage, which rendered them unforceable, to
wit:
The promissory notes and real estate mortgage executed by plaintiff Yuseco
appears to have been novated and, therefore, rendered to be unenforceable since
there was a change in the parties (from Credit Manila, Inc. to Savings Bank of
Manila) and, of course, in the amount of the loan applied for (from P5 Million to P2
Million) which, upon instruction of Mr. de Guzman -- was applied as follows:

It would, therefore, be imporper (sic) to consider and treat the promissory notes and
the real estate mortgage as relating to the separate loan of plaintiff Yuseco so made
and pursued for the same purpose and nature, all inuring to a specific project -- the
Azolla Project![26]

41

The Court of Appeals disagreed with the trial court and held that there was no
novation, hence, the promissory notes and the real estate mortgage are valid and
binding.
We agree with the appellate court.
Novation is the extinguishment of an obligation by the substitution or change of
the obligation by a subsequent one which extinguishes or modifies the first, either
by changing the object or principal conditions, or, by substituting another in place of
the debtor, or by subrogating a third person in the rights of the creditor. [27] In order
for novation to take place, the concurrence of the following requisites is
indispensable:[28]
1.

there must be a previous valid obligation,

2.

there must be an agreement of the parties concerned to a new

contract,

3.

there must be the extinguishment of the old contract, and

4.

there must be the validity of the new contract.

All these requisites are patently lacking in this case. In the first place, there is
no new obligation that supposedly novated the promissory notes or the real estate
mortgage, or a pre-existing obligation that was novated by the promissory notes
and the real estate mortgage. In fact, there is only one agreement between the
parties in this case, i.e., petitioners P2,000,000.00 loan with respondent, as
evidenced by the 3 promissory notes dated September 13 and 27, 1982, and
January 4, 1983, and the real estate mortgage. As the Court of Appeals held:
There was only one single loan agreement in the amount of P2 million between
the parties as evidenced by the promissory notes and real estate mortgage - how
can it be possibly claimed by plaintiffs that these notes and mortgage were
novated when no previous notes or mortgage or loan agreement had been
executed? What transpired was an application for loan was filed by plaintiffs with
Credit Manila in an amount greater than the P2 million eventually granted. This
loan application was endorsed to defendant Savings Bank of Manila, processed by
the latter and eventually approved by it in the amount of P2 million.
It cannot be said that the loan application of plaintiffs or their initial representations
with Credit Manilas Michael de Guzman was already in itself a binding original
contract that was later novated by defendant. Plaintiff Yuseco being himself a
banker, cannot pretend to have been unaware of banking procedures that normally
recognize a loan application as just that, a mere application. Only upon the
banks approval of the loan application in the amount and under such terms it
deems viable and acceptable, that a binding and effective loan agreement comes
into existence. Without any such first or original loan agreement as approved in
the amount and under specified terms by the bank, there can be nothing
whatsoever that can be subsequently novated. [29]
Moreover, records show that petitioners were well aware of the conditions of the
loan application. In its August 31, 1982 Board Resolution, the Board of Directors of
Azolla Farms authorized Yuseco to borrow from the SAVINGS BANK OF MANILA,
Head Office, sums of money in anamount not exceeding P2,200,000.00.[30] The
promissory notes signed by Yuseco were respondent Savings Banks promissory
notes, and the real estate mortgage was likewise respondent Savings Banks
standard real estate mortgage form. Obviously, this case is an attempt by
petitioners to extricate themselves from their obligations; but they cannot be
allowed to have their cake and eat it, too.

42

WHEREFORE, the petition is DENIED for lack of merit. The Court of Appeals
Decision dated February 19, 1999, together with its Resolution dated March 31,
1999, in CA-G.R. CV No. 53076, is AFFIRMED.
Costs against petitioners.
SO ORDERED.
Callejo, Sr., and Chico-Nazario, JJ., concur.
Puno, J., on official leave.
Tinga, J., on leave.

Spouses Dela Cruz v. Concepcion, G.R. No. 172825, October 11, 2012
G.R. No. 172825
October 11, 2012
SPOUSES MINIANO B. DELA CRUZ and LETA L. DELA CRUZ, Petitioners,
vs.
ANA MARIE CONCEPCION, Respondent.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court
filed by petitioners spouses Miniano B. Dela Cruz and Leta L. Dela Cruz against
respondent Ana Marie Concepcion are the Court of Appeals (CA) Decision 1dated
March 31, 2005 and Resolution2 dated May 24, 2006 in CA-G.R. CV No. 83030.
The facts of the case are as follows:
On March 25, 1996, petitioners (as vendors) entered into a Contract to Sell 3 with
respondent (as vendee) involving a house and lot in Cypress St., Phase I, Town and
Country Executive Village, Antipolo City for a consideration of P2,000,000.00 subject
to the following terms and conditions:
a) That an earnest money of P100,000.00 shall be paid immediately;
b) That a full down payment of Four Hundred Thousand Pesos (P400,000.00)
shall be paid on February 29, 1996;
c) That Five Hundred Thousand Pesos (P500,000.00) shall be paid on or
before May 5, 1996; and
d) That the balance of One Million Pesos (P1,000,000.00) shall be paid on
installment with interest of Eighteen Percent (18%) per annum or One and a
half percent (1-1/2 %) interest per month, based on the diminishing balance,
compounded monthly, effective May 6, 1996. The interest shall continue to
run until the whole obligation shall have been fully paid. The whole One
Million Pesos shall be paid within three years from May 6, 1996;
e) That the agreed monthly amortization of Fifty Thousand Pesos
(P50,000.00), principal and interest included, must be paid to the Vendors,
without need of prior demand, on or before May 6, 1996, and every month
thereafter. Failure to pay the monthly amortization on time, a penalty equal to
Five Percent (5%) of the amount due shall be imposed, until the account is

43

updated. In addition, a penalty of One Hundred Pesos per day shall be

imposed until the account is updated;
f) That after receipt of the full payment, the Vendors shall execute the
necessary Absolute Deed of Sale covering the house and lot mentioned
above x x x4
Respondent made the following payments, to wit: (1) P500,000.00 by way of
downpayment; (2) P500,000.00 on May 30, 1996; (3) P500,000.00 paid on January
22, 1997; and (4) P500,000.00 bounced check dated June 30, 1997 which was
subsequently replaced by another check of the same amount, dated July 7, 1997.
Respondent was, therefore, able to pay a total of P2,000,000.00. 5
Before respondent issued the P500,000.00 replacement check, she told petitioners
that based on the computation of her accountant as of July 6, 1997, her unpaid
obligation which includes interests and penalties was only P200,000.00. 6Petitioners
agreed with respondent and said "if P200,000.00 is the correct balance, it is okay
with us."7
Meanwhile, the title to the property was transferred to respondent. Petitioners later
reminded respondent to pay P209,000.00 within three months. 8 They claimed that
the said amount remained unpaid, despite the transfer of the title to the property to
respondent. Several months later, petitioners made further demands stating the
supposed correct computation of respondents liabilities. 9 Despite repeated
demands, petitioners failed to collect the amounts they claimed from respondent.
Hence, the Complaint for Sum of Money With Damages 10 filed with the Regional Trial
Court (RTC)11 of Antipolo, Rizal. The case was docketed as Civil Case No. 98-4716.
In her Answer with Compulsory Counterclaim,12 respondent claimed that her unpaid
obligation to petitioners is only P200,000.00 as earlier confirmed by petitioners and
not P487,384.15 as later alleged in the complaint. Respondent thus prayed for the
dismissal of the complaint. By way of counterclaim, respondent prayed for the
payment of moral damages and attorneys fees. During the presentation of the
parties evidence, in addition to documents showing the statement of her paid
obligations, respondent presented a receipt purportedly indicating payment of the
remaining balance of P200,000.00 to Adoracion Losloso (Losloso) who allegedly
received the same on behalf of petitioners. 13
On March 8, 2004, the RTC rendered a Decision 14 in favor of respondent, the
dispositive portion of which reads:
WHEREFORE, premises considered, this case is hereby DISMISSED. The plaintiff is
hereby ordered to pay the defendants counterclaim, amounting to wit:
a) P300,000 as moral damages; and
b) P100,000 plus P2,000 per court appearance as attorneys fees.
SO ORDERED.15
The RTC noted that the evidence formally offered by petitioners have not actually
been marked as none of the markings were recorded. Thus, it found no basis to
grant their claims, especially since the amount claimed in the complaint is different

44

from that testified to. The court, on the other hand, granted respondents
counterclaim.16
On appeal, the CA affirmed the decision with modification by deleting the award of
moral damages and attorneys fees in favor of respondent. 17 It agreed with the RTC
that the evidence presented by petitioners cannot be given credence in determining
the correct liability of respondent. 18 Considering that the purchase price had been
fully paid by respondent ahead of the scheduled date agreed upon by the parties,
petitioners were not awarded the excessive penalties and interests. 19 The CA thus
maintained that respondents liability is limited to P200,000.00 as claimed by
respondent and originally admitted by petitioners. 20 This amount, however, had
already
been
paid
by
respondent
and
received
by
petitioners
21
representative. Finally, the CA pointed out that the RTC did not explain in its
decision why moral damages and attorneys fees were awarded. Considering also
that bad faith cannot be attributed to petitioners when they instituted the collection
suit, the CA deleted the grant of their counterclaims. 22
Aggrieved, petitioners come before the Court in this petition for review on certiorari
under Rule 45 of the Rules of Court raising the following errors:
I.
"THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT ON THE GROUND
THAT PLAINTIFF FAILED TO FORMALLY OFFER THEIR EVIDENCE AS DEFENDANT
JUDICIALLY ADMITTED IN HER ANSWER WITH COMPULS[O]RY COUNTERCLAIM
HER OUTSTANDING OBLIGATION STILL DUE TO PLAINTIFFS AND NEED NO
PROOF.
II.
THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT FOR ALLEGED
FAILURE OF PLAINTIFFS TO PRESENT COMPUTATION OF THE AMOUNT BEING
CLAIMED AS DEFENDANT JUDICIALLY ADMITTED HAVING RECEIVED THE
DEMAND LETTER DATED OCTOBER 22, 1997 WITH COMPUTATION OF THE
BALANCE DUE.
III.
THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT ON THE GROUND
THAT THE DEFENDANT FULLY PAID THE CLAIMS OF PLAINTIFFS BASED ON THE
ALLEGED RECEIPT OF PAYMENT BY ADORACION LOSLOSO FROM ANA MARIE
CONCEPCION MAGLASANG WHICH HAS NOTHING TO DO WITH THE JUDICIALLY
ADMITTED OBLIGATION OF APPELLEE."23
Invoking the rule on judicial admission, petitioners insist that respondent admitted
in her Answer with Compulsory Counterclaim that she had paid only a total amount
of P2 million and that her unpaid obligation amounts to P200,000.00. 24They thus
maintain that the RTC and the CA erred in concluding that said amount had already
been paid by respondent. Petitioners add that respondents total liability as shown
in the latters statement of account was erroneously computed for failure to
compound the monthly interest agreed upon. 25 Petitioners also claim that the RTC
and the CA erred in giving credence to the receipt presented by respondent to show
that her unpaid obligation had already been paid having been allegedly given to a
person who was not armed with authority to receive payment. 26

45

The petition is without merit.

It is undisputed that the parties entered into a contract to sell a house and lot for a
total consideration of P2 million. Considering that the property was payable in
installment, they likewise agreed on the payment of interest as well as penalty in
case of default. It is likewise settled that respondent was able to pay the total
purchase price of P2 million ahead of the agreed term. Afterwhich, they agreed on
the remaining balance by way of interest and penalties which is P200,000.00.
Considering that the term of payment was not strictly followed and the purchase
price had already been fully paid by respondent, the latter presented to petitioners
her computation of her liabilities for interests and penalties which was agreed to by
petitioners. Petitioners also manifested their conformity to the statement of account
prepared by respondent.
In paragraph (9) of petitioners Complaint, they stated that:
9) That the Plaintiffs answered the Defendant as follows: "if P200,000 is the correct
balance, it is okay with us." x x x.27
But in paragraph (17) thereof, petitioners claimed that defendants outstanding
liability as of November 6, 1997 was P487,384.15. 28 Different amounts, however,
were claimed in their demand letter and in their testimony in court.
With the foregoing factual antecedents, petitioners cannot be permitted to assert a
different computation of the correct amount of respondents liability.
It is noteworthy that in answer to petitioners claim of her purported unpaid
obligation, respondent admitted in her Answer with Compulsory Counterclaim that
she paid a total amount of P2 million representing the purchase price of the subject
house and lot. She then manifested to petitioners and conformed to by respondent
that her only balance was P200,000.00. Nowhere in her Answer did she allege the
defense of payment. However, during the presentation of her evidence, respondent
submitted a receipt to prove that she had already paid the remaining balance. Both
the RTC and the CA concluded that respondent had already paid the remaining
balance of P200,000.00. Petitioners now assail this, insisting that the court should
have maintained the judicial admissions of respondent in her Answer with
Compulsory Counterclaim, especially as to their agreed stipulations on interests and
penalties as well as the existence of outstanding obligations.
It is, thus, necessary to discuss the effect of failure of respondent to plead payment
of its obligations.
Section 1, Rule 9 of the Rules of Court states that "defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived." Hence,
respondent should have been barred from raising the defense of payment of the
unpaid P200,000.00. However, Section 5, Rule 10 of the Rules of Court allows the
amendment to conform to or authorize presentation of evidence, to wit:
Section 5. Amendment to conform to or authorize presentation of evidence. When
issues not raised by the pleadings are tried with the express or implied consent of
the parties, they shall be treated in all respects as if they had been raised in the
pleadings. Such amendment of the pleadings as may be necessary to cause them to
conform to the evidence and to raise these issues may be made upon motion of any
party at any time, even after judgment; but failure to amend does not affect the

46

result of the trial of these issues. If evidence is objected to at the trial on the ground
that it is not within the issues made by the pleadings, the court may allow the
pleadings to be amended and shall do so with liberality if the presentation of the
merits of the action and the ends of substantial justice will be subserved thereby.
The court may grant a continuance to enable the amendment to be made.
The foregoing provision envisions two scenarios, namely, when evidence is
introduced in an issue not alleged in the pleadings and no objection was interjected;
and when evidence is offered on an issue not alleged in the pleadings but this time
an objection was raised.29 When the issue is tried without the objection of the
parties, it should be treated in all respects as if it had been raised in the
pleadings.30 On the other hand, when there is an objection, the evidence may be
admitted where its admission will not prejudice him. 31
Thus, while respondent judicially admitted in her Answer that she only paid P2
million and that she still owed petitioners P200,000.00, respondent claimed later
and, in fact, submitted an evidence to show that she already paid the whole amount
of her unpaid obligation. It is noteworthy that when respondent presented the
evidence of payment, petitioners did not object thereto. When the receipt was
formally offered as evidence, petitioners did not manifest their objection to the
admissibility of said document on the ground that payment was not an issue.
Apparently, petitioners only denied receipt of said payment and assailed the
authority of Losloso to receive payment. Since there was an implied consent on the
part of petitioners to try the issue of payment, even if no motion was filed and no
amendment of the pleading has been ordered, 32the RTC cannot be faulted for
admitting respondents testimonial and documentary evidence to prove payment. 33
As stressed by the Court in Royal Cargo Corporation v. DFS Sports Unlimited, Inc., 34
The failure of a party to amend a pleading to conform to the evidence adduced
during trial does not preclude adjudication by the court on the basis of such
evidence which may embody new issues not raised in the pleadings. x x x Although,
the pleading may not have been amended to conform to the evidence submitted
during trial, judgment may nonetheless be rendered, not simply on the basis of the
issues alleged but also on the issues discussed and the assertions of fact proved in
the course of the trial. The court may treat the pleading as if it had been amended
to conform to the evidence, although it had not been actually amended. x x x
Clearly, a court may rule and render judgment on the basis of the evidence before it
even though the relevant pleading had not been previously amended, so long as no
surprise or prejudice is thereby caused to the adverse party. Put a little differently,
so long as the basic requirements of fair play had been met, as where the litigants
were given full opportunity to support their respective contentions and to object to
or refute each other's evidence, the court may validly treat the pleadings as if they
had been amended to conform to the evidence and proceed to adjudicate on the
basis of all the evidence before it. (Emphasis supplied) 35
To be sure, petitioners were given ample opportunity to refute the fact of and
present evidence to prove payment.
With the evidence presented by the contending parties, the more important
question to resolve is whether or not respondents obligation had already been
extinguished by payment.
We rule in the affirmative as aptly held by the RTC and the CA.

47

Respondents obligation consists of payment of a sum of money. In order to

extinguish said obligation, payment should be made to the proper person as set
forth in Article 1240 of the Civil Code, to wit:
Article 1240. Payment shall be made to the person in whose favor the obligation has
been constituted, or his successor in interest, or any person authorized to receive it.
(Emphasis supplied)
The Court explained in Cambroon v. City of Butuan, 36 cited in Republic v. De
Guzman,37 to whom payment should be made in order to extinguish an obligation:
Payment made by the debtor to the person of the creditor or to one authorized by
him or by the law to receive it extinguishes the obligation. When payment is made
to the wrong party, however, the obligation is not extinguished as to the creditor
who is without fault or negligence even if the debtor acted in utmost good faith and
by mistake as to the person of the creditor or through error induced by fraud of a
third person.
In general, a payment in order to be effective to discharge an obligation, must be
made to the proper person. Thus, payment must be made to the obligee himself or
to an agent having authority, express or implied, to receive the particular payment.
Payment made to one having apparent authority to receive the money will, as a
rule, be treated as though actual authority had been given for its receipt. Likewise,
if payment is made to one who by law is authorized to act for the creditor, it will
work a discharge. The receipt of money due on a judgment by an officer authorized
by law to accept it will, therefore, satisfy the debt. 38
Admittedly, payment of the remaining balance of P200,000.00 was not made to the
creditors themselves. Rather, it was allegedly made to a certain Losloso.
Respondent claims that Losloso was the authorized agent of petitioners, but the
latter dispute it.
Loslosos authority to receive payment was embodied in petitioners
Letter39 addressed to respondent, dated August 7, 1997, where they informed
respondent of the amounts they advanced for the payment of the 1997 real estate
taxes. In said letter, petitioners reminded respondent of her remaining balance,
together with the amount of taxes paid. Taking into consideration the busy schedule
of respondent, petitioners advised the latter to leave the payment to a certain
"Dori" who admittedly is Losloso, or to her trusted helper. This is an express
authority given to Losloso to receive payment.
Moreover, as correctly held by the CA:
Furthermore, that Adoracion Losloso was indeed an agent of the appellant spouses
is borne out by the following admissions of plaintiff-appellant Atty. Miniano dela
Cruz, to wit:
Q: You would agree with me that you have authorized this Doiry Losloso to receive
payment of whatever balance is due you coming from Ana Marie Concepcion, that is
correct?
A: In one or two times but not total authority, sir.
Q: Yes, but you have authorized her to receive payment?

48

A: One or two times, yes x x x. (TSN, June 28, 1999, pp. 16-17) 40
Thus, as shown in the receipt signed by petitioners agent and pursuant to the
authority granted by petitioners to Losloso, payment made to the latter is deemed
payment to petitioners. We find no reason to depart from the RTC and the CA
conclusion that payment had already been made and that it extinguished
respondent's obligations.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. The
Court of Appeals Decision dated March 31, 2005 and Resolution dated May 24, 2006
in CA-G.R. CV No. 83030, are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice

Sec. 6. Supplemental pleadings

Delbros Hotel v. IAC, G.R. No. L-72566, April 12, 1988
/---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\
[1988V236E] DELBROS HOTEL CORPORATION, petitioners, vs. THE INTERMEDIATE
APPELLATE COURT [FIRST SPECIAL CASES DIVISION], HILTON INTERNATIONAL
COMPANY, ACHIM IHLENFELD, as successor to RICHARD CHAPMAN and FLAVIANO
MOSQUERA, JR., the latter two in their respective capacities as former General
Manager and Comptroller of the Manila Hilton International Hotel, respondents.1988
Apr 12En BancG.R. No. L-72566D E C I S I O N
FERNAN, J.:
This is a petition for certiorari with urgent prayer for the issuance of a temporary
restraining order and/or writ of preliminary injunction to nullify and resolutions
dated September 5, 11 and 24, 1985, issued by the then Intermediate Appellate
Court, now Court of Appeals, in AC-G.R. No. SP-07020, entitled "Hilton Hotels
International, Inc. [Hilton International Co.], et al. vs. Hon. Abelardo M. Dayrit, et al."
The antecedent facts are as follows:
On February 27, 1985, petitioner Delbros Hotel Corporation [DELBROS, for short]
filed before the Regional Trial Court of Manila a complaint for termination of
agreement and damages, with prayer for the issuance of a restraining order and/or
writ of preliminary mandatory injunction against private respondents Hilton Hotels
International [now known as Hilton International Company] and Richard Chapman,
in his capacity as General Manager of Manila Hilton. In said complaint, docketed as
Civil Case No. 85-29489 and raffled off to Branch XXXIX presided over by Judge
Abelardo M. Dayrit, it was alleged that pursuant to the Agreement and Lease
entered into by and between DELBROS and Hilton Hotels International, Inc. [HILTON]
on June 2, 1964, later amended into a Management Agreement on June 9, 1966, and
its Supplemental Amendments of March 23, 1973 and November 22, 1976,
DELBROS financed, built, furnished and equipped a first-class hotel of approximately
400 rooms, now known as the "Manila Hilton," the operation and management of
which was granted to HILTON; that for their respective undertakings, DELBROS was
to receive a share in the gross operating profit [GOP] of the hotel, as defined in

49

Article V of the basic agreements, while HILTON was entitled to a management fee
equivalent to five percent [5%] of the gross revenues and an incentive fee
equivalent to ten percent [10%] of the GOP of the hotel; that in violation of the
terms of the agreement, HILTON a] refused, despite repeated demands, to remit to
DELBROS its share in the GOP, which as of December 31, 1984 amounted to
P2,591,165.00 as well as the excess of the normal working capital; b] transferred,
without DELBROS' prior approval, a portion of the reserve funds to its operating
funds; and, c] used said operating funds for capital expenditures without the
consent of DELBROS; that in addition, HILTON grossly mismanaged the hotel and
breached the trust and confidence reposed upon it by DELBROS, thereby causing
DELBROS to default in its amortizations to the GSIS. 1
In their Answer with Compulsory counterclaim, therein defendants HILTON and
Chapman specifically denied the allegations of DELBROS and set forth the following
as affirmative defenses: that DELBROS had no valid and sufficient cause of action
for failure to give a five-day notice of termination of the Management Agreement as
required under Article XI thereof; DELBROS' cause or causes of action, if any, were
barred by estoppel or laches; DELBROS' claims or demands had been waived or
abandoned; and that the alleged violations of the Management Agreement were too
trivial or insignificant to warrant the grave penalty of termination of the
Management Agreement after it had been in force for 17 years. By way of
compulsory counterclaim, HILTON and Chapman prayed for an award of moral
damages in the amount of P1,000,000.00 each and the same amount each as
exemplary damages plus attorney's fees. 2
On March 21, 1985, Judge Dayrit issued a writ of preliminary injunction, enjoining
HILTON and Chapman from:
"a]
Disposing, removing, tampering, destroying, or otherwise concealing
corporate records, books of accounts, statement of accounts receivables, ledgers,
vouchers, invoices, receipts, purchase orders, job orders, bank statements, returned
checks, gate passes, incident reports, debit/credit memos and/or any other
document of similar nature, pertaining to the operation, management and
administration of the business and affairs of the hotel known as the 'Manila Hilton'
located at the United Nations Avenue, Ermita, Manila;
"b] Disposing, removing, destroying, dissipating, or otherwise concealing hotel
stocks [consisting of food, beverage, supplies and items of similar nature], furniture,
furnishings, specialized hotel equipment [which term shall mean all equipment
required for the operation of kitchen, laundries, dry cleaning facilities, restaurants,
bars, special lighting and other equipment of similar nature] operating equipment
[which term shall include chinaware, linens, silverware, kitchenwares and other
similar items], operating and guest supplies [which term shall include soaps,
cleaning materials, matches, paper supplies, stationery and other similar items] and
such other furnishings equipment and other personal properties or assets as are
normally required for the efficient and continuing operation of the Manila Hilton;
"c] Disbursing, expending and/or dissipating monies, funds, time deposits,
revenues, and income under the account of Hilton International Company and/or
Manila Hilton, without prior approval from this Court, except only as may be
necessary to prevent total or partial disruption of the hotel's services;
"d] Disbursing funds in payment to Hilton International Company or transferring
funds to Hilton's local bank accounts or offsetting hotel receivables in favor of Hilton
International Company and/or its affiliated companies;
"e] Remitting funds from their local bank accounts to their foreign offices." 3
A clarificatory order on this writ was issued on March 28, 1985.
From these orders, HILTON and Chapman went to the Intermediate Appellate Court
on a petition for certiorari docketed as AC-G.R. No. SP-06474. On July 3, 1985, the

50

Third Special Cases Division of the IAC, to which the petition was assigned, issued a
temporary restraining order enjoining the implementation of the orders of Judge
Dayrit. The temporary restraining order was replaced on August 21, 1985 with a writ
of preliminary injunction. 4
Meanwhile, on April 12, 1985, DELBROS filed in Civil Case No. 85-29489 a motion to
admit Supplemental Complaint. The Supplemental Complaint impleaded as an
additional defendant Flaviano Mosquera, Jr., in his capacity as Comptroller of the
Manila Hilton and sought the confirmation by the trial court of the termination of the
Management Contract effected by DELBROS through the service upon HILTON of the
five-day notice of termination provided thereunder, as well as the payment of
DELBROS' share in the GOP of the hotel for the months of January and February
1985 and other damages.
Over the opposition of HILTON and Chapman, the lower court issued an Order on
June 14, 1985, admitting the Supplemental Complaint, directing summons and copy
of the supplemental complaint to be served on the additional defendant and
requiring HILTON and Chapman to answer the supplemental complaint within five
[5] days from notice. Copies of the June 14, 1985 Order were received by the
parties' counsels on June 21, 1985.
On July 6, 1986, an ex-parte motion for an extension of twelve [12] days to answer
the supplemental complaint was filed in behalf of all the three defendants, HILTON,
Chapman and Mosquera. Said motion, sent by registered mail, was not received by
the trial court until July 16, 1985.
However, earlier, or on July 9, 1985, DELBROS had filed a motion to declare
defendants HILTON and Chapman in default with respect to the supplemental
complaint. This was granted on even date and DELBROS allowed to present its
evidence ex-parte in support of its supplemental complaint.
On July 15, 1986, the lower court rendered a judgment by default, confirming as
legal and valid the termination as of March 31, 1985 of the Management Agreement
between the parties and ordering, among others, the defendants to immediately
quit and surrender the Manila Hilton International Hotel to DELBROS' President as
well as to pay DELBROS its share in the GOP of the hotel for the months of January
to March, 1985, plus legal interest thereon from the date of the filing of the
Supplemental Complaint until full payment thereof. 5 Copies of the default judgment
were served on the parties' counsels in the morning of July 18, 1985. In the
afternoon of the same day, HILTON, et al. filed their Answer to the Supplemental
Complaint, and on July 24, 1985, filed a notice of appeal from the judgment by
default.
Meanwhile, on July 19, 1985, DELBROS moved for the execution of the judgment
pending appeal. Although opposed by HILTON, et al., the motion was granted in a
Special Order dated September 3, 1985. A writ of execution was issued and served
upon defendants on the same day. The Partial Sheriffs Return reads as follows:
"That on September 3, 1985, copies of the Writ of Execution dated September 3,
1985 together with the Judgment by Default dated July 15, 1985 and the Special
Order dated September 3, 1985, all issued in the above-entitled case, were served
and tendered upon the following:
"1. Defendant Hilton International, Inc. [now known as Hilton International
Company] through Achim Ihlenfeld, General Manager of Manila Hilton International
Hotel; and,
"2. Defendant Flaviano Mosquera, Jr. at their given addresses, as evidenced by
their signatures acknowledging receipt of the aforementioned documents, hereto
attached.

51

"The aforesaid individuals, after carefully reading the documents served and after
consulting with their counsel by telephone voluntarily vacated and surrendered their
respective offices at the Manila Hilton International. Thereupon, Delbros Hotel
Corporation took over possession and control over the management and operation
of the Hotel as evidenced by notices of take over of the hotel signed by the
President of Delbros Hotel Corporation and addressed to all officers and employees,
posted in strategic places in the hotel, a copy hereto attached.
"The Notices of Garnishment were likewise served on the following banks:
1. Pilipinas Bank, Manila Hilton Branch
2. PNB, Ermita Branch
3. Bank of America, Paseo de Roxas Branch.
as evidenced by the rubber stamp mark and signatures appearing on the duplicate
original copies thereof, hereto attached.
"The undersigned posted guard in the respective offices of Messrs. Ihlenfeld and
Mosquera.
"Manila, Philippines, September 3, 1985.
"For the Sheriff of Manila.
[Sgd.] Miguelito S. Navarro Deputy Sheriff Branch XXXIX, RTC of Manila." 6
On the following day, September 4, 1985, HILTON, et al. instituted before the then
Intermediate Appellate Court a petition for certiorari with prayer for a restraining
order/preliminary injunction, docketed as AC-G.R. No. SP-07020, to assail the Special
Order of September 3, 1985 for allegedly having been issued with grave abuse of
discretion amounting to lack of jurisdiction. 7 As prayed for, the First Special Cases
Division of the IAC, to which the petition was assigned, issued on September 5,
1985 a temporary restraining order enjoining the implementation and/or
enforcement of the Special Order of September 3, 1985.
On September 9, 1985, HILTON, et al. filed in AC-G.R. No. SP-07020 an urgent exparte motion to deputize Manila police authorities to enforce/implement the
restraining order of September 5, 1985. 8 This was opposed by DELBROS.
On September 11, 1985, the First Special Cases Division of the IAC issued a
resolution reiterating "the continuing efficacy of its restraining order dated
September 5, 1985, enjoining the parties to conform to the restraint against the
execution/implementation of the Special Order dated September 3, 1985 . . .," 9 and
on September 24, 1985 granted HILTON's motion to deputize Manila police
authorities to enforce the restraining order of September 5, 1985. 10
DELBROS forthwith filed on September 25, 1985 an urgent motion for
reconsideration of the resolution dated September 24, 1985. When more than a
month had elapsed without the IAC acting on its motion for reconsideration,
petitioner filed the instant petition assailing as null and void the three orders issued
in AC-G.R. No. SP-07020, and raising the following questions of law:
[1] Can a temporary restraining order, or a writ of preliminary injunction, for that
matter, prohibit an act already performed and accomplished?
[2] Can a party in legal and actual possession and control be deprived of the came
by means of a temporary restraining order?
[3] Can a temporary restraining order continue to be enforced beyond twenty (20)
days from its issuance, contrary to paragraph 8 of the Interim or Transitional Rules

52

and Guidelines relative to the implementation of the Judiciary Reorganization Act of

1981. (B.P. 129)? 11
In their comment, private respondents HILTON, Achim Ihlenfeld [successor of
Chapman] and Flaviano Mosquera, Jr. assailed the veracity of the Partial Sheriff's
Return, contending that no take-over of the hotel's management was ever effected
as no advice to surrender their offices was given to either Ihlenfeld and Mosquera,
Jr., and that it is HILTON which continues to run and manage the hotel and which is
recognized by the employees as manager thereof; that the twenty-day life-span of a
temporary restraining order provided under B.P. 224 does not apply to the Court of
Appeals; and that, at any rate, the Special Order of September 3, 1985 which
granted petitioner's motion for execution pending appeal is null and void, having as
its basis an invalid judgment by default.
As aforesaid, the instant petition is focused primarily on the interlocutory orders
dated September 5, 11 and 24, 1985 issued in AC-G.R. No. SP-07020. These orders,
however, are so inextricably connected with the default order of July 9, 1985, the
default judgment of July 15, 1985 as well as the Special Order dated September 3,
1985, that to simply limit ourselves to said orders would afford the parties neither
complete relief nor substantial justice. Thus, it becomes imperative that We should
delve further back into the proceedings taken in the trial court and in the process,
preempt the jurisdiction of the appellate court before which the question of legality
and propriety of the Special Order of September 3, 1985 had been brought as well
as the appeal filed by private respondents HILTON and Ihlenfeld [as successor to
Chapman] from the judgment by default.
Private respondents HILTON and Chapman were declared in default for failure to file
an answer to the Supplemental Complaint. This is reversible error.
Fundamentally, default orders are taken on the legal presumption that in failing to
file an answer, the defendant does not oppose the allegations and relief demanded
in the complaint. In the case at bar, however, no such presumption can arise vis-avis the Answer filed by HILTON and Chapman to the original complaint; their
institution of the certiorari proceedings in AC-G.R. No. SP-06474 in opposition to
petitioner's attempt to interfere with and/or take over the control and management
of the hotel pendente lite; and their vigorous opposition to the admission of the
supplemental complaint under consideration. These factors, of which the trial judge
had full knowledge and notice, should have cautioned him from precipitately
rendering the default order as well as the default judgment.
"A supplemental pleading is not like an amended pleading ---- a substitute for the
original one. It does not supersede the original, but assumes that the original
pleading is to stand, and the issues joined under the original pleading remain as
issues to be tried in the action." 12 While it is conceded that there is authority in
support of a default judgment being predicated upon defendant's failure to answer a
supplemental complaint, 13 the same cannot apply here. The reason is that
although in the supplemental complaint, the relief prayed for was altered from
termination of the management contract to judicial confirmation of its termination,
the basic and principal issue of whether or not petitioner was entitled to terminate
the management contract, remained. As this basic issue had been previously
traversed and joined by the Answer filed by HILTON and Chapman, there was no
necessity for requiring them to plead further to the Supplemental Complaint.
Consequently, the trial judge did not have a legal ground for declaring them in
default for such failure to plead.
Another factor which the trial judge should have considered is that the
supplemental complaint brought in an additional defendant, Flaviano Mosquera, Jr.
On this score, it would have been more prudent under the liberal construction rule
provided in Section 2, Rule 1 of the Rules of Court, for the trial court to have treated
the supplemental complaint as an amended complaint, and the original answer
thereto as sufficient; 14 or otherwise to have waited for the answer of the newlyimpleaded defendant before acting on the motion to declare the original defendants

53

in default and rendering the default judgment, considering that a common cause of
action has been asserted against the three defendants, so that the answer of
Mosquera, Jr. could inure to the benefit of the original defendants. 15 As it turned
out, the Answer filed on July 18, 1985 was for and in behalf of all the defendants.
Hence, under Sec. 4 of Rule 18, the court shall try the case against all upon the
answer filed and render judgment upon the evidence presented.
Indeed, no prejudice would result to petitioner had the trial judge taken a more
prudent and judicious course of action as above suggested. Acting as the trial judge
did, grave, irreparable and serious damage caused to private respondents. Such
prejudice is compounded by the issuance of the Special Order of September 3, 1985
decreeing the execution pending appeal of the default judgment at a time when
defendant Mosquera was not yet declared in default. Consequently, any defense set
up by him for himself and for the benefit of his co-defendants was rendered
practically inutile by the execution of the default judgment.
Time and again, this Court has expressed disfavor toward default judgments 16 for
the reason that:
"A default judgment does not pretend to be based on the merits of the controversy.
Its existence is justified by expediency. It may, however, amount to a positive and
considerable injustice to the defendant. The possibility of such serious
consequences necessarily requires a careful examination of the circumstances
under which a default order was issued. And when no real injury would result to the
interests of the plaintiff by the reopening of the case, the only objection to such
action would, therefore, be solely on a technicality. On such an infirm foundation, it
would be a grevious error to sacrifice the substantial rights of a litigant." 17
Upon these considerations, the order of default dated July 9, 1985, the default
judgment of July 15, 1985 as well as the Special Order dated September 3, 1985,
should be, as they are hereby set aside.
With this conclusion, We could very well write finis to this opinion, were it not for an
important legal issue raised herein that has long awaited resolution by this Court;
namely, whether or not paragraph 8 of the Interim Rules and Guidelines
promulgated by this Court relative to the implementation of the Judiciary
Reorganization Act of 1981 applies to the Court of Appeals.
The provision in the Interim Rules and Guidelines adverted to reads in full, thus:
"8. Preliminary injunction not granted without notice; issuance of restraining order.
No preliminary injunction shall be granted without notice to the defendant. If it shall
appear from the facts shown by affidavits or by verified complaint, that great or
irreparable injury would result to the applicant before the matter can be heard on
notice, the Court to which the application for preliminary injunction was made, may
issue a restraining order to be effective only for a period of twenty days from date
of its issuance. Within said twenty day period, the court must cause an order to be
served on the defendant, requiring him to show cause, at a specified time and
place, why the injunction should not be granted, and determine within the same
period whether or not the preliminary injunction shall be granted, and shall
accordingly issue the corresponding order. In the event that the application for
preliminary injunction is denied, the restraining order is deemed automatically
vacated."
The applicability of the above-quoted provision to the then Intermediate Appellate
Court, now the Court of Appeals, can hardly be doubted. The Interim Rules and
Guidelines were promulgated to implement the Judiciary Reorganization Act of 1981
18 which included the Intermediate Appellate Court among the courts reorganized
thereunder. This is emphasized in the preamble of the Interim Rules which states
that the same shall apply to "all inferior courts according to the Constitution." The
term "inferior courts" as used therein refers to all courts except the Supreme Court,
the Sandiganbayan and the Court of Tax Appeals. Thus, paragraphs 14 and 15 of the

54

Interim Rules expressedly provide for "Procedure in the Intermediate Appellate

Court."
Indeed, if paragraph 8 of the Interim Rules were not intended to apply to temporary
restraining orders issued by the respondent Court, there would have been
absolutely no reason for the inclusion of said paragraph in the Interim Rules. The
limited life-span of temporary restraining orders issued by the regional trial courts
and municipal trial courts is already provided for in B.P. Blg. 224. It was precisely to
include the Intermediate Appellate Court within the same limitation as to the
effectivity of its temporary restraining orders that B.P. Blg. 224 was incorporated in
the Interim Rules, with the significant change of the word "judge" to "court", so as to
make it clear and unequivocal that the temporary restraining orders contemplated
therein are those issued not only by trial judges but also by justices of the appellate
court.
Private respondents argue that it is impractical to apply paragraph 8 of the Interim
Rules to the respondent court because the latter's processes are enforceable
throughout the country and there could be instances when the twenty-day period of
the effectivity of a temporary restraining order would lapse before it is served on
the parties concerned. This allegation appears to be more illusory and imaginary
than real. Private respondents have not cited any single, actual instance when such
eventuality had occurred. Its possibility is deemed remote and unlikely considering
the present state of fast and efficient modes of communication as well as the
presumed eagerness of a party-litigant who has secured a temporary restraining
order to have the same immediately served on the parties concerned with the least
waste of time.
WHEREFORE, the instant petition is hereby DISMISSED. The default order of July 9,
1985, the default judgment dated July 15, 1985 and the Special Order of September
3, 1985 issued in Civil Case No. 85-29489 of the Regional Trial Court of Manila are
hereby annulled and set aside. The Answer dated July 18, 1985 filed by herein
private respondents in said case is ordered admitted and the case is remanded for
trial on the merits. No pronouncement as to costs.
SO ORDERED.
Yap, Cruz, Paras, Gancayco, Padilla, Bidin, Sarmiento and Cortes JJ., concur.
Narvasa, J., took no part.
Separate Opinions
TEEHANKEE, C.J., concurring:
The fourteen participating members of the Court are unanimous in their
concurrence in the Court's basic judgment on the merits annulling the trial court's
questioned default order and judgment and special order of execution against
respondent-defendant Hilton International Company and remanding the case back
to the trial court for trial on the merits.
Clearly, the trial court exceeded its jurisdiction and acted with grave abuse of
discretion in rendering the default judgment against said respondent-defendant with
respect to the supplemental complaint for failure to answer petitioner-plaintiffs
supplemental complaint (which supplemented but did not supersede the original
complaint and merely altered the relief prayed for from termination of the
management contract over the Manila Hilton Hotel to judicial confirmation of its
alleged termination) when the basic and main issue of whether or not petitioner was
entitled to terminate respondent's management contract as joined by respondent's
answer to the original complaint had yet to be tried and adjudicated on the merits.
There was no need for respondent to file yet another answer to the supplemental
complaint, since its answer to the original complaint stood as answer on the selfsame issue raised in the supplemental complaint, in the same way that a plaintiffs

55

original complaint stands as answer to a compulsory counterclaim filed by

defendant with his answer.
There are, however, four dissenting votes in the separate concurring and dissenting
opinion filed, vis a vis the ten-member majority ruling (on the procedural issue
raised by petitioner) that the twenty-day period of effectivity of a temporary
restraining order issued ex parte (within which period it must be replaced with a
preliminary injunction issued after prior notice and opportunity given the defendant
to show cause why such injunction should not be granted) is applicable to all lower
courts established by law under the Constitution, including the Court of Appeals.
There is here an O. Henry twist. The majority upholds petitioner's submittal that the
lifetime of temporary restraining order issued ex parte is limited to 20 days if no
preliminary injunction is issued with notice and opportunity for the defendant to be
heard in the interval, while the minority sustains the contrary view, insofar as the
Court of Appeals is concerned, i.e. that the 20-day limit should not apply to the
Court of Appeals. If this issue were not procedural in character, then petitioner
should prevail instead of having its petition at bar dismissed. But as is evident,
respondent has instead prevailed, notwithstanding the rejection of its contrary view
sustained by the minority that the lifetime of the Court of Appeals' temporary
restraining order should be without limit, since the Court has unanimously ruled on
the substantive issue that the Court of Appeals correctly issued the temporary
restraining order against execution of the void default judgment wrongfully issued
by the trial judge.
So, the 20-day limitation on the effectivity of the Court of Appeal's temporary
restraining order against enforcement or execution of the default judgment became
irrelevant, in view of this Court's unanimous ruling on the substantive issue that
such default judgment was void for having been issued with grave abuse of
discretion and in excess of jurisdiction. Thus, petitioner has won the argument but
nevertheless lost the case.
If petitioner had insisted in the Court of Appeals on its correct stand on the
temporary restraining order's limited 20-day lifetime, all that the Court of Appeals
would have had to do was replace the temporary restraining order with a
preliminary injunction with bond, as required by the law (B.P. Blg. 224, approved
April 16, 1982) and the Interim Rules (Section 8) of the January 11 , 1983. Since
petitioner chose not to await the Court of Appeal's action on its motion for
reconsideration and instead to file the petition at bar with prayer for a temporary
restraining order against enforcement of the Court of Appeals' temporary
restraining order against it, this Court's refusal to issue such temporary restraining
order indicated that petitioner had not shown a clear prima facie right thereto and
presaged this Court's ultimate ruling at bar on the merits that the trial court's
default judgment on the supplemental complaint was null and void and its execution
had been properly and correctly restrained by the Court of Appeals. In other words,
it is as if this Court, bound by no twenty-day limitation, had itself directly issued a
temporary restraining order against execution of the trial court's void default
judgment.
The purpose of this concurrence is simply to place the issue at bar on the
applicability of the legislative twenty-day limitation on the lifetime of temporary
restraining orders to the Court of Appeals in proper balance and perspective, in
addition to the sound and valid reasons stated in the Court's decision.
Firstly, the majority ruling in no way indicates a lack of appreciation of the Court of
Appeals' acknowledged importance and worth "as our partner in the administration
of justice" nor does it "equate" them with municipal courts and regional trial courts,
as misperceived in the concurring and dissenting opinion. The fact is that under
both the 1935 1 and the 1973 2 Constitutions, the legislature was granted the
authority to repeal, alter or supplement the Rules of Court. Pursuant thereto, the
Batasang Pambansa enacted B.P. Blg. 224 amending section 5 of Rule 58 of the
Rules of Court "regulating the issuance of restraining orders" and imposing a

56

twenty-day effectivity period for such restraining orders issued ex parte, as adopted
in section 8 of the Court's Interim Rules and Guidelines. The Batasang Pambansa
meant this legislative amendment of the Rules of Court (approved on third reading
on March 22, 1982 with 111 yeas and no nays or abstentions 3) to apply to all
courts, including the Supreme Court, as shown in the response of the bill's (B.P. Blg.
293) author and sponsor Hilario G. Davide, Jr. during the deliberations on March 9,
1982:
"Mr. Seno. If this bill is passed into law, would it apply to restraining orders of the
Supreme Court?
Mr. Davide. Mr. Speaker, it will apply to all courts.
Mr. Seno. Thank you, Mr. Speaker. I want to make it of record so that the intention of
the bill will be clear." 4
But the Supreme Court nevertheless has never considered itself bound by such
twenty-day limitation of temporary restraining orders issued by it in the exercise of
its certiorari jurisdiction, where such restriction could be taken as a violation of the
fundamental principle of separation of powers or an interference by the legislature
with the Supreme Court's exercise of its judicial power of settling and adjudicating
actual controversies involving rights that are legally demandable and enforceable in
much the same way that this Court would not interfere with the legislative power of
enacting the laws of the land. As stressed by the Court in its decision in PCGG vs.
Hon. Emmanuel G. Pea, G.R. No. 77663, promulgated this month also, "(E)xecutive
Order No. 1 thus effectively withholds jurisdiction over cases against the
Commission [PCGG] from all lower courts, including the Court of Appeals, except the
Sandiganbayan in whom is vested original and exclusive jurisdiction and this Court.
Early on, in special civil actions questioning challenged acts of the Commission, its
submittal that the cited Executive Order bars such actions in this Court was given
short shrift, because this Court, as the third great department of government vested
with the judicial power and as the guardian of the Constitution, cannot be deprived
of its certiorari jurisdiction to pass upon and determine alleged violations of the
citizens' constitutional and legal rights under the Rule of Law." In other words, the
legislature was constitutionally empowered under the 1935 and 1973 Constitutions
to alter or modify the Rules of Court, as it did under B.P. Blg. 224, subject of this
case. But this Court was and is exempt from such legislature-made Rule. Manifestly,
the Court could not extend this exemption pertaining to the Supreme Court as a
constitutional Court and repository of the judicial power to a constitutionally lesser
court established by law such as the Court of Appeals.
(Parenthetically, it is noteworthy that the power given to Congress to repeal, alter or
supplement the Rules of Court as promulgated by the Supreme Court has now been
deleted and excluded from our new Constitution [Art. VIII, sec. 5(5), 1987
Constitution].)
Secondly, the case at bar serves but to stress once more that the adjudication of
cases is not subject to mathematical formulas or arithmetical timetables. But such
periods and deadlines for the filing of pleadings and effectivity of interlocutory
orders are necessary for the orderly administration of justice. Here, the amendatory
law provides the practical alternative that the issuing court (including the Court of
Appeals) must replace the temporary restraining order within the 20-day period, if it
finds the plaintiff entitled to the injunctive relief after notice and hearing the
adverse party's side, with a preliminary injunction with the corresponding injunction
bond, which under the Rules of Court, must be in an adequate amount to indemnify
the party enjoined for any loss or damage should the injunction be found to have
been wrongfully issued. But in extreme cases, such as the case at bar, where the
legislative deadline has not been followed (by the Court of Appeals, in this
instance), substantial justice will still prevail over the procedural rule and the
injunctive relief against a void default judgment win nevertheless be granted and
made permanent with a decision on the merits.

57

Lastly, the statement in the concurring and dissenting opinion describing as "not
only gratuitous but false" the majority opinion's basis for rejecting the argument
that the twenty-day life of a temporary restraining order is impractical and
insufficient, as there could be instances when the twenty-day life of the order would
lapse before it is served on the parties concerned, is to be regretted. The rejection
has sound basis in its statement of fact that not a single actual instance has been
cited wherein such eventuality has occurred in a case of the Court of Appeals. Then,
the argument of impracticality and shortness of the time go to the wisdom, and not
the conceded validity, of the legislature's imposition of the twenty-day lifetime of
the restraining order ---- which was beyond the Court's jurisdiction to modify or set
aside. Besides, as above indicated, the law provides a practical alternative, when
the twenty-day period is found inadequate ---- which is, to replace the restraining
order with a no-time-limit preliminary injunction covered by an injunction bond.
<b>GUTIERREZ, JR., J., concurring and dissenting:</b>
I concur in the setting aside of the July 9, 1985 order of default, the July 15, 1985
default judgment, and the September 3, 1985 special order.
I, however, take strong exceptions to and accordingly dissent from the ruling that
would bind the Court of Appeals to the twenty-day life of a restraining order.
The majority opinion blithely discredits the respondents' argument that Court of
Appeals processes are enforceable throughout the country and there could be
instances when the twenty-day period would lapse before the temporary restraining
order is served on the parties concerned. According to the majority opinion, this
allegation appears to be more illusory and imaginary than real.
I am sorry to state that such a conclusion is not only gratuitous but false. I served in
the Court of Appeals for almost five and a half years. With more than one thousand
decisions and full length resolutions that I penned for the appellate court, I humbly
believe I can claim first hand knowledge of how long it takes to serve processes in
the more distant parts of the country. Twenty days is not enough to serve the
restraining order and get the answer or comments of the private respondent.
The more perceptive and distinguished members of the appellate court, the Justices
most affected by our ruling, have voiced similar sentiments in their decisions. In
Roberto T. Marquez v. Hon. Jose P. Castro, et al. (AC-G.R. SP No. 02578, October 18,
1984, the court, through ponente Justice Vicente V. Mendoza, then Chairman and
now Supreme Court Justice Edgardo L. Paras, and Justice Luis A. Javellana, stated:
"The respondent spouses impliedly admit the charge but defend themselves on the
ground that the temporary restraining order issued in this case expired on February
27, 1984, twenty days after its issuance on February 7, 1984, in accordance with BP
Blg. 224. The respondents cite the decision in Dionisio v. Court of First Instance, 124
SCRA 222 (1983) holding that upon the expiration of twenty days a temporary
restraining order likewise expires.
"On the other hand, the petitioner argues that BP Blg. 224 applies only to trial
courts. He points out that it would be absurd to apply the twenty-day period, which
is counted from the date of issuance of the temporary restraining order, to appellate
courts because of the possibility at times of serving the order to remote parts of the
country before the twentieth day. No such problem can possibly arise in the case of
trial courts whose orders granting injunctions can be enforced only within the
region, in accordance with Rule 3(a) of the Interim Rules of Court. The petitioner
points out that the case of Dionisio, which is invoked by the respondents, involved a
Court of First Instance whose territorial jurisdiction is even more limited than a
region.
"There is much to commend the petitioner's interpretation of the law. BP Blg. 224
speaks of a 'judge' not 'Justice' of the Intermediate Appellate Court. While in Rule 8
of the Interim Rules of Court the word 'judge' was changed to 'court' it is

58

nevertheless plausible to argue that no substantial change was intended since BP

Blg. 224 is an act of the legislature and cannot possibly be amended by the
Supreme Court under its rule making authority. The Supreme Court may have the
primary authority to promulgate a rule of court, but the power to repeal, alter or
supplement it belongs to the Batasan Pambansa under the Constitution. (Art. X, Sec.
5 [5])
"That is what was done in the case of the rule on injunction. The Supreme Court
promulgated the Rules of Court, Rule 58, Section 5 of which provides for the
issuance of injunctions. By means of BP Blg. 224 the Batasan Pambansa amended
Rule 58, Section 5. We do not believe that the Supreme Court can in turn amend the
amendatory statute, consistently with the Constitution."
The situation has not changed much since 1982 when I joined this Court on 1984
when the Marquez decision was promulgated. If at all, communications in the court
try have worsened I agree with the appellate court that B.P. Blg. 224 is intended
only for regional trial courts, metropolitan trial courts, and municipal trial courts not
the Court of Appeals. And certainly, not the Supreme Court. I was also a member of
the Supreme Court when the Interim Rules were adopted and no matter how
intensely I rack my memory, I simply cannot remember any deliberations which
indicate that it was ever our intention to include the Court of Appeals in the twentyday limitation.
My objections to the twenty-day rule for restraining orders of the Court of Appeals
are, however, based on reasons more weighty than mere statutory construction or
even the realities of the situation. To my mind, the ruling indicates a sad neglect on
our part to properly appreciate the importance and worth of the Court of Appeals as
our partner in the administration of justice.
Like the Supreme Court, the Court of Appeals is a national court whose jurisdiction
embraces the entire country. The same reasons which impel us to exempt our
restraining orders from the twenty-day rule apply with equal force to the Court of
Appeals.
More important, however, it is the Court of Appeals which enables us to function as
a "supreme court" or a court of cassation.
As this Court stated in Braulio Conde, et al. v. Intermediate Appellate Court, et al.
(144 SCRA 144):
"There are instances when this Court desires a further review of facts or a detailed
analysis and systematic presentation of issues which the appellate court is in a
more favored position to accomplish. Standing between the trial courts and the
Supreme Court, the appellate court was precisely created to take over much of the
work that used to be previously done by this Court. It has been of great help to the
Supreme Court in synthesizing facts, issues, and rulings in an orderly and intelligible
manner and in identifying errors which ordinarily might have escaped detection.
Statistics will show that the great majority of petitions to review the decisions of the
appellate court have been denied due course for lack of merit in minute resolutions.
The appellate court has, therefore, freed this Court to better discharge its
constitutional duties and perform its most important work which, in the words of
Dean Vicente G. Sinco, 'is less concerned with the decision of cases that begin and
end with the transient rights and obligations of that particular individuals but is
more intertwined with the direction of national policies, momentous economic and
social problems, the delimitation of governmental authority and its impact upon
fundamental rights.' (Philippine Political Law, 10th Edition, p. 323 . . ." (at pp. 149150)
Since the Court of Appeals has freed us to better perform our constitutional duties,
it is imperative that we should not deny it the tools with which to discharge its own
functions faithfully and speedily. Its members should be chosen with the same care
and scrupulous attention given to the search for Supreme Court Justices. Their

59

compensation and allowances should not be too different from that given to us. And
instead of being equated with municipal courts and regional trial courts, the Court
of Appeals should be regarded as a court closer to the Supreme Court than any
other court.
I am, therefore, constrained to regretfully dissent, in part, from the majority
decision.
Feliciano and Grio-Aquino, JJ., concur.
<b>MELENCIO-HERRERA, J., concurring and dissenting:</b>
I join the Concurring and Dissenting Opinions of Mr. Justice Gutierrez. To settle all
doubts, now that the revisions of the Rules of Court is ongoing, a categorical rule on
the inclusion/exclusion of the Court of Appeals from the coverage of the 20-day lifespan of restraining orders, should be laid down.

Barba v. Liceo de Cagayan, G.R. No. 193857, November 28, 2012

Sec. 7. Filing of amended pleadings

Sec. 8. Effect of amended pleadings

Air Ads v. TADECO, G.R. No. 160736, March 23, 2011
Republic of the Philippines
Supreme Court
Manila
THIRD DIVISION

AIR ADS INCORPORATED,

Petitioner,

G.R. No. 160736

Present:

- versus -

TAGUM
AGRICULTURAL
DEVELOPMENT CORPORATION
(TADECO),
Respondent.

CARPIO MORALES, Chairperson,

BRION,
BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.
Promulgated:

March 23, 2011

x-----------------------------------------------------------------------------------------x

60

DECISION
BERSAMIN, J:
Assailed via petition for review on certiorari are the two resolutions
promulgated on February 24, 2003[1] and November 13, 2003,[2] whereby the Court
of Appeals (CA) respectively dismissed the petitioners petition for certiorari and
prohibition, and denied the petitioners motion for reconsideration of the dismissal.
We find no reversible error on the part of the CA, and affirm the dismissal of
the petitioners petition for certiorari.

Antecedents
This case stemmed from Civil Case No. 27802-2000 of the Regional Trial
Court, Branch 15, in Davao City (RTC) entitledElva O. Pormento v. Tagum
Agricultural Development Corporation and Edwin Yap, an action to recover damages
for the death of the plaintiffs husband and attorneys fees
On
April
6,
2000, respondent Tagum
Agricultural
Development
Corporation (TADECO), as defendant, filed through counsel ACCRA Law Office
an answer with compulsory counterclaims and motion for leave to file third party
complaint,[3] impleading petitioner Air Ads, Inc. and Pioneer Insurance and Surety
Corporation (Pioneer) as third-party defendants. The RTC admitted TADECOs third
party complaint on April 14, 2000.[4] On June 16, 2000, however, ACCRA Law Office,
upon realizing that Pioneer was a client of its Makati Office, filed a notice of
dismissal without prejudice to third party complaint only against Pioneer Insurance
and Surety Corporation.[5]
Ten days later, TADECO filed through another counsel Dominguez Paderna &
Tan Law Offices (Dominguez Law Office) amotion to withdraw notice of dismissal
without prejudice of third party complaint only against Pioneer Insurance & Surety
Corporation or motion for reconsideration,[6] alleging that the notice of dismissal
without prejudice etc. filed by ACCRA Law Office had been made without its
consent. On June 29, 2000, the RTC granted the notice of dismissal without
prejudice etc.[7]
Nearly a month later, the RTC also granted the motion to withdraw notice of
dismissal without prejudice of third party complaint only against Pioneer Insurance
& Surety Corporation or motion for reconsideration, and set aside the dismissal of
the third party complaint against Pioneer.
Following the grant of its motion to withdraw the notice of dismissal etc.,
TADECO, still through Dominguez Law Office, filed a motion to admit third party
complaint in substitution of the third party complaint filed by the third party
plaintiffs former counsel,[8] explaining that the substitute third party complaint was
being filed to avoid putting ACCRA Law Office in an awkward situation, and to avoid
the appearance that new counsel Dominguez Law Office was merely adopting the
previous third party complaint.
It is noted that the substitute third party complaint contained allegations
pertaining only to Pioneer as third party defendant, to wit:
xxx
5. Under the heading ADMISSIONS of the answer of TADECO it
alleged:

61

TADECO admits the allegations in the following paragraphs of

the complaint:
xxx

xxx

xxx

xxx

1.3
Paragraph 3 only in so far as it is alleged that TADECO
is the owner of the CESSNA 550 Citation jetplane; and that the
aircraft is duly registered with the Air Transportation Office.
6. The CESSNA 550 Citation jetplane, hereinafter referred to as the
Citation jetplane, was insured by PIONEER INSURANCE under Aircraft
Insurance Policy No. AV-HO-96-60014 effective December 02, 1996 to
December 02, 1997, a copy of which is attached as Annex C by
virtue of which PIONEER INSURANCE agreed to be bound by the
following stipulation:
SECTION II Third Party Liability
The Company will indemnify the Assured for all sums
which the Assured shall become legally liable to pay and
shall pay as compensation, including costs awarded, in
respect of accidental bodily injury (fatal or non-fatal) or
accidental damage to property provided such injury or
damage is caused directly by the Aircraft or by objects falling
therefrom.
7. Should TADECO be found liable to the plaintiff under the
complaint, the third-party plaintiff is entitled to recover from PIONEER
INSURANCE indemnification for its liability to the plaintiff.
WHEREFORE, the third party plaintiff respectfully prays that in the
remote probability that TADECO would be held liable to the plaintiffs
under the complaint, that judgment be rendered ordering Pioneer
Insurance to indemnify TADECO all sums which the latter maybe found
liable to the plaintiffs.
xxx[9]
On August 28, 2000, the RTC granted the motion to admit third party
complaint in substitution of the third party complaint filed by the third party
plaintiffs former counsel,[10] viz:
The dismissal of defendant and Third Party Plaintiffs-Tagum
Agricultural Development Corporation complaint was without prejudice.
Considering further that the dismissal was filed by its former counsel
who is also the lawyer of Pioneer Insurance and Surety Corporation, the
Motion to Admit Third Party complaint in substitution of the Third Party
complaint that was dismissed is hereby granted.
xxx
SO ORDERED.
Air Ads then filed a motion to dismiss against the third party complaint,
averring that it had been dropped as third party defendant under TADECOs
substitute third party complaint; and arguing that the filing of the substitute third
party complaint had the effect of entirely superseding the original third party
complaint, which should consequently be stricken out from the records.
[11]

TADECO, represented by ACCRA Law Office, countered that it had never been
the intention of Dominguez Law Office to file a new third party complaint against Air

62

Ads because Dominguez Law Office represented TADECO only in regards to the third
party complaint against Pioneer.[12]
On July 25, 2002, the RTC denied Air Ads motion to dismiss,[13] holding that
the notice of dismissal etc. filed by ACCRA Law Office did not have the effect of
dropping Air Ads as a third party defendant due to the notice of dismissal etc. being
expressly restrictive about the dismissal being only with respect to Pioneer, to wit:
xxx
The first, third party complaint as against Air-ads was not
dismissed so there is no reason to grant Air-ads Motion to Dismiss.
It should be emphasized that the Notice of Dismissal filed by the
former counsel of third party plaintiff was restrictive that the dismissal
was its third complaint against Pioneer only, Air-ads is still a third party
defendant there is nothing to show that it was dropped as a third party
defendant by virtue of the said dismissal.
The motion that the first third party complaint filed by the former
counsel of Tadeco be removed from the record and declared as no
longer existing and that Air-ads should no longer be treated as a party
is without any legal basis.
In view whereof the Motion to Dismissed [sic] is denied for lack of
merit. Air-ads is given ten (10) days from receipt of this order to file its
answer.
The pre-trial shall be on September 18, 2002.
Notify all the parties of this order.
SO ORDERED.
Air Ads filed a motion for reconsideration,[14] but the RTC denied the motion
for reconsideration on September 20, 2002,[15]stating:
Third Party defendant Air Ads Motion for Reconsideration is
denied for lack of merit. This issue was repeatedly discussed by the
parties in their pleadings and the court resolution on this matter is
clear. The pre-trial conference shall be on October 4, 2002 at 2:30 p.m.
SO ORDERED.
After receiving the order of denial on October 4, 2002, [16] Air Ads brought a
petition for certiorari and prohibition docketed in the CA (C.A.-G.R. SP No. 73418).
[17]
However, on November 13, 2002, the CA dismissed the petition for failure to
attach the board resolution designating the petitioners duly authorized
representative to sign the verification and certification against forum shopping in its
behalf.[18]
Instead of filing a motion for reconsideration, Air Ads filed a new petition
for certiorari and prohibition on December 2, 2002 in the CA (C.A.-G.R. SP No.
74152),[19] already including the proper board certificate.
While C.A.-G.R. SP No. 74152 was pending, the CAs resolution dismissing
C.A.-G.R. SP No. 73418 became final and executory on December 10, 2002. [20]
On February 24, 2003, the CA issued the first assailed resolution in C.A.-G.R.
SP No. 74152,[21] viz:

63

xxx
Petitioners reasoning is specious. The notice of dismissal clearly
stated that the dismissal pertains only to the third party complaint
against Pioneer Insurance, not as against petitioner Air Ads. The thirdparty complaint against petitioner was never dismissed. Thus, when
TADECOs new counsel sought to revive the third-party complaint
against Pioneer, the allegations in the substitute third-party complaint
pertain only to Pioneer since petitioner Air Ads was never dropped as
third-party defendant in the proceedings. Petitioners motion to dismiss
was correctly denied by the trial court.
ACCORDINGLY, the petition is DENIED due course and DISMISSED.
SO ORDERED.
The CA denied Air Adss motion for reconsideration through the second
assailed resolution of November 13, 2003.[22]
Hence, this appeal by petition for review on certiorari.
TADECO, through ACCRA Law Office, filed its comment on March 30, 2004,
but on April 26, 2004, TADECO, through Dominguez Law Office, filed a motion to
dispense with comment of Tagum Agricultural Development Corporation as thirdparty plaintiff against Pioneer Insurance Corporation.[24] Accordingly, the Court
directed TADECO to manifest which between ACCRA Law Office and Dominguez Law
Office was its principal counsel.[25] In compliance, TADECO manifested that ACCRA
Law Office was its counsel in Civil Case No. 27802-2000 and in the third party
complaint against Air Ads, while Dominguez Law Office was its counsel in the third
party complaint against Pioneer.[26] After the Court directed the parties to submit
their respectivememoranda,[27] TADECO, through Dominguez Law Office and as
third-party plaintiff against Pioneer, filed a manifestation and motion,[28] praying that
it be excused from filing a memorandum considering that Pioneer was not involved
in the present recourse. On June 20, 2005, the Court granted the manifestation and
motion.[29]
[23]

Issues
The issues to be resolved are as follows:
I.
DOES THE FILING OF AN IDENTICAL PETITION FOLLOWING THE
DISMISSAL OF THE FIRST PETITION ON THE GROUND OF DEFECTIVE
AND INSUFFICIENT VERIFICATION AND CERTIFICATION CONSTITUTE
FORUM SHOPPING?
II.
DOES A SUBSTITUTE THIRD PARTY COMPLAINT HAVE THE EFFECT OF
SUPERSEDING THE ORIGINAL THIRD PARTY COMPLAINT?
Air Ads insists that the filing of the substitute third party complaint had the
effect of dropping it as third party defendant inCivil Case No. 27802-2000; and that
the substitute third party complaint superseded the original third party complaint.
On the other hand, TADECO counters that the filing of the second petition
for certiorari and prohibition in the CA violated the rule against forum shopping and
was already barred by res judicata due to the dismissal of the first being an
adjudication on the merits; and that Air Ads continued to be a third party defendant
because the third party complaint against Air Ads had not been withdrawn or
dismissed.
Ruling

64

The petition for review lacks merit.

I.
Refiling of the petition for certiorari did not
constitute forum shopping or res judicata
TADECOs contention, that Air Ads filing of the second petition while the first
petition was still pending was a clear case of forum shopping; and that, accordingly,
the second petition of Air Ads was already barred by res judicata due to the
dismissal of the first petition having resulted in an adjudication upon the merits,
conformably with Denoso v. Court of Appeals,[30] has no substance.
The dispositive portion of the CAs resolution of November 13, 2002 in C.A.G.R. SP No. 73418, which dismissed the first petition, reads:
WHEREFORE, the instant petition is hereby DISMISSED for
defective and insufficient verification and certification against forum
shopping.
SO ORDERED.
Section 5, Rule 7 of the 1997 Rules of Civil Procedure, defines the effect of
the failure to comply with the requirements for the certification against forum
shopping, viz:
Section 5. Certification against forum shopping. The plaintiff or
principal party shall certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in a sworn certification
annexed thereto and simultaneously filed therewith: (a) that he has not
theretofore commenced any action or filed any claim involving the
same issues in any court, tribunal or quasi-judicial agency and, to the
best of his knowledge, no such other action or claim is pending therein;
(b) if there is such other pending action or claim, a complete statement
of the present status thereof; and (c) if he should thereafter learn that
the same or similar action or claim has been filed or is pending, he
shall report that fact within five (5) days therefrom to the court wherein
his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall
not be curable by mere amendment of the complaint or other
initiatory pleading but shall be cause for the dismissal of the
case without prejudice, unless otherwise provided, upon
motion and after hearing. The submission of a false certification or
non-compliance with any of the undertakings therein shall constitute
indirect contempt of court, without prejudice to the corresponding
administrative and criminal actions. If the acts of the party or his
counsel clearly constitute willful and deliberate forum shopping, the
same shall be ground for summary dismissal with prejudice and shall
constitute direct contempt, as well as a cause for administrative
sanctions. (n)
The first sentence of the second paragraph expressly provides that the
dismissal of a petition due to failure to comply with the requirements therein
is without prejudice unless otherwise provided by the court. Accordingly, the
plaintiff or petitioner is not precluded from filing a similar action in order to rectify
the defect in the certification where the court states in its order that the action is
dismissed due to such defect, unless the court directs that the dismissal is with
prejudice, in which case the plaintiff is barred from filing a similar action by res
judicata. In the context of the aforequoted rule, the dismissal of C.A.-G.R. SP No.

65

73418, being without any qualification, was a dismissal without prejudice, plainly
indicating that Air Ads could not be barred from filing the second petition.
TADECO cited Denoso v. Court of Appeals, supra, to buttress its contention
that the present recourse was already barred byres judicata. There, the petitioners
had failed to attach the necessary copies of the relevant pleadings to their petition
for certiorari, thereby causing the dismissal of the petition. They had then sought
reconsideration by submitting the omitted documents, but the CA denied
their motion for reconsideration. On appeal, the Court upheld the dismissal of the
petition on the ground that it amounted to an adjudication upon the merits pursuant
to Section 3, Rule 17 of the Rules of Court,[31] which provides that failure to comply
with the rules shall result in the dismissal that has the effect of an adjudication upon
the merits. The lack of any qualification that the dismissal of the petition was
without prejudice rendered the dismissal an adjudication on the merits.
Herein, however, Section 5 of Rule 7, supra, promulgated after
the Denoso pronouncement, provides that the dismissal of the case (is) without
prejudice, unless otherwise provided. In this connection, the apt precedent is Heirs
of Juan Valdez v. Court of Appeals, [32] where the respondent corporation filed two
petitions for certiorari in the CA, the first of which was dismissed without prejudice
due to insufficient certification. After receiving the resolution dismissing the first
petition, the respondent corporation refiled its petition, which was docketed and
raffled to another division of the CA. The issue of whether the filing of the second
petition constituted forum shopping reached this Court, which resolved the issue
thuswise:
We have no doubt that it was within the CAs power and
prerogative to issue what either resolution decreed without committing
an abuse of discretion amounting to lack of excess of jurisdiction. In
the first May 5, 2003 Resolution, the CA correctly dismissed the
petition for the deficiency it found in the non-forum shopping
certification. Section 5, Rule 7 of the Revised Rules of Court provides
that Failure to comply with the foregoing requirements shall not be
curable by mere amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the casewithout
prejudice, unless otherwise provided, upon motion and after hearing.
On the other hand, the requirement specific to petitions filed with the
appellate court simply provides as a penalty that the failure of the
petitioner to comply with the listed requirements, among them the
need for a certification against forum shopping, shall be sufficient
ground for the dismissal of the petition. Thus, the Ninth Division
correctly dismissed the petition without prejudice.
xxx
The question of whether Lopez Resources forum shopped when it
re-filed its petition is largely rendered moot and academic by the terms
of the assailed May 5, 2003 order which dismissed the case without
prejudice. Lopez Resources, who cannot be blamed for the CAs
mistake, only followed what the assailed order allowed. Thus, we
cannot say that it forum shopped by filing another petition
while the first petition was pending. Insofar as it was
concerned, its first petition had been dismissed without
prejudice; hence, there was no bar, either by way of forum
shopping, litis pendentia or res adjudicata, to the petition it
re-filed.[33]
Indeed, Air Ads options to correct its dire situation included the refiling, for,
although the Rules of Court declares that the failure to comply with the
requirements of Section 5 of Rule 7 shall not be cured by amendment, nowhere
does the rule prohibit the filing of a similar complaint or pleading following the
dismissal without qualification of the earlier one.

66

II.
Substitute third party complaint did not
supersede original third party complaint
The posture of Air Ads that the original third party complaint was
automatically expunged from the records upon the admission of the substitute third
party complaint[34] is bereft of any basis in fact and in law.
The records indicate that: firstly, both TADECO and Pioneer were clients of
ACCRA Law Office; secondly, TADECO engaged Dominguez Law Office as its counsel
in lieu of ACCRA Law Office with respect only to its third party complaint against
Pioneer; thirdly, the RTC dismissed the third party complaint only against Pioneer
upon the notice of withdrawal filed by TADECO through ACCRA Law Office;
and fourthly, the RTC granted the motion to admit the substitute third party
complaint only against Pioneer. These rendered it plain and clear that the
substitute third party complaint merely replaced the third party complaint earlier
filed against Pioneer.
Air Ads urging that the filing of the substitute third party
complaint effectively superseded the third party complaintimpleading it as third
party defendant ostensibly harks back to Section 8 of Rule 10 of the Rules of Court,
which states that the amended pleading supersedes the pleading that it amends.
[35]
However, the substitution of the third party complaint could not produce the
effect that an amendment of an existing pleading produces. Under Section 1, [36] Rule
10 of the Rules of Court, an amendment is done by adding or striking out an
allegation or the name of any party, or by correcting a mistake in the name of a
party or a mistaken or inadequate allegation or description in any other respect. A
perusal of the original and the substitute third party complaints shows that their
averments are substantially the same; and that the substitute third party
complaint did not strike out any allegation of the prior one.
Lastly, Air Ads attributes error to the CA and the RTC for disregarding the
caption and the allegations of the substitute third party complaint that would have
led them to rule that the original third party complaint was effectively superseded
and supplanted by the substitute third party complaint. It submits that
substitution signifies to put in the place of another; and something that is put
in place of something else or is available for use instead of something else.
Air Ads submission is flawed. It is not the caption of the pleading that
determines the nature of the complaint but rather its allegations. [37] Although Air
Ads observation that the substitute third party complaint contained allegations only
against Pioneer is correct, sight should not be lost of the fact that Dominguez Law
Office represented TADECO in its third party complaint only against Pioneer, which
was precisely why the substitute third party complaint referred only to Pioneer.
WHEREFORE, we deny the petition for review on certiorari, and affirm the
resolutions the Court of Appeals promulgated on February 24, 2003 and November
13, 2003.
Costs against the petitioner.
SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

67

RULE 11- WHEN TO FILE RESPONSIVE PLEADINGS

Sec. 1. Answer to complaint
See: Secs. 1-2, Rule 22
Atty. Fernandez v. Court of Appeals, G.R. No. 131094, May 16, 2005
/---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\
[2005V496] ATTY. JESUS F. FERNANDEZ, Petitioner, versus HON. COURT OF APPEALS
and CONCEPCION OLIVARES, Respondents.2005 May 162nd DivisionG.R. No.
131094D E C I S I O N
CHICO-NAZARIO, J.:
The undisputed facts of this case show that a Complaint dated 23 January 1993 for
unlawful detainer docketed as Civil Case No. 140953 was filed by private
respondent Concepcion Olivares against the herein petitioner Jesus Fernandez.[1]
The Metropolitan Trial Court of Manila (MeTC), Branch XV, dismissed the Complaint
for lack of sufficient cause of action.[2]
Olivares appealed to the Regional Trial Court (RTC) of Manila, Branch 46, and the
latter reversed the MeTC, ordering Fernandez to pay rental arrearages, attorneys
fees, litigation expenses and costs[3] in a decision dated 02 May 1994.[4]
On 28 June 1994, Fernandez received a copy of the decision. On 12 July 1994 or 14
days after receipt of the decision, he filed a Motion for Reconsideration.[5] On 29
November 1994, Fernandez received an order denying his motion for
reconsideration.[6] On 01 December 1994, Fernandez filed with the Court of
Appeals a Motion for Extension of Time to File Petition for Review which was
granted.[7] Said resolution was received by Fernandez on 12 December 1994.
In the meantime, on 09 December 1994, Fernandez filed a Motion for New Trial,[8]
docketed as Civil Case No. 93-67034, before the RTC of Manila, Branch 46, citing
newly discovered evidence of receipts proving his rental payments. In view of his
Motion for New Trial, Fernandez, thru counsel, filed on 29 December 1994 in the
Court of Appeals a Motion to Withdraw his Petition For Review[9] which the court
duly noted in its resolution dated 19 January 1995.[10]
In an Order[11] dated 06 February 1995, the RTC denied the Motion for New Trial. It
explained that when Fernandez went to the Court of Appeals and filed a Motion for
Extension of Time to File Petition for Review, and the Court of Appeals accordingly
acted on the same by granting the extension sought, jurisdiction of the Court of
Appeals over the parties and the subject matter had already attached.
Fernandez filed a motion for reconsideration which the trial court denied in its
Order dated 14 December 1995.[12] Fernandez filed a Motion to Reconsider the
Order, while Olivares moved for the execution of the judgment of the RTC citing
Section 21 of the Revised Rules on Summary Procedure.[13] In an Order dated 30
January 1996, the RTC granted the Motion for Execution and denied the Motion for
Reconsideration.[14] A writ of execution was in fact issued by the RTC on 31
January 1996.[15]
This prompted Fernandez to file a Petition for Certiorari, Prohibition and
Mandamus with prayer for the issuance of a writ of preliminary injunction and

68

temporary restraining order, docketed as CA-G.R. SP No. 39655, before the Court of
Appeals.[16]
The Court of Appeals, in a resolution dated 14 February 1996 temporarily
restrained the respondents from proceeding with the enforcement of the writ of
execution, so as not to render the petition moot and ineffectual pending fuller
consideration thereof, as well as for the preservation of the rights of the
parties.[17] In a decision[18] dated 16 May 1997, the Court of Appeals denied the
Petition and affirmed the stance of the RTC. It ruled:

When petitioner herein elected to file before this Court a motion for extension
of time to file petition for review, he in effect opted to appeal the adverse decision
of the Regional Trial Court of Manila to the Court of Appeals. This is so because
appeal to this Court is perfected by petition for review, where judgment was
rendered by the Regional Trial Court in the exercise of appellate jurisdiction. This
Courts assumption of appellate jurisdiction resulted initially in the issuance of the
resolution granting petitioner an extension of fifteen (15) days within which to file
the petition for review. Since this Court acquired appellate jurisdiction, the only
proper thing for the court below to do was to deny the motion for new trial.[19]

Fernandez filed a Motion for Reconsideration which the Court of Appeals

denied in a resolution dated 13 October 1997.[20]
Hence, this petition.
In a resolution of this Court dated 26 January 1998,[21] respondents were
required to file their Comment on the Petition.
Private respondent Olivares
submitted her Comment on 26 February 1998.[22] Fernandez, in turn, was directed
to file his Reply.[23] After the submission of Fernandezs reply,[24] the parties were
then required by this Court, in a resolution[25]
dated 02 December 1998, to
submit their respective memoranda.
The only issue[26] submitted for resolution in this case is:

WHETHER OR NOT THE MERE FILING BY PETITIONER OF A MOTION FOR

EXTENSION OF TIME TO FILE PETITION FOR REVIEW (WHICH INTENTION [sic] WAS
LATER WITHDRAWN), AUTOMATICALLY DIVESTED THE REGIONAL TRIAL COURT (RTC)
OF ITS JURISDICTION OVER THE CASE, AS TO ENTERTAIN A MOTION FOR NEW TRIAL.

In general, in order for a Court to have authority to dispose of the case on the
merits, it must acquire jurisdiction over the subject matter and over the parties.[27]
Jurisdiction over the subject matter, or the jurisdiction to hear and decide a case, is
conferred by law.[28] Jurisdiction over the person, on the other hand, is acquired by
service of summons or by voluntary appearance.[29]

At first glance and mindful of the rule that the filing of motions seeking affirmative
relief, such as the motion for extension of time to file petition for review filed by
69

Fernandez in this case, is considered voluntary submission to the jurisdiction of the

court[30] it may seem at once apparent that the Court of Appeals had in fact
acquired jurisdiction over his person.
It has been repeatedly held that an
appearance in whatever form, without expressly objecting to the jurisdiction of the
court over the person, is a submission to the jurisdiction of the court over the
person. He may appear by presenting a motion, for example, and unless by such
appearance he specifically objects to the jurisdiction of the court, he thereby gives
his assent to the jurisdiction of the court over his person.[31]
As we are dealing here with the jurisdiction of an appellate court, additional
rules are required for jurisdiction to attach therein, to wit: (1) the petitioner must
have invoked the jurisdiction of the Court of Appeals within the time for doing so;
[32] (2) he must have filed his petition for review likewise within the time for doing
so;[33] (3) he must have paid the necessary docket fees; [34] and (4) the other
parties must have perfected their appeals in due time.[35]
The Rule requires that in an appeal by way of Petition For Review, the appeal
is deemed perfected as to the petitioner upon the timely filing of the petition and
the payment of docket and other lawful fees.[36] In the discussion of the
Committee on the revision of the Rules of Court, it was emphasized that to perfect
the appeal, the party has to file the petition for review and to pay the docket fees
within the prescribed period. The law and its intent are clear and unequivocal that
the petition is perfected upon its filing and the payment of the docket fees.
Thus, it may be argued, and rightly so, that the Court of Appeals has not yet
acquired jurisdiction over the case because Fernandez merely filed a motion for
extension of time to file petition but not the petition itself. Withal, sans the petition,
it cannot be said that the Court of Appeals has acquired jurisdiction over the case as
to say that the trial court is without authority to act on a motion for new trial. It is
axiomatic that if a statute is clear, plain and free from ambiguity, it must be given
its literal meaning and applied without attempted interpretation.[37] Indeed, when
the law speaks in clear and categorical language, there is no room for
interpretation, vacillation or construction, but only for application.[38] On this point
we fully agree in the position taken by Fernandez that when he filed the motion for
extension of time to file petition for review, jurisdiction of the Court of Appeals had
not yet attached, such that his failure to file the petition itself would normally have
the effect of rendering the decision of the lower court final and executory.[39]
The consequential question is: what is the legal effect of the filing by
Fernandez of a motion for new trial before the trial court?
Assuming that Fernandez filed his motion for new trial on time, we hold that
the trial court still had jurisdiction to rule on the matter as the jurisdiction it
originally acquired had not yet been lost.
The appellate jurisdiction of the trial court is to be juxtaposed with its residual
jurisdiction as set forth in Rule 42, Section 8(a), 3rd paragraph of the Rules of Court.
Before the Court of Appeals gives due course to a Petition for Review, the RTC
retains jurisdiction for specified instances enumerated therein, to wit:
(1)
To issue orders for the protection and preservation of the
rights of the parties which do not involve any matter litigated by the appeal, such
as, the appointment of a receiver, and the issuance of writs of preliminary
attachment or preliminary injunction.
70

(2)

To approve compromises.

(3)

To permit appeals of indigent litigants.

(4)
section 2 of Rule 39.
(5)

To order execution pending appeal in accordance with

To allow withdrawal of the appeal.[40]

The residual jurisdiction of the trial court is available at a stage in which the court is
normally deemed to have lost jurisdiction over the case or the subject matter
involved in the appeal. This stage is reached upon the perfection of the appeals by
the parties or upon the approval of the records on appeal, but prior to the
transmittal of the original records or the records on appeal.[41] Considering that no
appeal was perfected in this case and the records of the case have not yet been
transmitted to the Court of Appeals, the case has not as yet attained the residual
jurisdiction stage so as to say that the trial court already lost the jurisdiction it first
acquired and that it is left with only its residual powers.
The foregoing considered, the inevitable recourse would have been to remand this
case to the trial court for hearing on his motion for new trial. Such is not to be,
however.
So much has been said by the parties over the issue of whether or not jurisdiction
attaches to the Court of Appeals upon the filing of a motion for extension of time to
file petition for review thereby divesting the court of origin the power to rule on a
motion for new trial. As shall be hereunder shown, however, it turns out that the
unraveling of this issue is quite peripheral and that the resolution of this case
hinges on another matter totally different from that raised by the parties.
From the records of the case, the ultimate issue to be tackled concerns the proper
computation of the period to file a motion for new trial.
Rule 37, Section 1 of the Revised Rules of Court providing for the period to file a
motion for new trial in relation to Rule 41, Section 3 is in point.
Rule 37. . . .
Section 1. Grounds of and period for filing motion for new trial or
reconsideration. Within the period for taking an appeal, the aggrieved party may
move the trial court to set aside the judgment or final order and grant a new trial for
one or more of the following causes materially affecting the substantial rights of
said party.

Rule 41 . . . .
Sec. 3. Period of ordinary appeal. The appeal shall be taken within fifteen (15)
days from notice of the judgment or final order appealed from. Where a record on
appeal is required, the appellant shall file a notice of appeal and a record on appeal
within thirty (30) days from notice of the judgment or final order.

71

The period of appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial or
reconsideration shall be allowed.

It is without question that Fernandez received a copy of the RTC Decision on

28 June 1994. Fourteen (14) days after the receipt of the decision or specifically on
12 July 1994, he filed a motion for reconsideration. This motion was denied by the
RTC and the Order of denial was received by Fernandez on 29 November 1994.
Applying Rule 37, Section 1 of the Revised Rules of Court, he had only one (1) day
left to file a motion for new trial since a motion for new trial should be filed within
the period to appeal, that is, within fifteen (15) days from notice of the judgment.
[42] The motion for new trial suspends the running of the period to appeal but does
not extend the time within which an appeal must be perfected.[43] Hence if denied,
a movant, like Fernandez in this case has only the balance of the reglementary
period within which to appeal.[44] It bears repeating that Fernandez received a
copy of the RTC decision on 28 June 1994. Applying Rule 41, Section 3 of the
Revised Rules of Court, he had fifteen (15) days from receipt of the RTC decision to
file a motion for new trial or reconsideration. He filed a motion for reconsideration
fourteen (14) days after receipt of the decision. The motion was denied and he had
only the remaining one (1) day to file a motion for new trial which day fell on 01
December 1994. Since 30 November 1994 was a holiday, Fernandez had up to 01
December 1994 to file the motion for new trial. Extant from the records, instead of
a motion for new trial, he filed before the Court of Appeals on 01 December 1994
the motion for extension of time to file petition for review. Thereafter, and pending
the resolution of his motion before the Court of Appeals, Fernandez went back to the
RTC and filed on 09 December 1994 a motion for new trial.
Applying the foregoing, Fernandezs motion for new trial was filed out of time.
The fifteen (15)-day period for filing a motion for new trial cannot be extended. As
early as the case of Habaluyas v. Japzon,[45] cited in Naguiat v. Intermediate
Appellate Court,[46] and reiterated in Tung Chin Hui v. Rodriguez,[47] motions for
extension of time to file a motion for new trial or reconsideration may no longer be
filed before all courts, lower than the Supreme Court. The rule in Habaluyas applies
even if the motion is filed before the expiration of the period sought to be extended
because the fifteen (15) days period for filing a motion for new trial or
reconsideration with said court is non-extendible. Thus, motions for extension of
time to file a motion for new trial or reconsideration may be filed only in connection
with cases pending before the Supreme Court, which may in its sound discretion
either grant or deny the extension requested. No such motion may be filed before
any lower courts.[48]
IN SUM, considering that a motion for new trial must be filed during the
period for filing an appeal and that such period cannot be extended, Fernandez, by
filing his motion for new trial beyond the period to appeal, had unwittingly sealed
his fate and stripped himself of any further relief.
WHEREFORE, premises considered, the instant petition is DENIED for lack of
merit. The Regional Trial Court of Manila, Branch 46, is ordered to execute the
decision dated 02 May 1994 in Civil Case No. 93-67034.
SO ORDERED.

72

MINITA V. CHICO-NAZARIO
Associate Justice

Victoria v. Court of Appeals, G.R. No. 147550, January 26, 2005

/---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\
[2005V79] ISIDRA VDA. DE VICTORIA Substituted by MARIO VICTORIA, Petitioner,
versus HON. COURT OF APPEALS, HON. JUANITA T. GUERRERO, Presiding Judge of
Regional Trial Court, Branch 37, Calamba, Laguna; HON. FLORENCIO P. BUESER,
Presiding Judge, Municipal Trial Court, Calauan, Laguna; EX-OFFICIO SHERIFF
Regional Trial Court, Calamba, Laguna and/or his Deputies; SPOUSES LUIS GIBE and
ZENAIDA GIBE and All Persons Acting on their Behalf, Respondents.2005 Jan 263rd
DivisionG. R. No. 147550D E C I S I O N
CARPIO MORALES, J.:
Through his appeal by certiorari,[1] petitioner Mario Victoria seeks to set aside the
Resolutions of the Court of Appeals promulgated on May 25, 2000 and July 12, 2000,
which (1) dismissed petitioners special civil action for certiorari[2] and (2) denied
petitioners motion for reconsideration, respectively.

The antecedents of the case are as follows:

On October 27, 1993, respondent spouses Luis and Zenaida Gibe filed a
Complaint for Ejectment and Damages with a Writ of Preliminary Mandatory
Injunction [3] against Isidra Vda. de Victoria (the mother of herein petitioner Mario
Victoria), Eusebio Arida, Juan Becina and Guillermo Becina with the Municipal Trial
Court (MTC) of Calauan, Laguna, docketed as Civil Case No. 261 (the Ejectment
Case). In their Complaint, the Gibe spouses alleged, among other things, the
following:

1. In 1992 they acquired a parcel of land (the property) from the heirs of the late
Judge Gregorio Lantin, designated as Lot 1-B-153-A with an area of approximately
27,064 square meters (sq. m.).

2. The property was originally part of Lot 1-B-153 with an area of approximately
34,829 sq. m., which was subdivided into seven parcels in 1989 among Judge Lantin
and four of his tenants as follows:

73

Lot No.
Tenant/Owner/Claimant
Area
(in sq. m.)
1-B-153-A
Gregorio Lantin
27,064
1-B-153-B
Felix Victoria
883
1-B-153-C
Guillermo Becina
3,900
1-B-153-D
Juan Becina
2,019
1-B-153-E
Felix Victoria
624
1-B-153-F
Eusebio Arida
224

74

1-B-153-G
Gregorio Lantin
115

Total Area
34,829

Felix Victoria, now deceased, was the husband of Isidra Victoria.

All the
defendants in the Ejectment Case, as former tenants, were given home lots, while
Lot 1-B-153-A which was allotted to Gregorio Lantin was sold to the spouses Gibe.

3. In the course of fencing Lot 1-B-153-A, it was discovered that the Victoria house
was standing on the northwestern portion of the property; that Mrs. Victoria was
harvesting and picking fruits from the citrus trees planted in that area without the
knowledge and permission of the Gibe spouses; and that Eusebio Arida, Juan Becina
and Guillermo Becina were also surreptitiously planting palay on the northwestern
portion.

4. The fencing was discontinued after the children of Mrs. Victoria threatened to
shoot at the workers of the Gibe spouses with an armalite rifle, leaving
approximately 8,000 sq. m. of the northwestern portion of Lot 1-B-153-A open and
unfenced.

In her Answer (With Motion to Dismiss),[4] Mrs. Victoria denied having entered
Judge Lantins lot alleged to have been purchased by the spouses Gibe, claiming
that her farmhouse was constructed on the very lot awarded to her family by the
DAR.
Moving thus for the dismissal of the Ejectment Case for lack of cause of
action, she interposed a counterclaim praying that, as a tenant of Judge Lantin, she
be maintained in the peaceful possession and cultivation of her lot or, in the
alternative, awarded disturbance compensation; and, in either event, reimbursed
for the expenses she incurred as a result of the Ejectment Case.

At the Preliminary Conference of the Ejectment Case, the parties mutually agreed to
a relocation survey of the property to be conducted by a geodetic engineer.

After the court-appointed geodetic engineer had submitted the results of the
relocation survey, Mrs. Victoria and her co-defendants in the Ejectment Case filed a

75

Manifestation with Motion[5] requesting the trial court to allow them to engage the
services of an independent surveyor, at their expense, to conduct another survey.
Although the motion was granted, no resulting survey plan was, however, submitted
by them.

By Decision of May 21, 1998, the MTC, finding in favor of the plaintiffs-spouses
Gibe, disposed as follows:

WHEREFORE in the light of the foregoing, this Court on the basis of the
evidences [sic], the [sic] mutually submitted before it by both the plaintiffs and the
defendants, this Court has to rule as follows:

1. That since it clearly appeared that the plaintiffs are the real owners of the
real property with an area of 27,064 square meters, including the real property with
an area of 5,825 square meters which is in possession of all the defendants, they
have the absolute right to obtain the proper possession thereof and to eject all of
them thru legal means;

2. That in as much as all the defendants are at present and also the real
owners of the real properties and also in the possession thereof as evidence[d] by
their respective emancipation patents, each of them is hereby ordered by this Court
to properly and absolutely abandoned [sic] the portions of the real property covered
by Transfer Certificate of Title No. T-140417 and immediately delivered its
possession to the plaintiffs;

3. That considering the possession of the defendant Isidra Vda. de Victoria

of the real properties with a total area of 1,508 square meters which she did not
own, [she] is ordered by this Court to pay and remit to the above plaintiffs the sum
of
P45,000.00 as reasonable compensation for the use and occupation of
the portion above mentioned as it belong[s] to the plaintiffs and the defendant
Becina together with two other defendants Juan and Arida are in possession of the
real property owned by the plaintiffs with an area of 4,327 square meters, they are
hereby ordered [to] jointly pay the plaintiffs the sum of P50,000.00 jointly as
reasonable compensation.

4. That all the defendants are hereby ordered to pay the counsel for the
plaintiffs the sum of P20,000.00 jointly as attorneys fees;

5. That in view of failure of the plaintiffs to prove their entitlement to

preliminary mandatory injunction and to the set the same for hearing as required by
law, the same is hereby denied.

76

6. The defendants are hereby ordered to pay the costs of suit.

SO ORDERED.[6]

nderscoring supplied)

On May 22, the spouses Gibe, without notice to the defendants in the Ejectment
Case, filed a Motion for Immediate Execution and Demolition[7] praying that a writ
of execution be issued to enforce and satisfy the judgment, for the ejectment and
demolition of the house of the Defendants.

Eight days after promulgation and receipt of the MTC decision or on May 29, 1998,
the defendants in the Ejectment Case filed a Notice of Appeal[8] without, however,
filing a supersedeas bond to stay the immediate execution of the decision and
depositing monthly rentals.

By Order of June 1, 1998,[9] the MTC granted the Motion for Immediate Execution
and Demolition and accordingly issued a Writ of Execution.[10]

A Petition for Certiorari and Prohibition (With Prayer for Issuance of a Temporary
Restraining Order [TRO] and a Writ of Preliminary Injunction)[11] was filed on July
13, 1998 with the Regional Trial Court (RTC) of Calamba, Laguna, docketed as Civil
Case No. 2625-98-C (the Petition for Certiorari).

The Petition assailed the MTC Decision, its Order of June 1, 1998, and the Writ of
Execution, contending that the MTC had no jurisdiction over the Ejectment Case and
committed grave abuse of discretion in deciding the case in favor of the spouses
Gibe and in issuing the said Order and Writ of Execution pending appeal.[12]

Mrs. Victoria, it turned out, had passed away shortly before the MTC promulgated its
May 21, 1998 Decision. Her son, petitioner Mario Victoria, thus substituted for her.
[13]

Branch 37 of the RTC Calauan, to which the Petition for Certiorari was raffled, issued
a Writ of Preliminary Injunction.[14]

In the meantime, the appeal filed by the defendants in the Ejectment Case before
the RTC of Calauan, Laguna was dismissed by Branch 92 thereof by Order of
October 7, 1998[15] for failure to file their appeal memorandum.[16]

By its Decision dated August 13, 1999,[17] the RTC dismissed the Petition for
Certiorari in light of the following ratiocination:

77

The petitioner contends that the lower court has no jurisdiction to try the
case and to issue the questioned decision because the subject parcels of land have
been subjected and covered by P.D. 27 known as Operation Land Transfer and any
dispute involving said lands must be referred to the Honorable Department of
Agrarian Reform Adjudication Board (DARAB) for proper disposition.

Jurisdiction of a court is determined by the allegations in the complaint. The

complaint filed by the private respondents was for Ejectment and Damages With a
Writ of Preliminary Mandatory Injunction. Ejectment proceedings are within the
exclusive original jurisdiction of the Municipal Trial Court.

xxx

The Answer and the Position Paper of the petitioner Victoria in the case
below show that she claimed ownership over the portion of the lot, by virtue of the
Operation Land Transfer, which the private respondents Gibe alleged to have been
occupied by the farm house of the petitioner. Petitioner Victoria did not question
the jurisdiction of the Court but prayed for the dismissal of the case below for lack
of cause of action. So much so, that when the respondent Court took into
consideration the issue of ownership over the portion of the property allegedly
transgressed, it did so only to determine who is better entitled to possession over
said portion. And when it ordered the resurvey of the property to determine its
actual boundaries and the admission of the Engineers report to aid it in the
issuance of the questioned decision.
It did not determine the question of
ownership, i.e. as to who the real owner is which the petitioner may do so in a
separate complaint before the proper forum.

xxx

The Decision of the Court below is therefore not an error of jurisdiction but
an error of judgment which is not reviewable by certiorari proceedings. In other
words, certiorari is a remedy designed for the correction of errors of jurisdiction and
not errors of judgment as its function is to keep and inferior court within its
jurisdiction.

Having found [the MTC] to have jurisdiction to issue the decision dated May
28, 1998, the respondent judge likewise has jurisdiction to direct the execution of
the same pending appeal pursuant to Section 19, Rule 70 of the 1997 Rules of Civil
Procedure.[18] nderscoring supplied)

Herein petitioner, Mario Victoria, received a copy of the foregoing Decision of the
RTC on September 18, 1999 and filed a Motion for Reconsideration of the same on
September 28, 1999.[19] In due course, the RTC denied petitioners Motion for
Reconsideration by Order dated December 7, 1999.[20]

78

On March 28, 2000, petitioner instituted another special civil action for certiorari,
this time with the Court of Appeals (CA), questioning both the August 13, 1999
Decision of the RTC and the May 21, 1998 Decision of the MTC with prayer for the
issuance of a TRO and/or a Writ of Preliminary Injunction.[21] This case was
docketed as C.A. G.R. S.P. No. 47964 (the CA Certiorari Petition).

By Resolution of May 25, 2000,[22] the CA dismissed the CA Certiorari Petition in

this wise:

The petition is flawed for the following reasons viz:

1. The correct remedy from a decision of a Regional Trial Court in a petition

for certiorari is an ordinary appeal pursuant to Section 1, Rule 41 of the 1997 Rules
of Civil Procedure and section 5, Rule 6 of the Revised Internal Rules of the Court of
Appeals;

2. The instant petition is filed out of time. The assailed RTC decision was
received on September 18, 1999 while the Motion for Reconsideration was filed on
September 28, 1999. (Rollo P. 152). Thus a period of nine (9) days had elapsed.
The Order dated December 7, 1999 was received by petitioner on January 29, 2000
while the instant petition was filed only on March 28, 2000. Thus a period of fifty
eight (58) days had passed. Hence, petitioner had consumed a period of 67 days,
well beyond the 60-day period allowed by the rules as amended by Supreme Court
En Banc resolution dated July 21, 1998.[23] Plainly, the petition was filed out of
time.

3. The statement of material dates as to timeliness of the filing of the

petition is incomplete as it failed to state when the motion for reconsideration was
filed in violation of Section 3, Rule 46.

WHEREFORE, the petition is DISMISSED.

SO ORDERED.[24]

Petitioners Motion for Reconsideration[25] having been denied by the CA by

Resolution of July 12, 2000[26] for being filed 2 days beyond the reglementary
period, he filed the petition at bar after he was granted, on his motion, an extension
of thirty days to file the petition, conditioned upon the timeliness of the motion for
extension.[27]

79

Petitioner anchored his petition on the following grounds:

I.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF OR IN [sic] EXCESS OF JURISDICTION BY
NOT GIVING DUE COURSE TO THE PETITIONERS PETITION FOR CERTIORARI ON
GROUND OF TECHNICALITY INSTEAD OF RESOLVING THE CASE ON THE MERITS.

II.
PUBLIC RESPONDENT REGIONAL TRIAL COURT OF CALAMBA, LAGUNA,
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR IN [sic]
EXCESS OF JURISDICTION BY RULING THAT THIS CASE FALLS WITHIN THE
JURISDICTION OF THE MUNICIPAL TRIAL COURT, AND THAT THE DECISION OF THE
COURT A QUO WAS NOT AN ERROR [OF] JURISDICTION BUT AN ERROR OF
JUDGMENT WHICH IS NOT REVIEWABLE IN CERTIORARI [P]ROCEEDINGS.[28]

The appeal must be denied.

As earlier noted, this Court granted petitioner an extended period to file the
petition, conditioned, however, on the timeliness of the filing of the Motion for
Extension of Time to File Petition for Review on Certiorari. It is a basic rule of
remedial law that a motion for extension of time must be filed before the expiration
of the period sought to be extended.[29] Where a motion for extension of time is
filed beyond the period for appeal, the same is of no effect since there would no
longer be any period to extend, and the judgment or order to be appealed from will
have become final and executory.[30]

In the case at bar, an examination of the records reveals that the reglementary
period to appeal had in fact expired almost 10 months prior to the filing of
petitioners motion for extension of time on April 10, 2001. The Registry Return
Receipt[31] of the Resolution of the CA dismissing the CA Certiorari Petition shows
that the same was received by counsel for petitioners agent on June 5, 2000.
Hence, petitioner had only until June 20, 2000 within which to file an appeal or a
motion for new trial or reconsideration.[32]

Clearly, the Court of Appeals committed no error when it denied petitioners Motion
for Reconsideration for having been filed two days after the expiration of the
reglementary period on June 22, 2000.

Similarly, the instant petition for review must likewise be denied for having been
filed on May 12, 2001, almost 11 months after the expiration of the period to appeal
on June 20, 2000.[33]

80

In fact, a closer inspection of the records indicates that this case should have been
terminated as early as January 4, 2000 with the lapse of the period within which
petitioner could have appealed from the RTC Decision.

By his own account, petitioner received a copy of the Decision of the RTC dismissing
the Petition for Certiorari on September 18, 1999 and filed a Motion for
Reconsideration of the same on September 28, 1999. As correctly pointed out by
the CA, by that time a period of 9 days had already elapsed.[34] Thus, upon receipt
of the notice of the denial of the motion for reconsideration, which was admitted to
be on December 29, 1999,[35] petitioner only had 6 days or until January 4,
2000[36] within which to file a notice of appeal.

However, petitioner failed to do so, and he instead, on March 28, 2000, filed a
petition for certiorari under Rule 65 with the Court of Appeals. As the Court of
Appeals again correctly pointed out, [t]he correct remedy from a decision of a
Regional Trial Court in a petition for certiorari is an ordinary appeal pursuant to
Section 1, Rule 41 of the 1997 Rules of Civil Procedure xxx. It is well settled that
the perfection of an appeal in the manner and within the period permitted by law is
not only mandatory, but also jurisdictional.[37] Certiorari is not and cannot be
made a substitute for an appeal where the latter remedy is available but was lost
through fault or negligence.[38]

To be sure, petitioner has regularly invoked, before this Court and the lower courts,
the policy in favor of a liberal interpretation of the Rules of Procedure.

Apropos on this point are this Courts observations in Duremdes v. Duremdes:[39]

Although it has been said time and again that litigation is not a game of
technicalities, that every case must be prosecuted in accordance with the
prescribed procedure so that issues may be properly presented and justly resolved,
this does not mean that procedural rules may altogether be disregarded. Rules of
procedure must be faithfully followed except only when, for persuasive reasons,
they may be relaxed to relieve a litigant of an injustice commensurate with his
failure to comply with the prescribed procedure.
Concomitant to a liberal
application of the rules of procedure should be an effort on the part of the party
invoking liberality to adequately explain his failure to abide by the rules.[40]
( mphasis supplied; italics in the original; citations omitted)

In the case at bar, petitioner has not provided any cogent explanation that would
absolve him of the consequences of his repeated failure to abide by the rules.

Moreover, petitioners principal substantive argument that the Ejectment Case

properly falls within the jurisdiction of the DARAB and not of the MTC is without
merit.

81

The MTC does not automatically lose its exclusive original jurisdiction over
ejectment cases by the mere allegation of a tenancy relationship. As thoroughly
discussed in Rivera v. Santiago,[41] the party alleging tenancy must prove the
existence of all the essential requisites of tenancy in order to oust the MTC of its
jurisdiction over the case:

Jurisdiction is determined by the allegations in the complaint. That is basic.

Unquestionably, petitioner lodged an action for ejectment before the MTC. Under
BP 129, the allegations in the complaint conferred initiatory jurisdiction on that first
level court.

xxx

However, when tenancy is averred as a defense and is shown prima facie to

be the real issue, the MTC must dismiss the case for lack of jurisdiction. Under RA
6657, it is the DAR that has authority to hear and decide when tenancy is
legitimately involved.

In the instant case, respondents averred tenancy as an affirmative and/or

special defense in their Answer with Counterclaim. Under the RSP [Revised Rule on
Summary Procedure], the MTC was supposed to conduct a preliminary conference to
determine if such relationship was indeed the real issue. We emphasize that the
MTC did not automatically lose its jurisdiction simply because respondents raised
tenancy as a defense. It continued to have the authority to hear the case precisely
to determine whether it had jurisdiction to dispose of the ejectment suit on its
merits.

xxx

An agrarian dispute refers to any controversy relating to, inter alia, tenancy
over lands devoted to agriculture. To determine whether the CA was correct in its
reversal of the trial court, it is necessary to keep in mind the essential requisites of
tenancy which are as follows:

(1) The parties are the landowner and the tenant or agricultural lessee;
(2) The subject of the relationship is agricultural land;
(3) There is mutual consent to the tenancy between the parties;
(4) The purpose of the relationship is agricultural production;
(5) There is personal cultivation by the tenant or agricultural lessee; and
(6) There is a sharing of harvests between the parties.

82

All these elements must concur. It is not enough that they are alleged; to
divest the MTC of jurisdiction, they must all be shown to be present. x x x[42]
(Emphasis and underscoring supplied; italics in the original; citations omitted)

In Duremdes v. Duremdes,[43] where a similar argument was raised under factual

circumstances analogous to the case at bar, this Court held:

First. For the DARAB to have jurisdiction over the case, there must be a
tenancy relationship between the parties. In order for a tenancy agreement to take
hold over a dispute it is essential to establish all its indispensable elements, to wit:

1) [T]hat the parties are the landowner and the tenant or agricultural lessee;
2) that the subject matter of the relationship is an agricultural land; 3) that there is
consent between the parties to the relationship; 4) that the purpose of the
relationship is to bring about agricultural production; 5) that there is personal
cultivation on the part of the tenant or agricultural lessee; and 6) that the harvest is
shared between the landowner and the tenant or agricultural lessee.

Second. The trial court found that no such tenancy agreement existed
between the respondent and Herminio Tara, and that such allegation was a mere
ploy to prevent the respondent from exercising dominion and ownership over the
subject property. This was affirmed by the Court of Appeals. We find no cogent
reason to reverse such finding.

Third. The petitioner is barred from raising the issue of jurisdiction. The
petitioner actively participated in all stages of the instant case, setting up a
counterclaim and asking for affirmative relief in his answer. He failed, however, to
question the courts jurisdiction over the suit. After relying on the jurisdiction of the
regular courts, he cannot be permitted to turn around and question it. It is not right
for a party who has affirmed and invoked the jurisdiction of a court in a particular
matter to secure an affirmative relief, to afterwards deny that same jurisdiction.[44]
( mphasis supplied; italics in the original; citations omitted)

In the present case, neither petitioner nor his predecessor-in-interest submitted

evidence to substantiate the existence of the essential requisites of tenancy. Thus,
there is no basis at all to support petitioners claim that the MTC was without
jurisdiction to render the questioned Decision.

What is more, as in Duremdes and unlike in Rivera, petitioners predecessor-ininterest never questioned the jurisdiction of the MTC. Instead, she based her prayer
for the dismissal of the Ejectment Case on respondents alleged lack of cause of
action; with a counterclaim praying that she be maintained in the peaceful
possession and cultivation of the subject property or, in the alternative, awarded
disturbance compensation; and, in either event, reimbursed for the expenses she
incurred. Considering that petitioners predecessor-in-interest actively participated
in the proceedings before the MTC and invoked its jurisdiction to secure an

83

affirmative relief, petitioner cannot now turn around and question that courts
jurisdiction.

Finally, this Court notes with consternation petitioners attempts, with the aid of his
counsel, Atty. Abdul A. Basar, to deliberately mislead this Court as to the material
dates and status of the decision appealed from, thereby impeding if not frustrating
the ends of justice.

In his Motion for Extension of Time to File Petition for Review on Certiorari, petitioner
declared under oath that: (1) he had filed a timely Motion for Reconsideration of
the CA Resolution dismissing his petition for certiorari, and (2) the notice of the
denial by the CA of his Motion for Reconsideration was received by petitioner only
[on] March 28, 2001, thus making it appear that he had until April 12, 2001 within
which to perfect his appeal.

Significantly, petitioner did not disclose, either in his motion for extension of time or
in his subsequent petition, the date on which he received the Resolution of the CA
denying his petition for certiorari, thereby concealing the actual period for appeal
from the Court processor.

As already noted, petitioners motion for reconsideration failed to suspend the

running of the reglementary period since it was filed two days too late. Worse, the
Registry Return Receipt[45] of the CA Resolution denying petitioners motion for
reconsideration shows that it was received by counsel for petitioners agent on
September 20, 2000, and not March 28, 2001 as claimed by petitioner. In fact, by
Resolution dated May 7, 2001,[46] the CA had ordered the issuance of an Entry of
Judgment in this case, which was later withdrawn by Resolution of October 23,
2001[47] following receipt by it of the instant Petition on May 15, 2001.

It cannot be overemphasized that parties and their counsel are duty-bound to

observe honesty and truthfulness in all their pleadings, motions and statements
before the courts. Canon 10 of the Code of Professional Responsibility states, A
lawyer owes candor, fairness and good faith to the court; while Rules 10.01 and
10.03 of the same provide:

Rule 10.01 A lawyer shall not do any falsehood, nor consent to the doing of
any in Court; nor shall he mislead, or allow the Court to be mislead by any artifice.

xxx

Rule 10.03 A lawyer shall observe the rules of procedure and shall not
misuse them to defeat the ends of justice.

84

Petitioner and his counsel, Atty. Abdul A. Basar, are thus hereby directed TO SHOW
CAUSE, within 10 days from receipt of a copy of this Decision, why they should not
be held in contempt of court and disciplinarily dealt with for violation of Canon 10 of
the Code of Professional Responsibility, respectively.

WHEREFORE, the petition is hereby DENIED.

Petitioner MARIO VICTORIA and his counsel, Atty. Abdul A. Basar, are hereby
ORDERED TO SHOW CAUSE, within ten
(10) days from receipt of a copy of this Decision, why they should not be held in
contempt of court and disciplinarily dealt with for violation of Canon 10 of the Code
of Professional Responsibility, respectively.

Treble costs against petitioner.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

85

Sec. 2. Answer of a defendant foreign private juridical entity

Sec. 3. Answer to amended complaint

Sec. 4. Answer to counterclaim or cross-claim

Sec. 5. Answer to third (fourth, etc.)-party complaint

Sec. 6. Reply may be filed within tem (10) days from service of
the pleadings responded to

Sec. 7. Answer to supplemental complaint

Sec. 8. Existing counterclaim or cross-claim

Sec. 9. Counterclaim or cross-claim arising after answer

Sec. 10. Omitted counterclaim or cross-claim

Sec. 11. Extension of time to plead

RULE 12- BILL OF PARTICULARS

Sec. 1. When applied for purpose
Republic v. Sandiganbayan, G.R. No. 148154, December 17, 2007
/---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\

[2007R1337] REPUBLIC OF THE PHILIPPINES, represented by the Presidential

Commission on Good Government (PCGG), Petitioner, versus SANDIGANBAYAN
(Second Division) and FERDINAND R. MARCOS, JR. (as executor of the estate of

86

FERDINAND E. MARCOS),
148154RESOLUTION

Respondents.2007

Dec

172nd

DivisionG.R.

No.

QUISUMBING, J.:

The propriety of filing and granting of a motion for a bill of particulars filed for the
estate of a defaulting and deceased defendant is the main issue in this saga of the
protracted legal battle between the Philippine government and the Marcoses on
alleged ill-gotten wealth.

This special civil action for certiorari[1] assails two resolutions of the Sandiganbayan
(anti-graft court or court) issued during the preliminary legal skirmishes in this
20-year case:[2] (1) the January 31, 2000 Resolution[3] which granted the motion
for a bill of particulars filed by executor Ferdinand R. Marcos, Jr. (respondent) on
behalf of his fathers estate and (2) the March 27, 2001 Resolution[4] which denied
the governments motion for reconsideration.

From the records, the antecedent and pertinent facts in this case are as follows:

The administration of then President Corazon C. Aquino successively sued former

President Ferdinand E. Marcos and former First Lady Imelda Romualdez-Marcos (Mrs.
Marcos), and their alleged cronies or dummies before the anti-graft court to recover
the alleged ill-gotten wealth that they amassed during the former presidents 20year rule. Roman A. Cruz, Jr. (Cruz), then president and general manager of the
Government Service Insurance System (GSIS); president of the Philippine Airlines
(PAL); chairman and president of the Hotel Enterprises of the Philippines, Inc., owner
of Hyatt Regency Manila; chairman and president of Manila Hotel Corporation; and
chairman of the Commercial Bank of Manila (CBM), is the alleged crony in this case.

On July 21, 1987, the Presidential Commission on Good Government (PCGG),

through the Office of the Solicitor General, filed a Complaint[5] for reconveyance,
reversion, accounting, restitution and damages alleging that Cruz and the Marcoses
stole public assets and invested them in several institutions here and abroad.
Specifically, Cruz allegedly purchased, in connivance with the Marcoses, assets
whose values are disproportionate to their legal income, to wit: two residential lots
and two condominiums in Baguio City; a residential building in Makati; a parcel of
land and six condominium units in California, USA; and a residential land in Metro
Manila. The PCGG also prayed for the payment of moral damages of P50 billion and
exemplary damages of P1 billion.

On September 18, 1987, Cruz filed an Omnibus Motion to Dismiss, strike out
averments in the complaint, and for a bill of particulars.[6]

87

On April 18, 1988, the court ordered that alias summonses be served on the
Marcoses who were then in exile in Hawaii.[7] The court likewise admitted the
PCGGs Expanded Complaint[8] dated April 25, 1988, then denied Cruzs omnibus
motion on July 28, 1988 after finding that the expanded complaint sufficiently states
causes of action and that the matters alleged are specific enough to allow Cruz to
prepare a responsive pleading and for trial.[9] On September 15, 1988, Cruz filed
his answer ad cautelam.[10]

On November 10, 1988, the alias summonses on the Marcoses were served at 2338
Makiki Heights, Honolulu, Hawaii.[11] The Marcoses, however, failed to file an
answer and were accordingly declared in default by the anti-graft court on April 6,
1989.[12] In Imelda R. Marcos, et al. v. Garchitorena, et al.,[13] this Court upheld
the validity of the Marcoses default status for failure to file an answer within 60
days from November 10, 1988 when the alias summonses were validly served in
their house address in Hawaii.

On September 29, 1989, former President Marcos died in Hawaii.

He was
substituted by his estate, represented by Mrs. Marcos and their three children, upon
the motion of the PCGG.[14]

On July 13, 1992, Mrs. Marcos filed a Motion to Set Aside Order of Default,[15] which
was granted by the anti-graft court on October 28, 1992.[16] In Republic v.
Sandiganbayan,[17] this Court affirmed the resolution of the anti-graft court, ruling
that Mrs. Marcos had a meritorious defense, and that failure of a party to properly
respond to various complaints brought about by the occurrence of circumstances
which ordinary prudence could not have guarded against, such as being barred from
returning to the Philippines, numerous civil and criminal suits in the United States,
deteriorating health of her husband, and the complexities of her legal battles, is
considered as due to fraud, accident and excusable negligence.[18]

On September 6, 1995, Mrs. Marcos filed her answer,[19] arguing that the former
President Marcos wealth is not ill-gotten and that the civil complaints and
proceedings are void for denying them due process. She also questioned the
legality of the PCGGs acts and asked for P20 billion moral and exemplary damages
and P10 million attorneys fees.

On January 11, 1999, after pre-trial briefs had been filed by Cruz, the PCGG, and
Mrs. Marcos, the court directed former President Marcos children to appear before it
or it will proceed with pre-trial and subsequent proceedings.[20]

On March 16, 1999, respondent filed a Motion for Leave to File a Responsive
Pleading as executor of his late fathers estate.[21] The PCGG opposed the motion,

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citing as ground the absence of a motion to set aside the default order or any order
lifting the default status of former President Marcos.[22]

On May 28, 1999, the court granted respondents motion:

xxxx

The Court concedes the plausibility of the stance taken by the Solicitor General that
the default Order binds the estate and the executor for they merely derived their
right, if any, from the decedent. Considering however the complexities of this case,
and so that the case as against the other defendants can proceed smoothly as the
stage reached to date is only a continuation of the pre-trial proceedings, the Court,
in the interest of justice and conformably with the discretion granted to it under
Section 3 of Rule 9 of the Rules of Court hereby accords affirmative relief to the
prayer sought in the motion.

Accordingly, Ferdinand R. Marcos, Jr.[,] as executor of the [estate of] deceased

defendant Ferdinand E. Marcos[,] is granted a period of ten (10) days from receipt of
this Resolution within which to submit his Responsive Pleading.

x x x x[23]

Respondent asked for three extensions totaling 35 days to file an answer. The court
granted the motions and gave him until July 17, 1999 to file an answer. But instead
of filing an answer, respondent filed on July 16, 1999, a Motion For Bill of Particulars,
[24] praying for clearer statements of the allegations which he called mere
conclusions of law, too vague and general to enable defendants to intelligently
answer.

The PCGG opposed the motion, arguing that the requested particulars were
evidentiary matters; that the motion was dilatory; and that it contravened the May
28, 1999 Resolution granting respondents Motion for Leave to File a Responsive
Pleading.[25]

The anti-graft court, however, upheld respondent, explaining that the allegations
against former President Marcos were vague, general, and were mere conclusions of
law. It pointed out that the accusations did not specify the ultimate facts of former
President Marcos participation in Cruzs alleged accumulation of ill-gotten wealth,
effectively preventing respondent from intelligently preparing an answer. It noted
that this was not the first time the same issue was raised before it, and stressed

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that this Court had consistently ruled in favor of the motions for bills of particulars
of the defendants in the other ill-gotten wealth cases involving the Marcoses.

The fallo of the assailed January 31, 2000 Resolution reads:

WHEREFORE, the defendant-movants motion for bill of particulars is hereby

GRANTED.

Accordingly, the plaintiff is hereby ordered to amend pars. 9 and Annex A, 12 (a)
to (e), and 19 in relation to par-3 of the PRAYER, of the Expanded Complaint, to
allege the ultimate facts indicating the nature, manner, period and extent of
participation of Ferdinand E. Marcos in the acts referred to therein, and the amount
of damages to be proven during trial, respectively, within fifteen (15) days from
receipt of this resolution[.]

SO ORDERED.[26]

Not convinced by petitioners Motion for Reconsideration,[27] the court ruled in the
assailed March 27, 2001 Resolution that the motion for a bill of particulars was not
dilatory considering that the case was only at its pre-trial stage and that Section 1,
[28] Rule 12 of the 1997 Rules of Civil Procedure allows its filing.

In urging us to nullify now the subject resolutions, petitioner, through the PCGG,
relies on two grounds:

i.

The motion for bill of particulars contravenes section 3, rule 9 of the 1997 rules [OF]
civil procedure.

ii.

The motion for bill of particulars is patently dilatory and bereft of any basis.[29]

Invoking Section 3,[30] Rule 9 of the 1997 Rules of Civil Procedure, petitioner argues
that since the default order against former President Marcos has not been lifted by
90

any court order, respondent cannot file a motion for a bill of particulars. Petitioner
stresses that respondent did not file a motion to lift the default order as executor of
his fathers estate; thus, he and the estate cannot take part in the trial.

Petitioner also contends that respondent was granted leave to file an answer to the
expanded complaint, not a motion for a bill of particulars. The anti-graft court
should not have accepted the motion for a bill of particulars after he had filed a
motion for leave to file responsive pleading and three successive motions for
extension as the motion for a bill of particulars is dilatory. Petitioner insists that
respondent impliedly admitted that the complaint sufficiently averred factual
matters with definiteness to enable him to properly prepare a responsive pleading
because he was able to prepare a draft answer, as stated in his second and third
motions for extension. Petitioner adds that the factual matters in the expanded
complaint are clear and sufficient as Mrs. Marcos and Cruz had already filed their
respective answers.

Petitioner also argues that if the assailed Resolutions are enforced, the People will
suffer irreparable damage because petitioner will be forced to prematurely divulge
evidentiary matters, which is not a function of a bill of particulars. Petitioner
maintains that paragraph 12, subparagraphs a to e,[31] of the expanded complaint
illustrate the essential acts pertaining to the conspirational acts between Cruz and
former President Marcos. Petitioner argues that respondent erroneously took out of
context the phrase unlawful concert from the rest of the averments in the
complaint.

Respondent, for his part, counters that this Court had compelled petitioner in
several ill-gotten wealth cases involving the same issues and parties to comply with
the motions for bills of particulars filed by other defendants on the ground that
most, if not all, of the allegations in the similarly worded complaints for the recovery
of alleged ill-gotten wealth consisted of mere conclusions of law and were too vague
and general to enable the defendants to intelligently parry them.

Respondent adds that it is misleading for the Government to argue that the default
order against his father stands because the May 28, 1999 Resolution effectively
lifted it; otherwise, he would not have been called by the court to appear before it
and allowed to file a responsive pleading. He stresses that the May 28, 1999
Resolution remains effective for all intents and purposes because petitioner did not
file a motion for reconsideration.

Respondent likewise denies that his motion for a bill of particulars is dilatory as it is
petitioners continued refusal to submit a bill of particulars which causes the delay
and it is petitioner who is hedging, flip-flopping and delaying in its prosecution of
Civil Case No. 0006. His draft answer turned out not an intelligent one due to the
vagueness of the allegations. He claims that petitioners actions only mean one

91

thing: it has no specific information or evidence to show his fathers participation in

the acts of which petitioner complains.

In its Reply,[32] petitioner adds that the acts imputed to former President Marcos
were acts that Cruz committed in conspiracy with the late dictator, and which Cruz
could not have done without the participation of the latter. Petitioner further argues
that conspiracies need not be established by direct evidence of the acts charged
but by a number of indefinite acts, conditions and circumstances.

In a nutshell, the ultimate issue is: Did the court commit grave abuse of discretion
amounting to lack or excess of jurisdiction in granting respondents motion for a bill
of particulars as executor of former President Marcos estates considering that the
deceased defendant was then a defaulting defendant when the motion was filed?

We rule in the negative, and dismiss the instant petition for utter lack of merit.

Under the Rules of Court, a defending party may be declared in default, upon
motion and notice, for failure to file an answer within the allowable period. As a
result, the defaulting party cannot take part in the trial albeit he is entitled to notice
of subsequent proceedings.[33]

The remedies against a default order are: (1) a motion to set aside the order of
default at any time after discovery thereof and before judgment on the ground that
the defendants failure to file an answer was due to fraud, accident, mistake or
excusable neglect and that the defendant has a meritorious defense; (2) a motion
for new trial within 15 days from receipt of judgment by default, if judgment had
already been rendered before the defendant discovered the default, but before said
judgment has become final and executory; (3) an appeal within 15 days from
receipt of judgment by default; (4) a petition for relief from judgment within 60
days from notice of judgment and within 6 months from entry thereof; and (5) a
petition for certiorari in exceptional circumstances.[34]

In this case, former President Marcos was declared in default for failure to file an
answer. He died in Hawaii as an exile while this case was pending, since he and his
family fled to Hawaii in February 1986 during a people-power revolt in Metro Manila.
His representatives failed to file a motion to lift the order of default. Nevertheless,
respondent, as executor of his fathers estate, filed a motion for leave to file a
responsive pleading, three motions for extensions to file an answer, and a motion
for bill of particulars all of which were granted by the anti-graft court.

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Given the existence of the default order then, what is the legal effect of the granting
of the motions to file a responsive pleading and bill of particulars? In our view, the
effect is that the default order against the former president is deemed lifted.

Considering that a motion for extension of time to plead is not a litigated motion but
an ex parte one, the granting of which is a matter addressed to the sound discretion
of the court; that in some cases we have allowed defendants to file their answers
even after the time fixed for their presentation; that we have set aside orders of
default where defendants failure to answer on time was excusable; that the
pendency of the motion for a bill of particulars interrupts the period to file a
responsive pleading; and considering that no real injury would result to the interests
of petitioner with the granting of the motion for a bill of particulars, the three
motions for extensions of time to file an answer, and the motion with leave to file a
responsive pleading, the anti-graft court has validly clothed respondent with the
authority to represent his deceased father. The only objection to the action of said
court would be on a technicality. But on such flimsy foundation, it would be
erroneous to sacrifice the substantial rights of a litigant. Rules of procedure should
be liberally construed to promote their objective in assisting the parties obtain a
just, speedy and inexpensive determination of their case.[35]

While it is true that there was no positive act on the part of the court to lift the
default order because there was no motion nor order to that effect, the anti-graft
courts act of granting respondent the opportunity to file a responsive pleading
meant the lifting of the default order on terms the court deemed proper in the
interest of justice. It was the operative act lifting the default order and thereby
reinstating the position of the original defendant whom respondent is representing,
founded on the courts discretionary power to set aside orders of default.

It is noteworthy that a motion to lift a default order requires no hearing; it need be

under oath only and accompanied by an affidavit of merits showing a meritorious
defense.[36] And it can be filed at any time after notice thereof and before
judgment. Thus, the act of the court in entertaining the motions to file a
responsive pleading during the pre-trial stage of the proceedings effectively meant
that respondent has acquired a locus standi in this case. That he filed a motion for
a bill of particulars instead of an answer does not pose an issue because he, as
party defendant representing the estate, is allowed to do so under the Rules of
Court to be able to file an intelligent answer. It follows that petitioners filing of a
bill of particulars in this case is merely a condition precedent to the filing of an
answer.

Indeed, failure to file a motion to lift a default order is not procedurally fatal as a
defaulted party can even avail of other remedies mentioned above.

As default judgments are frowned upon, we have been advising the courts below to
be liberal in setting aside default orders to give both parties every chance to

93

present their case fairly without resort to technicality.[37] Judicial experience

shows, however, that resort to motions for bills of particulars is sometimes intended
for delay or, even if not so intended, actually result in delay since the reglementary
period for filing a responsive pleading is suspended and the subsequent
proceedings are likewise set back in the meantime. As understood under Section 1
of Rule 12, mentioned above, a motion for a bill of particulars must be filed within
the reglementary period for the filing of a responsive pleading to the pleading
sought to be clarified. This contemplates pleadings which are required by the Rules
to be answered under pain of procedural sanctions, such as default or implied
admission of the facts not responded to.[38]

But as defaulted defendants are not actually thrown out of court because the Rules
see to it that judgments against them must be in accordance with the law and
competent evidence, this Court prefers that the lifting of default orders be effected
before trial courts could receive plaintiffs evidence and render judgments. This is
so since judgments by default may result in considerable injustice to defendants,
necessitating careful and liberal examination of the grounds in motions seeking to
set them aside. The inconvenience and complications associated with rectifying
resultant errors, if defendant justifies his omission to seasonably answer, far
outweigh the gain in time and dispatch of immediately trying the case.[39] The fact
that former President Marcos was in exile when he was declared in default, and that
he later died still in exile, makes the belated filing of his answer in this case
understandably excusable.

The anti-graft court required the Marcos siblings through its January 11, 1999
Order[40] to substitute for their father without informing them that the latter was
already declared in default. They were unaware, therefore, that they had to
immediately tackle the matter of default. Respondent, who stands as the executor
of their fathers estate, could assume that everything was in order as far as his
standing in court was concerned. That his motion for leave to file a responsive
pleading was granted by the court gave him credible reason not to doubt the
validity of his legal participation in this case. Coupled with his intent to file an
answer, once his motion for a bill of particulars is sufficiently answered by
petitioner, the circumstances abovementioned warrant the affirmation of the antigraft courts actions now being assailed.

As to the propriety of the granting of the motion for a bill of particulars, we find for
respondent as the allegations against former President Marcos appear obviously
couched in general terms. They do not cite the ultimate facts to show how the
Marcoses acted in unlawful concert with Cruz in illegally amassing assets,
property and funds in amounts disproportionate to Cruzs lawful income, except that
the former President Marcos was the president at the time.

The pertinent allegations in the expanded complaint subject of the motion for a bill
of particulars read as follows:

94

11. Defendant Roman A. Cruz, Jr. served as public officer during the Marcos
administration. During his . . . incumbency as public officer, he acquired assets,
funds and other property grossly and manifestly disproportionate to his salaries,
lawful income and income from legitimately acquired property.

12. . . . Cruz, Jr., in blatant abuse of his position as Chairman and General Manager
of the Government Service Insurance System (GSIS), as President and Chairman of
the Board of Directors of the Philippine Airlines (PAL), and as Executive Officer of the
Commercial Bank of Manila, by himself and/or in unlawful concert with defendants
Ferdinand E. Marcos and Imelda R. Marcos, among others:

(a) purchased through Arconal N.V., a Netherland-Antilles Corporation, a lot and

building located at 212 Stockton St., San Francisco, California, for an amount much
more than the value of the property at the time of the sale to the gross and
manifest disadvantageous (sic) to plaintiff.

GSIS funds in the amount of $10,653,350.00 were used for the purchase when
under the right of first refusal by PAL contained in the lease agreement with Kevin
Hsu and his wife, the owners of the building, a much lower amount should have
been paid.

For the purchase of the building, defendant Cruz allowed the intervention of Sylvia
Lichauco as broker despite the fact that the services of such broker were not
necessary and even contrary to existing policies of PAL to deal directly with the
seller. The broker was paid the amount of $300,000.00 resulting to the prejudice of
GSIS and PAL.

(b) Converted and appropriated to . . . own use and benefit funds of the Commercial
Bank of Manila, of which he was Executive Officer at the time.

He caused the disbursement from the funds of the bank of among others, the
amount of P81,152.00 for personal services rendered to him by one Brenda Tuazon.

(c) Entered into an agency agreement on behalf of the Government Service

Insurance System with the Integral Factors Corporation (IFC), to solicit insurance,
and effect reinsurance on behalf of the GSIS, pursuant to which agreement, IFC
effected a great part of its reinsurance with INRE Corporation, which, was a noninsurance company registered in London[,] with defendant . . . Cruz, Jr., as one of its
directors.

95

IFC was allowed to service accounts emanating from government agencies like the
Bureau of Buildings, Philippine National Oil Corporation, National Power Corporation,
Ministry of Public Works and Highways which under the laws are required to insure
with and deal directly with the GSIS for their insurance needs. The intervention of
IFC to service these accounts caused the reduction of premium paid to GSIS as a
portion thereof was paid to IFC.

(d) Entered into an agreement with the Asiatic Integrated Corporation (AIC) whereby
the GSIS ceded, transferred, and conveyed property consisting of five (5) adjoining
parcels of land situated in Manila covered by Transfer Certificates of Title (TCT) Nos.
49853, 49854, 49855 and 49856 to AIC in exchange for AIC property known as the
Pinugay Estate located at Tanay, Rizal, covered by TCT No. 271378, under terms and
conditions grossly and manifestly disadvantageous to the government.

The appraised value of the GSIS parcels of land was P14,585,600.00 as of June 25,
1971 while the value of the Pinugay Estate was P2.00 per square meter or a total
amount of P15,219,264.00. But in the barter agreement, the Pinugay Estate was
valued at P5.50 per square meter or a total of P41,852,976.00, thus GSIS had to pay
AIC P27,287,976.00, when it was GSIS which was entitled to payment from AIC for
its failure to pay the rentals of the GSIS property then occupied by it.

(e) purchased three (4) (sic) additional Airbus 300 in an amount much more than
the market price at the time when PAL was in deep financial strain, to the gross and
manifest disadvantage of Plaintiff.

On October 29, 1979, defendant Cruz, as President and Chairman of the Board of
Directors of . . . (PAL) authorized the payment of non-refundable deposit of U.S.
$200,000.00 even before a meeting of the Board of Directors of PAL could deliberate
and approve the purchase.[41]

In his motion for a bill of particulars, respondent wanted clarification on the specific
nature, manner and extent of participation of his father in the acquisition of the
assets cited above under Cruz; particularly whether former President Marcos was a
beneficial owner of these properties; and the specific manner in which he acquired
such beneficial control.

Also, respondent wanted to know the specific nature, manner, time and extent of
support, participation and collaboration of his father in (1) Cruzs alleged blatant
abuse as GSIS president and general manager, PAL president and chairman of the
board, and executive officer of the CBM; (2) the purchase of a lot and building in
California using GSIS funds and Cruzs allowing Lichauco as broker in the sale of the
lot and building contrary to PAL policies; (3) Cruzs appropriating to himself CBM
funds; (4) Cruzs disbursement of P81,152 CBM funds for personal services
rendered to him by Tuazon; (5) Cruzs entering into an agency agreement for GSIS

96

with IFC to solicit, insure, and effect reinsurance of GSIS, as result of which IFC
effected a great part of its reinsurance with INRE Corporation, a London-registered
non-insurance company, of which Cruz was one of the directors; (6) Cruzs allowing
IFC to service the accounts emanating from government agencies which were
required under the law to insure and deal directly with the GSIS for their insurance
needs; (7) the GSIS-AIC agreement wherein GSIS ceded and conveyed to AIC five
parcels of land in Manila in exchange for AICs Pinugay Estate in Tanay, Rizal; (8)
PALs purchase of three Airbus 300 jets for a higher price than the market price; and
(9) if former President Marcos was connected in any way to IFC and INRE
Corporation. Respondent likewise asked, what is the specific amount of damages
demanded?

The 1991 Virata-Mapa Doctrine[42] prescribes a motion for a bill of particulars, not a
motion to dismiss, as the remedy for perceived ambiguity or vagueness of a
complaint for the recovery of ill-gotten wealth,[43] which was similarly worded as
the complaint in this case. That doctrine provided protective precedent in favor of
respondent when he filed his motion for a bill of particulars.

While the allegations as to the alleged specific acts of Cruz were clear, they were
vague and unclear as to the acts of the Marcos couple who were allegedly in
unlawful concert with the former. There was no factual allegation in the original
and expanded complaints on the collaboration of or on the kind of support extended
by former President Marcos to Cruz in the commission of the alleged unlawful acts
constituting the alleged plunder. All the allegations against the Marcoses, aside
from being maladroitly laid, were couched in general terms. The alleged acts,
conditions and circumstances that could show the conspiracy among the
defendants were not particularized and sufficiently set forth by petitioner.

That the late presidents co-defendants were able to file their respective answers to
the complaint does not necessarily mean that his estates executor will be able to
file an equally intelligent answer, since the answering defendants defense might be
personal to them.

In dismissing this petition, Tantuico, Jr. v. Republic[44] also provides us a cogent

jurisprudential guide. There, the allegations against former President Marcos were
also conclusions of law unsupported by factual premises. The particulars prayed for
in the motion for a bill of particulars were also not evidentiary in nature. In that
case, we ruled that the anti-graft court acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in denying an alleged cronys motion for
a bill of particulars on a complaint with similar tenor and wordings as in the case at
bar.

Likewise we have ruled in Virata v. Sandiganbayan[45] (1993) that Tantuicos

applicability to that case was ineluctable, and the propriety of the motion for a bill

97

of particulars under Section 1, Rule 12 of the Revised Rules of Court was beyond
dispute.[46]

In 1996, in the similar case of Republic v. Sandiganbayan (Second Division),[47] we

also affirmed the resolutions of the Sandiganbayan granting the motion for a bill of
particulars of Marcos alleged crony, business tycoon Lucio Tan.[48]

Phrases like in flagrant breach of public trust and of their fiduciary obligations as
public officers with grave and scandalous abuse of right and power and in brazen
violation of the Constitution and laws, unjust enrichment, embarked upon a
systematic plan to accumulate ill-gotten wealth, arrogated unto himself all powers
of government, are easy and easy to read; they have potential media quotability
and they evoke passion with literary flair, not to mention that it was populist to
flaunt those statements in the late 1980s. But they are just that, accusations by
generalization. Motherhood statements they are, although now they might be a
politically incorrect expression and an affront to mothers everywhere, although they
best describe the accusations against the Marcoses in the case at bar.

In Justice Laurels words, the administration of justice is not a matter of

guesswork.[49] The name of the game is fair play, not foul play. We cannot allow
a legal skirmish where, from the start, one of the protagonists enters the arena with
one arm tied to his back.[50] We must stress anew that the administration of
justice entails a painstaking, not haphazard, preparation of pleadings.

The facile verbosity with which the legal counsel for the government flaunted the
accusation of excesses against the Marcoses in general terms must be soonest
refurbished by a bill of particulars, so that respondent can properly prepare an
intelligent responsive pleading and so that trial in this case will proceed as
expeditiously as possible. To avoid a situation where its pleadings may be found
defective, thereby amounting to a failure to state a cause of action, petitioner for its
part must be given the opportunity to file a bill of particulars. Thus, we are hereby
allowing it to supplement its pleadings now, considering that amendments to
pleadings are favored and liberally allowed especially before trial.

Lastly, the allowance of the motion for a more definite statement rests with the
sound discretion of the court. As usual in matters of a discretionary nature, the
ruling of the trial court will not be reversed unless there has been a palpable abuse
of discretion or a clearly erroneous order.[51] This Court has been liberal in giving
the lower courts the widest latitude of discretion in setting aside default orders
justified under the right to due process principle. Plain justice demands and the law
requires no less that defendants must know what the complaint against them is all
about.[52]

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What is important is that this case against the Marcoses and their alleged crony and
dummy be decided by the anti-graft court on the merits, not merely on some
procedural faux pas. In the interest of justice, we need to dispel the impression in
the individual respondents minds that they are being railroaded out of their rights
and properties without due process of law.

WHEREFORE, finding no grave abuse of discretion on the part of the Sandiganbayan

in granting respondents Motion for Bill of Particulars, the petition is DISMISSED.
The Resolutions of the Sandiganbayan dated January 31, 2000 and March 27, 2001
in Civil Case No. 0006 are AFFIRMED. Petitioner is ordered to prepare and file a bill
of particulars containing the ultimate facts as prayed for by respondent within
twenty (20) days from notice.

SO ORDERED.

LEONARDO A. QUISUMBING
Associate Justice

Salita v. Hon. Magtolis, G.R. No. 106429, June 13, 1994 (Supra.)

Sec. 2. Action by the court

Sec. 3. Compliance with order

Sec. 4. Effect of non-compliance

Sec. 5. Stay of period to file responsive pleading

Sec. 6. Bill a part of pleading

RULE 13- FILING AND SERVICE OF PLEADINGS, JUDGMENTS

AND OTHER PAPERS

99

Sec. 1. Coverage

Sec. 2. Filing and service, defined

Garrucho v. Court of Appeals, G.R. No. 143791, January 14, 2005

SECOND DIVISION

[G.R. No. 143791. January 14, 2005]

PETER D. GARRUCHO, petitioner, vs. COURT OF APPEALS, HON. OSCAR B.

PIMENTEL (in his capacity as Presiding Judge of the Regional Trial
Court, Branch 148, Makati City), SHERIFF RENATO C. FLORA (in his
capacity as Branch Sheriff), and RAMON BINAMIRA, respondents.
DECISION
CALLEJO, SR., J.:
In a Letter dated July 18 and 26, 1990, then Secretary of the Department of
Tourism and Chairman of the Board of Directors of the Philippine Tourism Authority
(PTA) petitioner Peter D. Garrucho requested then Commissioner of Immigration and
Deportation Andrea Domingo to issue Hold Departure Orders against Ramon
Binamira and Faustino Roberto. This was in connection with the investigation being
conducted by the Department of Justice involving anomalous transactions in
government securities affecting the PTA which entailed the loss of
someP161,000,000.00. Commissioner Domingo granted the request and issued
Hold Departure Order Nos. 333 and 334 against Binamira and Roberto on the said
date. Roberto requested the lifting of the order, and Secretary Garrucho opposed
the same in a Letter dated August 22, 1990.
Roberto then filed a complaint for prohibition and damages against petitioner
Garrucho and Commissioner Domingo in the Regional Trial Court (RTC) of Makati
City. Binamira, for his part, filed a complaint-in-intervention in the case. Petitioner
Garrucho was represented by private practitioners Remollo & Associates, whose
offices were located at Suite No. 23, Legaspi Suites, 178 Salcedo Street, Legaspi
Village, Makati City.
On April 16, 1997, the trial court rendered judgment in favor of respondent
Binamira. The fallo of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff
and against the defendants, and the latter are hereby ordered to, jointly and
severally, pay the following:
1.

The amount of P100,000.00 as actual and compensatory damages;

2.

The amount of P1 million as moral damages;

3.

The amount of P500,000.00 as exemplary damages;

4.

The amount of P20,000.00 as attorneys fees;

5.

Plus cost of suit.

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Further, Hold Departure Order No. 333 having been found to be void ab initio,
unconstitutional and illegal, the preliminary injunction is hereby declared
permanent.
SO ORDERED.[1]
The petitioner and Commissioner Domingo appealed the decision to the Court of
Appeals (CA). On March 9, 1999, the CA sent a notice by registered mail to the
petitioners counsel directing the latter to file his brief as appellant. However, the
notice was returned to the court. The envelope containing the said notice was
stamped, thus: Return To Sender, Moved Out. [2] The CA resent the notice dated
March 5, 1999 to the petitioner at his office at the Department of Tourism building,
Agripino Circle, Manila. The notice was returned to the CA on May 5, 1999, again,
having been unclaimed. The CA issued a minute resolution [3] on June 23, 1999,
declaring that the service of notice on the petitioner was complete as of May 5,
1999. A copy of the said resolution was sent by registered mail to the petitioner in
the Department of Tourism.
On November 26, 1999, the appellate court issued a Resolution [4] dismissing the
appeal of the petitioner for his failure to file his brief. A copy of the resolution was
sent by registered mail to the petitioners counsel, but the said resolution was
returned to the court with a notation stamped on the envelope Return To Sender,
Moved Out.[5] The CA then had a separate copy of the notice served by registered
mail on the petitioner at his office address, but the same was returned to the CA
with the notation Unclaimed.
The appellate court issued an entry of judgment. [6] A copy of the said entry of
judgment was sent to the petitioner by registered mail at the Department of
Tourism. Thus, the appeal of Commissioner Domingo was considered submitted for
decision after filing her brief and the filing by the plaintiff-appellee of his brief.
Binamiras motion for a writ of execution against the petitioner was granted by
the trial court on June 22, 2000. The trial court issued a writ of execution on June
28, 2000. The sheriff served a copy of the said writ on the petitioner on July 12 and
17, 2000, at his office at the Benpress Building, Pasig City.
The petitioner filed a petition for certiorari under Rule 65 of the Rules of Court
against the CA, the RTC, Sheriff Flora and Binamira, for the nullification of the CA
resolutions dated June 23, 1999 and November 26, 1999, the June 22, 2000 Order of
the RTC, as well as the June 28, 2000 writ of execution issued by the latter court.
The petitioner alleged, inter alia, that the CA and RTC erred in issuing the
assailed resolutions and order because he never received copies of the assailed CA
resolutions which were sent to him at his former office at the Department of
Tourism. He averred that he had resigned as Secretary of the Department of
Tourism and Chairman of the PTA as early as January 9, 1991 [7] and was no longer
holding office thereat.[8]Since then, he had gone back to the private sector and held
office at 417 Benpress Building, Meralco Avenue corner Echague Road, Ortigas
Center, Pasig City. His counsel failed to receive his copy of the CA resolution
because he transferred his office at Suite No. 23, Legaspi Suites, 178 Salcedo
Street, Legaspi Village, Makati City, and his residence to Dumaguete City, Negros
Occidental. He further alleged that the CA and the RTC were obliged to take judicial
notice of his resignation as Tourism Secretary and the appointment of his successor,
his appointment as Executive Secretary by President Fidel E. Ramos in July 1992,
and his resignation from the said position in August/September 1992.
The petitioner argues that he was deprived of his right to due process when the
CA and the RTC failed to serve the copies of the assailed resolutions and order. He
points out that his present office was not difficult to locate, considering his stature
in business and politics in the country. He avers that there was no reason why the
copies of the assailed resolutions and order could not be sent to him at the same
office since the sheriff was able to locate his office on July 12 and 17, 2000.

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In his comment on the petition, the private respondent alleged that the
petitioner was mandated to inform his counsel of his present address after he (the
petitioner) resigned as Secretary of the Department of Tourism. It was also the duty
of the petitioners counsel to inform the trial court of his new office address. The
private respondent asserts that the petitioner must suffer the dire consequences of
his and his counsels inexcusable negligence.
The respondent further contends that while the CA and the RTC were mandated
to take judicial notice of the petitioners resignation and the appointment of his
successor, they were not mandated to take judicial notice of the petitioners office
address after he resigned from the government, or of the address of his counsel in
Dumaguete City, Negros Occidental. The respondent asserts that such failure of the
petitioner to inform the said courts of his address and that of his counsel constitutes
inexcusable neglect. Thus, if the petitioners appeal was dismissed on account of
his failure to file his brief, he has nobody but himself to blame.
The petition has no merit.
The contention of the petitioner that he was deprived of his right to due process
when the CA dismissed his appeal because of his failure to file his brief as appellant
therein has no factual and legal basis.
The records show that the counsel of the petitioner in the trial court was the law
firm of Remollo & Associates with offices at Suite No. 23, Legaspi Suites, 178
Salcedo Street, Legaspi Village, Makati City. Under Section 2, Rule 44 of the 1997
Rules of Civil Procedure, the counsel of the parties in the court of origin shall be
considered as their counsel in the CA.[9]
Section 2, Rule 13 of the Rules of Civil Procedure provides that if any party has
appeared by counsel, service upon him shall be made upon his counsel unless
served upon the party himself is ordered by the trial court. [10] Notice or service
made upon a party who is represented by counsel is a nullity. [11] Notice to the client
and not to his counsel of record is not notice in law. [12] The rule admits of exceptions,
as when the court or tribunal orders service upon a party or when the tribunal
defendant is waived.[13]
In the absence of a proper and adequate notice to the court of a change of
address, the service of the order or resolution of a court upon the parties must be
made at the last address of their counsel on record. [14] It is the duty of the party and
his counsel to device a system for the receipt of mail intended for them, just as it is
the duty of the counsel to inform the court officially of a change in his address. It is
also the responsibility of a party to inform the court of the change of his address so
that in the event the court orders that an order or resolution be served on the said
party to enable him to receive the said resolution or order. [15]
In the present case, the law firm of Remollo & Associates, the petitioners
counsel of record, moved out from their office at the Legaspi Suites to Dumaguete
City without informing the court of such fact. Based on its records, the CA believed
that the law office of the petitioners counsel was still at the Legaspi Suites and sent
copies of its resolutions to the counsel of the petitioner at the said address.
Neither did the petitioner inform the court of his home or office address after his
resignation as Secretary of the Department of Tourism where copies of the said
order or resolution could be sent. Notwithstanding his stature in the business
community, the CA cannot take judicial notice of the petitioners home address or
his office address after his departure as Secretary of the Department of Tourism or
as Executive Secretary of the President.
Indeed, the petitioner has nobody but himself to blame. It was his responsibility
to check the status of his appeal in the CA from time to time, from his counsel or
from the CA. He failed to do so. As we held in Bernardo v. Court of Appeals:[16]
Litigants, represented by counsel, should not expect that all they need to do is sit
back, relax and await the outcome of their case. They should give the necessary
assistance to their counsel for what is at stake is their interest in the case.

102

In his concurring opinion in Republic vs. Sandiganbayan, Mr. Justice Teodoro R.

Padilla emphasized the value and significance of the partys presence and diligence
in the advancement of his cause, thus:
xxx An almost lifetime of experience in litigation is the best witness to the
indispensability of partys presence (aside from his lawyer, in case he has the
assistance of counsel) in order to litigate with any reasonable opportunity of
success. xxx especially during the cross-examination of adverse partys witnesses
where the truth must be determined every counsel worth his salt must have the
assistance and presence of his client on the spot, for the client invariably knows the
facts far better than his counsel. In short, even in civil cases, the presence of party
(as distinguished from his lawyer alone) is essential to due process.
True enough, the party-litigant should not rely totally on his counsel to litigate his
case even if the latter expressly assures that the formers presence in court will no
longer be needed. No prudent party will leave the fate of his case entirely to his
lawyer. Absence in one or two hearings may be negligible but want of inquiry or
update on the status of his case for several months (four, in this case) is
inexcusable. It is the duty of a party-litigant to be in contact with his counsel from
time to time in order to be informed of the progress of his case. Petitioner simply
claims that he was busy with his gravel and sand and trading businesses which
involved frequent traveling from Manila to outlying provinces. But this was not a
justifiable excuse for him to fail to ask about the developments in his case or to ask
somebody to make the query for him. Petitioner failed to act with prudence and
diligence; hence, his plea that he was not accorded the right to due process cannot
elicit this Courts approval or even sympathy.[17]
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Phil. Radiant Products v. Metrobank, G.R. No. 163569, December 9, 2005

SECOND DIVISION
PHILIPPINE RADIANT PRODUCTS, G.R. No. 163569
INC., represented by DR. MANUEL
T. ANG,
Present:
Petitioner,
PUNO, J., Chairman,
AUSTRIA-MARTINEZ,
CALLEJO, SR.,
- versus TINGA, and
CHICO-NAZARIO, JJ.
METROPOLITAN BANK & TRUST
Promulgated:
COMPANY, INC.
Respondent.

103

December 9, 2005

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
CALLEJO, SR., J.:
Before the Court is a petition for review on certiorari of the Decision[1] of the
Court of Appeals (CA) in CA-G.R. SP No. 73432 which set aside the September 20,
2002 Order[2] of the Regional Trial Court (RTC), Tagum City, Branch 2, in Civil Case
No. 3400, dismissing the appeal of petitioner Philippine Radiant Products, Inc.

104

The factual and procedural antecedents are as follows:

On February 1, 2001, the Philippine Radiant Products, Inc. (PRPI) filed a
complaint[3] against the Aurora Textile Finishing Company (ATFC), the Philippine
Savings Bank (PSB), and the Metropolitan Bank & Trust Company, Inc. (MBTC) in the
RTC of Tagum City, for specific performance and damages with a plea for a
temporary restraining order or a writ of preliminary injunction. PRPI alleged, inter
alia, that it had been ordering from ATFC yards of medical plaster cloth backing
since 1990 and up to the present time. To pay for its purchases from ATFC, PRPI
opened a savings account and a current account with PSB and opened a Letter of
Credit at MBTC. PSB would charge all payments made by PRPI to ATFC against its
account with PSB and then remit the same to MBTC. The latter would then remit the
payment to ATFC.
On August 12, 2000, an order for 35,000 yards of medical plaster cloth
backing was placed by PRPI and accepted by ATFC. The shipment arrived at the
port of Manila. However, the agreed port of destination was the Davao City port.
When the shipment of 35,000 yards of medical plaster cloth backing finally arrived
at Davao City, PRPI discovered that the said 35,000 yards cloth backing were not
vinyl coated. PRPI immediately informed PSB and MBTC of the discrepancy. PRPI
also informed ATFC that the 35,000 yards medical plaster cloth backing they
delivered was not vinyl coated. ATFC promised PRPI that it would send to the
Philippines a technician to perform vinyl coating on the 35,000 yards of the medical
plaster cloth backing.
In the meantime, ATFC demanded payment of the shipment and was poised
to collect from PSB and MBTC. PRPI thus prayed in its complaint for injunctive relief
to enjoin PSB and MBTC from making payment to ATFC for the shipment. [4] PRPI
likewise prayed for payment of attorneys fees, but despite its repeated requests to
ATFC to make good its commitments, the same remained unanswered. [5]
PRPI prayed that:
1. That a Temporary Restraining Order and/or Writ of Preliminary
Injunction be issued prohibiting the defendants METROPOLITAN BANK
and TRUST COMPANY and PHILIPPINE SAVINGS BANK in paying the
defendant AURORA TEXTILE FINISHING COMPANY;
2. That the defendant AURORA TEXTILE FINISHING COMPANY be
ordered to send its technician in the Philippines to perform the vinyl
coating of the 35,000 yards of medical plaster cloth backing in the sum
of One Million Eight Hundred Ninety Thousand (P1,890,000.00);
3. That Aurora Textile Finishing Company be ordered to pay for
Attorneys Fees in the amount of P100,000.00;
4. That Aurora Textile Finishing Company be ordered to pay
damages and actual expenses incurred by the plaintiff to be proven
during the Trial or the sum equivalent to Two Hundred Thousand
(P200,000.00) Pesos.[6]
The case was docketed as Civil Case No. 3400.
On February 21, 2001, the RTC issued an Order [7] enjoining the PSB and MBTC
to suspend payment for the goods to ATFC until final orders of the court.
On March 13, 2001, MBTC filed its Answer [8] in which it interposed in the
special and affirmative defense that it had already paid the amount on January 31,
2001 under the Letter of Credit with ATFC named as beneficiary. MBTC interposed
compulsory counterclaim.

105

MBTC prayed that, after due proceedings, judgment be rendered as follows:

WHEREFORE, premises considered, it is most respectfully
prayed [of] the Honorable Court:
1. That the complaint be dismissed;
2. To order plaintiff to pay the sum of:
1.) P200,000.00 as attorneys fees plus P2,000.00
as appearance fees per hearing and to reimburse the cost
and expenses incurred by the defendant Metropolitan
Bank and Trust Company as proven at the trial.
Defendant Metropolitan Bank and Trust Company prays for such
other reliefs as the Honorable Court may consider just and equitable
under the premises.[9]
MBTC appended to its answer a copy of the Irrevocable Documentary Credit
No. DMO 112/00.[10]
On April 5, 2002, MBTC filed a complaint [11] against PRPI and/or Dr. Manuel T.
Ang in the RTC of Davao City for the collection of the cost of the unpaid import bills
plus charges in the amount of US$50 discrepancy fee or in the total amount of
US$48,492.60 relative to the Letter of Credit No. DMO 112/00 and attorneys fees.
The case was docketed as Civil Case No.29,066-2002.
In its complaint, MBTC prayed that, after due proceedings, judgment be
rendered in its favor, thus:
WHEREFORE, premises considered, it is respectfully prayed that
this Honorable Court:
1. Immediately order the issuance of a writ of preliminary
attachment upon the filing by the plaintiff of an attachment bond in the
sum fixed by this Honorable Court, directing the sheriff to attach the
properties of defendants sufficient to satisfy plaintiffs claim of
USD48,492.60 or its peso equivalent.
2. After due notice and hearing, judgment be rendered in favor
of the plaintiff directing the defendants to pay the following:
a. USD48,492.60 or its peso equivalent as principal
obligation plus accrued interest and penalty charges;
b. 10% for and as attorneys fees plus P1,500.00 per
court appearance;
c. Cost of the bond.
Such other reliefs just and equitable under the premises
are, likewise, prayed for.[12]
In its amended answer to MBTCs complaint, PRPI interposed the special and
affirmative defense of litis pendentia and forum shopping. Acting thereon, on April
8, 2003, the RTC of Davao City issued an Order [13] dismissing the complaint in the
said case on the ground of litis pendentia. MBTC appealed the said Order to the CA.
Meanwhile, on June 14, 2002, the RTC of Tagum City rendered judgment in
Civil Case No. 3400 in favor of PRPI and against MBTC and ATFC. The fallo of the
decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered ordering Metropolitan Bank and Trust Company and Aurora

106

Textile Finishing Company to pay plaintiff, jointly and severally, the

following:
1. One Million Eight Hundred Ninety Thousand (P1,890,000.00)
Pesos for actual damage;
2. Three Million Pesos (P3,000,000.00) for loss of income of the
plaintiff;
3. Ten Million Pesos (P10,000,000.00) for moral damages;
4. One Hundred Thousand Pesos (P100,000.00) for exemplary
damages;
5. Three Hundred Thousand Pesos (P300,000.00) for attorneys
fee.
6. and to pay the cost.
SO ORDERED.[14]
On June 26, 2002, PRPI received a copy of the decision and filed a motion for
execution pending appeal.[15] The following day, MBTC received its copy of the
decision and filed a motion for reconsideration thereof and the consequent dismissal
of the complaint.[16]
On August 22, 2002, the RTC of Tagum City issued an Order partially granting
the motion for reconsideration of MBTC. Thefallo of the decision, as amended,
reads:
WHEREFORE, in view of the foregoing, the award of actual
damages in the amount of Php 1,800,000.00 as mandated in the
decision is ordered deleted and the award of attorneys fees in the
amount of P300,000.00 is ordered reduced to P100,000.00.
SO ORDERED.[17]
On the same day, the RTC of Tagum City issued an Order [18] partially granting
the motion of PRPI for the partial execution of the decision pending appeal, thus:
WHEREFORE, in view of the foregoing, partial execution of
Judgment pending appeal is hereby granted, ordering Metropolitan
Bank and Trust Company and Aurora Textile Finishing Company to pay
plaintiff, jointly and severally, the following:
1. One Million Five Hundred Thousand (P1,500,000.00) Pesos for
loss of income;
2. Five Million (P5,000,000.00) Pesos for moral damages;
3. Fifty Thousand (P50,000.00) Pesos for exemplary damages;
4. Fifty Thousand (P50,000.00) Pesos for attorneys fees.
SO ORDERED.[19]
On August 23, 2002, the Ex-Officio Sheriff issued a Writ of Execution[20] in
compliance with the said order granting partial execution pending appeal. On
August 27, 2002, the Sheriff arrived at the Davao City office of MBTC and served
copies of the August 22, 2002 Orders and the writ of execution on William R.
Vidanes, the manager of MBTC, who endorsed the said orders to Patricia Uy, the
General Manager of the Davao City branch.[21]

107

On August 30, 2002, the counsel of MBTC received copies of the August 22,
2002 Orders of the court. He filed a Notice of Appeal of the RTC of Tagum Citys
decision and its August 22, 2002 Order partially granting MBTCs motion for
reconsideration of the decision. [22]
PRPI opposed the appeal of MBTC contending that it was filed beyond the
period therefor. PRPI alleged that MBTC received a copy of the August 22, 2002
Order denying its motion for reconsideration on August 27, 2002, and not on August
30, 2002 as alleged by MBTC. PRPI relied on the Initial Report [23] of the ExOfficio Sheriff dated September 2, 2002 on his service of the writ of execution and
said order wherein he stated, inter alia, that he talked by telephone to MBTCs
counsel, when he served on August 27, 2002 the Orders dated August 22, 2002 of
the RTC of Tagum City on Vidanes and Uy and said counsel ordered him to leave the
copies of the orders with Uy.
MBTC declared, in its Reply and Surrejoinder, that the period for appeal
should be reckoned from August 30, 2002 when its counsel received, by registered
mail, the August 22, 2002 Order of the RTC of Tagum City denying its motion for
reconsideration and not from August 27, 2002 when Vidanes and Uy were served
with copies of said orders. MBTC also alleged that its counsel objected to the
service on Vidanes and Uy of the August 22, 2002 Order denying its motion for
reconsideration considering that separate copies of said order had been served on
its counsel of record.
At the hearing on PRPIs motion for clarification, the Ex-Officio Sheriff testified
that he was told by Atty. Emmanuel Galicia, Jr., MBTCs counsel, when they talked on
the telephone on August 22, 2002, to just leave the copies of the August 22, 2002
Order with Uy.[24]
On September 20, 2002, the RTC of Tagum City issued an Order [25] denying
MBTCs notice of appeal and declaring the June 14, 2002 Decision final and
executory. The RTC of Tagum City gave credence to the testimony of the sheriff.
MBTC filed a motion to present Atty. Galicia to refute the testimony of the ExOfficio Sheriff. The motion was set for hearing on October 1, 2002.
When MBTC received the September 20, 2002 Order of the RTC of Tagum City,
it filed an urgent motion for reconsiderationex abundanti ad cautelam[26] with a
tender of the testimony of Atty. Galicia refuting the testimony of the sheriff. The
lawyertestified and belied the testimony of the sheriff. Appended to the motion
was the affidavit of Atty. Galicia in support thereof. [27]
PRPI, for its part, filed a motion for the full execution of the June 14, 2002
Decision of the RTC of Tagum City. [28] The motions of PRPI and MBTC were set for
hearing on September 27, 2002 at 8:30 a.m. and 2:00 p.m., respectively. [29]
On October 4, 2002, the RTC of Tagum City issued an Order [30] reiterating its
September 20, 2002 Order denying MBTCs notice of appeal and declaring its June
14, 2002 Decision final and executory. On October 7, 2002, the said RTC issued an
Order[31] directing the issuance of a writ of execution. On the following day, the ExOfficio Sheriff issued the writ of execution.[32]
On October 8, 2002, MBTC filed a petition for certiorari against PRPI and the
Sheriff with the CA for the nullification of the June 14, 2002 Decision and the Orders
dated August 22, 2002, September 20, 2002 and October 4, 2002 of the RTC of
Tagum City, with a prayer for injunctive relief. The case was docketed as CA-G.R. SP
No. 73241 and raffled to the Special Ninth Division of the appellate court. However,
the CA failed to act on MBTCs plea for injunctive relief.
Worse, on October 17, 2002, the CA issued a Resolution dismissing the
petition for the following reasons:

108

1) the VERIFICATION/CERTIFICATION AGAINST FORUM SHOPPING

was signed by one Patricia A. Uy, the Branch Manager of Petitioner
Metropolitan Bank & [Trust] Company, however, no Special Power of
Attorney, as alleged, is attached to the petition to establish Patricia A.
Uys authority to sign the verification and certification of non-forum
shopping in behalf of the petitioner-corporation;
2) Copies of Annexes D, E, and F are mere machine copies
of the certified RTC orders of September 20, 2002, October 4, 2002 and
October 7, 2002, respectively. (Section 3, paragraphs 3 and 4, Rule 46,
1997 Revised Rules of Court).
ACCORDINGLY, the petition is hereby DISMISSED. [33]
On the same day, MBTC filed a Notice of Withdrawal of Petition, in CA-G.R.
SP No. 73241 dated October 14, 2002, a copy of which was served on the RTC, on
the same day, alleging therein that it noticed that its petition lacked certain
technical requirements which, if uncorrected, would unduly prejudice its interests.
[34]
MBTC manifested that it was withdrawing its petition without prejudice to the
refiling thereof or to the filing of another petition.
After the withdrawal of the petition in the CA, MBTC refiled its petition
for certiorari and mandamus in the appellate court on October 18, 2002. The case
was docketed as CA-G.R. SP No. 73432 and raffled to the First Division. MBTC
prayed that:
1. Immediately upon the filing of this Petition, the Honorable
Court issue a temporary restraining order and thereafter, a writ of
preliminary injunction:
a) To restrain the public respondent, Honorable Erasto D.
Salcedo, presiding judge of Branch 2 of the Regional Trial Court, Tagum
City from further acting on the case, save only to give due course to
the Notice of Appeal timely filed by Metrobank;
b) To restrain the public respondent Sheriff Sulpicio Santillan
from executing or threatening to execute the questioned 14 June 2002
decision and 22 August 2002 orders of the respondent judge.
c) Thereafter, on the merits, the Honorable Court of Appeals
render a decision:
a)

Making the writ of preliminary injunction permanent;

b) Issuing a writ of mandamus to compel the respondent judge

to give due course to the Notice of Appeal timely filed by Metrobank,
and to transmit all the records of this case in due course, for proper
appellate proceedings; and
c) Ordering private respondent Radiant to pay Metrobank
attorneys fees of not less than TWO HUNDRED FIFTY THOUSAND Pesos
(P250,000.00) plus treble the costs of suit.
Other just and equitable relief are, likewise, prayed for. [35]
Meanwhile, MBTC received a demand from the Sheriff for the remittance
of P14,551,680.00 based on the Writ of Execution issued on October 7, 2002. [36]
MBTC filed a motion ex abundanti ad cautelam[37] dated October 21, 2002 for the
quashal of the Writ of Execution. MBTC also filed with the RTC a Manifestation and

109

Motion dated October 21, 2002, alleging therein that despite the pendency of CAG.R. SP No. 73432, the Sheriff persisted in implementing the writ of execution
issued by the RTC. MBTC prayed that:
WHEREFORE, it is respectfully prayed of this Honorable Court to
defer the implementation of the writ of execution and to issue the
appropriate order:
1. Directing Sheriff Sulpicio Santillan to cease and desist from
any and all proceedings relative to this case, specifically from
implementing the writ of execution issued by this court, and
2. Cancelling the annotation of the notice of levy and
attachment made on any of Metrobanks Torrens title, pending
resolution of the Petition for Certiorari by the Court of Appeals.
SO ORDERED.[38]
MBTC appended thereto a copy of the first page of its petition in CA-G.R. SP
No. 73241 and the demand for the payment of the aforesaid amount. [39] MBTC
received a notice of sale at public auction of its property covered by TCT No. 160610
on November 26, 2002.[40] MBTC was impelled to file with the appellate court, in CAG.R. SP No. 73432, an urgent motion for the early resolution of its plea for a
temporary restraining order.[41]
However, on October 28, 2002, the RTC of Tagum City denied MBTCs
motion ex abundanti ad cautelam. The said court ruled that MBTC was guilty of
forum shopping for filing its motion despite the pendency of its petition in the CA.
MBTC filed a motion for the reconsideration thereof, but on November 18, 2002, the
RTC issued an Order[42] denying the same.
In the meantime, MBTC received on November 5, 2002 the CA Resolution
dated October 17, 2002 in CA-G.R. SP No. 73241. MBTC filed a Motion dated
November 11, 2002 to modify the October 17, 2002 Resolution [43] so that the
dismissal of its petition be based solely on its notice of withdrawal of its petition.
However, on May 7, 2003, the CA issued a Resolution [44] denying the motion for
modification of the decision because MBTC had refiled its petition. An Entry of
Judgment[45] was made of record on June 8, 2003.
In its comment on the petition in CA-G.R. SP No. 73432, PRPI averred that the
Order dismissing MBTCs appeal is in accordance with the rules; hence, the allusion
of grave abuse of discretion is a mere product of MBTCs imagination and that the
award of damages to PRPI is within the ambit of the applicable law and established
jurisprudence.[46] PRPI also alleged that the petition should be dismissed on the
ground of res judicata. It posited that the Resolution dated October 17, 2002 of the
CA in CA-G.R. SP No. 73241 dismissing its first petition was with prejudice and
barred the refiling of the same petition with the First Division of the appellate court.
[47]

On February 4, 2004, the CA rendered a Decision [48] in CA-G.R. SP No. 73432

granting the petition and annulling the assailed orders of the RTC. The fallo of the
decision reads:
WHEREFORE, the assailed Order dated September 20, 2002
which denied Metrobanks notice of appeal is hereby ANNULLED and
SET ASIDE. Accordingly, respondent judge is hereby ordered to give
due course to the notice of appeal timely filed by petitioner Metrobank.
SO ORDERED.[49]
The CA ruled that the dismissal of the petition by the Special Ninth Division in
CA-G.R. SP No. 73241 was not a resolution of the case on the merits. Hence, MBTC
may refile its petition for certiorari and mandamus. The appellate court declared
that, in any event, the petition before it was filed within the period therefor.

110

The CA delved into the merits of the petition and held that MBTCs appeal
from the decision of the RTC was within the period therefor. The service by the ExOfficio Sheriff on MBTC, through Patricia Uy, of the August 22, 2002 Order of the RTC
denying the motion for reconsideration of its decision was not made on MBTC
absent a specific order from the RTC authorizing the service thereof on the
petitioner and not on its counsel. Thus, the appellate court concluded, the RTC
committed grave abuse of discretion amounting to excess or lack of jurisdiction in
dismissing MBTCs appeal.
PRPI filed a motion for reconsideration of the decision of the appellate court.
On April 27, 2004, the CA denied the motion. [50]
PRPI, now the petitioner, filed its petition for review on certiorari of the
decision and resolution of the CA.[51]
The petitioner avers that: (1) respondent MBTCs petition filed with the CA
was barred by the October 17, 2002 Resolution of the Special Ninth Division
dismissing its petition in CA-G.R. SP No. 73241 with prejudice; (2) respondent MBTC
is guilty of forum shopping; hence, the CA should have dismissed the petition in CAG.R. SP No. 73432; (3) the decision of the RTC, as amended, had become final and
executory and a petition for certiorari and mandamus could not be resorted to by
the respondent for its lost right to appeal.
The petitioner maintains that the dismissal of the respondents petition in CAG.R. SP No. 73241 was with prejudice and barred its petition in CA-G.R. SP No.
73432 before the CA. Moreover, the petitioner argues, the refiling by the
respondent of its petition in CA-G.R. SP No. 73432 constitutes willful and deliberate
forum shopping which warrants the outright dismissal of said petition. Additionally,
the respondent indulged in willful and deliberate forum shopping when it refiled its
complaint in Civil Case No. 29,066-2002 in the RTC of Davao City despite the
pendency of Civil Case No. 3400 in the RTC of Tagum City and when it filed a
motion ex abundanti ad cautelam in Civil Case No. 3400 for the reconsideration of
the Order of said court despite the pendency of CA-G.R. SP Nos. 73241 and 73432 in
the CA. Moreover, the respondent sought the modification of the Resolution of the
CA in CA-G.R. SP No. 73241 despite the refiling of its petition, docketed as CA-G.R.
SP No. 73432, before the First Division thereof.
The petition is denied for lack of merit.
Section 5, Rule 7 of the Rules of Civil Procedure reads:
SEC. 5. Certification against forum shopping. The plaintiff or
principal party shall certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in a sworn certification
annexed thereto and simultaneously filed therewith: (a) that he has not
theretofore commenced any action or filed any claim involving the
same issues in any court, tribunal or quasi-judicial agency and, to the
best of his knowledge, no such other action or claim is pending therein;
(b) if there is such other pending action or claim, a complete statement
of the present status thereof; and (c) if he should thereafter learn that
the same or similar action or claim has been filed or is pending, he
shall report that fact within five (5) days therefrom to the court wherein
his
aforesaid
complaint
or
initiatory
pleading
has
been
filed.
It has been held that forum shopping is the act of a party against whom an
adverse judgment has been rendered in one forum, of seeking another (and
possibly favorable) opinion in another forum (other than by appeal or the special
civil action of certiorari), or the institution of two (2) or more actions or proceedings
grounded on the same cause on the supposition that one or the other court would
make a favorable disposition.[52] Thus, it has been held that there is forum shopping

111

 (1) when, 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 (2) if, after he
has filed a petition before the Supreme Court, a party files a motion before the
Court of Appeals, since in such a case, he deliberately splits appeals in the hope
that even on one case in which a particular allowable remedy sought for is
dismissed, another case (offering a similar remedy) would still be open; or (3)
where a party attempts to obtain a preliminary injunction in another court after
finality to obtain the same from the original court. [53] Forum shopping exists where
the elements of litis pendentia are present or where a final judgment in one case
will amount to res judicata in another.[54]
The petitioner contends that the dismissal by the CA of the petition in CA-G.R.
SP No. 73241 due to the failure of respondent MBTC (the petitioner therein) to
append a Resolution of its Board of Directors authorizing Patricia Uy to file the
petition for and in its behalf and certified true copies of the orders subject thereof
was with prejudice. This contention is not correct. Section 5, Rule 7 of the Rules of
Civil Procedure plainly provides that such dismissal is without prejudice unless,
otherwise, made upon motion and after hearing. So is the dismissal of the petition
for failure of the petitioner to append thereto the requisite copies of the subject
order/orders. Indeed, the subsequent submission of the requirements of Section 3,
Rule 42 of the said Rules, at the initiative of the petitioner, is a compliance with said
Rule.[55]
Contrary to the petitioners contention, the respondent was not guilty of
forum shopping when it filed its petition in CA-G.R. SP No. 73432 on October 18,
2002, after filing its Notice of Withdrawal of its Petition in CA-G.R. SP No. 73241 on
October 17, 2002.
First. The respondent could have filed an amended petition and appended
the required duplicate original copy or certified true copy of the order. However, the
respondent was proscribed from filing an amended petition and appending thereto
the requisite resolution of its Board of Directors authorizing petitioner Uy to file the
petition under Section 5, Rule 7 of the 1997 Rules of Civil Procedure.[56] Hence, the
only recourse of the respondent was to refile its petition docketed as CA-G.R. SP No.
73432.
Second. The respondent filed its petition in CA-G.R. SP No. 73241 as early as
October 8, 2002. No action was taken by the CA on said petition and respondents
plea for injunctive relief, on account probably of the retirement of Justice Wenceslao
Agnir, Jr., a member of the Ninth Division, and the need for his replacement via a
raffle. But the respondent realized that its petition in CA-G.R. SP No. 73241 was
defective. It then filed its Notice of Withdrawal of Petition with the CA alleging that
its petition was defective and prayed to refile its petition:
1. Metrobank filed the instant Petition for Certiorari and
Mandamus with Extremely Urgent Prayer for Issuance of a Temporary
Restraining Order with the Honorable Court on 10 October 2002, by
personal delivery.
2. However, in the zeal to prepare and file the same petition
speedily due to the extreme urgency of the situation, counsel
discovered that certain technical requirements were inadvertently
omitted which, if left uncorrected, might unduly prejudice Metrobanks
substantial rights.
3. In the interest of accuracy and with utmost good faith,
Metrobank most respectfully notifies the Honorable Court of its
intention to WITHDRAW, as it hereby respectfully withdraws, the
instant Petition WITHOUT PREJUDICE to the timely filing of another
Petition, this time in strict conformity with what the Rules and
applicable jurisprudence prescribe.[57]

112

By withdrawing its petition before the CA could have acted thereon and
refiling the same, it could not be said that the respondent did so in order to obtain a
favorable decision or action. In Executive Secretary v. Gordon,[58] this Court held
that:
In the case at bar, although respondent Richard J. Gordon filed a
petition for prohibition before this Court and, after two days, filed
substantially the same petition before the Regional Trial Court of
Olongapo City, the fact remains that (1) before filing his petition in the
Olongapo court he first filed a notice of withdrawal of his petition which
this Court later granted and (2) he withdrew his petition in this Court
for the following reasons:
Due, however, to the present policy of the Court
requiring parties and their counsel to adhere strictly to
the hierarchy of courts and in order to obviate any
technical objection on this ground, petitioner has deemed
it fit to withdraw, as he hereby withdraws, the instant
petition so that it may be filed in the proper court where it
can be ventilated on its merits.
No adverse decision had been rendered by this Court against
respondent Gordon for which reason he thought it proper to institute
the second action in the trial court. The situation he found himself in is
similar to that in which a party, after filing a suit, realizes he made a
mistake because the court in which he has brought the case has no
jurisdiction. He, therefore, withdraws his action and refiles it in the
proper forum. For, indeed, the policy of this Court respecting the
hierarchy of courts and consequently prohibiting the filing of a petition
in this Court in view of the concurrent jurisdiction with the lower courts
has been consistently observed in the absence of any compelling
reason for departing from such policy. It is clear from respondents
actions and explanation that they had no intention of disregarding
court processes. They in fact complied with Rule 7, 5 of the Rules of
Civil Procedure.[59]
Although the CA resolved, on November 2, 2002, in CA-G.R. SP No. 73241, to
deny the motion of the respondent to amend its October 17, 2002 Order, the CA did
so because it denied the motion as moot since the respondent herein had refiled its
petition in said case.
In
view
of
the
foregoing,
and
considering
the
opposition/comment filed by the respondents, and it further appearing
that the petitioner has refiled the instant petition on October 18, 2002
which has been docketed in the First Division of this Court as CA-G.R.
SP No. 73432, we resolved to deny the present motion.
WHEREFORE, the instant motion to amend, modify and/or
reconsider (17 October 2002 Order) is hereby DENIED. Our dismissal
of the Resolution of October 17, 2002 stands.
SO ORDERED.[60]
Third. The respondent cannot, likewise, be faulted for filing its motion ex
abundantia cautelam for the quashal of the writ of execution issued by the RTC and
its Manifestation and Motion ex abundanti ad cautelam in the RTC in Civil Case No.
3400. It appears that, despite the filing of the petitions in CA-G.R. SP Nos. 73241
and 73432, the Sheriff went through the process of implementing the writ of

113

execution issued by the RTC, by issuing a notice of levy and had the same
annotated at the dorsal portion of the property of the respondent covered by TCT
No. 160610 and setting the sale thereof at public auction. The Sheriff ignored the
pendency of CA-G.R. SP Nos. 73241 and 73432 on account of the failure of the CA to
act on the petition for writ of temporary restraining order. The respondent had two
remedies at that time to protect its rights and interests: (1) file the motion in the
RTC in Civil Case No. 3400 ex abundanti ad cautelam for the said court to suspend,
in the meantime, the enforcement of its writ of execution or to quash the same, and
for the RTC to suspend all proceedings until after the CA shall have resolved its plea
for a temporary restraining order or writ of preliminary injunction conformably with
the ruling of this Court in Eternal Gardens Memorial Park Corporation v. Court of
Appeals,[61] and/or (2) file a motion in the CA in CA-G.R. SP No. 73432 for it to
resolve its plea for injunctive relief. The respondent sought relief in the CA and in
the RTC via a motion ex abundanti ad cautelam. On November 25, 2002, the CA
resolved in CA-G.R. SP No. 73432 to grant the plea of the respondent for a writ of
preliminary injunction upon a bond of P500,000.00, precisely because of the
precipitate enforcement by the Sheriff of the writ of execution issued by the RTC. [62]
Fourth. Relative to the filing by the respondent of a complaint against the
petitioner in the RTC of Davao City, docketed as Civil Case No. 29,066-2002, it
appears on record that the order of the said RTC dismissing the complaint on the
ground of litis pendentia has been appealed to the CA. This Court cannot preempt
the CA and resolve the issue of whether the respondent indulged in forum shopping
when it filed its complaint in said case. Suffice it to say that the only issue in CAG.R. SP No. 73432 was whether the RTC of Tagum City committed grave abuse of
discretion amounting to excess or lack of jurisdiction in dismissing respondent
MBTCs appeal and ordering the execution of the decision. The matter of whether
the respondent indulged in forum shopping in filing its complaint in Civil Case No.
29,066-2002 was not raised in or the subject matter of CA-G.R. SP No. 73432.
In nullifying the September 20 and October 4, 2002 Orders of the RTC of
Tagum City, the CA declared that service of a copy of the assailed RTC Order on Uy
on August 27, 2002 did not amount to service thereof on respondent MBTC. Service
of such order on the respondent took place on August 30, 2002 when Atty. Galicia
received his copy of the order by registered mail.
The petitioner asserts that the ruling of the CA is not correct. It posits that,
as stated by the RTC, based on the testimony of the Sheriff, Atty. Galicia, the
counsel of record of the respondent in the RTC, learned of the August 22, 2002
Order of the RTC denying the respondents motion for reconsideration of its decision
when he informed Atty. Galicia on August 27, 2002 of said order, copies of which he
was serving on William Vidanes, the Davao City Bank Manager of the respondent.
According to the Sheriff, Atty. Galicia instructed him to just leave the copy of the
order with Vidanes or Uy. The petitioner avers that, as against the testimony of the
respondent, that of the Sheriff, who is presumed to have acted regularly, should
prevail.
The contention of the petitioner is incorrect. It bears stressing that the
respondent was represented by Atty. Galicia and Atty. Silvanio Liza whose offices
were located in Davao City. The August 22, 2002 Order of the RTC denying the
respondents motion for reconsideration of its decision was sent to said counsel by
registered mail. Service of the order on the manager of respondent MBTC and not
on its counsel was not notice to the said respondent. The only exception is when
the service upon the party itself has been ordered by the court. [63]
The service of the sheriff of the August 22, 2002 Order through Vidanes
and/or Uy on August 27, 2002 was not service on the respondent. Neither could the
respondent be deemed to have been notified thereof as of August 27, 2002 for
purposes of appeal.

114

We have examined the CA Rollo and the pleadings of the parties in this case
and find no evidence that Atty. Galicia waived the service of the August 22, 2002
Order of the RTC on the respondent, through counsel, as provided in the 1997 Rules
of Civil Procedure. The initial report of the Sheriff and his testimony before the RTC
are incongruent. The initial report of the Sheriff reads:
That on August 27, 2002 at about 11:45 a.m., I served a copy of
the Writ of Execution, together with a duplicate copy of two (2) orders
dated August 22, 2002, to Metro Bank, Davao City, which was received
personally by Mr. William Vidanes, Manager, and he indorsed the said
writ to the Metrobanks General Manager, Mrs. Patricia Uy, in her office
at second floor, Metro Bank Building, Davao City, and she called up and
referred to their counsel thru telephone. I talked to the counsel of
Metro Bank thru telephone and he questioned me regarding the said
execution why I served it when in fact they have not yet received any
order from the court;
That on September 02, 2002, I went back again to Metro Bank,
Davao City, to follow up about the said writ but Mr. William R. Vidanes
informed me that Mrs. Patricia Uy, Gen. Manager of the said bank is on
leave and that he doesnt know of any development with regards to
the said writ because the Gen. Manager is the one in-charge of it. [64]
The report does not state that respondent MBTCs counsel, Atty. Galicia,
instructed the Sheriff to leave copies of the Orders with Vidanes or Uy.
When the Sheriff testified during the hearing of the motion of the petitioner
for clarification, he declared that Atty. Galicia ordered him to leave a copy of the
August 22, 2002 Order of the RTC with Uy, which he did, and that Vidanes
acknowledged having received a copy of the said order. [65]
However, when he testified, Atty. Galicia belied the testimony of the Sheriff
and declared that:
ATTY. DIOLA:
Thank you, Your Honor. Let us go to the testimony of
Sheriff Santillan on the hearing of September 18, on page 8 of
the Transcript of Stenographic Notes, I quote the question and
answer. Now, a question to Sheriff Santillan: Now, what was
your conversation with Atty. Galicia all about over the phone?
Answer: I informed Atty. Galicia that I have a writ of execution
to be served to Metro Bank. Then Question: When he
questioned you according to your report regarding the execution
why you served it when in fact they have not received any order
yet from the Court, what was your reply? Answer: I informed
him that I have a copy of the order denying the Motion for
Reconsideration. What can you say to the testimony of Sheriff
Santillan when he informed you that he had a copy of the order
denying the motion for reconsideration?
A
That is a very big lie.
Q
A

What is the truth Atty. Galicia?

The Sheriff did not mention that he has any copy of the orders
at that time he served the writ of execution. He told me that the
order was sent by registered mail to us.

You said order? Was it in the singular; in the plural, or was it

clear to you?
In the singular.

A
Q

And what order was referred to you by Sheriff Santillan, as far

as your (sic) understood it?

115

As far as I understood it, it was the order granting the Motion for
execution pending appeal because at that time he was serving
or implementing the writ of execution.

Then, furthermore, there was this question to Sheriff Santillan,

and I quote: Then, what was the reply of Atty. Galicia? A-Atty.
Galicia told Miss Patricia Uy not to receive the order but he
ordered me to leave a copy of the order in front of Miss Patricia
Uy. Number 2 What can you say to this answer, or to this
testimony of Sheriff Santillan?
Again, that is not true.

A
Q
A

What is the truth?

It appears to me that the Sheriff made me a liar before this
Honorable Court. The Sheriff did not mention any order at that
time that we had a conversation over the phone. He merely
informed me that he has with him the writ of execution and he is
mandated by the court to implement it and so I told him that it is
still premature because we have not yet received any copy of
any order.

ATTY. DIOLA:
Q
And what was Sheriff Santillans reply to you?
A
He replied that I am here to implement, as ordered by the court
and so I requested that the phone be given back to Miss Uy and I
told Miss Uy that if the Sheriff will insist, just let him leave a
copy but do not acknowledge official receipt of that copy. I did
not tell the Sheriff to leave any order.
Q
A

You are referring to the writ of execution issued by the court?

The order or any order, the writ of execution because according
to him, he has a copy of the writ at that time. If he would insist
in serving the writ, then I advised Miss Patricia Uy to just let him
leave but do not receive any copy because we have not yet
received a copy of any order granting our motion for execution
pending appeal.

At that point in that discussion that you had with Sheriff

Santillan, did he say that the order had been sent to you by
registered mail?
When I told him why are you serving the writ of execution when
in fact we have not yet received a copy of any order granting the
motion for execution, and he replied that the order had been
sent to us by mail.

Q
A

Q
A
Q
A

Now, do you confirm that the order or orders of the court were
actually sent to you by mail, is that a correct information?
In the proceedings of this case, all the orders from this court
regarding this case or relative to this case, we have received it
by mail.
With respect to the August 22, 2002 orders when [did] you
actually receive them?
Our office actually received copies of the two (2) August 22
orders and August 30, 2002 that was Friday.
And do you have any evidence to show that said orders were
delivered to you or to your office on August 30, 2002?
Yes, we have secured a certification from the Postmaster.

ATTY. DIOLA:

116

Q
A

If I will show to you a certification, will you be able to identify it?

Yes.
And aside from that, I can clearly recall that it was on August
30, 2002 because at that time, when I arrived from the court in
Davao City to our office, I was informed by Atty. Liza that the two
(2) August 22 orders were already received by our office and I
went near him and he was dictating already a notice of appeal to
our Secretary and at that time I was in a hurry. That was why I
can exactly recall it was August 30 because I was also in a hurry
because I had also a hearing in Lupon in the afternoon at 1:30,
so I told Atty. Liza to take care of the notice of appeal.

Im showing to you a certification dated September 26, 2002

issued by Aquilina J. Niepes, Postmaster IV of the Philippine
Postal Corporation, Region XI, is this the certification that you
are referring to?
Yes.[66]

We are inclined to believe the testimony of Atty. Emmanuel Galicia. The

testimony of counsel is congruent with the initial report of the Sheriff that he (Atty.
Galicia) questioned the service of the orders on the bank manager of the
respondent, and that neither Uy nor Vidanes acknowledged receipt of copies of the
orders of the RTC. (Vidanes acknowledged receipt of only a true copy of the writ of
execution.)
It was not part of the duties of the Sheriff to serve copies of the assailed
Order of the RTC on the counsel of the respondent unless directed by the said
court. Such duty devolved on its process server. The Sheriff had a copy of the
assailed order because it was forwarded to him by the Branch Clerk of the RTC for
the purpose of the implementation of the writ of execution. [67]
We do not believe that a practicing lawyer will simply allow the Sheriff to just
leave copies of the orders of the court especially an order on his motion for
reconsideration on the bank manager and waive his right to be served with copies
thereof as required by the 1997 Rules of Civil Procedure. The least that a lawyer
would do is to order the Sheriff to deliver the order to his office and for the sheriff to
serve the writ of execution on the bank manager. Atty. Galicia knew that he filed a
motion for reconsideration only on July 12, 2002 which was the fifteenth day from
his receipt of the assailed decision on June 27, 2002.
Knowledge by Atty. Galicia of the existence of the assailed Order on August
27, 2002 during his telephone conversation with the Sheriff does not amount to
service thereof on the respondent as contemplated in Section 13, Rule 13 of the
1997 Rules of Civil Procedure. Service on the respondent of the assailed order on
Atty. Galicia took place only on August 30, 2002 when he, in fact, received the said
order through registered mail.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of
merit.
SO ORDERED.
ROMEO J. CALLEJO, SR.
Associate Justice

Grand Placement v. Court of Appeals, G.R. No. 142358, January 31, 2006
Republic of the Philippines
Supreme Court

117

Manila
FIRST DIVISION
GRAND PLACEMENT and
GENERAL SERVICES
CORPORATION,
Petitioner,

G.R. NO. 142358

Present:
PANGANIBAN, C.J.
(Chairperson)
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ.

- versus -

COURT OF APPEALS,
NATIONAL LABOR RELATIONS
COMMISSION, and MARY ANN
Promulgated:
PARAGAS,
Respondents.
January 31, 2006
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of
Court assailing the Decision [1] of the Court of Appeals (CA) dated September 14,
1999 in CA-G.R. SP No. 51965, which affirmed the Decision dated November 25,
1997 and Resolution dated February 19, 1998 of the National Labor Relations
Commission (NLRC) in NLRC CA No. 012651-97; and the CA Resolution dated
January 7, 2000, which denied petitioners motion for reconsideration.
The factual background of the case is as follows:
On February 26, 1996, Mary Ann Paragas (respondent) filed a complaint for
breach of contract, non-payment of monetary benefits and damages against Philips
Electronics of Taiwan Ltd. (Philips) and its accredited agent, J.S. Contractor, Inc.,
(JSCI) before the NLRC, National Capital Region, Quezon City, docketed as NLRC NCR
OCW Case No. 00-02-1363-96.[2] She alleged that: on December 14, 1994, she was
deployed by JSCI to work as a factory operator for Philips for a period of one year
with a monthly salary of NT$13,350.00, exclusive of allowances; she worked at the
Philips factory in Chupei City until February 13, 1995; from February 14, 1995 to
December 13, 1995, she was assigned to the Philips factory in Chungli City; during
the 10 months she worked in Chungli City, she did not receive an additional daily
night shift allowance of NT$215.00 and full attendance bonus of NT$900.00 per
month, benefits which she enjoyed while in Chupei City; she paid an excessive
placement fee of P52,000.00; she returned to the Philippines on December 23,
1995. Respondent prayed that she be paid P207,300.00 for night shift differential,
excess placement fee, annual bonus, and full attendance bonus; NT$78,600.00 for
salary differential; moral and exemplary damages.[3]
During the pendency of the case, the accreditation of JSCI was transferred to
Grand Placement and General Services Corporation (petitioner). Consequently,
petitioner was impleaded as additional party respondent in the NLRC case.

118

JSCI denied liability for herein respondents monetary claims in view of the
transfer of accreditation to petitioner. [4] To refute the charge of excessive placement
fee, JSCI presented Official Receipt No. 5890 dated October 28, 1994 in the amount
ofP18,350.00.[5]
For its part, petitioner averred that it cannot be held liable as transferee
agent because it had no privity of contract with respondent. Nonetheless, it argued
that respondent is not entitled to her claim of salary differential, night shift
differential and full attendance bonus as she was duly paid her salary and other
emoluments under her employment contract. It further alleged that respondents
claims were laid to rest in the Decision dated December 9, 1996 in NLRC NCR OCW
Case No. 00-02-1362-96, which is a similar case for unpaid monetary benefits filed
by Lilibeth Lazaga, respondents co-worker, wherein the claim of Lazaga is
dismissed by the Labor Arbiter, affirmed by the NLRC and the petition
for certiorari dismissed by this Court in G.R. No. 130953.[6]
On February 20, 1997, Labor Arbiter Potenciano S. Caizares, Jr. rendered a
decision in favor of respondent, the dispositive portion of which reads as follows:
WHEREFORE, the respondents are hereby ordered to pay the
complainant the sum of P207,300.00 representing night shift
differential, excess of placement fee, annual bonus, and full
attendance bonus, plus her salary differential of NT$78,600.00 as
computed by her, and the respondents failed to refute by clear and
convincing evidence.[7]
The Labor Arbiter held that: JSCI failed to refute respondents monetary
claims; there was no legal basis to JSCIs allegation that petitioner, as transferee
agent, is answerable as the breach of contract happened when JSCI was Philips
agent; on the issue of transfer of accreditation, Section 6, Rule I, Book III of the
Rules and Regulations governing overseas employment issued by the Secretary of
Labor and Employment on May 3, 1991 states that [t]he accreditation of a principal
or a project may be transferred to another agency, provided, that transfer shall not
involve any diminution of wages and benefits of workers; respondent instituted her
complaint precisely on her claims of diminution of wages and benefits and the
breach of contractual obligations.[8]
JSCI appealed to the NLRC invoking anew that it is not liable in view of the
transfer of its accreditation. It likewise repeated its argument that respondent paid
only the amount of P18,350.00 as placement fee.
On November 25, 1997, the NLRC modified the decision of the Labor Arbiter
by dismissing the case against JSCI and holding petitioner solely liable for
respondents claims.[9] It sustained JSCIs view that petitioner should shoulder the
liability as transferee agent in accordance with the POEA Rules. The NLRC deleted
the award of excess placement fee after considering that Official Receipt No. 5890
dated October 28, 1994 showed that respondent paid the amount of
only P18,350.00.[10]
Petitioner filed a motion for reconsideration [11] but it was dismissed in the
NLRC Resolution dated February 19, 1998.[12]
On May 4, 1998, petitioner filed a petition for certiorari before us, docketed
as G.R. No. 133361.[13] On June 22, 1998, the Court granted the temporary
restraining order prayed for in the petition and required the NLRC and respondent to
comment thereon.[14]
On January 25 1999, after the parties submitted their respective responsive
pleadings, the Court referred the petition to the CA, [15] in accordance with St.
Martin Funeral Homes v. National Labor Relations Commission. [16]

119

On September 14, 1999, the CA issued the herein assailed Decision affirming
the decision of the NLRC and lifting the TRO issued by this Court. [17] The CA held
that petitioner is liable under Section 6, Rule I, Book III of the POEA Rules and
Regulations, to wit:
Section 6. Transfer of Accreditation. The accreditation of a
principal or a project may be transferred to another agency provided
that transfer shall not involve diminution of wages and benefits of
workers.
The transferee agency in these instances shall comply with the
requirements for accreditation and shall assume full and complete
responsibility for all contractual obligations of the principals to its
workers originally recruited and processed by the former agency. Prior
to the transfer of accreditation, the Administration shall notify the
previous agency and principal of such application.
It sustained the NLRCs view that the time of the breach of contract in a case of a
valid accreditation is of no moment since the rules did not provide for a qualification
and petitioners Affidavit of Assumption of Responsibility dated July 31, 1996 stated
that it is willing to assume any responsibility that may arise or may have arisen with
respect to workers recruited by JSCI. It added that while the Supreme Court ruled
in ABD
Overseas
Manpower
Corporation
v.
National
Labor
Relations
Commission[18] that the rule on transfer of accreditation should not be given a strict
interpretation when the same interpretation would result to grave injustice, said
case is inapplicable here since the facts showed that petitioner actively participated
in the hearing of the present case and as such, it was given the opportunity to deny
its liability and present its defense.
Petitioner filed a motion for reconsideration [19] and a supplement
thereto[20] but the CA denied the motion in a Resolution dated January 7, 2000.[21]
Hence, the present petition for review on certiorari on the sole ground, to wit:
THE COURT OF APPEALS HAS DECIDED A QUESTION IN A WAY
NOT IN ACCORD WITH THE LAW AND APPLICABLE DECISIONS OF THE
SUPREME COURT.[22]
Petitioner offers five arguments in support thereof:
First, it contends that the provisions of the POEA Rules and Regulations on
transfer of accreditation is inapplicable because of the express provision of Section
10 of Republic Act No. 8042, the Migrant Workers and Overseas Filipinos Act of
1995, that the liability of the principal and the recruitment agency is joint and
several and continues during the entire duration of the employment contract and
shall not be affected by any substitution, amendment or modification made locally
or in a foreign country of the said contract.
Second, it alleges that the CA misapplied ABD Overseas Manpower
Corporation v. National Labor Relations Commission [23] to the effect that Section 6,
Rule I, Book III of the POEA Rules should not be used as a shield against liability by a
recruitment agency.
Third, it argues that the conclusions of the Labor Arbiter and NLRC, as
affirmed by the CA, were not supported by substantial evidence. It claims that the
Solicitor General, in his Comment before the CA, even noted that the defenses
presented by the petitioner were not touched in the decisions of the Labor Arbiter
and the NLRC and suggested that there is a need to remand the case back to the
Labor Arbiter for further proceedings on the factual issue of whether respondent is
entitled to her monetary claims.

120

Fourth, it submits that the CA misapplied the rule on caveat emptor; that the
rule is inapplicable to labor employment contracts which are imbued with public
interest and subservient to the police power of the State.
Fifth, it maintains that the CA disregarded the doctrine of stare decisis in the
light of the Courts ruling on January 14, 1998 in G.R. No. 130953 entitled Lilibeth
Lazaga v. National Labor Relations Commission [24] where the Court sustained the
NLRCs dismissal for lack of merit of an identical complaint for unpaid monetary
claims of respondents co-worker in Philips.
In her Comment,[25] respondent alleges that the instant petition merits
outright dismissal for being filed out of time since petitioner admitted that its
counsel on record, Atty. Ricardo C. Orias, Jr., received copy of the CA Resolution
dated January 7, 2000on January 25, 2000 and the petition was filed only on May 5,
2000 or 101 days late. Respondent submits that the argument that the filing of the
petition was delayed because the notice of withdrawal of Atty. Orias, Jr. was not filed
on time with the CA by the petitioner as it is not adept to legal intricacies is but a
tactical ploy to delay the case and avoid payment of its monetary liability. At any
rate, respondent insists that the arguments raised in the petition have already been
raised and squarely resolved by the NLRC and the CA.
In its Reply,[26] petitioner points out that: it received a copy of the CA
Resolution dated January 7, 2000 only on March 23, 2000; within fifteen days
thereafter it filed before this Court a motion for a thirty-day extension of time or up
to May 7, 2000 to file a petition for review on certiorari which was granted by the
Court; the petition was filed on May 6, 2000, [27] within the extended period; the
failure of Atty. Orias, Jr., who had already withdrawn from the case, to duly inform it
that the motion for reconsideration was denied by the CA upon receipt of the CA
Resolution dated January 7, 2000 was not its fault and should not be taken against
it. It submits that it should be deemed to have notice of the denial of the motion for
reconsideration only as of the date of its actual receipt, i.e., March 23, 2000. It
insists that it should not be made to bear the adverse consequences of Atty. Orias,
Jr.s negligence.
The Court finds for the petitioner.
To begin with, the Court is fully aware that procedural rules are not to be
belittled or simply disregarded for these prescribed procedures insure an orderly
and speedy administration of justice. However, it is equally true that litigation is not
merely a game of technicalities. The law and jurisprudence grant to courts the
prerogative to relax compliance with procedural rules of even the most mandatory
character, mindful of the duty to reconcile both the need to put an end to litigation
speedily and the parties right to an opportunity to be heard. [28]
The Court has often stressed that rules of procedure are merely tools
designed to facilitate the attainment of justice. They were conceived and
promulgated to effectively aid the court in the dispensation of justice. Courts are
not slaves to or robots of technical rules, shorn of judicial discretion. In rendering
justice, courts have always been, as they ought to be, conscientiously guided by the
norm that on the balance, technicalities take a backseat against substantive rights,
and not the other way around. Thus, if the application of the Rules would tend to
frustrate rather than promote justice, it is always within our power to suspend the
rules or except a particular case from its operation. [29]
In numerous cases, the Court has allowed liberal construction of
the Rules of Court with respect to the rules on the manner and periods for
perfecting appeals, when to do so would serve the demands of substantial justice
and in the exercise of equity jurisdiction of the Supreme Court. [30] Indeed, laws and
rules should be interpreted and applied not in a vacuum or in isolated abstraction
but in light of surrounding circumstances and attendant facts in order to afford
justice to all.[31] Thus, where a decision may be made to rest on informed judgment

121

rather than rigid rules, the equities of the case must be accorded their due weight
because labor determinations should not only be secundum rationem but
also secundum caritatem.[32]
In this particular case, the suspension of the Rules is warranted since the
procedural infirmity was not entirely attributable to the fault or negligence of
petitioner. Petitioner and its counsel, Atty. Orias, Jr., agreed to terminate the
services of the latter on January 25, 2000.[33] Atty. Orias, Jr. received the CA
Resolution on January 28, 2000.[34] The Withdrawal of Appearance which Atty.
Orias, Jr. gave to petitioner was sent by the latter thru registered mail only on March
24, 2000 and received by the CA on March 27, 2000.[35]
Considering that only three days have elapsed since the termination of his
services, Atty. Orias, Jr. should have promptly relayed to petitioner that he received
the Resolution dated January 7, 2000 denying petitioners motion for
reconsideration. Had he done so, he would have known that his Withdrawal of
Appearance has not been sent yet by petitioner. It is the duty of a lawyer to pay
heed to the urgency and importance of registered letter sent by the court. [36] Before
the date of receipt on March 27, 2000 by the CA of the Withdrawal of Appearance,
Atty. Orias, Jr. remained as petitioners counsel of record.
Ordinarily, until his dismissal or withdrawal is made of record in court, any
judicial notice sent to a counsel of record is binding upon his client even though as
between them the professional relationship may have been terminated.
[37]
However, under the peculiar circumstances of this case, Atty. Orias, Jr. was
negligent in not adequately protecting petitioners interest, which necessarily calls
for a liberal construction of the Rules. Verily, the negligence of Atty. Orias, Jr. cannot
be deemed as negligence of petitioner itself in the present case. A notice to a
lawyer who appears to have been unconscionably irresponsible cannot be
considered as notice to his client. [38] Thus, petitioner is deemed to have filed its
petition for review on certiorari within the reglementary period as alleged in its
Reply.
The general rule is that findings of fact of the NLRC, as affirmed by the CA,
are conclusive upon the Supreme Court when supported by substantial evidence
that is manifest in the decision and on the records. [39] However, this Court has
recognized several exceptions to this rule, to wit: (1) when the findings are
grounded entirely on speculation, surmises, or conjectures; (2) when the inference
made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse
of discretion; (4) when the judgment is based on a misapprehension of
facts; (5) when the findings of facts are conflicting; (6) when in making its
findings, the Court of Appeals went beyond the issues of the case, or its findings are
contrary to the admissions of both the appellant and the appellee; (7) when the
findings are contrary to the trial court; (8) when the findings are conclusions
without citation of specific evidence on which they are based; (9) when the facts
set forth in the petition as well as in the petitioners main and reply briefs are not
disputed by the respondent; (10) when the findings of fact are premised on the
supposed absence of evidence and contradicted by the evidence on record; and
(11) when the Court of Appeals manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly considered, would justify a different
conclusion.[40] In the present case, the Court is constrained to review the NLRCs
findings of fact, which the CA chose not to pass upon, as there is ample evidence on
record to show that certain facts were overlooked which would clearly affect the
disposition of the case.
Foremost to consider and point out is that there is no factual basis for the
monetary award in respondents favor. Significantly, the Labor Arbiter merely
accepted per se private respondents computation on her monetary claims in view
of JSCIs failure to refute her allegations. He did not assess and weigh or even touch
upon herein petitioners arguments and evidence against respondents
claims. Clearly, the Labor Arbiter should not have precipitately granted private

122

respondents claims because petitioner had adduced evidence to refute her

allegations. Since the Labor Arbiters decision did not touch upon or rule on
petitioners arguments and evidence against respondents claims, the NLRC and the
CA had no basis for affirming his findings.
Petitioner submits that the NLRC already resolved the same issues in this
case in its Decision dated June 25, 1997 in NLRC OCW CA 012269-97,
entitled, Lilibeth Lazaga v. Grand Placement & General Services Corp., et
al.[41] and should not be relitigated under the principle of stare decisis.
Stare decisis et non quieta movere. Stand by the decision and disturb not
what is settled. Stare decisis simply means that for the sake of certainty, a
conclusion reached in one case should be applied to those that follow if the facts are
substantially the same, even though the parties may be different. It proceeds from
the first principle of justice that, absent any powerful countervailing considerations,
like cases ought to be decided alike. [42] Thus, where the same questions relating to
the same event have been put forward by parties similarly situated as in a previous
case litigated and decided by a competent court, the rule of stare decisis is a bar to
any attempt to relitigate the same issue.[43]
In the Lazaga case, Lazaga was contracted to work as factory worker for
Philips in Chupei City, Taiwan for one year, from July 26, 1994 to July 26, 1995 with a
stipulated salary of NT$13,350.00. On April 27, 1995, she was transferred to the
Philips factory in Chungli City. Upon the expiration of her contract, she extended
the same until she was voluntarily repatriated on February 15, 1996. Thereafter,
she filed her complaint for non-payment of salary differential, night shift differential,
full attendance bonus and payment of excessive placement fee against petitioner,
Philips and Labor International Corp., before the NLRC, National Capital
Region, Quezon City.
In her complaint, Lazaga alleged that: she is entitled to salary differential as
the salary of NT$13,350.00 in the OFW Info Sheet refers to the basic salary,
exclusive of other benefits such as shift allowance, factory incentives, full
attendance bonus, monthly dormitory bonus and others; she is entitled to night shift
allowance of NT$215.00 and full attendance bonus of NT$900.00 per month,
benefits she enjoyed in Chupei City; she paid an excessive placement fee
of P30,000.00.
On December 9, 1996, Labor Arbiter Ariel Cadiente Santos, dismissed
Lazagas complaint for lack of merit. Said the Labor Arbiter in that case:
Complainant therefore cannot capitalize on the entry on the
OCW Info Sheet indicating NT$13,350.00 as the basic salary. This is in
light of the clear terms of the Employment Contract she duly executed
with respondents. x x x Moreover, complainant herself admits that in
addition to NT$13,350.00, she also enjoyed other emoluments in the
form of bonuses and differential (p; 3, Amended Complaint). Hence,
the claim for salary differential is patently without basis.
The claim for night shift differential is resolved in respondents
favor. x x x The records of this case disclose that the giving of night
differential to the workers at respondents Philips was the subject of a
meeting/negotiation on December 21, 1996 and was agreed upon to
take
effect
three
(3)
months
thereafter,
i.e.,
on
April
1996. Complainant however, by her own volition, had already caused
herself to be repatriated before the effectivity of the giving of night
shift
differential. She
therefore
cannot
claim
entitlement
thereto. x x x In the absence of proof that the benefit was agreed upon
to have a retroactive effect, complainants claim for night differential
cannot be granted.

123

The claim for full attendance bonus is likewise denied for lack of
basis. The records indicate that complainant was duly paid the same,
as shown by the Employee Payment/Deduct Detail Analysis Report
(Annex 1, Answer to Amended Complaint). Complainants allegation
cannot prevail over the documentary evidence on record which
establish the fact of payment of full attendance bonus. x x x
xxx
x x x [C]omplainants claim for refund of alleged placement fee
cannot be sustained against respondent Grand. There is in fact no
proof on record that she ever paid respondent Grand the alleged
excessive placement fee. xxx[44]
On appeal, the NLRC in its Decision dated June 25, 1997, sustained the Labor
Arbiters findings and conclusions.[45] When the NLRC Decision dated June 25,
1997 was elevated to this Court via a petition for certiorari, the First Division, in a
minute resolution dated January 14, 1998[46] dismissed the petition for failure to
show that the NLRC committed grave abuse of discretion in rendering the
questioned judgment. The resolution became final and executory on February 16,
1998.
The Lazaga case is not stare decisis to the present case since the factual
circumstances surrounding each case is different. The contracts of employment of
Lazaga and respondent spanned different periods. Lazagas contract was from July
26, 1994 to July 26, 1995 and she opted to extend her employment until her
repatriation on February 15, 1996, while herein respondent Paragas was employed
from December 14, 1994 to December 13, 1995. Furthermore, the contract
stipulations in their respective contracts have not been shown to be the
same. Lazagas contract of employment is not part of the evidence on record for a
detailed comparison with respondents contract. Besides, evidence to establish
their respective claims for salary differential, night shift differential, full attendance
bonus and excessive placement fee are different.
Verily, the resolution of the interpretation of the respondents contract and
her entitlement to salary differential, night shift differential, full attendance bonus
and excessive placement fee requires conscientious evaluation and assessment of
the evidence adduced by the parties, which is best undertaken by the Labor Arbiter.
This Court is not the proper venue to consider factual issues nor is it its function to
analyze or weigh the probative value of the evidence presented. Needless to stress,
the Supreme Court is not a trier of facts. [47] Ordinarily, the case should be
remanded to the Labor Arbiter for proper evaluation of the evidence adduced by the
parties. However, considering that the records of the NLRC are before the Court,
the Court deems it more appropriate and practical to resolve the present
controversy in order to avoid further delay.[48]
Anent the interpretation of the contract of employment regarding the amount
of NT$13,350.00, the Court finds that the OCW Info Sheet [49] of respondent
indicating NT$13,350.00 as basic salary cannot be the basis for her claim of
salary differential since Article IV of her employment contract specifically provides
that the wage for a full month of working shall be NT$13,350.00 only with free food
and accommodation.[50] Moreover, the official interpretation of the Philippine Labor
Representative to Taiwan, Guerrero N. Cirilo, that the stipulated salary is the
totality of the amount given to an employee as his compensation for work done on
a monthly basis[51] should stand, in the absence of evidence that said interpretation
is patently erroneous.
As to the issue on night shift differential, evidence for the petitioner has
shown that the employees agreement with Philips to grant night shift allowance
became effective only after February 1996.[52] In the absence of express provision in

124

the agreement, the grant of night shift allowance cannot be interpreted to apply
retroactively. In this case, since the grant of night shift allowance became effective
three months after respondents repatriation to the Philippines on December 23,
1995, she is clearly not entitled to night shift differential.
With regard to the question of respondents entitlement to salary differential,
annual bonus and full attendance bonus, a thorough review of the evidence
adduced by the petitioner, comprising of the Employee Payment/Deduct Detail
Analysis Report[53]and bank remittance sheets[54] show that respondent has been
duly paid her salary, annual bonus and full attendance bonus. The documentary
evidence confirms that private respondents salary and other benefits have been
religiously remitted to her bank account. Against petitioners documentary
evidence, respondent offered none of her own to fully substantiate her
allegations. Necessarily therefore, her case must fail.
As to respondents claim for excessive placement fee, not only did
respondent fail to substantiate her claim that she paid the amount of P52,000.00,
but JSCI Official Receipt No. 5890 dated October 28, 1994 is ample proof that
respondent only paid the amount of P18,350.00.[55] Consequently, the Labor
Arbiters decision to refund the excess placement fee is barren of factual basis. On
this score, the NLRC, as affirmed by the CA, aptly deleted the refund of excess
placement fee.
Having ruled that the respondent is not entitled to her monetary claims in the
first place, the Court sees no more need to address the other arguments of
petitioner.
WHEREFORE, the instant petition is GRANTED. The assailed Decision and
Resolution of the Court of Appeals dated September 14, 1999 and January 7, 2000,
respectively, in CA-G.R. SP No. 51965, are REVERSED and SET ASIDE insofar as it
affirms the NLRCs award in favor of respondent Mary Ann Paragas for salary
differential, night shift differential, annual bonus and full attendance bonus. The
complaint for unpaid monetary benefits is DISMISSED.
Atty. Ricardo C. Orias, Jr. is admonished to be more conscientious of his duties
as counsel for a party.
SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

Salting v. Velez, G.R. No. 181930, January 10, 2011

Republic of the Philippines

Supreme Court
Manila
SECOND DIVISION

125

MILAGROS SALTING,
Petitioner,

G.R. No. 181930

Present:
CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.

- versus -

JOHN VELEZ and CLARISSA R. VELEZ,

Respondents.

Promulgated:
January 10, 2011

x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court,
seeking to annul and set aside the Court of Appeals (CA) Decision [1] dated
November 29, 2007 and Resolution [2] dated February 27, 2008 in CA-G.R. SP No.
97618.

The factual and procedural antecedents leading to the instant petition are as
follows:
On October 7, 2003, respondents John Velez and Clarissa Velez filed a
complaint[3] for ejectment against petitioner Milagros Salting involving a property
covered by Transfer Certificate of Title (TCT) No. 38079. The case was docketed as
Civil Case No. 2524. On March 28, 2006, respondents obtained a favorable
decision[4] when the Metropolitan Trial Court (MeTC), Branch LXXIV, of Taguig City,
Metro Manila, ordered petitioner to vacate the subject parcel of land and to pay
attorneys fees and costs of suit. The decision became final and executory, after
which respondents filed a motion for execution which was opposed by petitioner.
Thereafter, petitioner instituted an action before the Regional Trial Court
(RTC), Branch 153, for Annulment of Sale of the Property covered by TCT No.
38079, with prayer for the issuance of a Temporary Restraining Order (TRO) and/or
Writ of Preliminary Injunction against respondents, Hon. Ma. Paz Yson, Deputy
Sheriff Ernesto G. Raymundo, Jr., Teresita Diokno-Villamena, and Heirs of Daniel B.
Villamena (Heirs of Villamena).[5] The case was docketed as Civil Case No. 70859-TG.
Petitioner claimed that she purchased the subject parcel of land from Villamena as
evidenced by a notarized document known as Sale of Real Estate. She further
explained that respondents were able to obtain title to the subject property through
the fraudulent acts of the heirs of Villamena. Finally, she averred that the decision in
Civil Case No. 2524 had not attained finality as she was not properly informed of the
MeTC decision. Petitioner thus prayed that a TRO be issued, restraining respondents
and all persons acting for and in their behalf from executing the MeTC decision
dated March 28, 2006. She further sought the declaration of nullity of the sale by
the heirs of Villamena to respondents involving the subject parcel of land, and,
consequently, the cancellation of the title to the property in the name of
respondents.

126

Finding that petitioner would suffer grave and irreparable damage if

respondents would not be enjoined from executing the March 28, 2006 MeTC
decision while respondents would not suffer any prejudice, the RTC, in an Order
dated October 26, 2006, granted the writ of preliminary injunction applied for.
[6]
Aggrieved, respondents filed a special civil action for certiorari under Rule 65 of
the Rules of Court before the CA, raising the sole issue of whether or not the RTC
committed grave abuse of discretion amounting to lack or excess of jurisdiction in
issuing the writ of preliminary injunction against the execution of a judgment for
ejectment.
In a Decision[7] dated November 29, 2007, the CA resolved the issue in the
affirmative. The CA noted that the principal action in Civil Case No. 70859-TG is the
annulment of the deed of sale executed between respondents and the heirs of
Villamena, while the subject of the ancillary remedy of preliminary injunction is the
execution of the final judgment in a separate proceeding for ejectment in Civil Case
No. 2524. The appellate court concluded that petitioner had no clear and
unmistakable right to possession over the subject parcel of land in view of the
March 28, 2006 MeTC decision. Hence, contrary to the conclusion of the RTC, the CA
opined that petitioner was not entitled to the writ of preliminary injunction. The CA
thus set aside the October 26, 2006 Order of the RTC.
Petitioner now comes before this Court in this petition
on certiorari under Rule 45 of the Rules of Court, claiming that:

for

review

In rendering the assailed Decision and Resolution, the Court of

Appeals has decided in a way probably not in accord with law or with
the applicable decisions of the Supreme Court. (Section 6 (a), Rule 45,
1997 Rule[s] of Civil Procedure). The Court of Appeals disregarded the
rule that service of decision to a deceased lawyer is invalid and that
the party must be duly served by the final judgment in order that the
final judgment will become final and executory. The Court of Appeals,
likewise, disregarded the existence of a clear and existing right of the
petitioner which should be protected by an injunctive relief and the
rule that the pendency of an action assailing the right of a party to
eject will justify the suspension of the proceedings of the ejectment
case.[8]
Petitioner claims that she was denied her right to appeal when the March 28,
2006 MeTC decision was declared final and executory despite the fact that the copy
of the decision was served on her deceased counsel. She further claims that the
MeTC decision had not attained finality due to improper service of the decision.
Moreover, petitioner avers that she has a clear and existing right and interest over
the subject property which should be protected by injunction. Finally, petitioner
argues that jurisprudence allows the suspension of proceedings in an ejectment
case at whatever stage when warranted by the circumstances of the case.
In their Comment,[9] respondents allege that the petition is already moot and
academic in view of the execution of the MeTC decision. They claim that it is not
proper to restrain the execution of the MeTC decision as the case instituted before
the RTC was for the annulment of the sale executed between respondents and the
heirs of Villamena, and not an action for annulment of judgment or mandamus to
compel the MeTC to entertain her belated appeal. Respondents add that the finality
of the ejectment case is not a bar to the case instituted for the annulment of the
sale and the eventual recovery of ownership of the subject property. The actions for
ejectment and for annulment of sale are two different cases that may proceed
independently, especially when the judgment in the ejectment case had attained
finality, as in the instant case. Finally, respondents fault the petitioner herself for
not informing the MeTC of the death of her former counsel the moment she learned
of such death.

127

We find no merit in the petition.

.
We first determine the validity of the service of the March 28, 2006 MeTC
decision on petitioners counsel who, as of that date, was already deceased. If a
party to a case has appeared by counsel, service of pleadings and judgments shall
be made upon his counsel or one of them, unless service upon the party himself is
ordered by the court.[10] Thus, when the MeTC decision was sent to petitioners
counsel, such service of judgment was valid and binding upon petitioner,
notwithstanding the death of her counsel. It is not the duty of the courts to inquire,
during the progress of a case, whether the law firm or partnership continues to exist
lawfully, the partners are still alive, or its associates are still connected with the
firm.[11] Litigants, represented by counsel, cannot simply sit back, relax, and await
the outcome of their case.[12] It is the duty of the party-litigant to be in contact with
her counsel from time to time in order to be informed of the progress of her case.
[13]
It is likewise the duty of the party to inform the court of the fact of her counsels
death. Her failure to do so means that she is negligent in the protection of her
cause, and she cannot pass the blame to the court which is not tasked to monitor
the changes in the circumstances of the parties and their counsels.
It is noteworthy that when petitioner came to know of the death of her
counsel and upon obtaining the services of a new counsel, petitioner instituted
another action for the annulment of the deed of sale between her and the heirs of
Villamena, instead of questioning the MeTC decision through an action for
annulment of judgment. Obviously, the annulment case instituted by petitioner is
separate and distinct from the ejectment case filed by respondents. She cannot,
therefore, obtain relief through the second case for alleged errors and injustices
committed in the first case.
With the foregoing disquisition, we find that the March 28, 2006 MeTC
decision had, indeed, become final and executory. A final and executory decision
can only be annulled by a petition to annul the same on the ground of extrinsic
fraud and lack of jurisdiction, or by a petition for relief from a final order or
judgment under Rule 38 of the Rules of Court. However, no petition to that effect
was filed.[14] Well-settled is the rule that once a judgment becomes final and
executory, it can no longer be disturbed, altered, or modified in any respect except
to correct clerical errors or to make nunc pro tunc entries. Nothing further can be
done to a final judgment except to execute it.[15]
In the present case, the finality of the March 28, 2006 decision with respect to
possession de facto cannot be affected by the pendency of the annulment case
where the ownership of the property is being contested. [16] We are inclined to adhere
to settled jurisprudence that suits involving ownership may not be successfully
pleaded in abatement of the enforcement of the final decision in an ejectment suit.
The rationale of the rule has been explained in this wise:
This rule is not without good reason. If the rule were otherwise,
ejectment cases could easily be frustrated through the simple
expedient of filing an action contesting the ownership over the
property subject of the controversy. This would render nugatory the
underlying philosophy of the summary remedy of ejectment which is to
prevent criminal disorder and breaches of the peace and to discourage
those who, believing themselves entitled to the possession of the
property, resort to force rather than to some appropriate action in
court to assert their claims.[17]
Unlawful detainer and forcible entry suits under Rule 70 of the Rules of Court
are designed to summarily restore physical possession of a piece of land or building
to one who has been illegally or forcibly deprived thereof, without prejudice to the
settlement of the parties opposing claims of juridical possession in appropriate
proceedings.[18]

128

Finally, as aptly held by the CA, petitioner is not entitled to a writ of

preliminary injunction to restrain the execution of the MeTC decision. Section 3, Rule
58 of the Rules of Court enumerates the grounds for the issuance of preliminary
injunction, viz.:
SEC. 3. Grounds for issuance of preliminary injunction. A
preliminary injunction may be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and
the whole or part of such relief consists in restraining the
commission or continuance of the act or acts complained of, or
in requiring the performance of an act or acts, either for a
limited period or perpetually;
(b) That the commission, continuance or non-performance of
the act or acts complained of during the litigation would
probably work injustice to the applicant; or
(c) That a party, court, agency or a person is doing,
threatening, or is attempting to do, or is procuring or suffering to
be done, some act or acts probably in violation of the rights of
the applicant respecting the subject of the action or proceeding,
and tending to render the judgment ineffectual.
And as clearly explained in Ocampo v. Sison Vda. de Fernandez[19]
To be entitled to the injunctive writ, the applicant must show
that there exists a right to be protected which is directly threatened by
an act sought to be enjoined. Furthermore, there must be a showing
that the invasion of the right is material and substantial and that there
is an urgent and paramount necessity for the writ to prevent serious
damage. The applicants right must be clear and unmistakable. In the
absence of a clear legal right, the issuance of the writ constitutes
grave abuse of discretion. Where the applicants right or title is
doubtful or disputed, injunction is not proper. The possibility of
irreparable damage without proof of an actual existing right is not a
ground for injunction.
A clear and positive right especially calling for judicial protection
must be shown. Injunction is not a remedy to protect or enforce
contingent, abstract, or future rights; it will not issue to protect a right
not in esse and which may never arise, or to restrain an act which does
not give rise to a cause of action. There must exist an actual right.
There must be a patent showing by the applicant that there exists a
right to be protected and that the acts against which the writ is to be
directed are violative of said right. [20]
In this case, the enforcement of the writ of execution which would evict
petitioner from her residence is manifestly prejudicial to her interest. However, she
possesses no legal right that merits the protection of the courts through the writ of
preliminary injunction. Her right to possess the property in question has been
declared inferior or inexistent in relation to respondents in the ejectment case in the
MeTC decision which has become final and executory. [21]
In any event, as manifested by respondents, the March 28, 2006 MeTC
decision has already been executed. Hence, there is nothing more to restrain.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
The Court of Appeals Decision dated November 29, 2007 and Resolution dated
February 27, 2008 in CA-G.R. SP No. 97618 are AFFIRMED.

129

SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice

Sec. 3. Manner of filing

Russel v. Austria, G.R. No. 184542, April 23, 2010
THIRD DIVISION
ALMA B. RUSSEL,
Petitioner,

G.R. No. 184542

Present:

- versus -

TEOFISTA EBASAN and

AGAPITO AUSTRIA,
Respondents.

CORONA, J.,
Chairperson,
VELASCO, JR.,
NACHURA,
PERALTA, and
MENDOZA, JJ.
Promulgated:
April 23, 2010

x------------------------------------------------------------------------------------x
RESOLUTION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court, questioning the June 18, 2007 [1]and the August 26,
2008[2] Resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 01675.
The petition stems from a complaint for forcible entry filed by petitioner Alma
B. Russel against respondents Teofista Ebasan and Agapito Austria. The Municipal
Trial Court in Cities (MTCC) of Iligan City heard the ejectment proceedings and
rendered judgment on November 23, 2006 in favor of petitioner. [3] The trial court
ordered respondents to vacate the property involved and to pay attorneys fees and
costs.[4]
Prejudiced by the ruling, respondents appealed to the Regional Trial Court
(RTC). The RTC, in its March 28, 2007 Decision, [5] reversed the ruling of the MTCC
and ordered the dismissal of the complaint.
Petitioner received her copy of the RTC decision on April 13, 2007. [6] Inclined
to appeal the adverse ruling to the CA, petitioner, on April 20, 2007, filed a motion
for an extension of 15 days from the expiry of the reglementary period for the filing

130

of a petition for review. Petitioner attached to her motion postal money orders
representing the filing and docket fees. [7] She consequently filed via registered mail
her petition for review with the appellate court on May 15, 2007. [8]
In the assailed June 18, 2007 Resolution, [9] the CA dismissed the appeal on
the following grounds:
1.

The petition is filed out of time, in violation of Sec. 1, Rule 42.

Even if petitioners Motion for Extension of Time to File Petition for
Review were granted, the Petition would have still been filed six (6)
days late from the requested extension of time.

2.

There is no Written Explanation why the Petition was filed by mail

instead of the preferred mode of personal filing, as is required
under Sec. 11, Rule 13.

3.

The Verification and Certification page is defective, since there is

no statement and therefore no assurance that the allegations in the
Petition are based on authentic records, in violation of Sec. 4, Rule
7.

4.

Pertinent documents such as the Complaint and Answer filed

before the MTCC, which are material portions of the record referred
to in the Petition are not attached, in violation of Sec. 2(d), Rule 42.
[10]

Petitioner received her copy of the June 18, 2007 Resolution on July 18, 2007.
On July 27, 2007, petitioner filed by registered mail her motion for
reconsideration and admission of her amended petition. She pointed out in her
motion that the petition was filed within the extended reglementary period. She also
explained that her office clerk inadvertently failed to attach the page containing the
explanation why filing by registered mail was resorted to. Petitioner also begged the
appellate courts indulgence to accept the verification because only the phrase
based on authentic records was missing in the same. She claimed that this was
merely a formal requisite which does not affect the validity or efficacy of the
pleading. She then pleaded for liberality in the application of the rules of procedure
and for the consequent admission of her amended petition containing the written
explanation, the corrected verification, and the certified true copies of the complaint
and the answer filed before the trial court. [12]
[11]

The appellate court, however, in the assailed August 26, 2008 Resolution,
denied petitioners motion. It ruled that the motion for reconsideration was filed
only on October 4, 2007, or 63 days after the expiry of the reglementary period for
the filing thereof.
[13]

Aggrieved, petitioner elevated the matter to this Court via the instant petition
for review on certiorari.
The Court grants the petition and remands the case to the appellate court for
disposition on the merits.
Petitioners petition for review (under Rule 42) and motion for reconsideration
before the appellate court were filed well within the reglementary period for the
filing thereof.
It must be noted that petitioner received her copy of the RTC decision on April
13, 2007. Following the Rules of Court, she had 15 days or until April 28, 2007 to file
her petition for review before the CA. Section 1 of Rule 42 provides:

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Sec. 1. How appeal taken; time for filing.A party desiring to

appeal from a decision of the Regional Trial Court rendered in the
exercise of its appellate jurisdiction may file a verified petition for
review with the Court of Appeals, paying at the same time to the clerk
of said court the corresponding docket and other lawful fees,
depositing the amount of P500.00 for costs, and furnishing the
Regional Trial Court and the adverse party with a copy of the petition.
The petition shall be filed and served within fifteen (15) days from
notice of the decision sought to be reviewed or of the denial of
petitioners motion for new trial or reconsideration filed in due time
after judgment. Upon proper motion and the payment of the full
amount of the docket and other lawful fees and the deposit for costs
before the expiration of the reglementary period, the Court of Appeals
may grant an additional period of fifteen (15) days only within which to
file the petition for review. No further extension shall be granted except
for the most compelling reason and in no case to exceed fifteen (15)
days.
On April 20, 2007, petitioner filed before the CA, via registered mail, her
motion for extension of time to file the petition for review. She pleaded in her
motion that she be granted an additional 15 days, counted from the expiry of the
reglementary period. Petitioner likewise attached to her motion postal money orders
representing the docket fees.
Fifteen days from April 28, 2007 would be May 13, 2007. This was, however, a
Sunday. May 14, 2007, the following day, was a legal holidaythe holding of the
national and local elections. Section 1 of Rule 22 states:
Sec. 1. How to compute time.In computing any period of time
prescribed or allowed by these Rules, or by order of the court, or by
any applicable statute, the day of the act or event from which the
designated period of time begins to run is to be excluded and the date
of performance included. If the last day of the period, as thus
computed, falls on a Saturday, a Sunday, or a legal holiday in the place
where the court sits, the time shall not run until the next working day.
Therefore, when petitioner filed her petition for review with the appellate court on
May 15, 2007, the same was well within the extended period for the filing thereof.
Petitioners motion for reconsideration was likewise filed on time. She
received a copy of the June 18, 2007 CA Resolution on July 18, 2007. Under Section
1 of Rule 52, she had 15 days from notice, or until August 2, 2007, to file a motion
for reconsideration.[14] Petitioner filed by registered mail her motion for
reconsideration on July 27, 2007. The fact of mailing on the said date is proven by
the registry return receipt,[15] the affidavit of service,[16] and the certification of the
Office of the Postmaster of Iligan City. [17] Section 3, Rule 13 of the Rules of
Court[18] provides that if a pleading is filed by registered mail, then the date of
mailing shall be considered as the date of filing. It does not matter when the court
actually receives the mailed pleading. Thus, in this case, as the pleading was filed
by registered mail on July 27, 2007, within the reglementary period, it is
inconsequential that the CA actually received the motion in October of that year.
As to the CAs dismissal of the petition for review on the ground that
petitioner failed to attach a written explanation for non-personal filing, the Court
finds the same improper. Iligan City, where petitioner resides and where her counsel
holds office, and Cagayan de Oro City, where the concerned division of the CA is
stationed, are separated by a considerable distance. The CA, in the exercise of its
discretion, should have realized that it was indeed impracticable for petitioner to
personally file the petition for review in Cagayan De Oro City. Given the obvious

132

time, effort and expense that would have been spent in the personal filing of the
pleadings in this case, the written explanation why service had not been done
personally, as required by Section 11 of Rule 13, may be considered as superfluous.
[19]

Relative to the defective verification, the Court excuses the same. The
purpose of the verification is to secure an assurance that the allegations in the
petition have been made in good faith, or are true and correct and not merely
speculative. The requirement is simply a condition affecting the form of pleadings
and non-compliance therewith is neither jurisdictional nor does it render the
pleading fatally defective.[20] Here, the perceived defect is excusable and does not
justify a dismissal of the petition. In any case, petitioner, in her subsequent
pleading, submitted a corrected verification. The same degree of liberality should
apply to petitioners failure to attach a copy of the complaint and answer filed
before the MTCC in her petition for review. After all, petitioner substantially complied
with the requirement when she filed her amended petition.
In sum, the Court finds that the CA erred in dismissing petitioners appeal.
The appellate court should have been more prudent in computing the reglementary
period for the filing of petitions. The CA could have been more liberal in the
application of the Rules considering that, in this case, the MTCC and the RTC arrived
at conflicting rulings, necessitating a thorough review of the merits of the case. This
is in keeping with the principle that rules of procedure are mere tools designed to
facilitate the attainment of justice and that strict and rigid application of rules which
would result in technicalities that tend to frustrate rather than promote
substantial justice must always be avoided. It is a far better and wiser course of
action for the Court to excuse a technical lapse and afford the parties a
conscientious review of the case in order to attain the ends of justice, rather than
dispose of it on a technicality and cause grave injustice to the parties, giving a false
impression of speedy disposal of cases which actually results in more delay, if not in
an outright miscarriage of justice.[21]
WHEREFORE, premises considered, the petition is GRANTED. The instant
case is REMANDED to the Court of Appeals for disposition on the merits.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice

Heirs of Miranda v. Miranda, G.R. No. 179638, July 8, 2013

G.R. No. 179638
July 8, 2013
HEIRS OF NUMERIANO MIRANDA, SR., namely: CIRILA (deceased),
CORNELIO, NUMERIANO, JR., ERLINDA, LOLITA, RUFINA, DANILO,
ALEJANDRO, FELIMON, TERESITA, ELIZABETH and ANALIZA, all surnamed
MIRANDA, Petitioners,
vs.
PABLO R. MIRANDA, Respondent.
DECISION
DEL CASTILLO, J.:
An action for revival of a judgment cannot modify, alter, or reverse the original
judgment, which is already final and executory. 1

133

This Petition for Review on Certiorari 2 under Rule 45 of the Rules of Court assails the
Decision3 dated June 14, 2007 and the Resolution 4 dated September 11, 2007 of the
Court of Appeals (CA) in CA-G.R. SP No. 97350.
Factual Antecedents
In 1994, petitioners Cirila, Cornelio, Numeriano, Jr., Erlinda, Lolita, Rufina, Danilo,
Alejandro, Felimon, Teresita, Elizabeth, and Analiza, all surnamed Miranda,
representing themselves as the heirs of Numeriano Miranda, Sr., filed before the
Regional Trial Court (RTC) of Muntinlupa City, a Complaint 5 for Annulment of Titles
and Specific Performance, docketed as Civil Case No. 94-612, against the heirs of
Pedro Miranda, namely: Pacita and Oscar Miranda; the heir of Tranquilino Miranda,
Rogelio Miranda; and the spouses respondent Pablo Miranda and Aida Lorenzo.
After trial, the RTC, Branch 256, rendered a Decision 6 dated August 30, 1999, the
dispositive portion of which reads:
WHEREFORE, premises considered, this court resolves:
1. To uphold and sustain the validity of TCT Nos. 186011, 186012, and 186013;
2. Ordering Pablo Miranda to indemnify all other heirs of NUMERIANO MIRANDA the
amount equivalent to 12/13 fair market value of the co-owned residential house,
erected on the lot 826-A-3 covered by TCT No. 186013 corresponding to their
shares, and for the said heirs to divide among themselves the aforesaid amount as
follows:
1/13 to CIRILA MIRANDA
1/13 to CORNELIO MIRANDA
1/13 to NUMERIANO MIRANDA, JR.
1/13 to ERLINDA MIRANDA
1/13 to LOLITA MIRANDA
1/13 to RUFINA MIRANDA
1/13 to DANILO MIRANDA
1/13 to ALEJANDRO MIRANDA
1/13 to FELIMON MIRANDA
1/13 to TERESITA MIRANDA
1/13 to ELIZABETH MIRANDA
1/13 to ANALIZA MIRANDA
3. Ordering Plaintiffs Lolita Miranda, Alejandro Miranda, Teresita Miranda, Rufina
Miranda and all persons claiming rights under them to immediately vacate the
abovementioned residential house and to jointly and severally pay to the spouses

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Pablo and Aida Miranda a monthly rental of P2,000.00 from the date of notice of the
promulgation of this judgment up to the time that they have actually vacated the
property;
4. Proclaiming that ROGELIO MIRANDA is not the biological son or child by nature of
TRANQUILINO MIRANDA, and therefore is not entitled to inherit from the latter;
5. Declaring CORNELIO MIRANDA, NUMERIANO MIRANDA, JR., ERLINDA MIRANDA,
LOLITA MIRANDA, RUFINA MIRANDA, DANIL[O] MIRANDA, ALEJANDRO MIRANDA,
FELIMON MIRANDA, TERESITA MIRANDA, ELIZABETH MIRANDA, ANALIZA MIRANDA,
PABLO MIRANDA and PACITA MIRANDA as the lawful legal heirs of the deceased
TRANQUILINO MIRANDA and ordering them to partition among themselves Lot 826A-1 covered by TCT No. 186011 registered in the name of TRANQUILINO MIRANDA,
containing an area of 213 square meters, as follows:
1/13 aliquot share to Cornelio Miranda
1/13 aliquot share to Numeriano Miranda, Jr.
1/13 aliquot share to Erlinda Miranda
1/13 aliquot share to Lolita Miranda
1/13 aliquot share to Rufina Miranda
1/13 aliquot share to Danilo Miranda
1/13 aliquot share to Alejandro Miranda
1/13 aliquot share to Felimon Miranda
1/13 aliquot share to Teresita Miranda
1/13 aliquot share to Elizabeth Miranda
1/13 aliquot share to Analiza Miranda
1/13 aliquot share to Pablo Miranda
1/13 aliquot share to Pacita Miranda
6. Ordering all the abovenamed heirs to commission the survey of Lot 826-A-1 or to
authorize in writing, one of them to commission such survey, in order to avoid a
chaotic situation similar to the case at bar. Should they not agree as to what
particular portion shall belong to one another, they may agree that it be allotted to
one or two or several of them, who shall indemnify the others at a price agreed
upon by all of them. Should they not agree as to whom shall the property be
allotted, to sell the property to a third person at a price agreed upon by a majority
of all of them, and to partition the proceeds of the sale in accordance with No. 5
above.
SO ORDERED.7
Petitioners did not file any appeal hence the Decision became final and executory. 8

135

On December 11, 2001, the RTC issued a Writ of Execution, 9 which was not
implemented.10
On July 8, 2005, respondent filed an Ex-parte Motion 11 praying that the RTC issue a
"Break-Open and Demolition Order" in order to compel the petitioners to vacate his
property.12 But since more than five years have elapsed from the time the Writ of
Execution should have been enforced, the RTC denied the Motion in its
Order13 dated August 16, 2005.
This prompted respondent to file with the RTC a Petition 14 for Revival of Judgment,
which was docketed as Civil Case No. 05-131. Petitioners opposed the revival of
judgment assailing, among others, the jurisdiction of the RTC to take cognizance of
the Petition for Revival of Judgment.15
On June 20, 2006, the RTC rendered a Decision 16 granting the Petition. Thus:
WHEREFORE, finding the instant petition to be meritorious, the petition is hereby
GRANTED. Pursuant to Rule 39, Section 6 of the Rules of Court, the Decision dated
August 30, 1999 in Civil Case No. 94-612 is hereby REVIVED.
SO ORDERED.17
On July 13, 2006, petitioners filed a Notice of Appeal 18 via LBC,19 which was opposed
by respondent on the ground that the Decision dated August 30, 1999 has long
become final and executory. 20 Petitioners, in turn, moved for the transmittal of the
original records of the case to the CA, insisting that respondents opposition is
without merit.21
Ruling of the Regional Trial Court
Finding the appeal barred by prescription, the RTC denied the Notice of Appeal in its
Order22 dated October 10, 2006, to wit:
WHEREFORE, in view of the foregoing, the notice of appeal herein filed is hereby
DENIED for lack of merit.
SO ORDERED.23
Feeling aggrieved, petitioners filed a Petition for Mandamus 24 with the CA praying
that their Notice of Appeal be given due course. 25
Ruling of the Court of Appeals
On June 14, 2007, the CA denied the Petition for Mandamus on the ground that the
Notice of Appeal was filed out of time. 26The dispositive portion of the Decision
reads:
WHEREFORE, premises considered, the petition is DENIED. The appeal is hereby
DISMISSED for having been filed out of time.
SO ORDERED.27
Petitioners moved for reconsideration but the same was denied by the CA in its
Resolution28 dated September 11, 2007.

136

Issues
Hence, this recourse, with petitioners raising the following issues:
1. WHETHER X X X THE APPEAL WAS PERFECTED ON TIME?
2. WHETHER X X X THE LATE (ONE DAY) FILING WAS JUSTIFIED?
3. WHETHER X X X AN ACTION FOR REVIVAL OF JUDGMENT IS APPEALABLE?
4. WHETHER THE APPEAL IS MERITORIOUS?
a. Whether the RTC below has exclusive original jurisdiction over an
action for revival of judgment?
b. Whether xxx respondent herein, plaintiff therein, as one of the
judgment creditors can file the said action for revival ALONE?
c. Whether subsequent events or laws have rendered the judgment
sought to be revived modified or altered, or prevent its enforcement?
d. Whether res judicata or laches has seeped in, other judgment
creditors not suing for any such implementation of the 1999 judgment,
ONLY PLAINTIFF ALONE?
e. Whether x x x the Petitioners are entitled to damages? 29
Petitioners Arguments
Petitioners assert that an action to revive judgment is appealable, 30 and that their
appeal was perfected on time.31 They insist that the Notice of Appeal, which they
filed on the 15th day via LBC, was seasonably filed since the law does not require a
specific mode of service for filing a notice of appeal. 32
Besides, even if their appeal was belatedly filed, it should still be given due course
in the interest of justice, 33 considering that their counsel had to brave the storm and
the floods caused by typhoon "Florita" just to file their Notice of Appeal on time. 34
Petitioners further contend that their appeal is meritorious. 35 They insist that it is the
Metropolitan Trial Court (MeTC), not the RTC, which has jurisdiction over the Petition
for Revival of Judgment since the amount in the tax declarations of the properties
involved is less than Fifty Thousand Pesos (P50,000.00).36 They likewise assail the
Decision dated August 30, 1999, claiming that the deeds and certificates of title
subject of Civil Case No. 94-612 were falsified. 37
Respondents Arguments
Respondent, on the other hand, maintains that the Notice of Appeal was belatedly
filed,38 and that the revival of judgment is unappealable as it is barred by
prescription.39
Our Ruling
The Petition lacks merit.

137

The Notice of Appeal was belatedly filed.

It is basic and elementary that a Notice of Appeal should be filed "within fifteen (15)
days from notice of the judgment or final order appealed from." 40
Under Section 3,41 Rule 13 of the Rules of Court, pleadings may be filed in court
either personally or by registered mail. In the first case, the date of filing is the date
of receipt. In the second case, the date of mailing is the date of receipt.
In this case, however, the counsel for petitioners filed the Notice of Appeal via a
private courier, a mode of filing not provided in the Rules. Though not prohibited by
the Rules, we cannot consider the filing of petitioners Notice of Appeal via LBC
timely filed. It is established jurisprudence that "the date of delivery of pleadings to
a private letter-forwarding agency is not to be considered as the date of filing
thereof in court;" instead, "the date of actual receipt by the court x x x is deemed
the date of filing of that pleading." 42 Records show that the Notice of Appeal was
mailed on the 15th day and was received by the court on the 16th day or one day
beyond the reglementary period. Thus, the CA correctly ruled that the Notice of
Appeal was filed out of time.
Neither can petitioners use typhoon "Florita" as an excuse for the belated filing of
the Notice of Appeal because work in government offices in Metro Manila was not
suspended on July 13, 2006, the day petitioners Notice of Appeal was mailed via
LBC.43
And even if we, in the interest of justice, give due course to the appeal despite its
late filing, the result would still be the same. The appeal would still be denied for
lack of merit.
The Decision dated August 30, 1999 is already final and executory.
An action for revival of judgment is a new and independent action. 44 It is different
and distinct from the original judgment sought to be revived or enforced. 45 As such,
a party aggrieved by a decision of a court in an action for revival of judgment may
appeal the decision, but only insofar as the merits of the action for revival is
concerned. The original judgment, which is already final and executory, may no
longer be reversed, altered, or modified. 46
In this case, petitioners assail the Decision dated August 30, 1999, which is the
original
judgment
sought
to
be
revived
or
enforced
by
respondent.1wphi1 Considering that the said Decision had already attained
finality, petitioners may no longer question its correctness. As we have said, only
the merits of the action for revival may be appealed, not the merits of the original
judgment sought to be revived or enforced.
RTC has jurisdiction over the Petition for Revival of Judgment
As to whether the RTC has jurisdiction, we rule in the affirmative. An action for
revival of judgment may be filed either "in the same court where said judgment was
rendered or in the place where the plaintiff or defendant resides, or in any other
place designated by the statutes which treat of the venue of actions in general." 47 In
this case, respondent filed the Petition for Revival of Judgment in the same court
which rendered the Decision dated August 30, 1999.

138

All told, we find no error on the part of the CA in denying the Petition and dismissing
the appeal for having been filed out of time.
WHEREFORE, the Petition is hereby DENIED. The Decision dated June 14, 2007 and
the Resolution dated September 11, 2007 of the Court of Appeals in CA-G.R. SP No.
97350 are hereby AFFIRMED.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice
PNB v. CIR, G.R. No. 172458, December 14, 2011

Republic of the Philippines

Supreme Court
Manila
FIRST DIVISION
PHILIPPINE NATIONAL BANK,
Petitioner,

G.R. No. 172458

Present:
CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.

- versus -

COMMISSIONER OF INTERNAL
REVENUE,
Respondent.

Promulgated:
December 14, 2011

x---------------------------------------------------- x
DECISION
LEONARDO-DE CASTRO, J.:
This Petition for Review on Certiorari[1] seeks to reverse and set aside the
January 27, 2006[2] and April 19, 2006[3]Resolutions of the Court of Tax
Appeals En Banc (CTA En Banc) in C.T.A. E.B. NO. 145, which dismissed
outright the Petition for Review filed by the Philippine National Bank (PNB) dated
December 27, 2005 for being filed four days beyond the additional 15 days granted
to file such petition.
On April 15, 1999, petitioner PNB filed with the Bureau of Internal Revenue
(BIR) its Tentative Return for 1998 with the documents enumerated in the List of
Attachments to Annual Income Tax Return Calendar Year Ended December 31,

139

1998 enclosed. On September 30, 1999, PNB filed its Amended Income Tax Return
for 1998, with the corresponding attachments to an amended annual income tax
return appended, including copies of the Certificates and Schedule of Creditable
Withholding Taxes for 1998. PNB likewise filed its Corporate Quarterly Returns for
the calendar year 1998.[4]
On February 8, 2001, PNB filed with respondent Commissioner of Internal
Revenue (CIR) an administrative claim for refund in the amount of 6,028,594.00,
which were payments made in excess of its income tax liability for 1998. [5]
As BIR did not act upon PNBs claim for refund, PNB, on March 30, 2001, filed
with the Second Division of the Court of Tax Appeals (CTA Division) a Petition for
Review,[6] and prayed that it be refunded or issued a tax credit certificate in the
amount of 6,028,594.00, representing creditable taxes withheld from PNBs income
from the sale of real property, rental income, commissions, and management fees
for the taxable year 1998.
In his Answer,[7] the CIR alleged that PNBs claim for refund/tax credit is
subject first to an investigation and that it failed to establish its right to a refund.
After PNB had rested its case, the CIR manifested that he would not be
presenting evidence. The parties were thereafter required to submit their
memoranda.[8]
On May 19, 2003, the BIR issued in PNBs favor Tax Credit Certificate No. SN
023837 for 4,154,353.42, leaving a balance of 1,874,240.58 out of PNBs total
claim of 6,028,594.00. PNB then informed the CTA Division of such tax credit
certificate, and manifested that its acceptance was without prejudice to recovering
the balance of its total claim.[9]
Consequently, the CIR filed a Motion, [10] asking that he be allowed to present
evidence on PNBs excluded claim. The CIR argued that the amount of
1,874,240.58 was disallowed because it was not remitted to the BIR, as verified by
its Regional Accounting Division.[11]
On August 11, 2005, the CTA Division rendered its Decision, [12] the dispositive
portion of which reads:
WHEREFORE, premises considered, the present Petition For
Review is hereby partially GRANTED. Respondent is hereby ORDERED
to REFUND or ISSUE a Tax Credit Certificate in favor of herein petitioner
in the amount of 1,428,661.66, representing the latters unutilized
creditable withholding tax for the year 1998. [13]
The CTA Division held that payments of withholding taxes for a certain
taxable year were creditable to the payees income tax liability as determined after
it had filed its income tax returns the following year. The CTA Division said that
since PNB posted net losses, it was not liable for any income tax and consequently,
the taxes withheld during the course of the taxable year, which was 1998, while
collected legally under Revenue Regulations No. 02-98, Section 2.57 (B), became
untenable and took on the nature of erroneously collected taxes at the end of that
year. The CTA Division averred that while the right to a refund is not automatic and
must be established by sufficient evidence, there is nothing in the Tax Code that
would suggest that the actual remittance of the withholding tax is a condition
precedent to claim for a tax refund. Moreover, the CTA Division added, that the CIR
failed to present the certification to prove his contention of PNBs non-remittance of
the disallowed amount. However, the CTA Division affirmed the disallowance of
eight transactions, amounting to 445,578.92 as they had already been reported as
income for other years, had not been recorded, or were not supported by pertinent
documents.[14]

140

On September 14, 2005, PNB filed a Motion for Partial Reconsideration,

asserting its entitlement to be refunded the amount of 445,578.92, by
explaining each transaction involved and pinpointed by the CTA Division. This
however was still denied by the CTA Division in its Resolution [16] dated November 15,
2005, for lack of merit.
[15]

Aggrieved, PNB, filed a partial appeal by way of Petition for Review [17] under
Section 18 of Republic Act No. 9282[18]before the CTA En Banc, to review and
modify the CTA Divisions August 11, 2005 Decision. This petition was received by
the CTA En Banc on December 27, 2005, four days beyond the additional 15 days
granted to PNB to file its petition.
Thus, on January 27, 2006, the CTA En Banc issued a Resolution[19] denying
due course and consequently dismissing PNBs petition for the following reasons:
1)
The Petition For Review was filed four (4) days late
on December 27, 2005, the reglementary deadline for the timely filing
of such petition being December 23, 2005.
Appeal is a statutory privilege and must be exercised in the
manner provided by law. Therefore, perfection of an appeal in the
manner and within the period prescribed by law is not only mandatory,
but jurisdictional, and non-compliance is fatal having the effect of
rendering the judgment final and executory (Cabellan vs. Court of
Appeals, 304 SCRA 119). Not only that, late appeals deprives the
appellate court of jurisdiction to alter the final judgment much less
entertain the appeal (Pedrosa vs. Hill, 257 SCRA 373).
2)
The petition is not accompanied by the duplicate
original or certified true copies of the assailed Decision dated August
11, 2005 and Resolution dated November 15, 2005, in violation
of Section 2, Rule 6 of the Revised Rules of the Court of Tax Appeals, in
relation to Section 6, Rule 43 of the Rules of Court.
3)
The Petition does not contain an Affidavit of
Service, in violation of Section 13, Rule 13 of the Rules of Court.
In the case of Policarpio vs. Court of Appeals, 269 SCRA 344,
351, the Supreme Court did not hesitate to dismiss the petition for
failure to attach an affidavit of service.
Lastly, Section 7 of Rule 43 of the Rules of Court provides that:
SEC. 7. Effect of failure to comply with requirements.The failure of the petitioner to comply with any of the foregoing
requirements regarding the payment of the docket and other
lawful fees, the deposit for costs, proof of service of the petition,
and the contents of and the documents which should
accompany the petition shall be sufficient ground for the
dismissal thereof.
Persistent in its claim, PNB filed a Motion for Reconsideration with
Manifestation of Compliance[20] on February 23, 2006, and answered each ground
propounded by the CTA En Banc in its Resolution.
PNB asserted that its petition was filed on December 23, 2005, which was the
last day of the additional 15-day period granted by the CTA En Banc, via LBC
Express, as shown by the copy of LBC Official Receipt No. 12990350 [21] dated
December 23, 2005. PNB explained that its counsel, Atty. Flerida P. Zaballa-

141

Banzuela, accompanied by her administrative assistant, tried to personally file the

petition with the CTA En Banc on December 23, 2005. However, PNB claimed, that
due to heavy traffic, Atty. Zaballa-Banzuela arrived at the CTA office in Quezon City
at 4:30 p.m., just as the CTA personnel were leaving the CTA premises in their
shuttle bus.[22]
PNB attached to its Motion the Affidavit[23] of Christopher Sarmiento, the
Security Guard who was then assigned at the CTA main gate. Sarmiento averred
that he did not allow Atty. Zaballa-Banzuela to enter the CTA compound because
there was no one left to receive her document. He also alleged that Atty. ZaballaBanzuela even tried to ask some of the CTA personnel who were on board the CTA
shuttle that passed her by, if they could receive her document, but they
declined. This was corroborated by Atty. Zaballa-Banzuelas administrative
assistant, Macrina J. Cataniag, in her Affidavit, [24] also annexed to PNBs Motion.
PNB argued that while its petition was deposited with LBC Express on
December 23, 2005, very well within the reglementary period, CTA En
Banc received it only on December 27, 2005, as December 24 to 26, 2005 were
holidays.[25]
Addressing the second ground that the CTA En Banc used to dismiss the
petition, PNB said that its non-submission of the duplicate original or certified true
copy of the CTA Divisions decision and resolution was not intended for delay but
was mere inadvertence and unintentional, but an honest mistake, an oversight, an
unintentional omission, and a human error occasioned by too much pressure of
work.[26]
In compliance, PNB attached to its Motion the Affidavit of Service [27] and
certified true copies of the CTA Divisions decision and resolution supposed to be
attached to its petition before the CTA En Banc.
On April 19, 2006, the CTA En Banc denied PNBs motion for lack of
merit. The CTA En Banc held that absent any cogent explanation [to not] comply
with the rules, the rules must apply to the petitioner as they do to all. [28] The
CTA En Bancratiocinated in this wise:
It is a jurisprudential rule that the date [of] delivery of pleadings to a
private letter-forwarding agency is not to be considered as the date of
filing thereof in court, and that in such cases, the date of actual receipt
by the court, and not the date of delivery to the private carrier, is
deemed the date of filing of that pleading (Benguet Electric
Corporation, Inc. vs. NLRC, 209 SCRA 60-61). Clearly, the present
Petition For Review was filed four (4) days late.
The instant Petition For Review is an appeal from the decision
of the Court in Division. Accordingly, the applicable rule is that the
fifteen-day reglementary period to perfect an appeal is mandatory and
jurisdictional in nature; that failure to file an appeal within the
reglementary period renders the assailed decision final and executory
and no longer subject to review (Armigos vs. Court of Appeals, 179
SCRA 1; Jocson vs. Baguio, 179 SCRA 550). Petitioner had thus lost its
right to appeal from the decision of this Court in Division. [29]
The CTA En Banc added:
Although petitioner subsequently attached to its present
motion, certified true copies of the assailed Decision, dated August 11,
2005, and Resolution, dated November 15, 2005, and the Affidavit of
Service, this did not stop the questioned decision from becoming final
and executory. It has been held that strict compliance with procedural

142

requirements in taking an appeal cannot be substituted by good faith

compliance. To rule otherwise would defeat the very purpose of the
rules of procedure, i.e., to facilitate the orderly administration of
justice (Santos vs. Court of Appeals, 198 SCRA 806, 810; Ortiz vs.
Court of Appeals, 299 SCRA 712).[30]
PNB thereafter filed a Petition for Review [31] before this Court on June 16,
2006, which was the last day of the additional thirty days it was granted [32] to file
such petition.
In order to convince this Court to allow its petition, PNB posits the following
arguments:
I
THE HONORABLE COURT OF TAX APPEALS EN BANC ERRED IN FAILING
TO CONSIDER THE EXPLANATION SUBMITTED BY PNB IN ITS MOTION
FOR RECONSIDERATION WITH MANIFESTATION OF COMPLIANCE WITH
RESPECT TO THE FILING OF THE PETITION ON DECEMBER 23, 2005
(THE DUE DATE FOR FILING THEREOF) VIA LBC SERVICE INSTEAD OF
REGISTERED MAIL WITH RETURN CARD.
II
THE PROCEDURAL LAPSE OBSERVED BY THE HONORABLE COURT OF
TAX APPEALS SHOULD BE LIBERALLY CONSTRUED IN THE INTEREST OF
SUBSTANTIAL JUSTICE, AS POSTULATED IN VARIOUS SUPREME COURT
DECISIONS.
III
THE PETITION FILED BY PNB BEFORE THE CTA EN BANC RAISES A
MERITORIOUS LEGAL DEFENSE WARRANTING JUDICIAL RESOLUTION. [33]
PNB once again narrated the circumstances leading to its counsels decision
to mail its petition for review via LBC Express, a private letter-forwarding company,
instead of registered mail. It claims that since this Court has repeatedly pronounced
the primacy of substantive justice over technical rules, then its procedural lapses
should likewise be excused, especially since no substantial rights of the CIR are
affected.
This Courts Ruling
The only issue to be resolved here is whether or not this Court should require
the CTA En Banc to give due course to C.T.A. E.B. No. 145 despite PNBs failure to
comply with the formal requirements of the Revised Rules of the Court of Tax
Appeals and the Rules of Court in filing a petition for review with the CTA En Banc.
Not having been successfully convinced by PNB, we answer the above issue
in the negative.
This Court would like to underscore the fact that PNB failed to comply with
not just one, but three procedural rules when it filed its petition for review with the
CTA En Banc.

Petition was filed late

143

It is stated under Section 3, Rule 1 of the Revised Rules of the Court of Tax
Appeals that the Rules of Court shall apply suppletorily. Thus, the manner in which
petitions are filed before the CTA is also covered by the relevant provision of the
Rules of Court, to wit:
Rule 13. x x x.
xxxx
Sec. 3. Manner of filing. The filing of pleadings, appearances,
motions, notices, orders, judgments and all other papers shall be made
by presenting the original copies thereof, plainly indicated as such,
personally to the clerk of court or by sending them by registered
mail. In the first case, the clerk of court shall endorse on the pleading
the date and hour of filing. In the second case, the date of the mailing
of motions, pleadings, or any other papers or payments or deposits, as
shown by the post office stamp on the envelope or the registry
receipt, shall be considered as the date of their filing,
payment, or deposit in court. The envelope shall be attached to
the record of the case. (Emphases ours.)
To recall, PNB filed its petition with the CTA En Banc four days beyond
the extended period granted to it to file such petition. PNB argues that it was filed
on time since it was mailed on the last day of the extended period, which was on
December 23, 2005. It has been established that a pleading filed by ordinary mail
or by private messengerial service x x x is deemed filed on the day it is actually
received by the court, and not on the day it was mailed or delivered to the
messengerial service.[34] In Benguet Electric Cooperative, Inc. v. National Labor
Relations Commission,[35] we said:
The established rule is that the date of delivery of pleadings to a
private letter-forwarding agency is not to be considered as the date of
filing thereof in court, and that in such cases, the date of actual receipt
by the court, and not the date of delivery to the private carrier, is
deemed the date of filing of that pleading. [36]
It is worthy to note that PNB already asked for an additional period of 15 days
within which to file its petition for review with the CTA En Banc. This period expired
on December 23, 2005. Knowing fully well that December 23, 2005 not only fell on
a Friday, followed by three consecutive non-working days, but also belonged to the
busiest holiday season of the year, PNB should have exercised more prudence and
foresight in filing its petition.
It is, however, curious why PNB chose to risk the holiday traffic in an effort to
personally file its petition with the CTA En Banc, when it already filed a copy to the
other party, the CIR, via registered mail.[37] Considering the circumstances, it would
have been more logical for PNB to send its petition to the CTA En Banc on the same
occasion it sent a copy to the CIR, especially since that day was already the last day
given to PNB to file its petition. Moreover, PNB offered no justification as to why it
sent its petition via ordinary mail instead of registered mail. Service by ordinary
mail is allowed only in instances where no registry service exists. [38] Rule 13,
Section 7 reads:
Sec. 7. Service by mail. Service by registered mail shall be
made by depositing the copy in the post office, in a sealed envelope,
plainly addressed to the party or his counsel at his office, if known,
otherwise at his residence, if known, with postage fully pre-paid, and
with instructions to the postmaster to return the mail to the sender
after ten (l0) days if undelivered. If no registry service is available

144

in the locality of either the sender or the addressee, service

may be done by ordinary mail. (Emphasis ours.)
Petition was not accompanied by the
required duplicate originals or certified
true copies of the decision and resolution
being assailed, and Affidavit of Service
The following provisions are instructive:
Section 2, Rule 6 of the Revised Rules of the Court of Tax Appeals:
SEC. 2. Petition for review; contents. The petition for review
shall contain allegations showing the jurisdiction of the Court, a
concise statement of the complete facts and a summary statement of
the issues involved in the case, as well as the reasons relied upon for
the review of the challenged decision. The petition shall be verified
and must contain a certification against forum shopping as provided in
Section 3, Rule 46 of the Rules of Court. A clearly legible duplicate
original or certified true copy of the decision appealed from
shall be attached to the petition. (Emphasis supplied.)
Section 4(b), Rule 8 of the Revised Rules of the Court of Tax Appeals:
Sec. 4(b) An appeal from a decision or resolution of the Court in
Division on a motion for reconsideration or new trial shall be taken to
the Court by petition for review as provided in Rule 43 of the Rules of
Court. The Court en banc shall act on the appeal.
Sections 6, Rule 43 of the Rules of Court:
Sec. 6. Contents of the petition. The petition for review shall (a)
state the full names of the parties to the case, without impleading the
court or agencies either as petitioners or respondents; (b) contain a
concise statement of the facts and issues involved and the grounds
relied upon for the review; (c) be accompanied by a clearly legible
duplicate original or a certified true copy of the award,
judgment, final order or resolution appealed from, together with
certified true copies of such material portions of the record referred to
therein and other supporting papers; and (d) contain a sworn
certification against forum shopping as provided in the last paragraph
of section 2, Rule 42. The petition shall state the specific material
dates showing that it was filed within the period fixed
herein. (Emphasis ours.)

This Court has already upheld the mandatory character of attaching duplicate
originals or certified true copies of the assailed decision to a petition for review.
[39]
Moreover, pursuant to Section 7, Rule 43 of the Rules of Court, non-compliance
with such mandatory requirement is a sufficient ground to dismiss the petition, viz:
Sec. 7. Effect of failure to comply with requirements. The
failure of the petitioner to comply with any of the foregoing
requirements regarding the payment of the docket and other lawful
fees, the deposit for costs, proof of service of the petition, and
the contents of and the documents which should accompany

145

the petition shall be sufficient ground for the dismissal

thereof. (Emphasis ours.)
Anent the failure to attach the Affidavit of Service, Section 13, Rule 13 of the
Rules of Court provides:
Sec. 13. Proof of service. Proof of personal service shall consist
of a written admission of the party served, or the official return of the
server, or the affidavit of the party serving, containing a full statement
of the date, place and manner of service. If the service is by ordinary
mail, proof thereof shall consist of an affidavit of the person mailing of
facts showing compliance with section 7 of this Rule. If service is made
by registered mail, proof shall be made by such affidavit and the
registry receipt issued by the mailing office. The registry return card
shall be filed immediately upon its receipt by the sender, or in lieu
thereof the unclaimed letter together with the certified or sworn copy
of the notice given by the postmaster to the addressee.
Although the failure to attach the required affidavit of service is not fatal if
the registry receipt attached to the petition clearly shows service to the other
party, [40] it must be remembered that this was not the only rule of procedure PNB
failed to satisfy. InSuarez v. Judge Villarama, Jr.[41] we said:
It is an accepted tenet that rules of procedure must be faithfully
followed except only when, for persuasive and weighting reasons, they
may be relaxed to relieve a litigant of an injustice commensurate with
his failure to comply with the prescribed procedure. Concomitant to a
liberal interpretation of the rules of procedure, however, should be an
effort on the part of the party invoking liberality to adequately explain
his failure to abide by the rules.[42]
This Court agrees with the CTA En Banc that PNB has not demonstrated any
cogent reason for this Court to take an exception and excuse PNBs blatant
disregard of the basic procedural rules in a petition for review. Furthermore, the
timely perfection of an appeal is a mandatory requirement. One cannot escape the
rigid observance of this rule by claiming oversight, or in this case, lack of
foresight. Neither can it be trifled with as a mere technicality to suit the interest
of a party. Verily, the periods for filing petitions for review and for certiorari are to
be observed religiously. Just as [the] losing party has the privilege to file an appeal
within the prescribed period, so does the winner have the x x x right to enjoy the
finality of the decision.[43] In Air France Philippines v. Leachon,[44] we held:
Procedural rules setting the period for perfecting an appeal or
filing an appellate petition are generally inviolable. It is doctrinally
entrenched that appeal is not a constitutional right but a mere
statutory privilege. Hence, parties who seek to avail of the privilege
must comply with the statutes or rules allowing it. The requirements
for perfecting an appeal within the reglementary period specified in the
law must, as a rule, be strictly followed. Such requirements are
considered indispensable interdictions against needless delays, and
are necessary for the orderly discharge of the judicial business. For
sure, the perfection of an appeal in the manner and within the period
set by law is not only mandatory, but jurisdictional as well. Failure to
perfect an appeal renders the judgment appealed from final and
executory.[45]

146

While it is true that the Court may deviate from the foregoing rule, this is true
only if the appeal is meritorious on its face. The Court has not hesitated to relax the
procedural rules in order to serve and achieve substantial justice. In the
circumstances obtaining in this case however, the occasion does not warrant the
desired relaxation.[46] PNB has not offered any meritorious legal defense to justify
the suspension of the rules in its favor. The CTA Division has taken into
consideration all of the evidence submitted by the PNB, and actually allowed it a
refund of 1,428,661.66, in addition to the 4,154,353.42 the BIR already
gave. The CTA Division explained why it disallowed the remaining balance of
445,578.92 in its Decision dated August 11, 2005. When PNB moved to reconsider
this decision, it did not offer the CTA any other evidence or explanation aside from
the ones the CTA Division had already evaluated. Nevertheless, the CTA carefully
considered and deliberated anew PNBs grounds, albeit they found them lacking in
merit. Thus, it cannot be said that PNB was deprived of its day in court, as in fact, it
was given all the time it had asked for.
While PNB may believe that it has a meritorious legal defense, this must be
weighed against the need to halt an abuse of the flexibility of procedural rules. It is
well established that faithful compliance with the Rules of Court is essential for the
prevention and avoidance of unnecessary delays and for the organized and efficient
dispatch of judicial business.[47]
WHEREFORE, the petition is hereby DENIED for lack of merit.

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

Sec. 4. Papers required to be filed and served

See: Sec. 1, Rule 36

Sec. 5. Modes of service

Aberca v. Ver, G.R. No. 166216, March 14, 2012

Republic of the Philippines

Supreme Court
Manila
THIRD DIVISION
ROGELIO
ABERCA,
RODOLFO
BENOSA, NESTOR BODINO,
NOEL ETABAG, DANILO DELA FUENTE,
BELEN DIAZ-FLORES, MANUEL MARIO
GUZMAN,
ALAN
JASMINEZ,
EDWIN
LOPEZ,

147

G.R. No. 166216

Present:
VELASCO, JR., J., Chairperson,

ALFREDO
MANSOS,
ALEX
MARCELINO, ELIZABETH PROTACIOMARCELINO,
JOSEPH
OLAYER,
CARLOSPALMA,
MARCO PALO,
ROLANDO
SALUTIN
BENJAMIN
SEGUNDO, ARTURO TABARA, EDWIN
TULALIAN, and
REBECCA TULALIAN,
Petitioners,

PERALTA,
ABAD,
MENDOZA, and
PERLAS-BERNABE, JJ.

- versus -

MAJ. GEN. FABIAN VER,

COL. FIDEL SINGSON,
COL. GERARDO B. LANTORIA, COL.
ROLANDO ABADILLA,
COL. GALILEO KINTANAR,
LT. COL. PANFILO M. LACSON, MAJ.
RODOLFO AGUINALDO, CAPT. DANILO
PIZARRO,
1LT. PEDRO TANGO,
1LT. ROMEO RICARDO,
1LT. RAUL BACALSO,
Promulgated:
M/SGT. BIENVENIDO BALABA
and JOHN DOES,
March 14, 2012
Respondents.
x -----------------------------------------------------------------------------------------------------x
DECISION
MENDOZA, J.:
Assailed in this petition is the July 31, 2003 Decision[1] of the Court of
Appeals (CA) in CA-G.R. CV No. 43763 and its November 26, 2004
Resolution[2] reversing and setting aside the February 19, 1993 Decision [3] of the
Regional Trial Court, Branch 107, Quezon City (RTC), in Civil Case No. 37487
entitled Rogelio Aberca, et al. v. Maj. Gen. Fabian Ver, et al. for sum of money and
damages.
The Facts
The factual and procedural antecedents were succinctly recited by the CA as
follows:
On 25 January 1983, several suspected subversives who were
arrested and detained by the military filed a complaint for damages
with the Regional Trial Court of Quezon City against Gen. Fabian Ver,
then AFP Chief of Staff, and the following subordinate officers: Col.
Fidel Singson, Col. Gerardo Lantoria, Col. Rolando Abadilla, Col.
Guillermo Kintanar, Lt. Col. Panfilo Lacson, Maj. Rodolfo Aguinaldo,
Capt. Danilo Pizarro, 1Lt. Pedro Tango, 1Lt. Romeo Ricardo, 1Lt. Raul
Bacalso, M/Sgt.Bienvenido Balaba and John Does. The case was
docketed as Civil Case No. 37487 and assigned to Branch 95.
In their complaint, the plaintiff-appellees alleged that they were
arrested and detained by Task Force Makabansa, a composite group of
various intelligence units of the AFP, on the strength of defective

148

search warrants; that while under detention and investigation, they

were subjected to physical and psychological harm, torture and other
brutalities to extort from them confessions and other information that
would incriminate them; and that by reason thereof, they suffered
actual and moral damages.
Defendants-appellants, through their counsel, the then Solicitor
General Estelito Mendoza, filed a motion to dismiss on the following
grounds: (1) since the privilege of the writ of habeas corpus was then
suspended, the trial court cannot inquire into the circumstances
surrounding plaintiffs-appellees arrests; (2) the defendants-appellants
are immune from liability for the reason that they were then
performing their official duties; and (3) the complaint states no cause
of action.
In an order dated November 8, 1983, the trial court granted
defendants-appellants motion to dismiss and ordered the case
dismissed.
Plaintiffs-appellees filed a motion to reconsider and set aside the
order of dismissal. In an order dated May 11, 1984, the trial court
declared the order of November 8, 1983 final.
Plaintiffs-appellees again filed a motion for reconsideration of
the order dated May 11, 1984. In an order datedSeptember 21, 1984,
the trial court denied the motion for reconsideration.
On March 15, 1985, plaintiffs-appellees went to the Supreme
Court on a petition for review on certiorari, seeking to annul and set
aside the orders of the trial court dated November 8, 1983, May 11,
1984 and September 21, 1984. The case was docketed as G.R. No.
69866.
While the case was pending in the Supreme Court, the so-called
EDSA revolution took place. As a result, the defendants-appellants lost
their official positions and were no longer in their respective office
addresses as appearing in the record. Also, in the meantime, the case
was re-raffled to Branch 107.
On April 15, 1988, the Supreme Court rendered a decision
annulling and setting aside the assailed orders and remanded the case
to the trial court for further proceedings.
However, trial could not proceed immediately because on June
11, 1988, the record of the case was destroyed when fire razed
the City Hall of Quezon City. It was only on October 9, 1989 when
plaintiffs-appellees sought a reconstitution of the record of the case.
The record shows that the petition for reconstitution was set for
hearing on October 27, 1989. However, there is nothing in the record
to show that defendants-appellants or their counsel were notified. For
lack of an opposition, the petition for reconstitution was granted in an
order dated March 12, 1990.
On August 15, 1990, plaintiffs-appellees filed a motion praying
that defendants-appellants be required to file their answer. However,
the record as reconstituted did not show who are the lawyers of the
defendants-appellants considering that Estelito Mendoza, who had
represented them in his capacity as Solicitor General, was no longer
holding that position. Furthermore, defendants-appellants were also no
longer occupying the positions they held at the time the complaint was

149

filed. Thus, in an order dated August 17, 1990, plaintiffs-appellees were

directed to report to the trial court the addresses and whereabouts of
defendants-appellants so that they could be properly notified.
Instead of complying with the order of August 17, 1990,
plaintiffs-appellees filed a motion to declare defendants-appellants in
default. The trial court deferred resolution of this motion and instead, it
issued an order on September 10, 1990 directing that a copy of the
order dated August 17, 1990 be furnished to new Solicitor General
Francisco Chavez to enable him to take action pursuant to Section 18,
Rule 3 of the Rules of Court, and to former Solicitor General Estelito
Mendoza to enable him to give notice as to whether he [would]
continue to represent the defendants-appellants in his private capacity.
As it said in its order, the trial court took this action in view of the
change in government and corresponding change in the addresses and
circumstances of the defendants-appellants who may not even be
aware of the decision of the Supreme Court in case G.R. No. L-69866
and of the reconstitution of records in this case xxx.
On October 1, 1990, former Solicitor General Mendoza filed a
manifestation informing the trial court that his appearance as
defendants-appellants counsel terminated when he ceased to be
Solicitor General and that he was not representing them in his private
capacity. On his part, Solicitor General Chavez finally filed
on December 11, 1990 a notice of withdrawal of appearance,
citing Urbano v. Go, where the Supreme Court said that the Office of
the Solicitor General (OSG) is not authorized to represent a public
official at any stage of a criminal case or in a civil suit for damages
arising from a felony. The record does not show that defendantsappellants were furnished a copy of this notice of withdrawal or that
they gave their conformity thereto.
In an order dated December 27, 1990, the trial court denied
plaintiffs-appellees motion to declare defendants-appellants in default,
emphatically pointing out that defendants-appellants were not duly
notified of the decision of the Supreme Court. In the same order, the
trial court directed plaintiffs-appellees to comply with the order
of August 17, 1990 within ten (10) days from notice, with a warning
that the case [would] be archived and eventually dismissed if plaintiffsappellees failed to furnish to the court the addresses of defendantsappellants. Plaintiffs-appellees moved to reconsider the order dated
December 27, 1990 but in an order dated February 1, 1991, the trial
court denied the motion, stating that without actual notice of the
judgment of the Supreme Court xxx the defendants-appellants herein
would not be aware that they should file a responsive pleading and
that, therefore, to consider the defendants-appellants in default would
be tantamount to lack of due process xxx.
For failure of the plaintiffs-appellees to comply with the orders
dated August 17, 1990 and December 27, 1990, the trial court
dismissed the case without prejudice in its order dated March 7, 1991.
Subsequently, however, in an order dated June 4, 1991, the trial court
set aside the order of dismissal and reinstated the case. It also
approved plaintiffs-appellees request to serve the notice to file answer
or responsive pleading by publication.
In a compliance dated September 12, 1991, plaintiffs-appellees
informed the trial court that the following notice was published in the
Tagalog
newspaper
BALITA
in
its
issues
of August
29,
1991 and September 5, 1991:

150

xxxx
No answer was filed by defendants-appellants within the period
stated in the notice. On motion of plaintiffs-appellees, the trial court in
its order dated December 5, 1991 declared defendants-appellants in
default and directed plaintiffs-appellees to present their evidence exparte.[4]
Ruling of the RTC
On February 19, 1993, the RTC handed down a decision in favor of the
petitioners, the dispositive portion of which reads:
WHEREFORE, judgment
following defendants:
1)
2)
3)
4)
5)
6)
7)
8)
9)

is

hereby

rendered,

ordering

the

Maj. General Fabian Ver

Col. Fidel Singson
Col. Rolando Abadilla
Col. Gerardo Lantoria
Col. Galileo Kintanar
Lt. Col. Panfilo Lacson
Maj. Rodolfo Aguinaldo
1Lt. Pedro Tango
M/Sgt. Bienvenido Balaba

to pay jointly and severally to EACH of the following plaintiffs:

a)
b)
c)
d)
e)

Rodolfo Benosa
Manuel Mario Guzman
Joseph Olayer
Marco Palo
Rolando Salutin

the amounts of FIFTY THOUSAND PESOS (50,000.00) as temperate or

moderate damages; ONE HUNDRED FIFTY THOUSAND PESOS
(150,000.00) as moral damages; and ONE HUNDRED FIFTY
THOUSAND PESOS (150,000.00) as exemplary damages. Likewise,
they are ordered to pay jointly and severally the sum of TWO
HUNDRED THOUSAND PESOS to the plaintiffs counsel.
The claims of the rest of the plaintiffs are denied and thereby
dismissed. Likewise, the case against the following defendants: Capt.
Danilo Pizarro, 1Lt. Romeo Ricardo and 1Lt. Raul Bacalso is DISMISSED,
and the said defendants are exonerated from any liability. [5]
Subsequently, respondents Col. Fidel Singson (Col. Singson), Lt. Col. Panfilo
M. Lacson (Lt. Col. Lacson), and Col. Rolando Abadilla (Col. Abadilla) filed their
Omnibus Motion praying as follows: 1) that the order of default dated December 5,
1991 be reversed and set aside; 2) that the decision dated February 19, 1993 be
reversed and set aside; 3) that the entire proceedings be declared null and void;
and 4) that they be given fifteen (15) days from notice to file answer to the
complaint and present their evidence. Col. Gerardo B. Lantoria (Col. Lantoria) filed
his own Motion for Reconsideration.
On his part, respondent Maj. Rodolfo Aguinaldo (Maj. Aguinaldo) failed to file
a timely notice of appeal so he filed a Petition for Relief from Judgment praying that
the RTC set aside its decision and proceed to try the case based on the following
grounds: 1) the decision was rendered without the benefit of notice in gross
violation of his right to due process; 2) the reconstitution of the records of the case

151

and further proceedings taken thereon were effected through fraud; and 3) his
failure to move for a new trial or to appeal was due to mistake or excusable
negligence.
The Omnibus Motion of Col. Singson, Lt. Col. Lacson and Col. Abadilla; the
Motion for Reconsideration of Col. Gerardo Lantoria; and the Petition for Relief from
Judgment of Maj. Aguinaldo were denied by the RTC. [6] Aggrieved, the said
respondents elevated their case to the CA.
Maj. Aguinaldo argued that he was deliberately deprived of the opportunity to
be heard and put up his defense, while Col. Singson, Lt. Col. Lacson and Col.
Abadilla presented the following assignment of errors:
I
THE TRIAL COURT ERRED IN ALLOWING THE OFFICE OF THE SOLICITOR
GENERAL (OSG) TO WITHDRAW AS COUNSEL WITHOUT THE REQUIRED
NOTICE TO, AND/OR CONSENT/CONFORMITY OF APPELLANTS.
II
THE TRIAL COURT ERRED IN NOT SETTING ASIDE THE ORDER OF
DEFAULT AND/OR THE JUDGMENT BY DEFAULT AND GRANTING NEW
TRIAL.
III
THE TRIAL COURT ERRED IN HOLDING THAT THE OSGS MISTAKES AND
NEGLIGENCE ARE BINDING ON THE DEFENDANTS-APPELLANTS.
IV
THE TRIAL COURT ERRED IN HOLDING THE DEFENDANTS-APPELLANTS
SINGSON, ABADILLA AND LACSON LIABLE FOR THE ALLEGED DAMAGES
SUSTAINED BY THE PLAINTIFFS-APPELLANTS (SIC).[7]
The Ruling of the CA
On July 31, 2003, the CA rendered a decision reversing and setting aside the
RTC decision and ordering the case remanded to the RTC for further proceedings.
The dispositive portion of the CA decision reads as follows:
WHEREFORE, premises considered, the appeal is hereby
GRANTED. The assailed decision dated February 19, 1993 is hereby
REVERSED and SET ASIDE. Let the record be REMANDED to the trial
court for further proceedings in accordance with the foregoing
disquisition.
SO ORDERED.[8]
The CA ruled, among others, that the RTC committed four (4) errors in
declaring the respondents in default and proceeding to hear the case. The RTC
committed its first error when it abandoned the proper modes of service of notices,
orders, resolutions or judgments as the petitioners failed to comply with its order
dated August 17, 1990, directing them to report the addresses and whereabouts of
the respondents so that they could be properly notified.
The second error was the failure of the RTC to avail of substituted service
after failing to effect personal service or service by mail. It perpetrated its third
error when it authorized service by publication after dismissing the case for failure
of the petitioners to furnish the current addresses of the respondents. The CA

152

reasoned out that there was nothing in the rules which would authorize publication
of a notice of hearing to file answer and for what was authorized to be published
were summons and final orders and judgments. The fourth error was committed
when the respondents were declared in default because they were not duly notified
and, therefore, were denied due process.
The CA stated that since the RTC failed to notify the respondents of the
proceedings undertaken, the latter were denied the chance to actively participate
therein. It explained as follows:
Instead of observing the above precepts by according
defendants-appellants every opportunity to ventilate their side of the
controversy, the trial court failed not only to notify them of the
proceedings undertaken relative to the resolution of the case but the
chance as well to actively participate therein. It bears stressing that
defendants-appellants were not informed of the reinstatement of the
case against them when the High Tribunal set aside the orders of the
trial court dated May 11, 1984,September 21, 1984 and November 8,
1983 dismissing the complaint instituted by plaintiffs-appellees.
Likewise, defendants-appellants were not apprised of the reconstitution
of the records of the case which were destroyed by the fire that razed
theCity Hall of Quezon City. In the same manner, they were not notified
of the withdrawal of the OSG as their official counsel of record, much
less was their consent thereto sought. Finally and most significantly,
defendants-appellants were precluded the chance to file their
respective answer or responsive pleadings to the complaint with the
issuance of the order dated December 5, 1991 declaring them in
default notwithstanding the defective service by publication of the
courts notice requiring them to file such answer or responsive
pleading.[9]
Not satisfied, the petitioners come to this Court praying for the reversal and
setting aside of the CA decision anchored on the following arguments:
I
IN REVERSING THE TRIAL COURTS RULINGS DECLARING DEFENDANTS
IN DEFAULT AND ALLOWING PLAINTIFFS TO PRESENT THEIR EVIDENCE
EX-PARTE; AND IN NULLIFYING THE TRIAL COURTS JUDGMENT BY
DEFAULT, THE COURT A QUO ACTED CONTRARY TO LAW AND
JURISPRUDENCE AND SO FAR DEPARTED FROM THE USUAL COURSE OF
JUDICIAL PROCEEDINGS AS TO WARRANT THE EXERCISE BY THIS
COURT OF ITS POWER OF SUPERVISION. [10]
II
IN HOLDING THAT THE TRIAL COURT ERRED IN DENYING
RESPONDENTS MOTION FOR NEW TRIAL TO SET ASIDE THE JUDGMENT
AND PETITION FOR RELIEF FROM JUDGMENT, THE COURT A QUO ACTED
CONTRARY TO LAW AND JURISPRUDENCE, AND SO FAR DEPARTED
FROM THE USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO WARRANT
THE EXERCISE BY THIS COURT OF ITS POWER OF SUPERVISION. [11]
The Petitioners Position
The petitioners claim that the RTC did not err in declaring the respondents in
default and in allowing them to present evidenceex- parte; that the respondents
were represented by the OSG from 1983 up to December 11, 1990 when the latter
withdrew its appearance from the case; that after the respondents had appeared,
thru the OSG, by filing a motion to dismiss, the petitioners were under no obligation
to track down the respondents addresses since the Rules of Court provide that once

153

a litigant is represented by counsel, all notices, motions and pleadings must be sent
to him as counsel of record; that it is a matter of record that the OSG was furnished
copies of all court orders and the petitioners pleadings for the period it remained as
the respondents counsel of record or from 1983 until the OSG withdrew on
December 11, 1990; that as counsel of record, the OSG was duty-bound to file the
respondents answer to the complaint within 15 days from notice that it was
reinstated by this Court and the case was remanded to the RTC for further
proceedings; and that despite having received copies of this Courts decision in G.R.
No. 69866 on or about April 20, 1988 and despite having been duly notified of the
finality of said decision by means of this Courts Entry of Judgment, the OSG did not
file any answer or seek an extension of time to do so.
The petitioners further argue that as early as May 1988, when this Courts
decision became final and executory and the respondents received notice thereof
through their counsel of record, it was incumbent upon them to have answered the
complaint within the period provided by the Rules of Court; that the RTC was not
hasty in declaring the respondents in default for they were given several chances to
file their answers even after their period to do so had already lapsed; that it was the
respondents failure to exercise ordinary prudence in monitoring the progress of this
case that placed the petitioners in a difficult situation; that the respondents in this
case cannot seize control of the proceedings or cause them to be suspended
indefinitely by the simple expedient of not filing their answers or by feigning
ignorance of the status of the proceedings; that the rule on service of summons by
means of publication applies to service of summons by publication, not to notices to
file answer by publication; that while service of summons by publication entails
acquiring jurisdiction over the person of the defendant, it was already obtained over
the respondents in this case by their voluntary appearance through counsel and
their act of filing a motion to dismiss on substantive grounds; that substituted
service was an exercise in futility because the respondents were no longer holding
the positions they were holding at the time the petition was filed and, therefore,
could not be reached at the addresses indicated on the complaint; that the only
remaining option was to notify the respondents by publication; that the RTC did not
err in holding that the respondents failed to establish the fraud, accident, mistake
and/or excusable negligence that would warrant the grant of a new trial, or the
setting aside of the judgment and/or petition for relief from judgment; that the
negligence of the OSG is binding on the respondents in the same manner that its
initial success in securing the dismissal of the case was binding on them; and that it
would be highly unfair to allow the respondents, who reaped the benefits of the
initial dismissal of the case and never complained then about the OSG, to suddenly
complain that they were not bound by their counsels handling or mishandling of the
case.
The Respondents Position
The respondents counter that the CA did not commit a reversible error in
reversing and setting aside the default judgment rendered by the RTC; that the
petitioners failed to address four (4) errors committed by the RTC cited by the CA;
that the respondents were deprived of the opportunity to file their answer or
responsive pleadings to the complaint when the RTC issued a default order against
them after a defective service of notice to file answer by publication; that the
petitioners invocation of the jurisprudence that a defaulting party has the burden of
showing that he has a meritorious defense does not apply in this case; and that
what should apply is the settled rule that once a denial or deprivation of due
process is determined, the RTC is ousted of its jurisdiction to proceed and its
judgment is null and void.

The Courts Ruling

154

The basic question is whether the constitutional right to procedural due

process was properly observed or was unacceptably violated in this case when the
respondents were declared in default for failing to file their answer within the
prescribed period and when the petitioners were allowed to present their
evidence ex-parte.
Section 1, Article III of the 1987 Constitution guarantees that:
No person shall be deprived of life, liberty, or property without
due process of law nor shall any person be denied the equal protection
of the law.
Procedural due process is that which hears before it condemns, which
proceeds upon inquiry and renders judgment only after trial. It contemplates notice
and opportunity to be heard before judgment is rendered affecting one's person or
property.[12]
Moreover, pursuant to the provisions of Section 5(5) of Article VIII of the 1987
Constitution,[13] the Court adopted and promulgated the following rules concerning,
among others, the protection and enforcement of constitutional rights, pleading,
practice and procedure in all courts:

Rule 13
SEC. 5. Modes of service.Service of pleadings, motions,
notices, orders, judgments and other papers shall be made either
personally or by mail.
SEC. 6. Personal service.Service of the papers may be made
by delivering personally a copy to the party or his counsel, or by
leaving it in his office with his clerk or with a person having charge
thereof. If no person is found in his office, or his office is not known, or
he has no office, then by leaving the copy, between the hours of eight
in the morning and six in the evening, at the partys or counsels
residence, if known, with a person of sufficient age and discretion then
residing therein.
SEC. 7. Service by mail.Service by registered mail shall be
made by depositing the copy in the office, in a sealed envelope, plainly
addressed to the party or his counsel at his office, if known, otherwise
at his residence, if known, with postage fully prepaid, and with
instructions to the postmaster to return the mail to the sender after ten
(10) days if undelivered. If no registry service is available in the locality
of either the sender or the addressee, service may be done by ordinary
mail.
SEC. 8. Substituted service.If service of pleadings, motions,
notices, resolutions, orders and other papers cannot be made under
the two preceding sections, the office and place of residence of the
party or his counsel being unknown, service may be made by
delivering the copy to the clerk of court, with proof of failure of both
personal service and service by mail. The service is complete at the
time of such delivery.
The above rules, thus, prescribe the modes of service of pleadings, motions,
notices, orders, judgments, and other papers, namely: (1) personal service; (2)

155

service by mail; and (3) substituted service, in case service cannot be effected
either personally or by mail.
The Rules of Court has been laid down to insure the orderly conduct of
litigation and to protect the substantive rights of all party litigants. It is for this
reason that the basic rules on the modes of service provided under Rule 13 of the
Rules of Court have been made mandatory and, hence, should be strictly followed.
In Marcelino Domingo v. Court of Appeals, [14] the Court wrote:
Section 11, Rule 13 of the Rules of Court states:
SEC. 11. Priorities in modes of service and filing. Whenever
practicable, the service and filing of pleadings and other papers shall
be done personally. Except with respect to papers emanating from the
court, a resort to other modes must be accompanied by a written
explanation why the service or filing was not done personally. A
violation of this Rule may be cause to consider the paper as not filed.
Section 11 is mandatory. In Solar Team Entertainment, Inc. v.
Judge Ricafort, the Court held that:
Pursuant x x x to Section 11 of Rule 13, service and filing of
pleadings and other papers must, whenever practicable, be done
personally; and if made through other modes, the party concerned
must provide a written explanation as to why the service or filing was
not done personally. x x x
Personal service and filing are preferred for obvious reasons.
Plainly, such should expedite action or resolution on a pleading, motion
or other paper; and conversely, minimize, if not eliminate, delays likely
to be incurred if service or filing is done by mail, considering the
inefficiency of postal service. Likewise, personal service will do away
with the practice of some lawyers who, wanting to appear clever,
resort to the following less than ethical practices: (1) serving or filing
pleadings by mail to catch opposing counsel off-guard, thus leaving the
latter with little or no time to prepare, for instance, responsive
pleadings or an opposition; or (2) upon receiving notice from the post
office that the registered parcel containing the pleading of or other
paper from the adverse party may be claimed, unduly procrastinating
before claiming the parcel, or, worse, not claiming it at all, thereby
causing undue delay in the disposition of such pleading or other
papers.
If only to underscore the mandatory nature of this innovation
to our set of adjective rules requiring personal service whenever
practicable, Section 11 of Rule 13 then gives the court the discretion to
consider a pleading or paper as not filed if the other modes of service
or filing were resorted to and no written explanation was made as to
why personal service was not done in the first place. The exercise of
discretion must, necessarily, consider the practicability of personal
service, for Section 11 itself begins with the clause "whenever
practicable."
We thus take this opportunity to clarify that under Section 11,
Rule 13 of the 1997 Rules of Civil Procedure, personal service and filing
is the general rule, and resort to other modes of service and filing, the
exception. Henceforth, whenever personal service or filing is
practicable, in light of the circumstances of time, place and person,
personal service or filing ismandatory. Only when personal service or
filing is not practicable may resort to other modes be had, which must
then be accompanied by a written explanation as to why personal

156

service or filing was not practicable to begin with. In adjudging the

plausibility of an explanation, a court shall likewise consider the
importance of the subject matter of the case or the issues involved
therein, and the prima facie merit of the pleading sought to be
expunged for violation of Section 11. This Court cannot rule otherwise,
lest we allow circumvention of the innovation introduced by the 1997
Rules in order to obviate delay in the administration of justice.
xxxx
x x x [F]or the guidance of the Bench and Bar, strictest
compliance with Section 11 of Rule 13 is mandated. [Emphasis
supplied]
In the case at bench, the respondents were completely deprived of due
process when they were declared in default based on a defective mode of service
service of notice to file answer by publication. The rules on service of pleadings,
motions, notices, orders, judgments, and other papers were not strictly followed in
declaring the respondents in default. The Court agrees with the CA that the RTC
committed procedural lapses in declaring the respondents in default and in allowing
the petitioners to present evidenceex-parte.
A review of the records discloses that after the Court rendered its April 15,
1988 Decision in G.R. No. 69866, annulling the RTC orders dated November 8, 1983,
May 11, 1984 and September 21, 1984 and ordering the remand of the case to the
RTC for further proceedings, the RTC issued an order [15] dated August 17, 1990
directing the petitioners to report the addresses and whereabouts of the
respondents so that they would be properly notified of the proceedings. This
directive was issued by the RTC considering that the respondents counsel of record,
the OSG, could no longer represent them and because the respondents were no
longer holding official government positions because of a change in government
brought about by the 1986 EDSA Revolution. This order was likewise made in
response to the motion[16] filed by the petitioners praying that the respondents be
required to file their answer.
Instead of complying with the RTCs directive to report the respondents
addresses and whereabouts, the petitioners filed a motion [17] dated September 4,
1990 to declare the respondents in default. On December 27, 1990, the RTC denied
the petitioners default motion because the respondents were not duly notified of
the April 15, 1988 Decision of this Court and the OSG no longer wanted to represent
them. The RTC likewise ordered the petitioners to comply with its August 17,
1990 Order, otherwise, the case would be archived and eventually dismissed.
On February 1, 1991, the RTC denied the petitioners motion for reconsideration and
on March 7, 1991, it issued an order dismissing the case without prejudice.
Surprisingly, on June 4, 1991, the RTC issued an order [18] setting aside
its March 7, 1991 Order and reinstating the case. It directed the petitioners, among
others, to cause the publication of a notice on the respondents to file answer or
responsive pleading. After the petitioners complied with the publication
requirements, the RTC issued the order dated December 5, 1991 declaring the
respondents in default and directing the petitioners to present evidence ex-parte.
As correctly observed by the CA, the RTCs August 17, 1990 Order was an
attempt to serve a notice to file answer on the respondents by personal service
and/or by mail. These proper and preferred modes of service, however, were never
resorted to because the OSG abandoned them when the petitioners failed to comply
with the August 17, 1990 RTC order requiring them to report the addresses and
whereabouts of the respondents. Nevertheless, there was still another less preferred
but proper mode of service available substituted service - which is service made
by delivering the copy to the clerk of court, with proof of failure of both personal
service and service by mail. Unfortunately, this substitute mode of service was not

157

resorted to by the RTC after it failed to effect personal service and service by mail.
Instead, the RTC authorized an unrecognized mode of service under the Rules,
which was service of notice to file answer by publication.
Considering the fact that the OSG could no longer represent the
respondents, the RTC should have been more patient in notifying the respondents
through personal service and/or service by mail. It should not have simply
abandoned the preferred modes of service when the petitioners failed to comply
with its August 17, 1990 order with the correct addresses of the respondents. More
so, it should not have skipped the substituted service prescribed under the Rules
and authorized a service of notice on the respondents to file answer by publication.
In view of the peculiar circumstances surrounding the case, the RTC should
have instead directed the petitioners to exert diligent efforts to notify the
respondents either personally or by registered mail. In case the preferred modes
were impractical, the Court should have required the petitioners to at least report in
writing why efforts exerted towards personal service or service by mail failed. In
other words, a convincing proof of an impossibility of personal service or service by
mail to the respondents should have been shown first. The RTC, thus, erred when it
ruled that the publication of a notice to file answer to the respondents substantially
cured the procedural defect equivalent to lack of due process. The RTC cannot just
abandon the basic requirement of personal service and/or service by mail.

At any rate, the Court is of the view that personal service to the respondents
was practicable under the circumstances considering that they were well-known
persons who used to occupy high government positions.
To stress, the only modes of service of pleadings, motions, notices, orders,
judgments and other papers allowed by the rules are personal service, service by
mail and substituted service if either personal service or service by mail cannot be
made, as stated in Sections 6, 7 and 8 of Rule 13 of the Rules of Court. Nowhere
under this rule is service of notice to file answer by publication is mentioned, much
less recognized.
Furthermore, the Court would like to point out that service by publication
only applies to service of summons stated under Rule 14 of the Rules of Court where
the methods of service of summons in civil cases are: (1) personal service; [19] (2)
substituted service;[20] and (3) service by publication. [21] Similarly, service by
publication can apply to judgments, final orders and resolutions as provided under
Section 9, Rule 13 of the Rules of Court, as follows:
SEC. 9. Service of judgments, final orders or resolutions.
Judgments, final orders or resolutions shall be served either personally
or by registered mail. When a party summoned by publication has
failed to appear in the action, judgments, final orders or
resolutions against him shall be served upon him also by
publication at the expense of the prevailing party. [Emphasis
supplied]
As correctly ruled by the CA:
Its third error was when it authorized service by publication after
initially dismissing the case for failure of plaintiffs-appellees to furnish
the current address of defendants-appellants. There is, however,
nothing in the Rules that authorizes publication of a notice of hearing
to file answer. What is authorized to be published are: (1) summons,
and (2) final orders and judgments.

158

Xxx

xxx

xxx

The above-quoted provision cannot be used to justify the trial

courts action in authorizing service by publication. Firstly, what was
published was not a final order or judgment but a simple order or
notice to file answer. Secondly, even granting that the notice to file
answer can be served by publication, it is explicit in the Rule that
publication is allowed only if the defendant-appellant was summoned
by publication. The record is clear that defendants-appellants were not
summoned by publication.
On this point, the petitioners argue that the publication was a valid and
justified procedure because following the ruling of the RTC, it was an extra step to
safeguard the interest of the defendants done pursuant to the inherent power of the
courts to control its proceedings to make them comfortable to law and justice. The
petitioners further argue that the defendants in a civil case cannot seize control of
the proceedings or cause them to be suspended indefinitely by the simple
expedient of not filing their answers or by feigning ignorance of the proceedings. All
these could have been avoided had the defendants not been so inexplicably
complacent and utterly lacking in ordinary prudence.
The Court is not convinced.
As already discussed above, the basic rules on modes of service of pleadings,
motions, notices, orders, judgments, and other papers are mandatory in nature and,
therefore, must be strictly observed. The Court is not unaware of the inherent power
of courts to control its proceedings. Nonetheless, the exercise of such inherent
power must not violate basic court procedures. More importantly, it must not
disregard ones basic constitutional right to procedural due process.
This was precisely the reason for the RTCs denial of the petitioners
default motion in its August 17, 1990 Order, and for the eventual dismissal of the
case in its December 27, 1990 Order.
It must be noted that as the RTC orders stated, the respondents were not
notified of the April 15, 1988 Decision of this Court, which ordered the re-opening
and remanding of this case to the RTC. They were neither notified of the
reconstitution proceedings that took place pertaining to the burned records of the
case. The RTC further stated that the respondents were no longer holding their
official government positions and that they were no longer represented by the OSG
on account of the change in government. In other words, the respondents had no
counsel of record and no notice of subsequent proceedings. In short, due process
was absent.
Next, the court records got burned during the June 11, 1988 fire that hit
the Quezon City Hall where the records were kept. OnMarch 12, 1990, the RTC
granted the petitioners petition for reconstitution. Again, the records do not show
that the RTC initiated extra efforts to notify the respondents about the reconstitution
proceedings. The entire records of this case tend to show that the respondents were
completely out of the picture until after the promulgation of the RTC decision.
On countless occasions, the Court ruled that, generally, judgments by default
are looked upon with disfavor and are frowned upon as contrary to public policy. An
example here would be the case of Regalado P. Samartino v. Leonor B. Raon,
[22]
where the Court stated:
The trial court should not have been too rash in declaring
petitioner in default, considering it had actual notice of valid reasons
that prevented him from answering. Well-settled is the rule that courts

159

should be liberal in setting aside orders of default for default

judgments are frowned upon, unless in cases where it clearly appears
that the reopening of the case is intended for delay. The issuance of
orders of default should be the exception rather than the rule, to be
allowed only in clear cases of obstinate refusal by the defendant to
comply with the orders of the trial court.
Suits should as much as possible be decided on the merits and
not on technicalities. In this regard, we have often admonished courts
to be liberal in setting aside orders of default as default judgments are
frowned upon and not looked upon with favor for they may amount to
a positive and considerable injustice to the defendant and the
possibility of such serious consequences necessitates a careful
examination of the grounds upon which the defendant asks that it be
set aside. Since rules of procedure are mere tools designed to facilitate
the attainment of justice, it is well recognized that this Court is
empowered to suspend its operation, or except a particular case from
its operation, when the rigid application thereof tends to frustrate
rather than promote the ends of justice. We are not unmindful of the
fact that during the pendency of the instant petition, the trial court has
rendered judgment against petitioners. However, being the court of
last resort, we deem it in the best interest that liberality and relaxation
of the Rules be extended to petitioners by setting aside the order of
default issued by the trial court and the consequent default judgment;
otherwise, great injustice would result if petitioners are not afforded an
opportunity to prove their claims.
Finally, the Court finds unacceptable the petitioners contention that 1) the
respondents were well represented by counsel from 1983 up to December 1990 and
that the respondents were properly notified of the entire proceedings through their
counsel; 2) the respondents counsel was negligent for failing to file an answer
within the prescribed period; and 3) the negligence of the OSG binds the
respondents.
The petitioners do not deny the fact that on May 15, 1985, they filed a
petition for certiorari before this Court questioning the RTC orders granting the
respondents motion to dismiss and denying their motion for reconsideration. They
do not question the fact that while their petition was pending in this Court, the 1986
EDSA Revolution took place which resulted in the removal of the respondents from
their respective high government offices and the replacement of then Solicitor
General Estelito Mendoza (Sol. Gen. Mendoza). There is likewise no dispute that
subsequently, on April 15, 1988, this Court rendered its decision annulling the
subject RTC orders and remanding the case to the RTC for further proceedings. The
case was then re-raffled to another branch.
Clearly from the above circumstances, there was no longer any lawyer-client
relationship between the OSG and the respondents at the time the decision of the
Court dated April 15, 1988 was promulgated because, admittedly, after the 1986
EDSA Revolution, the respondents were no longer occupying their respective
government positions and Sol. Gen. Mendoza, who represented them, was no longer
the Solicitor General.
In fact, in compliance with the RTCs order dated September 10, 1990,
former Solicitor General Mendoza submitted a manifestation [24] that his legal
representation for the respondents was deemed terminated when he ceased to be
the Solicitor General and that he was not representing the respondents in his
private capacity. For his part, on December 11, 1990, the incumbent Solicitor
General at that time, Solicitor General Francisco Chavez (Sol. Gen. Chavez), filed a
notice of withdrawal of appearance for the respondents citing the case of Urbano v.
Chavez,[25] where the Court ruled that the OSG is not authorized to represent a
public official at any stage of a criminal case or in a civil suit for damages arising
[23]

160

from a felony. The records do not show any proof that the respondents were
furnished a copy of this notice of withdrawal or whether or not they gave their
conformity thereto.
Contrary to the petitioners position, while it is true that Sol. Gen. Chavez
filed a notice of withdrawal only on December 11, 1990, the respondents were in
effect no longer represented by counsel as early as April 15, 1988 when the Courts
decision was rendered, or much earlier, right after the 1986 EDSA Revolution due to
the change in government. The Court cannot subscribe to the petitioners argument
that there was negligence or mistake on the part of the OSG considering that Sol.
Gen. Mendoza ceased to hold office due to the EDSA Revolution while Sol. Gen.
Chavez withdrew his representation because of the prohibition in Urbano v.
Chavez. Definitely, Sol. Gen. Mendozas cessation from holding office and Sol. Gen.
Chavezs withdrawal of representation in the unique scenario of this case are not
equivalent to professional delinquency or ignorance, incompetency or inexperience
or negligence and dereliction of duty. Hence, there is no negligence of counsel in
this case. After the 1986 EDSA Revolution, the respondents were practically left
without counsel.
As a final point, this Court commiserates with the petitioners plight and cry
for justice. They should not be denied redress of their grievances. The Court,
however, finds Itself unable to grant their plea because the fundamental law clearly
provides that no person shall be deprived of life, liberty and property without due
process of law.
WHEREFORE, the petition is DENIED.
SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

Sec. 6. Personal service

Garrucho v. Court of Appeals, G.R. No. 143791, January 14, 2005 (Supra.)
SECOND DIVISION

[G.R. No. 143791. January 14, 2005]

PETER D. GARRUCHO, petitioner, vs. COURT OF APPEALS, HON. OSCAR B.

PIMENTEL (in his capacity as Presiding Judge of the Regional Trial
Court, Branch 148, Makati City), SHERIFF RENATO C. FLORA (in his
capacity as Branch Sheriff), and RAMON BINAMIRA, respondents.
DECISION

161

CALLEJO, SR., J.:

In a Letter dated July 18 and 26, 1990, then Secretary of the Department of
Tourism and Chairman of the Board of Directors of the Philippine Tourism Authority
(PTA) petitioner Peter D. Garrucho requested then Commissioner of Immigration and
Deportation Andrea Domingo to issue Hold Departure Orders against Ramon
Binamira and Faustino Roberto. This was in connection with the investigation being
conducted by the Department of Justice involving anomalous transactions in
government securities affecting the PTA which entailed the loss of
someP161,000,000.00. Commissioner Domingo granted the request and issued
Hold Departure Order Nos. 333 and 334 against Binamira and Roberto on the said
date. Roberto requested the lifting of the order, and Secretary Garrucho opposed
the same in a Letter dated August 22, 1990.
Roberto then filed a complaint for prohibition and damages against petitioner
Garrucho and Commissioner Domingo in the Regional Trial Court (RTC) of Makati
City. Binamira, for his part, filed a complaint-in-intervention in the case. Petitioner
Garrucho was represented by private practitioners Remollo & Associates, whose
offices were located at Suite No. 23, Legaspi Suites, 178 Salcedo Street, Legaspi
Village, Makati City.
On April 16, 1997, the trial court rendered judgment in favor of respondent
Binamira. The fallo of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff
and against the defendants, and the latter are hereby ordered to, jointly and
severally, pay the following:
1.

The amount of P100,000.00 as actual and compensatory damages;

2.

The amount of P1 million as moral damages;

3.

The amount of P500,000.00 as exemplary damages;

4.

The amount of P20,000.00 as attorneys fees;

5.

Plus cost of suit.

Further, Hold Departure Order No. 333 having been found to be void ab initio,
unconstitutional and illegal, the preliminary injunction is hereby declared
permanent.
SO ORDERED.[1]
The petitioner and Commissioner Domingo appealed the decision to the Court of
Appeals (CA). On March 9, 1999, the CA sent a notice by registered mail to the
petitioners counsel directing the latter to file his brief as appellant. However, the
notice was returned to the court. The envelope containing the said notice was
stamped, thus: Return To Sender, Moved Out. [2] The CA resent the notice dated
March 5, 1999 to the petitioner at his office at the Department of Tourism building,
Agripino Circle, Manila. The notice was returned to the CA on May 5, 1999, again,
having been unclaimed. The CA issued a minute resolution [3] on June 23, 1999,
declaring that the service of notice on the petitioner was complete as of May 5,
1999. A copy of the said resolution was sent by registered mail to the petitioner in
the Department of Tourism.
On November 26, 1999, the appellate court issued a Resolution [4] dismissing the
appeal of the petitioner for his failure to file his brief. A copy of the resolution was
sent by registered mail to the petitioners counsel, but the said resolution was
returned to the court with a notation stamped on the envelope Return To Sender,
Moved Out.[5] The CA then had a separate copy of the notice served by registered

162

mail on the petitioner at his office address, but the same was returned to the CA
with the notation Unclaimed.
The appellate court issued an entry of judgment. [6] A copy of the said entry of
judgment was sent to the petitioner by registered mail at the Department of
Tourism. Thus, the appeal of Commissioner Domingo was considered submitted for
decision after filing her brief and the filing by the plaintiff-appellee of his brief.
Binamiras motion for a writ of execution against the petitioner was granted by
the trial court on June 22, 2000. The trial court issued a writ of execution on June
28, 2000. The sheriff served a copy of the said writ on the petitioner on July 12 and
17, 2000, at his office at the Benpress Building, Pasig City.
The petitioner filed a petition for certiorari under Rule 65 of the Rules of Court
against the CA, the RTC, Sheriff Flora and Binamira, for the nullification of the CA
resolutions dated June 23, 1999 and November 26, 1999, the June 22, 2000 Order of
the RTC, as well as the June 28, 2000 writ of execution issued by the latter court.
The petitioner alleged, inter alia, that the CA and RTC erred in issuing the
assailed resolutions and order because he never received copies of the assailed CA
resolutions which were sent to him at his former office at the Department of
Tourism. He averred that he had resigned as Secretary of the Department of
Tourism and Chairman of the PTA as early as January 9, 1991 [7] and was no longer
holding office thereat.[8]Since then, he had gone back to the private sector and held
office at 417 Benpress Building, Meralco Avenue corner Echague Road, Ortigas
Center, Pasig City. His counsel failed to receive his copy of the CA resolution
because he transferred his office at Suite No. 23, Legaspi Suites, 178 Salcedo
Street, Legaspi Village, Makati City, and his residence to Dumaguete City, Negros
Occidental. He further alleged that the CA and the RTC were obliged to take judicial
notice of his resignation as Tourism Secretary and the appointment of his successor,
his appointment as Executive Secretary by President Fidel E. Ramos in July 1992,
and his resignation from the said position in August/September 1992.
The petitioner argues that he was deprived of his right to due process when the
CA and the RTC failed to serve the copies of the assailed resolutions and order. He
points out that his present office was not difficult to locate, considering his stature
in business and politics in the country. He avers that there was no reason why the
copies of the assailed resolutions and order could not be sent to him at the same
office since the sheriff was able to locate his office on July 12 and 17, 2000.
In his comment on the petition, the private respondent alleged that the
petitioner was mandated to inform his counsel of his present address after he (the
petitioner) resigned as Secretary of the Department of Tourism. It was also the duty
of the petitioners counsel to inform the trial court of his new office address. The
private respondent asserts that the petitioner must suffer the dire consequences of
his and his counsels inexcusable negligence.
The respondent further contends that while the CA and the RTC were mandated
to take judicial notice of the petitioners resignation and the appointment of his
successor, they were not mandated to take judicial notice of the petitioners office
address after he resigned from the government, or of the address of his counsel in
Dumaguete City, Negros Occidental. The respondent asserts that such failure of the
petitioner to inform the said courts of his address and that of his counsel constitutes
inexcusable neglect. Thus, if the petitioners appeal was dismissed on account of
his failure to file his brief, he has nobody but himself to blame.
The petition has no merit.
The contention of the petitioner that he was deprived of his right to due process
when the CA dismissed his appeal because of his failure to file his brief as appellant
therein has no factual and legal basis.
The records show that the counsel of the petitioner in the trial court was the law
firm of Remollo & Associates with offices at Suite No. 23, Legaspi Suites, 178
Salcedo Street, Legaspi Village, Makati City. Under Section 2, Rule 44 of the 1997

163

Rules of Civil Procedure, the counsel of the parties in the court of origin shall be
considered as their counsel in the CA.[9]
Section 2, Rule 13 of the Rules of Civil Procedure provides that if any party has
appeared by counsel, service upon him shall be made upon his counsel unless
served upon the party himself is ordered by the trial court. [10] Notice or service
made upon a party who is represented by counsel is a nullity. [11] Notice to the client
and not to his counsel of record is not notice in law. [12] The rule admits of exceptions,
as when the court or tribunal orders service upon a party or when the tribunal
defendant is waived.[13]
In the absence of a proper and adequate notice to the court of a change of
address, the service of the order or resolution of a court upon the parties must be
made at the last address of their counsel on record. [14] It is the duty of the party and
his counsel to device a system for the receipt of mail intended for them, just as it is
the duty of the counsel to inform the court officially of a change in his address. It is
also the responsibility of a party to inform the court of the change of his address so
that in the event the court orders that an order or resolution be served on the said
party to enable him to receive the said resolution or order. [15]
In the present case, the law firm of Remollo & Associates, the petitioners
counsel of record, moved out from their office at the Legaspi Suites to Dumaguete
City without informing the court of such fact. Based on its records, the CA believed
that the law office of the petitioners counsel was still at the Legaspi Suites and sent
copies of its resolutions to the counsel of the petitioner at the said address.
Neither did the petitioner inform the court of his home or office address after his
resignation as Secretary of the Department of Tourism where copies of the said
order or resolution could be sent. Notwithstanding his stature in the business
community, the CA cannot take judicial notice of the petitioners home address or
his office address after his departure as Secretary of the Department of Tourism or
as Executive Secretary of the President.
Indeed, the petitioner has nobody but himself to blame. It was his responsibility
to check the status of his appeal in the CA from time to time, from his counsel or
from the CA. He failed to do so. As we held in Bernardo v. Court of Appeals:[16]
Litigants, represented by counsel, should not expect that all they need to do is sit
back, relax and await the outcome of their case. They should give the necessary
assistance to their counsel for what is at stake is their interest in the case.
In his concurring opinion in Republic vs. Sandiganbayan, Mr. Justice Teodoro R.
Padilla emphasized the value and significance of the partys presence and diligence
in the advancement of his cause, thus:
xxx An almost lifetime of experience in litigation is the best witness to the
indispensability of partys presence (aside from his lawyer, in case he has the
assistance of counsel) in order to litigate with any reasonable opportunity of
success. xxx especially during the cross-examination of adverse partys witnesses
where the truth must be determined every counsel worth his salt must have the
assistance and presence of his client on the spot, for the client invariably knows the
facts far better than his counsel. In short, even in civil cases, the presence of party
(as distinguished from his lawyer alone) is essential to due process.
True enough, the party-litigant should not rely totally on his counsel to litigate his
case even if the latter expressly assures that the formers presence in court will no
longer be needed. No prudent party will leave the fate of his case entirely to his
lawyer. Absence in one or two hearings may be negligible but want of inquiry or
update on the status of his case for several months (four, in this case) is
inexcusable. It is the duty of a party-litigant to be in contact with his counsel from
time to time in order to be informed of the progress of his case. Petitioner simply
claims that he was busy with his gravel and sand and trading businesses which
involved frequent traveling from Manila to outlying provinces. But this was not a

164

justifiable excuse for him to fail to ask about the developments in his case or to ask
somebody to make the query for him. Petitioner failed to act with prudence and
diligence; hence, his plea that he was not accorded the right to due process cannot
elicit this Courts approval or even sympathy.[17]
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Sec. 7. Service by mail

Sec. 8. Substituted service

Thermochem v. Naval, G.R. No. 131541, October 20, 2000
FIRST DIVISION

[G.R. No. 131541. October 20, 2000]

THERMOCHEM INCORPORATED and JEROME O. CASTRO, petitioners,

vs. LEONORA NAVAL and THE COURT OF APPEALS, respondents.
DECISION
YNARES-SANTIAGO, J.:
This damage suit arose from a collision of vehicles based on the following facts:
"(O)n May 10, 1992, at around 12:00 o'clock midnight, Eduardo Edem [1] was driving
a "Luring Taxi" along Ortigas Avenue, near Rosario, Pasig, going towards
Cainta. Prior to the collision, the taxicab was parked along the right side of Ortigas
Avenue, not far from the Rosario Bridge, to unload a passenger. Thereafter, the
driver executed a U-turn to traverse the same road, going to the direction of
EDSA. At this point, the Nissan Pathfinder traveling along the same road going to
the direction of Cainta collided with the taxicab. The point of impact was so great
that the taxicab was hit in the middle portion and was pushed sideward, causing the
driver to lose control of the vehicle. The taxicab was then dragged into the nearby
Question Tailoring Shop, thus, causing damage to the said tailoring shop, and its
driver, Eduardo Eden, sustained injuries as a result of the incident." [2]
Private respondent, as owner of the taxi, filed a damage suit against petitioner,
Thermochem Incorporated, as the owner of the Nissan Pathfinder, and its driver,
petitioner Jerome Castro. After trial, the lower court adjudged petitioner Castro
negligent and ordered petitioners, jointly and severally, to pay private respondent
actual, compensatory and exemplary damages plus attorney's fees and costs of
suit. The dispositive portion of the Decision of the Regional Trial Court, Branch 150
of Makati City dated September 25, 1995, reads:

165

In view of all the foregoing, judgment is hereby rendered ordering the defendants,
jointly and severally, to pay plaintiff the following:
1. The amount of P47,850.00 as actual damages;
2. The amount of P45,000.00 as compensatory damages for unrealized income;
3. The amount of P10,000.00 as exemplary damages;
4. The amount of P10,000.00 as and for attorney's fees; and
5. Cost of suit.
SO ORDERED.[3]
On appeal, the Court of Appeals affirmed the judgment of the court a quo.
Hence, this petition for review on certiorari. The petition was denied on February
2, 1998 for failure to submit an explanation why no personal service of copies of
certain pleadings was made as required by Rule 13, Section 11 of the 1997 Rules of
Civil Procedure.[5] Upon petitioners' motion for reconsideration, the petition was
reinstated and private respondent was required to file her Comment in a Resolution
dated June 22, 1998.[6] A copy of the said Resolution was sent by registered mail to
private respondent's counsel but the same was returned to sender. [7] In a separate
Resolution issued on the same date, this Court ordered that a copy of the June 22,
1998 Resolution be served personally on private respondent's counsel. [8] As the said
Resolution was also returned unserved, "the Court Resolved to consider the said
Resolution as SERVED."[9] After more than a year, no Comment has been
filed. Considering that private respondent was given only ten (10) days to file her
Comment, that period had already lapsed ten days after the June 23, 1999
Resolution which stated that the June 22, 1998 resolution as "served".
[4]

Service of notice or other pleadings which are required by the rules to be

furnished to the parties must be made on their last address on record. If they are
represented by counsel, such notices shall be sent instead to the counsel's last
given address on record in the absence of a proper and adequate notice to the court
of a change of address,[10] unless service upon the party himself is ordered by the
court.[11] It is the party and his counsel's responsibility to device a system for the
receipt of mail intended for them [12] just as it is the duty of counsel to inform the
court of a change in his address. In the case at bar, private respondent's counsel
never notified the Court of any change of his address or whether he no longer holds
office in his last address of record. Neither was the Court informed if his ties with his
client has been severed. Insofar as the Court is concerned, the last address on
record is the place where all notices shall be served until the Court is officially
informed to the contrary. What is the effect of the failure of a private respondent to
comply with a court order to file Comment?
Courts are given the option to dispense with the filing of the Comment and
consider the case as deemed submitted for decision. Under Rule 46, Section 7 of the
1997 Rules of Civil Procedure, [13] when the respondent in an original action filed with
the court fails to file its comment, the case may be decided on the basis of the
evidence on record without prejudice to disciplinary action against the disobedient
party. Concomitant thereto is the rule that pursuant to Rule 51, Section 1(B)(1),
[14]
where no comment is filed upon the expiration of the period to comment in an
original action or a petition for review, the case shall be deemed submitted for
decision. Both provisions are applicable to a petition for review filed with the
Supreme Court as provided in Rule 56, Section 2(a) of the Rules. [15] Moreover, a
lawyer who fails to submit the required Comment manifests willful disobedience to a
lawful order of the Supreme Court, a clear violation of the Canon of Professional
Ethics.[16] Counsel must remember that his actions and omissions are binding on his
client.[17] He should not neglect legal matters entrusted to him as his negligence
therefrom shall render him liable.[18]

166

The petition lacks merit.

The issue of whether a party is negligent is a question of fact. It is a timehonored precept that the Supreme Court is not a trier of facts, [19]although it has
authority to review and reverse factual findings of lower courts if these do not
conform to evidence.[20] It is also settled that findings of fact of the trial court,
particularly when affirmed by the Court of Appeals, is binding on the Supreme
Court[21] and generally conclusive,[22]especially if it has not been adequately shown
that no significant facts and circumstances were overlooked or disregarded which
when considered would have altered the outcome of the disposition.
The driver of the oncoming Nissan Pathfinder vehicle was liable and the driver of
the U-turning taxicab was contributorily liable. Contrary to petitioners' contention,
the fact that a party had no opportunity to avoid the collision is of his own making
and this should not relieve him of liability. [23] From petitioner Castro's testimonial
admissions, it is established that he was driving at a speed faster than 50
kilometers per hour because it was a downhill slope coming from the Rosario
bridge. But as he allegedly stepped on the brake, it locked causing his Nissan
Pathfinder to skid to the left and consequently hit the taxicab. The sudden
malfunction of the vehicle's brake system is the usual excuse of drivers involved in
collisions which are the result of speedy driving, particularly when the road is
downhill.
Malfunction or loss of brake is not a fortuitous event. Between the owner and his
driver, on the one hand, and third parties such as commuters, drivers and
pedestrians, on the other, the former is presumed to know about the conditions of
his vehicle and is duty bound to take care thereof with the diligence of a good father
of the family. A mechanically defective vehicle should avoid the streets. As
petitioner's vehicle was moving downhill, the driver should have slowed down since
a downhill drive would naturally cause the vehicle to accelerate. Moreover, the
record shows that the Nissan Pathfinder was on the wrong lane when the collision
occurred. This was a disregard of traffic safety rules. The law considers what would
be reckless, blameworthy or negligent in a man of ordinary diligence and prudence
and determines liability by that. [24]Even assuming arguendo that loss of brakes is an
act of God, by reason of their negligence, the fortuitous event became humanized,
rendering the Nissan driver liable for the ensuing damages. [25]
As mentioned earlier, the driver of the taxi is contributorily liable. U-turns are
not generally advisable particularly on major streets. The taxi was hit on its side
which means that it had not yet fully made a turn to the other lane. The driver of
the taxi ought to have known that vehicles coming from the Rosario bridge are on a
downhill slope. Obviously, there was lack of foresight on his part, making him
contributorily liable. Most public utility drivers disregard signs and traffic rules
especially during the night when traffic enforcers manning the streets disappear
with the light.In driving vehicles, the primary concern should be the safety not only
of the driver or his passengers, but also his fellow motorists.
Considering the contributory negligence of the driver of private respondent's
taxi, the award of P47,850.00, for the repair of the taxi, should be reduced in
half. All other awards for damages are deleted for lack of merit.
WHEREFORE,
based
on
the
foregoing,
the
assailed
decision
is
MODIFIED. Petitioners are ordered to pay, jointly and severally, to private
respondent the amount of P23,925.00 as actual damages. All other awards are
DELETED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Pardo, JJ., concur.

Cubar v. Mendoza, G.R. No. 55035, February 23, 1983

G.R. No. L-55035 February 23, 1983

167

GENARO CUBAR,FLORA CUBAR, NARCISO CUBAR, CRESENCIA CUBAR,

ROSALIO CUBAR, PETRA T. VDA. DE CUBAR, FELOMINO CUBAR, FAUSTO
CUBAR,
et
al., petitioners,
vs.
HON. RAFEL T. MENDOZA, JUDGE of the Court of First Instance of Cebu
(Branch VI), VICTORIANO ENAD, RAFAEL ENAD, SIMON VELOSO and
ERLINDA PONCE, respondents.
Maximo S. Ylaya & Associate and Pelaez, Pelaez and Pelaez for petitioners.
Alercado Law Office for private respondents.

DE CASTRO, J.:
Special civil action of certiorari and prohibition with writ of preliminary injunction to
annul and set aside the Order dated January 28, 1980 of the defunct Court of First
Instance of Cebu, Branch VI, herein respondent judge presiding, setting aside the
Order for the issuance of a writ of execution issued by Branch V of said Court in Civil
Case No. R-15607 on January 8, 1980, and to restrain and enjoin respondent judge
from further proceeding with the case in any manner until further orders from this
Court.
On September 22, 1976, herein petitioners filed a complaint with the Court of First
Instance of Cebu, assigned to Branch Vthereof, then presided by Judge Mariano A.
Zosa, docketed as Civil Case No. R- 15607, for the nullification of certain documents
alleged in the complaint, which they, claiming to be "illiterate mountain people",
supposedly had signed upon the representations of the defendants, herein private
respondents, that what they were signing was a right of way in favor of the
government over their lands for the construction of a road leading to a mining site,
with the inducement that once operational, each landowner shall be entitled to a
royalty of P.30 per ton of minerals loaded in trucks passing through their respective
lots, which documents, however, turned out to be alleged authorizations for entry
into their 'lets by private respondents for the purpose of exploring rich rock
phosphate deposits, and on the basis of said documents, private respondents were
granted by the Bureau of Mines permits to exploit and develop the mineral
resources in petitioners' land to the exclusion of the latter.
In their answer, private respondents specifically denied the material allegations
thereof, claiming that the questioned documents were freely and voluntarily
executed by the petitioners.
After hearing on the merits and the case submitted for decision, the trial court
rendered judgment on October 1, 1979 declaring the subject documents null and
void, and adjudging private respondents liable to pay damages to petitioners. A
copy of said decision was served to Atty. Romeo Gonzaga, private respondents'
counsel of record and was received his wife at his given address on November 23,
1979.
No appeal having been duly perfected within the reglementary period provided by
law, petitioners filed on January 7, 1980 a motion for the issuance of a writ of
execution, which was granted by the trial court in its Order of January 8, 1980,

168

On January 12, 1980 or four days after the issuance of the order of
execution, Branch V became vacant with the appointment of Judge Zosa to the
Court of Appeals.
On January 14, 1980, private respondents, through a new lawyer, Atty. Ponciano H.
Alivio, filed a motion for reconsideration of the Order of January 8, 1980 and to
quash the writ of execution, on the ground that the decision is not yet final and
executory for lack of valid service thereof. Said motion was opposed by petitioners,
who insisted that said decision is already final and executory, and Atty. Alivio has no
personality to file said motion for want of formal substitution of counsel as required
by the Rules.
Since Branch V was then vacant, the motion for reconsideration was resolved
by Branch VI, presided over by the respondent judge who, on January 28, issued the
herein assailed Order setting aside the Order of execution and quashing the writ
issued thereunder.
Petitioners' motion for reconsideration filed against the above order of respondent
judge having been denied, this petition was filed.
We find the petition to be meritorious. That the decision of the trial court was
received by the wife of Atty. Romeo Gonzaga, private respondents' counsel of record
at his given address on November 23, 1979, is not disputed. It is likewise not
disputed that said wife has been receiving prior notices of the case for her husband
at the office of the latter, who had always acted as if he had received said notices
himself for he had duly complied therewith. With these facts, no other ruling can be
had but that the service of the decision in question is valid and binding. It is fully
being in accordance with Rule 13, Section 4, on personal service, said wife being of
sufficient discretion to receive notice of final judgment.
Private respondents argue that said service is not valid because Atty. Gonzaga had
left Cebu City, his address of record, and has resided in Legaspi City. It is already
well settled rule that when a party is represented by counsel, notice should be
made upon the counsel of record 1 at his given address, to which notices of all kind
emanating from the court should be sent in the absence of a proper and adequate
notice to the court of a change of address. 2 Petitioner's argument, likewise, fails to
consider the need of observing a legal formality before a counsel of record may be
considered relieved of his responsibility as such counsel on account of withdrawal.
This legal formality is that a lawyer's withdrawal as counsel must be made in a
formal petition filed in the case, without which, notice of judgment rendered in the
case served on the counsel of record, is, for all legal purposes notice to the client,
the date of receipt of which is considered the starting point from which the period of
appeal prescribed by law shall begin to run. 3 Not having withdrawn formally as
counsel in the case, Atty. Romeo Gonzaga continued to be the counsel of
record 4 and was, for all legal purpose, private respondents' attorney upon whom
the court's processes may be served, as they were in fact duly served.
Consequently, the decision of the trial court, copy of which was served upon
respondents' counsel on November 23, 1979, is already final and executory at the
time the order of execution was issued on January 8, 1980, no appeal having been
taken therefrom within the reglementary period provided by law. Time and again,
this court has ruled that once a judgment becomes final and executory, the
prevailing party can have it executed as a matter of right, and the granting of
execution becomes a ministerial duty of the court. 5 Therefore, respondent judge

169

gravely abused his discretion in issuing the herein questioned order, in the absence
of any justification, both legal and factual, that would warrant the stay of execution.
The claim of private respondents that the present petition was filed late 2 months
and 29 days after the assailed order was issued, is without any merit. This is a
special civil action of certiorari and prohibition which may be filed within a
reasonable period, no time frame for its filing having been fixed by Rule 65, Rules of
Court.
WHEREFORE, the writ of certiorari is granted and the questioned Order of
respondent judge is hereby annulled and set aside. The writ of prohibition is likewise
granted and respondent judge or whoever would be appointed to the appropriate
branch of the Regional Trial Court, prohibited from acting in any wise or form except
to order execution of the subject decision. The temporary restraining order
heretofore issued is hereby made permanent. Costs against private respondents.
SO ORDERED.
Makasiar (Chairman), Concepcion, Jr., Guerrero, Abad Santos and Escolin, JJ., concur.
Aquino J., is on leave.
Garrucho v. Court of Appeals, G.R. No. 143791, January 14, 2005 (Supra.)
Mojar v. Agro Commercial Security, G.R. No. 187188, June 27, 2012
Republic
Supreme
Manila

of

the Philippines
Court

SECOND DIVISION
SALVADOR O. MOJAR, EDGAR B.
BEGONIA, Heirs of the late JOSE M.
CORTEZ,
RESTITUTO
GADDI,
VIRGILIO M. MONANA, FREDDIE
RANCES, and EDSON D. TOMAS,
Petitioners,

- versus -

G. R. No. 187188
Present:
CARPIO, J., Chairperson,
BRION,
PEREZ,
SERENO, and
REYES, JJ.
Promulgated:

AGRO
COMMERCIAL
SECURITY
SERVICE AGENCY, INC., et al.,[1]
Respondents.

June 27, 2012

x--------------------------------------------------x

170

DECISION
SERENO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
seeking to annul the entire proceedings before the Court of Appeals (CA) in CA-G.R.
SP No. 102201, in which it issued its Decision dated 21 July 2008 and Resolution
dated 16 March 2009.[2]

Statement of Facts and of the Case

Petitioners were employed as security guards by respondent and assigned to
the various branches of the Bank of Commerce in Pangasinan, La Union and Ilocos
Sur.
In separate Office Orders dated 23 and 24 May 2002, petitioners were
relieved from their respective posts and directed to report to their new assignments
in Metro Manila effective 3 June 2002. They, however, failed to report for duty in
their new assignments, prompting respondent to send them a letter dated 18 June
2002. It required a written explanation why no disciplinary action should be taken
against them, but the letter was not heeded.
On 15 February 2005, petitioners filed a Complaint for illegal dismissal
against respondent and the Bank of Commerce, Dagupan Branch, before the
National Labor Relations Commission (NLRC). Petitioners claimed, among others,
that their reassignment was a scheme to sever the employer-employee relationship
and was done in retaliation for their pressing their claim for salary differential, which
they had earlier filed against respondent and the Bank of Commerce before the
NLRC. They also contended that the transfer to Manila was inconvenient and
prejudicial, since they would incur additional expenses for board and lodging.
On 22 May 2006, the Labor Arbiter (LA) rendered a Decision [3] finding that
petitioners were illegally dismissed. The dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby
rendered ordering respondents to reinstate all the complainants to
their former assignment in Pangasinan with full backwages and if
reinstatement is no longer possible, to pay separation pay of one
month for every year of service each of the seven complainant security
guards. (A detailed computation of the judgment award is attached as
Annex A.)[4] (Italicized in the original)

On appeal, the NLRC affirmed the LAs ruling, with the modification that the
Complaint against the Bank of Commerce was dismissed. [5] The dispositive portion
provides:
WHEREFORE, premises considered, the appeal of Agro
Commercial Security Service Agency, Inc. is hereby DISMISSED for lack
of merit. The Appeal of Bank of Commerce is GRANTED for being
impressed with merit. Accordingly, judgment is hereby rendered

171

MODIFYING the Decision of the Labor Arbiter dated May 22, 2006 by
DISMISSING the complaint against Bank of Commerce-Dagupan. All
other dispositions of the Labor Arbiter not so modified, STAYS. [6]

On 23 January 2008, respondent filed a Motion for Extension to file a Petition

for Certiorari before the CA. In a Resolution dated 20 February 2008, the latter
granted the Motion for Extension, allowing respondent until 10 February 2008 within
which to file its Petition. On 9 February 2008, respondent filed its Petition for
Certiorari before the appellate court.
On 30 June 2008, the CA issued a Resolution noting that no comment on the
Petition had been filed, and stating that the case was now deemed submitted for
resolution.
On 21 July 2008, the CA rendered its Decision. Finding merit in the Petition, it
found the Orders transferring petitioners to Manila to be a valid exercise of
management prerogative. The records were bereft of any showing that the subject
transfer involved a diminution of rank or salaries. Further, there was no showing of
bad faith or ill motive on the part of the employer. Thus, petitioners refusal to
comply with the transfer orders constituted willful disobedience of a lawful order of
an employer and abandonment, which were just causes for termination under the
Labor Code. However, respondent failed to observe the due process requirements in
terminating them. The dispositive portion of the CA Decision provides:
WHEREFORE, premises considered, the instant petition
is GRANTED. The assailed Decision and Resolution of the NLRC dated
July 31, 2007 and October 31, 2007[,] respectively, in NLRC NCR CA
No. 046036-05 are REVERSED and SET ASIDE. The complaints of
private respondents for illegal dismissal are hereby DISMISSED.
However, petitioner is ordered to pay private respondents the sum of
10,000.00 each for having violated the latters right to statutory due
process.[7]

On 1 August 2008, petitioner Mojar filed a Manifestation [8] before the CA,
stating that he and the other petitioners had not been served a copy of the CA
Petition. He also said that they were not aware whether their counsel before the
NLRC, Atty. Jose C. Espinas, was served a copy thereof, since the latter had already
been bedridden since December 2007 until his demise on 25 February
2008.[9] Neither could their new counsel, Atty. Mario G. Aglipay, enter his
appearance before the CA, as petitioners failed to get [the] folder from the office of
Atty. Espinas, as the folder can no longer be found. [10]
Thereafter, petitioners filed a Motion to Annul Proceedings [11] dated 9
September 2008 before the CA. They moved to annul the proceedings on the
ground of lack of jurisdiction. They argued that the NLRC Decision had already
attained finality, since the Petition before the CA was belatedly filed, and the
signatory to the Certification of non-forum shopping lacked the proper authority.
In a Resolution dated 16 March 2009, the CA denied the Motion to Annul
Proceedings.
Hence, this Petition.

172

The Petition raised the following arguments: (1) There was no proof of service
attached to the Motion for Extension to file a Petition for Certiorari before the CA;
thus, both the Motion and the Petition were mere scraps of paper. (2) Respondent
purposely intended to exclude petitioners from the proceedings before the CA by
omitting their actual addresses in the CA Petition, a mandatory requirement under
Section 3, Rule 46; in relation to Section 1, Rule 65 of the Rules of Court. Further,
respondent failed to prove the valid service of its CA Petition upon petitioners
former counsel of record. (3) The CA was grossly ignorant of the law in ignoring
jurisprudence, which states that when the floating status of an employee lasts for
more than six months, the latter may be considered to have been constructively
dismissed.
On 3 September 2009, respondent filed its Comment on the Petition,
pursuant to this Courts 29 June 2009 Resolution. In its Comment, it argued that the
CA Decision had already become final and executory, inasmuch as the Motion to
Annul Proceedings, a procedural approach not provided for in the Rules, was filed
some 44 days after the service of the CA Decision on the counsel for petitioners.
Further, Atty. Aglipay had then no legal standing to appear as counsel, considering
that there was still no substitution of counsel at the time he filed the Motion to
Annul Proceedings. In any case, petitioners are bound by the actions of their
counsel, Atty. Espinas.
On 1 March 2010, this Court issued a Resolution requiring petitioners to file
their reply, which petitioners complied with on 26 April 2010. In their Reply,
petitioners state among others that the records of the CA case showed that there
was a deliberate violation of their right to due process. The CA Petition did not
contain the required affidavit of service, which alone should have caused themotu
proprio dismissal thereof. Further, the instant Petition before this Court is an
appropriate mode to contest the CA Decision and Resolution, which petitioners
contend are void judgments. They also argue that there is no rule on the clients
substitution in case of the death of counsel. Instead, the reglementary period to file
pleadings in that case must be suspended and made more lenient, considering that
the duty of substitution is transferred to a non-lawyer.
On 30 March 2011, respondent filed a Motion for Early Resolution of the case.
Petitioners likewise filed a Motion for Leave (For the Admission of the Instant
Comment on Private Respondents Motion for Early Resolution), stating that they
were joining respondent in moving for the early resolution of the case.
This Court will resolve the issues raised in seriatim.
Actual Addresses of Parties
Petitioners contend that the CA should not have taken cognizance of the
Petition before it, as their actual addresses were not indicated therein as required
under Section 3, Rule 46[12] of the Rules of Court, and pursuant to Cendaa v. Avila.
[13]
In the 2008 case Cendaa, this Court ruled that the requirement that a petition
for certiorari must contain the actual addresses of all the petitioners and the
respondents is mandatory. The failure to comply with that requirement is a sufficient
ground for the dismissal of a petition.
This rule, however, is not absolute. In the 2011 case Santos v. Litton Mills
Incorporated,[14] this Court ruled that where the petitioner clearly mentioned that
the parties may be served with the courts notices or processes through their
respective counsels, whose addresses have been clearly specified as in this case,

173

this act would constitute substantial compliance with the requirements of Section 3,
Rule 46. The Court further observed that the notice required by law is notice to
counsel if the party has already appeared by counsel, pursuant to Section 2, Rule 13
of the Rules of Court.
In its Petition before the CA, respondent clearly indicated the following:
THE PARTIES
2.0. The petitioner AGRO COMMERCIAL SECURITY SERVICE
AGENCY, INC. (hereafter petitioner AGRO), is a corporation existing
under Philippine laws, and may be served with process thru counsel, at
his address hereunder indicated; private respondents (1) SALVADOR O.
MOJAR; (2) EDGAR B. BEGONIA; (3) JOSE M. CORTEZ; (4) FREDDIE
RANCES; (5) VIRGILIO MONANA; (6) RESTITUTU [sic] GADDI; and, (7)
EDSON D. TOMAS, are all of age, and during the material period, were
in the employ of petitioner AGRO as security guards; said respondents
may be served with process thru their common counsel, ATTY. JOSE C.
ESPINAS at No. 51 Scout Tuazon, Quezon City; on the other hand,
respondent National Labor Relations Commission, 1 st Division, Quezon
City, is the agency having jurisdiction over labor disputes in the
Philippines and may be served with process at offices in Quezon City;
[15]

The foregoing may thus be considered as substantial compliance with Section

3, Rule 46. In any case, and as will be discussed further below, the CA had sufficient
reason to take cognizance of the Petition.
Affidavit of Service
Section 3, Rule 46 provides that the petition for certiorari should be filed
together with the proof of service thereof on the respondent. Under Section 13, Rule
13 of the Rules of Court, if service is made by registered mail, as in this case, proof
shall be made by an affidavit of the person mailing and the registry receipt issued
by the mailing office. Section 3, Rule 46 further provides that the failure to comply
with any of the requirements shall be sufficient ground for the dismissal of the
petition.
Petitioners allege that no affidavit of service was attached to the CA Petition.
Neither is there any in the copy of the CA Petition attached to the instant Petition. In
its Comment, respondent claims that petitioners through their counsel, Atty.
Aglipay can be charged with knowledge of the pendency of the CA Petition. It says
that on April 2008, Atty. Aglipay filed before the NLRC an Entry of Appearance and
Motion for Execution Pending Appeal.[16] However, petitioners merely indicated
therein that they were respectfully mov[ing] for the execution pending appeal of
the Labor Arbiters decision dated 22 May 2006 affirmed by the NLRC. [17] There was
no indication that they had been served a copy of the CA Petition. No other proof
was presented by respondent to show petitioners actual receipt of the CA Petition.
In any case, this knowledge, even if presumed, would not and could not take the
place of actual service and proof of service by respondent.

In Ferrer v. Villanueva,[18] petitioner therein failed to append the proof of

service to his Petition for Certiorari. Holding that this failure was a fatal defect, the
Court stated:

174

There is no question that petitioner herein was remiss in

complying with the foregoing Rule. In Cruz v. Court of Appeals, we
ruled that with respect to motions, proof of service is a mandatory
requirement. We find no cogent reason why this dictum should not
apply and with more reason to a petition for certiorari, in view of
Section 3, Rule 46 which requires that the petition shall be
filed together with proof of service thereof. We agree with the
Court of Appeals that the lack of proof of service is a fatal defect. The
utter disregard of the Rule cannot be justified by harking to substantial
justice and the policy of liberal construction of the Rules. Technical
rules of procedure are not meant to frustrate the ends of justice.
Rather, they serve to effect the proper and orderly disposition of cases
and thus effectively prevent the clogging of court dockets. (Emphasis
in the original)

Indeed, while an affidavit of service is required merely as proof that service

has been made on the other party, it is nonetheless essential to due process and
the orderly administration of justice.[19]

Be that as it may, it does not escape the attention of this Court that in the CA
Resolution dated 16 March 2009, the appellate court stated that their records
revealed that Atty. Espinas, petitioners counsel of record at the time, was duly
served a copy of the following: CA Resolution dated 20 February 2008 granting
respondents Motion for Extension of Time to file the CA Petition; CA Resolution
dated 24 April 2008 requiring petitioners to file their Comment on the CA Petition;
and CA Resolution dated 30 June 2008, submitting the case for resolution, as no
comment was filed.

Such service to Atty. Espinas, as petitioners counsel of record, was valid

despite the fact he was already deceased at the time. If a party to a case has
appeared by counsel, service of pleadings and judgments shall be made upon his
counsel or one of them, unless service upon the party is specifically ordered by the
court. It is not the duty of the courts to inquire, during the progress of a case,
whether the law firm or partnership representing one of the litigants continues to
exist lawfully, whether the partners are still alive, or whether its associates are still
connected with the firm.[20]

It is the duty of party-litigants to be in contact with their counsel from time to

time in order to be informed of the progress of their case. It is likewise the duty of
parties to inform the court of the fact of their counsels death. [21] Their failure to do
so means that they have been negligent in the protection of their cause. [22] They
cannot pass the blame to the court, which is not tasked to monitor the changes in
the circumstances of the parties and their counsel.
Substitution of Counsel

Petitioners claim that Atty. Espinas passed away on 8 February 2008. They
further claim that he was already bedridden as early as December 2007, and thus
they failed to get any information whether [he] was served with a copy of the [CA
Petition].[23]

175

Petitioners were negligent in the conduct of their litigation. Having known

that Atty. Espinas was already bedridden as early as December 2007, they should
have already obtained new counsel who could adequately represent their interests.
The excuse that Atty. Aglipay could not enter his appearance before the CA
because [petitioners] failed to get [their] folder from the office of Atty.
Espinas[24] is flimsy at best.

The requirements for a valid

jurisprudentially settled in this wise:

substitution

of

counsel

have

been

Under Section 26, Rule 138 of the Rules of Court and established
jurisprudence, a valid substitution of counsel has the following
requirements: (1) the filing of a written application for substitution; (2)
the client's written consent; (3) the consent of the substituted lawyer if
such consent can be obtained; and, in case such written consent
cannot be procured, (4) a proof of service of notice of such motion on
the attorney to be substituted in the manner required by the Rules.
Where death of the previous attorney is the cause of substitution of the
counsel, a verified proof of the death of such attorney (usually a death
certificate) must accompany the notice of appearance of the new
counsel.[25]

The fact that petitioners were unable to obtain their folder from Atty. Espinas
is immaterial. Proof of service upon the lawyer to be substituted will suffice where
the lawyers consent cannot be obtained. With respect to the records of the case,
these may easily be reconstituted by obtaining copies thereof from the various
courts involved.
Petitioners allegedly went to the CA sometime prior to 31 July 2008, or the
date of filing of their Manifestation before the CA, to inquire about the status of their
case. Allegedly, they always visited the Court of Appeals for [the] development of
their case.[26]It is doubtful that a person who regularly follows up the status of his
case before a court would not be told, first, that a petition has been filed against
him; and, second, that the courts resolutions have been sent to his counsel. It is
questionable why, knowing these matters, petitioners did not seek the replacement
of their counsel, if the latter was unable to pursue their case. Further, despite their
manifestation that, sometime prior to 31 July 2008, they were already aware that
the case had been submitted for resolution, they still waited until 9 September 2008
or until they allegedly had knowledge of the CA Decision before they filed the
Motion to Annul Proceedings.

In Ampo v. Court of Appeals,[27] this Court explained the vigilance that must
be exercised by a party:

We are not persuaded by petitioners argument that he was not

aware that his counsel had died or that an adverse judgment had
already been rendered until he received the notice of promulgation
from the RTC of Butuan City on April 20, 2005. Time and again we have
stated that equity aids the vigilant, not those who slumber on their
rights. Petitioner should have taken it upon himself to periodically keep
in touch with his counsel, check with the court, and inquire about the
status of the case. Had petitioner been more prudent, he would have

176

found out sooner about the death of his counsel and would have taken
the necessary steps to prevent his present predicament.
xxx

xxx

x xx

Litigants who are represented by counsel should not expect that

all they need to do is sit back, relax and await the outcome of their
cases. Relief will not be granted to a party who seeks avoidance from
the effects of the judgment when the loss of the remedy at law was
due to his own negligence. The circumstances of this case plainly show
that petitioner only has himself to blame. Neither can he invoke due
process. The essence of due process is simply an opportunity to be
heard. Due process is satisfied when the parties are afforded a fair and
reasonable opportunity to explain their respective sides of the
controversy. Where a party, such as petitioner, was afforded this
opportunity to participate but failed to do so, he cannot complain of
deprivation of due process. If said opportunity is not availed of, it is
deemed waived or forfeited without violating the constitutional
guarantee.

In this case, petitioners must bear the fruits of their negligence in the
handling of their case. They may not decry the denial of due process, when they
were indeed afforded the right to be heard in the first place.

Substantive Issue: Illegal Dismissal

Petitioners argue that they were illegally dismissed, based on the 1989
case Agro Commercial Security Services Agency, Inc. v. NLRC.,[28] which holds that
when the floating status of employees lasts for more than six (6) months, they may
be considered to have been illegally dismissed from the service.

Unfortunately, the above-mentioned case is not applicable here. In Agro, the

service contracts of the security agency therein with various corporations and
government agencies to which the security guards were previously assigned
were terminated, generally due to the sequestration of the said offices. Accordingly,
many of the security guards were placed on floating status. Floating status means
an indefinite period of time when one does not receive any salary or financial
benefit provided by law.[29] In this case, petitioners were actually reassigned to new
posts, albeit in a different location from where they resided. Thus, there can be no
floating status or indefinite period to speak of. Instead, petitioners were the ones
who refused to report for work in their new assignment.

In cases involving security guards, a relief and transfer order in itself does not
sever the employment relationship between the security guards and their agency.
Employees have the right to security of tenure, but this does not give them such a
vested right to their positions as would deprive the company of its prerogative to
change their assignment or transfer them where their services, as security guards,
will be most beneficial to the client.[30]

An employer has the right to transfer or assign its employees from one office
or area of operation to another in pursuit of its legitimate business interest,
provided there is no demotion in rank or diminution of salary, benefits, and other
privileges; and the transfer is not motivated by discrimination or bad faith, or
effected as a form of punishment or demotion without sufficient cause. [31]

177

While petitioners may claim that their transfer to Manila will cause added
expenses and inconvenience, we agree with the CA that, absent any showing of bad
faith or ill motive on the part of the employer, the transfer remains valid.

WHEREFORE, the Petition is DENIED. The Court of Appeals Decision dated

21 July 2008 and Resolution dated 16 March 2009 in CA-G.R. SP No. 102201 are
hereby AFFIRMED.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

Sec. 9. Service of judgments, final orders, or resolutions

Aberca v. Ver, G.R. No. 166216, March 14, 2012 (Supra.)

Republic of the Philippines

Supreme Court
Manila
THIRD DIVISION
ROGELIO
ABERCA,
RODOLFO
BENOSA, NESTOR BODINO,
NOEL ETABAG, DANILO DELA FUENTE,
BELEN DIAZ-FLORES, MANUEL MARIO
GUZMAN,
ALAN
JASMINEZ,
EDWIN
LOPEZ,
ALFREDO
MANSOS,
ALEX
MARCELINO, ELIZABETH PROTACIOMARCELINO,
JOSEPH
OLAYER,
CARLOSPALMA,
MARCO PALO,
ROLANDO
SALUTIN
BENJAMIN
SEGUNDO, ARTURO TABARA, EDWIN
TULALIAN, and
REBECCA TULALIAN,
Petitioners,
- versus -

MAJ. GEN. FABIAN VER,

COL. FIDEL SINGSON,
COL. GERARDO B. LANTORIA, COL.
ROLANDO ABADILLA,

178

G.R. No. 166216

Present:
VELASCO, JR., J., Chairperson,
PERALTA,
ABAD,
MENDOZA, and
PERLAS-BERNABE, JJ.

COL. GALILEO KINTANAR,

LT. COL. PANFILO M. LACSON, MAJ.
RODOLFO AGUINALDO, CAPT. DANILO
PIZARRO,
1LT. PEDRO TANGO,
1LT. ROMEO RICARDO,
1LT. RAUL BACALSO,
Promulgated:
M/SGT. BIENVENIDO BALABA
and JOHN DOES,
March 14, 2012
Respondents.
x -----------------------------------------------------------------------------------------------------x
DECISION
MENDOZA, J.:
Assailed in this petition is the July 31, 2003 Decision[1] of the Court of
Appeals (CA) in CA-G.R. CV No. 43763 and its November 26, 2004
Resolution[2] reversing and setting aside the February 19, 1993 Decision [3] of the
Regional Trial Court, Branch 107, Quezon City (RTC), in Civil Case No. 37487
entitled Rogelio Aberca, et al. v. Maj. Gen. Fabian Ver, et al. for sum of money and
damages.
The Facts
The factual and procedural antecedents were succinctly recited by the CA as
follows:
On 25 January 1983, several suspected subversives who were
arrested and detained by the military filed a complaint for damages
with the Regional Trial Court of Quezon City against Gen. Fabian Ver,
then AFP Chief of Staff, and the following subordinate officers: Col.
Fidel Singson, Col. Gerardo Lantoria, Col. Rolando Abadilla, Col.
Guillermo Kintanar, Lt. Col. Panfilo Lacson, Maj. Rodolfo Aguinaldo,
Capt. Danilo Pizarro, 1Lt. Pedro Tango, 1Lt. Romeo Ricardo, 1Lt. Raul
Bacalso, M/Sgt.Bienvenido Balaba and John Does. The case was
docketed as Civil Case No. 37487 and assigned to Branch 95.
In their complaint, the plaintiff-appellees alleged that they were
arrested and detained by Task Force Makabansa, a composite group of
various intelligence units of the AFP, on the strength of defective
search warrants; that while under detention and investigation, they
were subjected to physical and psychological harm, torture and other
brutalities to extort from them confessions and other information that
would incriminate them; and that by reason thereof, they suffered
actual and moral damages.
Defendants-appellants, through their counsel, the then Solicitor
General Estelito Mendoza, filed a motion to dismiss on the following
grounds: (1) since the privilege of the writ of habeas corpus was then
suspended, the trial court cannot inquire into the circumstances
surrounding plaintiffs-appellees arrests; (2) the defendants-appellants
are immune from liability for the reason that they were then
performing their official duties; and (3) the complaint states no cause
of action.
In an order dated November 8, 1983, the trial court granted
defendants-appellants motion to dismiss and ordered the case
dismissed.

179

Plaintiffs-appellees filed a motion to reconsider and set aside the

order of dismissal. In an order dated May 11, 1984, the trial court
declared the order of November 8, 1983 final.
Plaintiffs-appellees again filed a motion for reconsideration of
the order dated May 11, 1984. In an order datedSeptember 21, 1984,
the trial court denied the motion for reconsideration.
On March 15, 1985, plaintiffs-appellees went to the Supreme
Court on a petition for review on certiorari, seeking to annul and set
aside the orders of the trial court dated November 8, 1983, May 11,
1984 and September 21, 1984. The case was docketed as G.R. No.
69866.
While the case was pending in the Supreme Court, the so-called
EDSA revolution took place. As a result, the defendants-appellants lost
their official positions and were no longer in their respective office
addresses as appearing in the record. Also, in the meantime, the case
was re-raffled to Branch 107.
On April 15, 1988, the Supreme Court rendered a decision
annulling and setting aside the assailed orders and remanded the case
to the trial court for further proceedings.
However, trial could not proceed immediately because on June
11, 1988, the record of the case was destroyed when fire razed
the City Hall of Quezon City. It was only on October 9, 1989 when
plaintiffs-appellees sought a reconstitution of the record of the case.
The record shows that the petition for reconstitution was set for
hearing on October 27, 1989. However, there is nothing in the record
to show that defendants-appellants or their counsel were notified. For
lack of an opposition, the petition for reconstitution was granted in an
order dated March 12, 1990.
On August 15, 1990, plaintiffs-appellees filed a motion praying
that defendants-appellants be required to file their answer. However,
the record as reconstituted did not show who are the lawyers of the
defendants-appellants considering that Estelito Mendoza, who had
represented them in his capacity as Solicitor General, was no longer
holding that position. Furthermore, defendants-appellants were also no
longer occupying the positions they held at the time the complaint was
filed. Thus, in an order dated August 17, 1990, plaintiffs-appellees were
directed to report to the trial court the addresses and whereabouts of
defendants-appellants so that they could be properly notified.
Instead of complying with the order of August 17, 1990,
plaintiffs-appellees filed a motion to declare defendants-appellants in
default. The trial court deferred resolution of this motion and instead, it
issued an order on September 10, 1990 directing that a copy of the
order dated August 17, 1990 be furnished to new Solicitor General
Francisco Chavez to enable him to take action pursuant to Section 18,
Rule 3 of the Rules of Court, and to former Solicitor General Estelito
Mendoza to enable him to give notice as to whether he [would]
continue to represent the defendants-appellants in his private capacity.
As it said in its order, the trial court took this action in view of the
change in government and corresponding change in the addresses and
circumstances of the defendants-appellants who may not even be
aware of the decision of the Supreme Court in case G.R. No. L-69866
and of the reconstitution of records in this case xxx.

180

On October 1, 1990, former Solicitor General Mendoza filed a

manifestation informing the trial court that his appearance as
defendants-appellants counsel terminated when he ceased to be
Solicitor General and that he was not representing them in his private
capacity. On his part, Solicitor General Chavez finally filed
on December 11, 1990 a notice of withdrawal of appearance,
citing Urbano v. Go, where the Supreme Court said that the Office of
the Solicitor General (OSG) is not authorized to represent a public
official at any stage of a criminal case or in a civil suit for damages
arising from a felony. The record does not show that defendantsappellants were furnished a copy of this notice of withdrawal or that
they gave their conformity thereto.
In an order dated December 27, 1990, the trial court denied
plaintiffs-appellees motion to declare defendants-appellants in default,
emphatically pointing out that defendants-appellants were not duly
notified of the decision of the Supreme Court. In the same order, the
trial court directed plaintiffs-appellees to comply with the order
of August 17, 1990 within ten (10) days from notice, with a warning
that the case [would] be archived and eventually dismissed if plaintiffsappellees failed to furnish to the court the addresses of defendantsappellants. Plaintiffs-appellees moved to reconsider the order dated
December 27, 1990 but in an order dated February 1, 1991, the trial
court denied the motion, stating that without actual notice of the
judgment of the Supreme Court xxx the defendants-appellants herein
would not be aware that they should file a responsive pleading and
that, therefore, to consider the defendants-appellants in default would
be tantamount to lack of due process xxx.
For failure of the plaintiffs-appellees to comply with the orders
dated August 17, 1990 and December 27, 1990, the trial court
dismissed the case without prejudice in its order dated March 7, 1991.
Subsequently, however, in an order dated June 4, 1991, the trial court
set aside the order of dismissal and reinstated the case. It also
approved plaintiffs-appellees request to serve the notice to file answer
or responsive pleading by publication.
In a compliance dated September 12, 1991, plaintiffs-appellees
informed the trial court that the following notice was published in the
Tagalog
newspaper
BALITA
in
its
issues
of August
29,
1991 and September 5, 1991:
xxxx
No answer was filed by defendants-appellants within the period
stated in the notice. On motion of plaintiffs-appellees, the trial court in
its order dated December 5, 1991 declared defendants-appellants in
default and directed plaintiffs-appellees to present their evidence exparte.[4]
Ruling of the RTC
On February 19, 1993, the RTC handed down a decision in favor of the
petitioners, the dispositive portion of which reads:
WHEREFORE, judgment
following defendants:
1)
2)

is

hereby

Maj. General Fabian Ver

Col. Fidel Singson

181

rendered,

ordering

the

3)
4)
5)
6)
7)
8)
9)

Col. Rolando Abadilla

Col. Gerardo Lantoria
Col. Galileo Kintanar
Lt. Col. Panfilo Lacson
Maj. Rodolfo Aguinaldo
1Lt. Pedro Tango
M/Sgt. Bienvenido Balaba

to pay jointly and severally to EACH of the following plaintiffs:

a)
b)
c)
d)
e)

Rodolfo Benosa
Manuel Mario Guzman
Joseph Olayer
Marco Palo
Rolando Salutin

the amounts of FIFTY THOUSAND PESOS (50,000.00) as temperate or

moderate damages; ONE HUNDRED FIFTY THOUSAND PESOS
(150,000.00) as moral damages; and ONE HUNDRED FIFTY
THOUSAND PESOS (150,000.00) as exemplary damages. Likewise,
they are ordered to pay jointly and severally the sum of TWO
HUNDRED THOUSAND PESOS to the plaintiffs counsel.
The claims of the rest of the plaintiffs are denied and thereby
dismissed. Likewise, the case against the following defendants: Capt.
Danilo Pizarro, 1Lt. Romeo Ricardo and 1Lt. Raul Bacalso is DISMISSED,
and the said defendants are exonerated from any liability. [5]
Subsequently, respondents Col. Fidel Singson (Col. Singson), Lt. Col. Panfilo
M. Lacson (Lt. Col. Lacson), and Col. Rolando Abadilla (Col. Abadilla) filed their
Omnibus Motion praying as follows: 1) that the order of default dated December 5,
1991 be reversed and set aside; 2) that the decision dated February 19, 1993 be
reversed and set aside; 3) that the entire proceedings be declared null and void;
and 4) that they be given fifteen (15) days from notice to file answer to the
complaint and present their evidence. Col. Gerardo B. Lantoria (Col. Lantoria) filed
his own Motion for Reconsideration.
On his part, respondent Maj. Rodolfo Aguinaldo (Maj. Aguinaldo) failed to file
a timely notice of appeal so he filed a Petition for Relief from Judgment praying that
the RTC set aside its decision and proceed to try the case based on the following
grounds: 1) the decision was rendered without the benefit of notice in gross
violation of his right to due process; 2) the reconstitution of the records of the case
and further proceedings taken thereon were effected through fraud; and 3) his
failure to move for a new trial or to appeal was due to mistake or excusable
negligence.
The Omnibus Motion of Col. Singson, Lt. Col. Lacson and Col. Abadilla; the
Motion for Reconsideration of Col. Gerardo Lantoria; and the Petition for Relief from
Judgment of Maj. Aguinaldo were denied by the RTC. [6] Aggrieved, the said
respondents elevated their case to the CA.
Maj. Aguinaldo argued that he was deliberately deprived of the opportunity to
be heard and put up his defense, while Col. Singson, Lt. Col. Lacson and Col.
Abadilla presented the following assignment of errors:
I
THE TRIAL COURT ERRED IN ALLOWING THE OFFICE OF THE SOLICITOR
GENERAL (OSG) TO WITHDRAW AS COUNSEL WITHOUT THE REQUIRED
NOTICE TO, AND/OR CONSENT/CONFORMITY OF APPELLANTS.
II

182

THE TRIAL COURT ERRED IN NOT SETTING ASIDE THE ORDER OF

DEFAULT AND/OR THE JUDGMENT BY DEFAULT AND GRANTING NEW
TRIAL.
III
THE TRIAL COURT ERRED IN HOLDING THAT THE OSGS MISTAKES AND
NEGLIGENCE ARE BINDING ON THE DEFENDANTS-APPELLANTS.
IV
THE TRIAL COURT ERRED IN HOLDING THE DEFENDANTS-APPELLANTS
SINGSON, ABADILLA AND LACSON LIABLE FOR THE ALLEGED DAMAGES
SUSTAINED BY THE PLAINTIFFS-APPELLANTS (SIC).[7]
The Ruling of the CA
On July 31, 2003, the CA rendered a decision reversing and setting aside the
RTC decision and ordering the case remanded to the RTC for further proceedings.
The dispositive portion of the CA decision reads as follows:
WHEREFORE, premises considered, the appeal is hereby
GRANTED. The assailed decision dated February 19, 1993 is hereby
REVERSED and SET ASIDE. Let the record be REMANDED to the trial
court for further proceedings in accordance with the foregoing
disquisition.
SO ORDERED.[8]
The CA ruled, among others, that the RTC committed four (4) errors in
declaring the respondents in default and proceeding to hear the case. The RTC
committed its first error when it abandoned the proper modes of service of notices,
orders, resolutions or judgments as the petitioners failed to comply with its order
dated August 17, 1990, directing them to report the addresses and whereabouts of
the respondents so that they could be properly notified.
The second error was the failure of the RTC to avail of substituted service
after failing to effect personal service or service by mail. It perpetrated its third
error when it authorized service by publication after dismissing the case for failure
of the petitioners to furnish the current addresses of the respondents. The CA
reasoned out that there was nothing in the rules which would authorize publication
of a notice of hearing to file answer and for what was authorized to be published
were summons and final orders and judgments. The fourth error was committed
when the respondents were declared in default because they were not duly notified
and, therefore, were denied due process.
The CA stated that since the RTC failed to notify the respondents of the
proceedings undertaken, the latter were denied the chance to actively participate
therein. It explained as follows:
Instead of observing the above precepts by according
defendants-appellants every opportunity to ventilate their side of the
controversy, the trial court failed not only to notify them of the
proceedings undertaken relative to the resolution of the case but the
chance as well to actively participate therein. It bears stressing that
defendants-appellants were not informed of the reinstatement of the
case against them when the High Tribunal set aside the orders of the
trial court dated May 11, 1984,September 21, 1984 and November 8,
1983 dismissing the complaint instituted by plaintiffs-appellees.

183

Likewise, defendants-appellants were not apprised of the reconstitution

of the records of the case which were destroyed by the fire that razed
theCity Hall of Quezon City. In the same manner, they were not notified
of the withdrawal of the OSG as their official counsel of record, much
less was their consent thereto sought. Finally and most significantly,
defendants-appellants were precluded the chance to file their
respective answer or responsive pleadings to the complaint with the
issuance of the order dated December 5, 1991 declaring them in
default notwithstanding the defective service by publication of the
courts notice requiring them to file such answer or responsive
pleading.[9]
Not satisfied, the petitioners come to this Court praying for the reversal and
setting aside of the CA decision anchored on the following arguments:
I
IN REVERSING THE TRIAL COURTS RULINGS DECLARING DEFENDANTS
IN DEFAULT AND ALLOWING PLAINTIFFS TO PRESENT THEIR EVIDENCE
EX-PARTE; AND IN NULLIFYING THE TRIAL COURTS JUDGMENT BY
DEFAULT, THE COURT A QUO ACTED CONTRARY TO LAW AND
JURISPRUDENCE AND SO FAR DEPARTED FROM THE USUAL COURSE OF
JUDICIAL PROCEEDINGS AS TO WARRANT THE EXERCISE BY THIS
COURT OF ITS POWER OF SUPERVISION. [10]
II
IN HOLDING THAT THE TRIAL COURT ERRED IN DENYING
RESPONDENTS MOTION FOR NEW TRIAL TO SET ASIDE THE JUDGMENT
AND PETITION FOR RELIEF FROM JUDGMENT, THE COURT A QUO ACTED
CONTRARY TO LAW AND JURISPRUDENCE, AND SO FAR DEPARTED
FROM THE USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO WARRANT
THE EXERCISE BY THIS COURT OF ITS POWER OF SUPERVISION. [11]
The Petitioners Position
The petitioners claim that the RTC did not err in declaring the respondents in
default and in allowing them to present evidenceex- parte; that the respondents
were represented by the OSG from 1983 up to December 11, 1990 when the latter
withdrew its appearance from the case; that after the respondents had appeared,
thru the OSG, by filing a motion to dismiss, the petitioners were under no obligation
to track down the respondents addresses since the Rules of Court provide that once
a litigant is represented by counsel, all notices, motions and pleadings must be sent
to him as counsel of record; that it is a matter of record that the OSG was furnished
copies of all court orders and the petitioners pleadings for the period it remained as
the respondents counsel of record or from 1983 until the OSG withdrew on
December 11, 1990; that as counsel of record, the OSG was duty-bound to file the
respondents answer to the complaint within 15 days from notice that it was
reinstated by this Court and the case was remanded to the RTC for further
proceedings; and that despite having received copies of this Courts decision in G.R.
No. 69866 on or about April 20, 1988 and despite having been duly notified of the
finality of said decision by means of this Courts Entry of Judgment, the OSG did not
file any answer or seek an extension of time to do so.
The petitioners further argue that as early as May 1988, when this Courts
decision became final and executory and the respondents received notice thereof
through their counsel of record, it was incumbent upon them to have answered the
complaint within the period provided by the Rules of Court; that the RTC was not
hasty in declaring the respondents in default for they were given several chances to
file their answers even after their period to do so had already lapsed; that it was the
respondents failure to exercise ordinary prudence in monitoring the progress of this

184

case that placed the petitioners in a difficult situation; that the respondents in this
case cannot seize control of the proceedings or cause them to be suspended
indefinitely by the simple expedient of not filing their answers or by feigning
ignorance of the status of the proceedings; that the rule on service of summons by
means of publication applies to service of summons by publication, not to notices to
file answer by publication; that while service of summons by publication entails
acquiring jurisdiction over the person of the defendant, it was already obtained over
the respondents in this case by their voluntary appearance through counsel and
their act of filing a motion to dismiss on substantive grounds; that substituted
service was an exercise in futility because the respondents were no longer holding
the positions they were holding at the time the petition was filed and, therefore,
could not be reached at the addresses indicated on the complaint; that the only
remaining option was to notify the respondents by publication; that the RTC did not
err in holding that the respondents failed to establish the fraud, accident, mistake
and/or excusable negligence that would warrant the grant of a new trial, or the
setting aside of the judgment and/or petition for relief from judgment; that the
negligence of the OSG is binding on the respondents in the same manner that its
initial success in securing the dismissal of the case was binding on them; and that it
would be highly unfair to allow the respondents, who reaped the benefits of the
initial dismissal of the case and never complained then about the OSG, to suddenly
complain that they were not bound by their counsels handling or mishandling of the
case.
The Respondents Position
The respondents counter that the CA did not commit a reversible error in
reversing and setting aside the default judgment rendered by the RTC; that the
petitioners failed to address four (4) errors committed by the RTC cited by the CA;
that the respondents were deprived of the opportunity to file their answer or
responsive pleadings to the complaint when the RTC issued a default order against
them after a defective service of notice to file answer by publication; that the
petitioners invocation of the jurisprudence that a defaulting party has the burden of
showing that he has a meritorious defense does not apply in this case; and that
what should apply is the settled rule that once a denial or deprivation of due
process is determined, the RTC is ousted of its jurisdiction to proceed and its
judgment is null and void.

The Courts Ruling

The basic question is whether the constitutional right to procedural due
process was properly observed or was unacceptably violated in this case when the
respondents were declared in default for failing to file their answer within the
prescribed period and when the petitioners were allowed to present their
evidence ex-parte.
Section 1, Article III of the 1987 Constitution guarantees that:
No person shall be deprived of life, liberty, or property without
due process of law nor shall any person be denied the equal protection
of the law.
Procedural due process is that which hears before it condemns, which
proceeds upon inquiry and renders judgment only after trial. It contemplates notice
and opportunity to be heard before judgment is rendered affecting one's person or
property.[12]

185

Moreover, pursuant to the provisions of Section 5(5) of Article VIII of the 1987
Constitution,[13] the Court adopted and promulgated the following rules concerning,
among others, the protection and enforcement of constitutional rights, pleading,
practice and procedure in all courts:

Rule 13
SEC. 5. Modes of service.Service of pleadings, motions,
notices, orders, judgments and other papers shall be made either
personally or by mail.
SEC. 6. Personal service.Service of the papers may be made
by delivering personally a copy to the party or his counsel, or by
leaving it in his office with his clerk or with a person having charge
thereof. If no person is found in his office, or his office is not known, or
he has no office, then by leaving the copy, between the hours of eight
in the morning and six in the evening, at the partys or counsels
residence, if known, with a person of sufficient age and discretion then
residing therein.
SEC. 7. Service by mail.Service by registered mail shall be
made by depositing the copy in the office, in a sealed envelope, plainly
addressed to the party or his counsel at his office, if known, otherwise
at his residence, if known, with postage fully prepaid, and with
instructions to the postmaster to return the mail to the sender after ten
(10) days if undelivered. If no registry service is available in the locality
of either the sender or the addressee, service may be done by ordinary
mail.
SEC. 8. Substituted service.If service of pleadings, motions,
notices, resolutions, orders and other papers cannot be made under
the two preceding sections, the office and place of residence of the
party or his counsel being unknown, service may be made by
delivering the copy to the clerk of court, with proof of failure of both
personal service and service by mail. The service is complete at the
time of such delivery.
The above rules, thus, prescribe the modes of service of pleadings, motions,
notices, orders, judgments, and other papers, namely: (1) personal service; (2)
service by mail; and (3) substituted service, in case service cannot be effected
either personally or by mail.
The Rules of Court has been laid down to insure the orderly conduct of
litigation and to protect the substantive rights of all party litigants. It is for this
reason that the basic rules on the modes of service provided under Rule 13 of the
Rules of Court have been made mandatory and, hence, should be strictly followed.
In Marcelino Domingo v. Court of Appeals, [14] the Court wrote:
Section 11, Rule 13 of the Rules of Court states:
SEC. 11. Priorities in modes of service and filing. Whenever
practicable, the service and filing of pleadings and other papers shall
be done personally. Except with respect to papers emanating from the
court, a resort to other modes must be accompanied by a written
explanation why the service or filing was not done personally. A
violation of this Rule may be cause to consider the paper as not filed.

186

Section 11 is mandatory. In Solar Team Entertainment, Inc. v.

Judge Ricafort, the Court held that:
Pursuant x x x to Section 11 of Rule 13, service and filing of
pleadings and other papers must, whenever practicable, be done
personally; and if made through other modes, the party concerned
must provide a written explanation as to why the service or filing was
not done personally. x x x
Personal service and filing are preferred for obvious reasons.
Plainly, such should expedite action or resolution on a pleading, motion
or other paper; and conversely, minimize, if not eliminate, delays likely
to be incurred if service or filing is done by mail, considering the
inefficiency of postal service. Likewise, personal service will do away
with the practice of some lawyers who, wanting to appear clever,
resort to the following less than ethical practices: (1) serving or filing
pleadings by mail to catch opposing counsel off-guard, thus leaving the
latter with little or no time to prepare, for instance, responsive
pleadings or an opposition; or (2) upon receiving notice from the post
office that the registered parcel containing the pleading of or other
paper from the adverse party may be claimed, unduly procrastinating
before claiming the parcel, or, worse, not claiming it at all, thereby
causing undue delay in the disposition of such pleading or other
papers.
If only to underscore the mandatory nature of this innovation
to our set of adjective rules requiring personal service whenever
practicable, Section 11 of Rule 13 then gives the court the discretion to
consider a pleading or paper as not filed if the other modes of service
or filing were resorted to and no written explanation was made as to
why personal service was not done in the first place. The exercise of
discretion must, necessarily, consider the practicability of personal
service, for Section 11 itself begins with the clause "whenever
practicable."
We thus take this opportunity to clarify that under Section 11,
Rule 13 of the 1997 Rules of Civil Procedure, personal service and filing
is the general rule, and resort to other modes of service and filing, the
exception. Henceforth, whenever personal service or filing is
practicable, in light of the circumstances of time, place and person,
personal service or filing ismandatory. Only when personal service or
filing is not practicable may resort to other modes be had, which must
then be accompanied by a written explanation as to why personal
service or filing was not practicable to begin with. In adjudging the
plausibility of an explanation, a court shall likewise consider the
importance of the subject matter of the case or the issues involved
therein, and the prima facie merit of the pleading sought to be
expunged for violation of Section 11. This Court cannot rule otherwise,
lest we allow circumvention of the innovation introduced by the 1997
Rules in order to obviate delay in the administration of justice.
xxxx
x x x [F]or the guidance of the Bench and Bar, strictest
compliance with Section 11 of Rule 13 is mandated. [Emphasis
supplied]
In the case at bench, the respondents were completely deprived of due
process when they were declared in default based on a defective mode of service
service of notice to file answer by publication. The rules on service of pleadings,
motions, notices, orders, judgments, and other papers were not strictly followed in

187

declaring the respondents in default. The Court agrees with the CA that the RTC
committed procedural lapses in declaring the respondents in default and in allowing
the petitioners to present evidenceex-parte.
A review of the records discloses that after the Court rendered its April 15,
1988 Decision in G.R. No. 69866, annulling the RTC orders dated November 8, 1983,
May 11, 1984 and September 21, 1984 and ordering the remand of the case to the
RTC for further proceedings, the RTC issued an order [15] dated August 17, 1990
directing the petitioners to report the addresses and whereabouts of the
respondents so that they would be properly notified of the proceedings. This
directive was issued by the RTC considering that the respondents counsel of record,
the OSG, could no longer represent them and because the respondents were no
longer holding official government positions because of a change in government
brought about by the 1986 EDSA Revolution. This order was likewise made in
response to the motion[16] filed by the petitioners praying that the respondents be
required to file their answer.
Instead of complying with the RTCs directive to report the respondents
addresses and whereabouts, the petitioners filed a motion [17] dated September 4,
1990 to declare the respondents in default. On December 27, 1990, the RTC denied
the petitioners default motion because the respondents were not duly notified of
the April 15, 1988 Decision of this Court and the OSG no longer wanted to represent
them. The RTC likewise ordered the petitioners to comply with its August 17,
1990 Order, otherwise, the case would be archived and eventually dismissed.
On February 1, 1991, the RTC denied the petitioners motion for reconsideration and
on March 7, 1991, it issued an order dismissing the case without prejudice.
Surprisingly, on June 4, 1991, the RTC issued an order [18] setting aside
its March 7, 1991 Order and reinstating the case. It directed the petitioners, among
others, to cause the publication of a notice on the respondents to file answer or
responsive pleading. After the petitioners complied with the publication
requirements, the RTC issued the order dated December 5, 1991 declaring the
respondents in default and directing the petitioners to present evidence ex-parte.
As correctly observed by the CA, the RTCs August 17, 1990 Order was an
attempt to serve a notice to file answer on the respondents by personal service
and/or by mail. These proper and preferred modes of service, however, were never
resorted to because the OSG abandoned them when the petitioners failed to comply
with the August 17, 1990 RTC order requiring them to report the addresses and
whereabouts of the respondents. Nevertheless, there was still another less preferred
but proper mode of service available substituted service - which is service made
by delivering the copy to the clerk of court, with proof of failure of both personal
service and service by mail. Unfortunately, this substitute mode of service was not
resorted to by the RTC after it failed to effect personal service and service by mail.
Instead, the RTC authorized an unrecognized mode of service under the Rules,
which was service of notice to file answer by publication.
Considering the fact that the OSG could no longer represent the
respondents, the RTC should have been more patient in notifying the respondents
through personal service and/or service by mail. It should not have simply
abandoned the preferred modes of service when the petitioners failed to comply
with its August 17, 1990 order with the correct addresses of the respondents. More
so, it should not have skipped the substituted service prescribed under the Rules
and authorized a service of notice on the respondents to file answer by publication.
In view of the peculiar circumstances surrounding the case, the RTC should
have instead directed the petitioners to exert diligent efforts to notify the
respondents either personally or by registered mail. In case the preferred modes
were impractical, the Court should have required the petitioners to at least report in
writing why efforts exerted towards personal service or service by mail failed. In
other words, a convincing proof of an impossibility of personal service or service by

188

mail to the respondents should have been shown first. The RTC, thus, erred when it
ruled that the publication of a notice to file answer to the respondents substantially
cured the procedural defect equivalent to lack of due process. The RTC cannot just
abandon the basic requirement of personal service and/or service by mail.

At any rate, the Court is of the view that personal service to the respondents
was practicable under the circumstances considering that they were well-known
persons who used to occupy high government positions.
To stress, the only modes of service of pleadings, motions, notices, orders,
judgments and other papers allowed by the rules are personal service, service by
mail and substituted service if either personal service or service by mail cannot be
made, as stated in Sections 6, 7 and 8 of Rule 13 of the Rules of Court. Nowhere
under this rule is service of notice to file answer by publication is mentioned, much
less recognized.
Furthermore, the Court would like to point out that service by publication
only applies to service of summons stated under Rule 14 of the Rules of Court where
the methods of service of summons in civil cases are: (1) personal service; [19] (2)
substituted service;[20] and (3) service by publication. [21] Similarly, service by
publication can apply to judgments, final orders and resolutions as provided under
Section 9, Rule 13 of the Rules of Court, as follows:
SEC. 9. Service of judgments, final orders or resolutions.
Judgments, final orders or resolutions shall be served either personally
or by registered mail. When a party summoned by publication has
failed to appear in the action, judgments, final orders or
resolutions against him shall be served upon him also by
publication at the expense of the prevailing party. [Emphasis
supplied]
As correctly ruled by the CA:
Its third error was when it authorized service by publication after
initially dismissing the case for failure of plaintiffs-appellees to furnish
the current address of defendants-appellants. There is, however,
nothing in the Rules that authorizes publication of a notice of hearing
to file answer. What is authorized to be published are: (1) summons,
and (2) final orders and judgments.
Xxx

xxx

xxx

The above-quoted provision cannot be used to justify the trial

courts action in authorizing service by publication. Firstly, what was
published was not a final order or judgment but a simple order or
notice to file answer. Secondly, even granting that the notice to file
answer can be served by publication, it is explicit in the Rule that
publication is allowed only if the defendant-appellant was summoned
by publication. The record is clear that defendants-appellants were not
summoned by publication.
On this point, the petitioners argue that the publication was a valid and
justified procedure because following the ruling of the RTC, it was an extra step to
safeguard the interest of the defendants done pursuant to the inherent power of the
courts to control its proceedings to make them comfortable to law and justice. The
petitioners further argue that the defendants in a civil case cannot seize control of
the proceedings or cause them to be suspended indefinitely by the simple

189

expedient of not filing their answers or by feigning ignorance of the proceedings. All
these could have been avoided had the defendants not been so inexplicably
complacent and utterly lacking in ordinary prudence.
The Court is not convinced.
As already discussed above, the basic rules on modes of service of pleadings,
motions, notices, orders, judgments, and other papers are mandatory in nature and,
therefore, must be strictly observed. The Court is not unaware of the inherent power
of courts to control its proceedings. Nonetheless, the exercise of such inherent
power must not violate basic court procedures. More importantly, it must not
disregard ones basic constitutional right to procedural due process.
This was precisely the reason for the RTCs denial of the petitioners
default motion in its August 17, 1990 Order, and for the eventual dismissal of the
case in its December 27, 1990 Order.
It must be noted that as the RTC orders stated, the respondents were not
notified of the April 15, 1988 Decision of this Court, which ordered the re-opening
and remanding of this case to the RTC. They were neither notified of the
reconstitution proceedings that took place pertaining to the burned records of the
case. The RTC further stated that the respondents were no longer holding their
official government positions and that they were no longer represented by the OSG
on account of the change in government. In other words, the respondents had no
counsel of record and no notice of subsequent proceedings. In short, due process
was absent.
Next, the court records got burned during the June 11, 1988 fire that hit
the Quezon City Hall where the records were kept. OnMarch 12, 1990, the RTC
granted the petitioners petition for reconstitution. Again, the records do not show
that the RTC initiated extra efforts to notify the respondents about the reconstitution
proceedings. The entire records of this case tend to show that the respondents were
completely out of the picture until after the promulgation of the RTC decision.
On countless occasions, the Court ruled that, generally, judgments by default
are looked upon with disfavor and are frowned upon as contrary to public policy. An
example here would be the case of Regalado P. Samartino v. Leonor B. Raon,
[22]
where the Court stated:
The trial court should not have been too rash in declaring
petitioner in default, considering it had actual notice of valid reasons
that prevented him from answering. Well-settled is the rule that courts
should be liberal in setting aside orders of default for default
judgments are frowned upon, unless in cases where it clearly appears
that the reopening of the case is intended for delay. The issuance of
orders of default should be the exception rather than the rule, to be
allowed only in clear cases of obstinate refusal by the defendant to
comply with the orders of the trial court.
Suits should as much as possible be decided on the merits and
not on technicalities. In this regard, we have often admonished courts
to be liberal in setting aside orders of default as default judgments are
frowned upon and not looked upon with favor for they may amount to
a positive and considerable injustice to the defendant and the
possibility of such serious consequences necessitates a careful
examination of the grounds upon which the defendant asks that it be
set aside. Since rules of procedure are mere tools designed to facilitate
the attainment of justice, it is well recognized that this Court is
empowered to suspend its operation, or except a particular case from
its operation, when the rigid application thereof tends to frustrate

190

rather than promote the ends of justice. We are not unmindful of the
fact that during the pendency of the instant petition, the trial court has
rendered judgment against petitioners. However, being the court of
last resort, we deem it in the best interest that liberality and relaxation
of the Rules be extended to petitioners by setting aside the order of
default issued by the trial court and the consequent default judgment;
otherwise, great injustice would result if petitioners are not afforded an
opportunity to prove their claims.
Finally, the Court finds unacceptable the petitioners contention that 1) the
respondents were well represented by counsel from 1983 up to December 1990 and
that the respondents were properly notified of the entire proceedings through their
counsel; 2) the respondents counsel was negligent for failing to file an answer
within the prescribed period; and 3) the negligence of the OSG binds the
respondents.
The petitioners do not deny the fact that on May 15, 1985, they filed a
petition for certiorari before this Court questioning the RTC orders granting the
respondents motion to dismiss and denying their motion for reconsideration. They
do not question the fact that while their petition was pending in this Court, the 1986
EDSA Revolution took place which resulted in the removal of the respondents from
their respective high government offices and the replacement of then Solicitor
General Estelito Mendoza (Sol. Gen. Mendoza). There is likewise no dispute that
subsequently, on April 15, 1988, this Court rendered its decision annulling the
subject RTC orders and remanding the case to the RTC for further proceedings. The
case was then re-raffled to another branch.
Clearly from the above circumstances, there was no longer any lawyer-client
relationship between the OSG and the respondents at the time the decision of the
Court dated April 15, 1988 was promulgated because, admittedly, after the 1986
EDSA Revolution, the respondents were no longer occupying their respective
government positions and Sol. Gen. Mendoza, who represented them, was no longer
the Solicitor General.
In fact, in compliance with the RTCs order dated September 10, 1990,
former Solicitor General Mendoza submitted a manifestation [24] that his legal
representation for the respondents was deemed terminated when he ceased to be
the Solicitor General and that he was not representing the respondents in his
private capacity. For his part, on December 11, 1990, the incumbent Solicitor
General at that time, Solicitor General Francisco Chavez (Sol. Gen. Chavez), filed a
notice of withdrawal of appearance for the respondents citing the case of Urbano v.
Chavez,[25] where the Court ruled that the OSG is not authorized to represent a
public official at any stage of a criminal case or in a civil suit for damages arising
from a felony. The records do not show any proof that the respondents were
furnished a copy of this notice of withdrawal or whether or not they gave their
conformity thereto.
[23]

Contrary to the petitioners position, while it is true that Sol. Gen. Chavez
filed a notice of withdrawal only on December 11, 1990, the respondents were in
effect no longer represented by counsel as early as April 15, 1988 when the Courts
decision was rendered, or much earlier, right after the 1986 EDSA Revolution due to
the change in government. The Court cannot subscribe to the petitioners argument
that there was negligence or mistake on the part of the OSG considering that Sol.
Gen. Mendoza ceased to hold office due to the EDSA Revolution while Sol. Gen.
Chavez withdrew his representation because of the prohibition in Urbano v.
Chavez. Definitely, Sol. Gen. Mendozas cessation from holding office and Sol. Gen.
Chavezs withdrawal of representation in the unique scenario of this case are not
equivalent to professional delinquency or ignorance, incompetency or inexperience
or negligence and dereliction of duty. Hence, there is no negligence of counsel in
this case. After the 1986 EDSA Revolution, the respondents were practically left
without counsel.

191

As a final point, this Court commiserates with the petitioners plight and cry
for justice. They should not be denied redress of their grievances. The Court,
however, finds Itself unable to grant their plea because the fundamental law clearly
provides that no person shall be deprived of life, liberty and property without due
process of law.
WHEREFORE, the petition is DENIED.
SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

Sec. 10. Completeness of service

Bernarte v. PBA, G.R. No. 192084, September 14, 2011
SECOND DIVISION

JOSE MEL BERNARTE,

G.R. No. 192084

Petitioner,

Present:

- versus -

CARPIO, J., Chairperson,

BRION,
DEL CASTILLO,*
PEREZ, and
SERENO, JJ.
PHILIPPINE BASKETBALL
ASSOCIATION (PBA), JOSE

192

EMMANUEL M. EALA, and

Promulgated:

PERRY MARTINEZ,
Respondents.

September 14, 2011

x-----------------------------------------------------------------------------------------x

DECISION

CARPIO, J.:

The Case

This is a petition for review1 of the 17 December 2009 Decision 2 and 5 April 2010
Resolution3 of the Court of Appeals in CA-G.R. SP No. 105406. The Court of Appeals
set aside the decision of the National Labor Relations Commission (NLRC), which
affirmed the decision of the Labor Arbiter, and held that petitioner Jose
Mel Bernarte is an independent contractor, and not an employee of respondents
Philippine Basketball Association (PBA), Jose Emmanuel M. Eala, and Perry Martinez.
The Court of Appeals denied the motion for reconsideration.

The Facts

The facts, as summarized by the NLRC and quoted by the Court of Appeals, are as
follows:

Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were
invited to join the PBA as referees. During the leadership of Commissioner
Emilio Bernardino, they were made to sign contracts on a year-to-year basis.
During the term of Commissioner Eala, however, changes were made on the
terms of their employment.

193

Complainant Bernarte, for instance, was not made to sign a contract during
the first conference of the All-Filipino Cup which was from February 23, 2003
to June 2003. It was only during the second conference when he was made to
sign a one and a half month contract for the period July 1 to August 5, 2003.

On January 15, 2004, Bernarte received a letter from the Office of the
Commissioner advising him that his contract would not be renewed citing his
unsatisfactory performance on and off the court. It was a total shock
for Bernarte who was awarded Referee of the year in 2003. He felt that the
dismissal was caused by his refusal to fix a game upon order of Ernie De
Leon.

On the other hand, complainant Guevarra alleges that he was invited to join
the PBA pool of referees in February 2001. On March 1, 2001, he signed a
contract as trainee. Beginning 2002, he signed a yearly contract as Regular
Class C referee. On May 6, 2003, respondent Martinez issued a memorandum
toGuevarra expressing dissatisfaction over his questioning on the assignment
of referees officiating out-of-town games. Beginning February 2004, he was
no longer made to sign a contract.

Respondents aver, on the other hand, that complainants entered into two
contracts of retainer with the PBA in the year 2003. The first contract was for
the period January 1, 2003 to July 15, 2003; and the second was for
September 1 to December 2003. After the lapse of the latter period, PBA
decided not to renew their contracts.

Complainants were not illegally dismissed because they were not employees
of the PBA. Their respective contracts of retainer were simply not renewed.
PBA had the prerogative of whether or not to renew their contracts, which
they knew were fixed.4

In her 31 March 2005 Decision,5 the Labor Arbiter6 declared petitioner an employee
whose dismissal by respondents was illegal. Accordingly, the Labor Arbiter ordered

194

the reinstatement of petitioner and the payment of backwages, moral and

exemplary damages and attorneys fees, to wit:

WHEREFORE, premises considered all respondents who are here found to

have illegally dismissed complainants are hereby ordered to (a) reinstate
complainants within thirty (30) days from the date of receipt of this decision
and to solidarily pay complainants:

JOSE
MELRENATO
BERNARTE GUEVARRA

1. backwages from January

1, 2004 up to the finality of
this Decision, which to date
is

P536,250.0
0

P211,250.0
0

100,000.00
2. moral damages
50,000.00

100,000.00

3. exemplary damages
50,000.00

4. 10% attorneys fees

68,625.00

36,125.00

TOTAL

P754,875.0
0

P397,375.0
0

or a total of P1,152,250.00

The rest of the claims are hereby dismissed for lack of merit or basis.

SO ORDERED.7

In its 28 January 2008 Decision,8 the NLRC affirmed the Labor Arbiters judgment.
The dispositive portion of the NLRCs decision reads:

195

WHEREFORE, the appeal is hereby DISMISSED. The Decision of Labor

Arbiter Teresita D. Castillon-Lora dated March 31, 2005 is AFFIRMED.

SO ORDERED.9

Respondents filed a petition for certiorari with the Court of Appeals, which
overturned the decisions of the NLRC and Labor Arbiter. The dispositive portion of
the Court of Appeals decision reads:

WHEREFORE, the petition is hereby GRANTED. The assailed Decision dated

January 28, 2008 and Resolution dated August 26, 2008 of the National Labor
Relations Commission are ANNULLED and SET ASIDE. Private respondents
complaint before the Labor Arbiter is DISMISSED.

SO ORDERED.10

The Court of Appeals Ruling

The Court of Appeals found petitioner an independent contractor since respondents

did not exercise any form of control over the means and methods by which
petitioner performed his work as a basketball referee. The Court of Appeals held:

While the NLRC agreed that the PBA has no control over the referees acts of
blowing the whistle and making calls during basketball games, it,
nevertheless, theorized that the said acts refer to the means and methods
employed by the referees in officiating basketball games for the illogical
reason that said acts refer only to the referees skills. How could a skilled
referee perform his job without blowing a whistle and making calls? Worse,
how can the PBA control the performance of work of a referee without
controlling his acts of blowing the whistle and making calls?

196

Moreover, this Court disagrees with the Labor Arbiters finding (as affirmed by
the NLRC) that the Contracts of Retainer show that petitioners have control
over private respondents.

xxxx

Neither do We agree with the NLRCs affirmance of the Labor Arbiters

conclusion that private respondents repeated hiring made them regular
employees by operation of law.11

The Issues

The main issue in this case is whether petitioner is an employee of respondents,

which in turn determines whether petitioner was illegally dismissed.

Petitioner raises the procedural issue of whether the Labor Arbiters decision has
become final and executory for failure of respondents to appeal with the NLRC
within the reglementary period.

The Ruling of the Court

The petition is bereft of merit.

The Court shall first resolve the procedural issue posed by petitioner.

197

Petitioner contends that the Labor Arbiters Decision of 31 March 2005 became final
and executory for failure of respondents to appeal with the NLRC within the
prescribed period. Petitioner claims that the Labor Arbiters decision was
constructively served on respondents as early as August 2005 while respondents
appealed the Arbiters decision only on 31 March 2006, way beyond
the reglementary period to appeal. Petitioner points out that service of an
unclaimed registered mail is deemed complete five days from the date of first
notice of the post master. In this case three notices were issued by the post office,
the last being on 1 August 2005. The unclaimed registered mail was consequently
returned to sender. Petitioner presents the Postmasters Certification to prove
constructive service of the Labor Arbiters decision on respondents. The Postmaster
certified:
xxx

That upon receipt of said registered mail matter, our registry in charge,
Vicente Asis, Jr., immediately issued the first registry notice to claim on July
12, 2005 by the addressee. The second and third notices were issued on July
21 and August 1, 2005, respectively.

That the subject registered letter was returned to the sender (RTS) because
the addressee failed to claim it after our one month retention period elapsed.
Said registered letter was dispatched from this office to Manila CPO (RTS)
under bill #6, line 7, page1, column 1, on September 8, 2005. 12

Section 10, Rule 13 of the Rules of Court provides:

SEC. 10. Completeness of service. Personal service is complete upon actual

delivery. Service by ordinary mail is complete upon the expiration of ten (10)
days after mailing, unless the court otherwise provides. Service by registered
mail is complete upon actual receipt by the addressee, or after five (5) days
from the date he received the first notice of the postmaster, whichever date
is earlier.

The rule on service by registered mail contemplates two situations: (1) actual
service the completeness of which is determined upon receipt by the addressee of

198

the registered mail; and (2) constructive service the completeness of which is
determined upon expiration of five days from the date the addressee received the
first notice of the postmaster.13

Insofar as constructive service is concerned, there must be conclusive proof that a

first notice was duly sent by the postmaster to the addressee. 14 Not only is it
required that notice of the registered mail be issued but that it should also be
delivered to and received by the addressee. 15 Notably, the presumption that official
duty has been regularly performed is not applicable in this situation. It is incumbent
upon a party who relies on constructive service to prove that the notice was sent to,
and received by, the addressee.16

The best evidence to prove that notice was sent would be a certification from the
postmaster, who should certify not only that the notice was issued or sent but also
as to how, when and to whom the delivery and receipt was made. The mailman may
also testify that the notice was actually delivered. 17

In this case, petitioner failed to present any concrete proof as to how, when and to
whom the delivery and receipt of the three notices issued by the post office was
made. There is no conclusive evidence showing that the post office notices were
actually received by respondents, negating petitioners claim of constructive service
of the Labor Arbiters decision on respondents. The Postmasters Certification does
not sufficiently prove that the three notices were delivered to and received by
respondents; it only indicates that the post office issued the three notices. Simply
put, the issuance of the notices by the post office is not equivalent to delivery to
and receipt by the addressee of the registered mail. Thus, there is no proof of
completed constructive service of the Labor Arbiters decision on respondents.

At any rate, the NLRC declared the issue on the finality of the Labor Arbiters
decision moot as respondents appeal was considered in the interest of substantial
justice. We agree with the NLRC. The ends of justice will be better served if we
resolve the instant case on the merits rather than allowing the substantial issue of
whether petitioner is an independent contractor or an employee linger and remain
unsettled due to procedural technicalities.

The existence of an employer-employee relationship is ultimately a question of fact.

As a general rule, factual issues are beyond the province of this Court. However,
this rule admits of exceptions, one of which is where there are conflicting findings of
fact between the Court of Appeals, on one hand, and the NLRC and Labor Arbiter, on
the other, such as in the present case. 18

199

To determine the existence of an employer-employee relationship, case law has

consistently applied the four-fold test, to wit: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employers power to control the employee on the means and methods by which the
work is accomplished. The so-called control test is the most important indicator
of the presence or absence of an employer-employee relationship. 19

In this case, PBA admits repeatedly engaging petitioners services, as shown in the
retainer contracts. PBA pays petitioner a retainer fee, exclusive of per diem or
allowances, as stipulated in the retainer contract. PBA can terminate the retainer
contract for petitioners violation of its terms and conditions.

However, respondents argue that the all-important element of control is lacking in

this case, making petitioner an independent contractor and not an employee of
respondents.

Petitioner contends otherwise. Petitioner asserts that he is an employee of

respondents since the latter exercise control over the performance of his work.
Petitioner cites the following stipulations in the retainer contract which evidence
control: (1) respondents classify or rate a referee; (2) respondents require referees
to attend all basketball games organized or authorized by the PBA, at least one hour
before the start of the first game of each day; (3) respondents assign petitioner to
officiate ballgames, or to act as alternate referee or substitute; (4) referee agrees to
observe and comply with all the requirements of the PBA governing the conduct of
the referees whether on or off the court; (5) referee agrees (a) to keep himself in
good physical, mental, and emotional condition during the life of the contract; (b) to
give always his best effort and service, and loyalty to the PBA, and not to officiate
as referee in any basketball game outside of the PBA, without written prior consent
of the Commissioner; (c) always to conduct himself on and off the court according to
the highest standards of honesty or morality; and (6) imposition of various sanctions
for violation of the terms and conditions of the contract.

The foregoing stipulations hardly demonstrate control over the means and methods
by which petitioner performs his work as a referee officiating a PBA basketball
game. The contractual stipulations do not pertain to, much less dictate, how and
when petitioner will blow the whistle and make calls. On the contrary, they merely
serve as rules of conduct or guidelines in order to maintain the integrity of the
professional basketball league. As correctly observed by the Court of Appeals,
how could a skilled referee perform his job without blowing a whistle and making
calls? x x x [H]ow can the PBA control the performance of work of a referee without
controlling his acts of blowing the whistle and making calls? 20

In Sonza v. ABS-CBN Broadcasting Corporation,21 which determined the relationship

between a television and radio station and one of its talents, the Court held that not

200

all rules imposed by the hiring party on the hired party indicate that the latter is an
employee of the former. The Court held:

We find that these general rules are merely guidelines towards the
achievement of the mutually desired result, which are top-rating television
and radio programs that comply with standards of the industry. We have ruled
that:

Further, not every form of control that a party reserves to himself over the
conduct of the other party in relation to the services being rendered may be
accorded the effect of establishing an employer-employee relationship. The
facts of this case fall squarely with the case of Insular Life Assurance Co., Ltd.
v. NLRC. In said case, we held that:
Logically, the line should be drawn between rules that merely serve as
guidelines towards the achievement of the mutually desired result without
dictating the means or methods to be employed in attaining it, and those that
control or fix the methodology and bind or restrict the party hired to the use
of such means. The first, which aim only to promote the result, create no
employer-employee relationship unlike the second, which address both the
result and the means used to achieve it. 22

We agree with respondents that once in the playing court, the referees exercise
their own independent judgment, based on the rules of the game, as to when and
how a call or decision is to be made. The referees decide whether an infraction was
committed, and the PBA cannot overrule them once the decision is made on the
playing court. The referees are the only, absolute, and final authority on the playing
court. Respondents or any of the PBA officers cannot and do not determine which
calls to make or not to make and cannot control the referee when he blows the
whistle because such authority exclusively belongs to the referees. The very nature
of petitioners job of officiating a professional basketball game undoubtedly calls for
freedom of control by respondents.

Moreover, the following circumstances indicate that petitioner is an independent

contractor: (1) the referees are required to report for work only when PBA games
are scheduled, which is three times a week spread over an average of only 105
playing days a year, and they officiate games at an average of two hours per game;
and (2) the only deductions from the fees received by the referees are withholding
taxes.

In other words, unlike regular employees who ordinarily report for work eight hours
per day for five days a week, petitioner is required to report for work only when PBA
games are scheduled or three times a week at two hours per game. In addition,
there
are
no
deductions
for
contributions
to
the
Social
Security

201

System, Philhealth or Pag-Ibig, which are the usual deductions from employees
salaries. These undisputed circumstances buttress the fact that petitioner is an
independent contractor, and not an employee of respondents.

Furthermore, the applicable foreign case law declares that a referee is an

independent contractor, whose special skills and independent judgment
are required specifically for such position and cannot possibly be controlled by the
hiring party.

In Yonan v. United States Soccer Federation, Inc.,23 the United States District Court
of Illinois held that plaintiff, a soccer referee, is an independent contractor, and not
an employee of defendant which is the statutory body that governs soccer in the
United States. As such, plaintiff was not entitled to protection by the Age
Discrimination in Employment Act. The U.S. District Court ruled:

Generally, if an employer has the right to control and direct the work of an
individual, not only as to the result to be achieved, but also as to details by
which the result is achieved, an employer/employee relationship is likely to
exist. The Court must be careful to distinguish between control[ling] the
conduct of another party contracting party by setting out in detail his
obligations consistent with the freedom of contract, on the one hand, and
the discretionary control an employer daily exercises over its employees
conduct on the other.

Yonan asserts that the Federation closely supervised his performance at

each soccer game he officiated by giving him an assessor, discussing his
performance, and controlling what clothes he wore while on the field and
traveling. Putting aside that the Federation did not, for the most part, control
what clothes he wore, the Federation did not supervise Yonan, but rather
evaluated
his
performance
after
matches. That
the
Federation
evaluated Yonan as a referee does not mean that he was an employee. There
is no question that parties retaining independent contractors may judge the
performance of those contractors to determine if the contractual relationship
should continue. x x x

It is undisputed that the Federation did not control the way Yonan refereed his
games. He had full discretion and authority, under the Laws of the Game, to
call the game as he saw fit. x x x In a similar vein, subjecting Yonan to
qualification standards and procedures like the Federations registration and
training requirements does not create an employer/employee relationship.
xxx

202

A position that requires special skills and independent judgment weights in

favor of independent contractor status. x x x Unskilled work, on the other
hand, suggests an employment relationship. x x x Here, it is undisputed that
soccer refereeing, especially at the professional and international level,
requires a great deal of skill and natural ability. Yonan asserts that it was
the Federations training that made him a top referee, and that suggests he
was an employee. Though substantial training supports an employment
inference, that inference is dulled significantly or negated when the putative
employers activity is the result of a statutory requirement, not the
employers choice. x x x

In McInturff v. Battle Ground Academy of Franklin,24 it was held that the

umpire was not an agent of the Tennessee Secondary School Athletic
Association (TSSAA), so the players vicarious liability claim against the
association should be dismissed. In finding that the umpire is an
independent contractor, the Court of Appeals of Tennesse ruled:

The TSSAA deals with umpires to achieve a result-uniform rules for all
baseball games played between TSSAA member schools. The TSSAA does not
supervise regular season games. It does not tell an official how to conduct the
game beyond the framework established by the rules. The TSSAA does not, in
the vernacular of the case law, control the means and method by which the
umpires work.

In addition, the fact that PBA repeatedly hired petitioner does not by itself prove
that petitioner is an employee of the former. For a hired party to be considered an
employee, the hiring party must have control over the means and methods by
which the hired party is to perform his work, which is absent in this case. The
continuous rehiring by PBA of petitioner simply signifies the renewal of the contract
between PBA and petitioner, and highlights the satisfactory services rendered by
petitioner warranting such contract renewal. Conversely, if PBA decides to
discontinue petitioners services at the end of the term fixed in the contract,
whether for unsatisfactory services, or violation of the terms and conditions of the
contract, or for whatever other reason, the same merely results in the non-renewal
of the contract, as in the present case. The non-renewal of the contract between the
parties does not constitute illegal dismissal of petitioner by respondents.

WHEREFORE, we DENY the petition and AFFIRM the assailed decision of the
Court of Appeals.

SO ORDERED.

203

ANTONIO T. CARPIO
Associate Justice

Sec. 11. Priorities in modes of service and filing

Solar Entertainment v. Ricafort, G.R. No. 132007, August 5, 1998
FIRST DIVISION

[G.R. No. 132007. August 5, 1998]

SOLAR TEAM ENTERTAINMENT, INC., petitioner, vs. HON. HELEN BAUTISTA

RICAFORT,in her capacity as Presiding Judge of the Regional Trial
Court of Paraaque, Metro Manila (Branch 260), TEAM IMAGE
ENTERTAINMENT, INC., FELIX S. CO, JEFFREY C. CAL, and KING
CUISIA, respondents.
DECISION
DAVIDE, JR., J.:
At issue is whether respondent judge committed grave abuse of discretion
amounting to lack or excess of jurisdiction in denying petitioners motion to
expunge private respondents answer with counterclaims on the ground that said
pleading was not served personally; moreover, there was no written explanation as
to why personal service was not accomplished, as required by Section 11 of Rule 13
of the 1997 Rules of Civil Procedure.
The antecedents are not disputed.
On 10 July 1997, petitioner, as plaintiff, filed before the Regional Trial Court
(RTC) in Paraaque, Metro Manila, a complaint for recovery of possession and
damages with prayer for a writ of replevin [1] against herein private
respondents. The case was docketed as Civil Case No. 97-0304 and was assigned
to Branch 260 of said court, presided over by public respondent Judge Helen
Bautista-Ricafort.
Summonses and copies of the complaint were forthwith served on private
respondents. On 25 July 1997, their counsel filed a notice of appearance with
urgent ex-parte motion for extension of time to plead,[2] which the court granted in
its order of 4 August 1997.[3]
On 8 August 1997, private respondents, as defendants, filed their Answer (with
Counterclaims).[4] A copy thereof was furnished counsel for petitioner by registered
mail; however, the pleading did not contain any written explanation as to why
service was not made personally upon petitioner-plaintiff, as required by Section 11
of Rule 13 of the 1997 Rules of Civil Procedure.

204

On 11 August 1997, petitioner filed a motion to expunge the Answer (with

Counterclaims) and to declare herein private respondents in default, [5] alleging
therein that the latter did not observe the mandate of the aforementioned Section
11, and that there was:
[A]bsolutely no valid reason why defendant[s] should not have personally served
plaintiffs ... counsel with [a] copy of their answer [as] (t)he office of defendants
(sic) counsel, Atty. Froilan Cabaltera, is just a stone [sic] throw away from the office
of [petitioners] counsel, with an estimate (sic) distance of about 200 meters more
or less.
Petitioner further alleged that the post office was about ten (10) times farther from
the office of Atty. Cabaltera.
On 15 August 1997, private respondents filed their opposition [6] to the above
mentioned motion, alleging that petitioners rigid and inflexible reliance on the
provisions of Section 11, Rule 13 ... is an adventitious resort to technicality and is
contrary to Section 6 of Rule 3 ... which admonishes that said Rules shall be
liberally construed in order to promote their objective in securing a just, speedy and
inexpensive disposition of [e]very action and proceeding; and that Section 11,
Rule 13 notwithstanding, private respondents religiously complied with [Section 5
of Rule 13] by personally present[ing] to the clerk of court their said Answer ...
furnishing a copy thereof to the counsel for [petitioner] by way of registered mail.
On 8 September 1997, public respondent Judge Bautista-Ricafort issued an
order[7]stating that under Section 11 of Rule 13 it is within the discretion of the
[trial court] whether to consider the pleading as filed or not, and denying, for lack
of merit, petitioners motion to expunge the Answer (with Counterclaims) and to
declare private respondents in default.
Petitioner immediately moved for reconsideration [8] of the order, but public
respondent Judge Bautista-Ricafort denied this motion in her order [9] of 17
November 1997. The order justified the denial in this wise:
Section 6 [of] Rule 1 of the 1997 Rules of Civil Procedure ordains that the Rules shall
be liberally construed in order to promote their objective of securing a just, speedy
and inexpensive disposition of every action and proceeding.
Liberal construction of the rules and the pleading is the controlling principle to
effect substantial justice.
As pointed out by the Supreme Court in Alonso vs. Villamor, 16 Phil. 315, "the error
in this case is purely technical. To take advantage of it for other purposes than to
cure it, does not appeal a fair sense of justice. Its presentation as fatal to plaintiff a
[sic] case smacks of skill rather than right. A litigation is not a game of technicalities
in which one, more deeply schooled and skilled in the subtle art of movement and
position, entraps and destroys the other. It is rather, a contest in which each
contending party fully and fairly lays before the Court the facts in issue and then,
brushing aside as wholly trivial and indecisive all imperfections or form of
technicalities of procedure, asks that justice be done upon the merits. Lawsuits,
unlike duels, are not to be won by a rapier's thrust."
While it is desirable that the above Rules be faithfully and even meticulously
observed, courts should not strict about procedural lapses that do not really impair
the proper administration of justice. Furthermore, it is well settled that litigations
should, as much as possible be decided on their merits and not on technicalities.
Petitioner thus filed the instant special civil action of certiorari, contending that
public respondent Judge Bautista-Ricafort committed grave abuse of discretion
amounting to lack or excess of jurisdiction when she admitted private respondents'
"Answer (with Counterclaims)" notwithstanding private respondents' clear, admitted
and inexcusable violation of Section 11, Rule 13 of the 1997 Rules of Civil

205

Procedure, in that: (a) the "Answer (with Counterclaims)" was not served personally
upon petitioners counsel despite the undisputed fact that the offices of private
respondents counsel and that of petitioners counsel are only about 200 meters
away from each other; and (b) the Answer did not contain any explanation as to
why the answer was not served personally.
In their Comment, filed in compliance with the resolution of 2 February 1998,
and to which petitioner filed a Reply, private respondents aver that public
respondent Judge Bautista-Ricafort correctly admitted private respondents Answer
(with Counterclaims) in light of Section 6, Rule 1 of the 1997 Rules of Civil
Procedure; that Section 11 of Rule 13 begins with the phrase whenever
practicable, thereby suggesting that service by mail may still be effected
depending on the relative priority of the pleading sought to be filed; and when
service is not done personally, it is more prudent and judicious for the courts to
require a written explanation rather than to expunge the pleading outright or
consider the same as not being filed.
In view of the importance of the issue raised, which is, undoubtedly, one of the
first impression, the Court resolved to give due course to the petition and consider
it submitted for decision on the basis of the pleadings filed by the parties.
Section 5, Rule 13 of the 1997 Rules of Civil Procedure prescribes two modes of
service of pleadings, motions, notices, orders, judgments and other papers, namely:
(1) personal service; and (2) service by mail. The first is governed by Section 6,
while the second, by Section 7 of said Rule. If service cannot be done either
personally or by mail, substituted service may be resorted to under Section 8
thereof.
Pursuant, however, to Section 11 of Rule 13, service and filing of pleadings and
other papers must, whenever practicable, be done personally; and if made through
other modes, the party concerned must provide a written explanation as to why the
service or filing was not done personally. The section reads:
SEC. 11. Priorities in modes of service and filing. -- Whenever practicable, the
service and filing of pleadings and other papers shall be done personally. Except
with respect to papers emanating from the court, a resort to other modes must be
accompanied by a written explanation why the service or filing was not done
personally. A violation of this Rule may be cause to consider the paper as not filed.
(n)
Note that Section 11 refers to both service of pleadings and other papers on the
adverse party or his counsel as provided for in Sections 6, 7 and 8; and to
the filing of pleadings and other papers in court.
Personal service and filing are preferred for obvious reasons. Plainly, such
should expedite action or resolution on a pleading, motion or other paper; and
conversely, minimize, if not eliminate, delays likely to be incurred if service or filing
is done by mail, considering the inefficiency of the postal service. Likewise,
personal service will do away with the practice of some lawyers who, wanting to
appear clever, resort to the following less than ethical practices: (1) serving or filing
pleadings by mail to catch opposing counsel off-guard, thus leaving the latter with
little or no time to prepare, for instance, responsive pleadings or an opposition; or
(2) upon receiving notice from the post office that the registered parcel containing
the pleading of or other paper from the adverse party may be claimed, unduly
procrastinating before claiming the parcel, or, worse, not claiming it at all, thereby
causing undue delay in the disposition of such pleading or other papers.
If only to underscore the mandatory nature of this innovation to our set of
adjective rules requiring personal service whenever practicable, Section 11 of Rule
13 then gives the court the discretion to consider a pleading or paper as not filed if
the other modes of service or filing were resorted to and no written explanation
was made as to why personal service was not done in the first place. The exercise
of discretion must, necessarily, consider the practicability of personal service, for
Section 11 itself begins with the clause whenever practicable.

206

We thus take this opportunity to clarify that under Section 11, Rule 13 of the
1997 Rules of Civil Procedure, personal service and filing is the general rule, and
resort to other modes of service and filing, the exception. Henceforth, whenever
personal service or filing is practicable, in light of the circumstances of time, place
and person, personal service or filing is mandatory. Only when personal service or
filing is not practicable may resort to other modes be had, which must then be
accompanied by a written explanation as to why personal service or filing was not
practicable to begin with. In adjudging the plausibility of an explanation, a court
shall likewise consider the importance of the subject matter of the case or the
issues involved therein, and the prima facie merit of the pleading sought to be
expunged for violation of Section 11. This Court cannot rule otherwise, lest we
allow circumvention of the innovation introduced by the 1997 Rules in order to
obviate delay in the administration of justice.
Here, the proximity between the offices of opposing counsel was
established; moreover, that the office of private respondents counsel was ten
times farther from the post office than the distance separating the offices of
opposing counsel. Of course, proximity would seem to make personal service most
practicable, but exceptions may nonetheless apply. For instance, where the adverse
party or opposing counsel to be served with a pleading seldom reports to office and
no employee is regularly present to receive pleadings, or where service is done on
the last day of the reglementary period and the office of the adverse party or
opposing counsel to be served is closed, for whatever reason.
Returning, however, to the merits of this case, in view of the proximity between
the offices of opposing counsel and the absence of any attendant explanation as to
why personal service of the answer was not effected, indubitably, private
respondents counsel violated Section 11 of Rule 13 and the motion to expunge
was prima facie meritorious. However, the grant or denial of said motion
nevertheless remained within the sound exercise of the trial courts
discretion. Thus, as guided by Section 6, Rule 1 of the 1997 Rules of Civil
Procedure, which ordains that the Rules shall be liberally construed in order to
promote their objective of securing a just, speedy and inexpensive disposition of
every action or proceeding, as well as by the dictum laid down in Alonso v. Villamor,
16 Phil. 315 [1910], the trial court opted to exercise its discretion in favor of
admitting the Answer (with Counterclaims), instead of expunging it from the
record.
To our mind, if motions to expunge or strike out pleadings for violation of
Section 11 of Rule 13 were to be indiscriminately resolved under Section 6 of Rule 1
or Alonzo v. Villamor and other analogous cases, then Section 11 would become
meaningless and its sound purpose negated. Nevertheless, we sustain the
challenged ruling of the trial court, but for reasons other than those provided for in
the challenged order.
The 1997 Rules of Civil Procedure took effect only on 1 July 1997, while the
questioned Answer (with Counterclaims) was filed only on 8 August 1997, or on
the 39th day following the effectivity of the 1997 Rules. Hence, private respondents
counsel may not have been fully aware of the requirements and ramifications of
Section 11, Rule 13. In fact, as pointed out by petitioners counsel, in another case
where private respondents counsel was likewise opposing counsel, the latter
similarly failed to comply with Section 11.
It has been several months since the 1997 Rules of Civil Procedure took
effect. In the interim, this Court has generally accommodated parties and counsel
who failed to comply with the requirement of a written explanation whenever
personal service or filing was not practicable, guided, in the exercise of our
discretion, by the primary objective of Section 11, the importance of the subject
matter of the case, the issues involved and the prima facie merit of the challenged
pleading. However, as we have in the past, for the guidance of the Bench and Bar,
strictest compliance with Section 11 of Rule 13 is mandated one month from
promulgation of this Decision.

207

WHEREFORE, the instant petition is DISMISSED considering that while the

justification for the denial of the motion to expunge the Answer (with
Counterclaims) may not necessarily be correct, yet, for the reasons above stated,
the violation of Section 11 of Rule 13 may be condoned.
No pronouncement as to costs.
SO ORDERED.
Vitug, Panganiban and Quisumbing, JJ., concur.
Bellosillo, J., separate opinion.

Lim v. NPC, G.R. No. 178789, November 14, 2012.

G.R. No. 178789
November 14, 2012
NATIVIDAD
LIM, Petitioner,
vs.
NATIONAL POWER CORPORATION, SPOUSES ROBERTO LL. ARCINUE and
ARABELA ARCINUE, Respondents.
DECISION
ABAD, J.:
This case is about the consequence of a party's failure to explain in his motion why
he served a copy of it on the adverse party by registered mail rather than by
personal service.
The Facts and the Case
On February 8, 1995 respondent National Power Corporation (NPC) filed an
expropriation suit1 against petitioner Natividad B. Lim (Lim) before the Regional Trial
Court (RTC) of Lingayen, Pangasinan, Branch 37 in Civil Case 17352 covering Lots
2373 and 2374 that the NPC needed for its Sual Coal-Fired Thermal Power Project.
Since Lim was residing in the United States, the court caused the service of
summons on her on February 20, 1995 through her tenant, a certain Wilfredo
Tabongbong.2 On March 1, 1995, upon notice to Lim and the deposit of the
provisional value of the property, the RTC ordered the issued writ of possession in
NPCs favor that would enable it to cause the removal of Lim from the land. 3
On April 24, 1995, however, Lim, represented by her husband Delfin, filed an
omnibus motion to dismiss the action and to suspend the writ of
possession,4 questioning the RTCs jurisdiction over Lims person and the nature of
the action. She also assailed the failure of the complaint to state a cause of action.
The RTC denied the motions.5
On December 6, 1996 respondent spouses Roberto and Arabela Arcinue (the
Arcinues) filed a motion for leave to admit complaint in intervention, 6 alleging that
they owned and were in possession of Lot 2374, one of the two lots subject of the
expropriation. On January 7, 1997 the RTC granted the Arcinues motion and
required both the NPC and Lim to answer the complaint-in-intervention within 10
days from receipt of its order.7
When Lim and the NPC still did not file their answers to the complaint-inintervention after 10 months, on December 7, 1998 the Arcinues filed a motion for

208

judgment by default.8 Lim sought to expunge the motion on the ground that it
lacked the requisite explanation why the Arcinues resorted to service by registered
mail rather than to personal service. At the scheduled hearing of the motion, Lims
counsel did not appear. The NPC for its part manifested that it did not file an answer
since its interest lay in determining who was entitled to just compensation.
On March 1, 1999 the RTC issued an order of default9 against both Lim and the NPC.
The RTC pointed out that the Arcinues failure to explain their resort to service by
registered mail had already been cured by the manifestation of Lims counsel that
he received a copy of the Arcinues motion on December 7, 1998 or 10 days before
its scheduled hearing. Lim filed a motion for reconsideration 10 to lift the default
order but the Court denied the motion, 11 prompting Lim to file a petition for
certiorari12 before the Court of Appeals (CA) in CA-G.R. SP 52842.
On March 23, 2007 the CA rendered a decision 13 that affirmed the RTCs order of
default. Lim filed a motion for reconsideration 14 but the CA denied it, 15 prompting
her to file the present petition for review. 16 On September 24, 2007 the Court
initially denied Lims petition17 but on motion for reconsideration, the Court
reinstated the same.18
Issue Presented
The only issue presented in this case is whether or not the CA gravely abused its
discretion in affirming the order of default that the RTC entered against Lim.
Ruling of the Court
Lim points out that an answer-in-intervention cannot give rise to default since the
filing of such an answer is only permissive. But Section 4, Rule 19 19 of the 1997
Rules of Civil Procedure requires the original parties to file an answer to the
complaint-in-intervention within 15 days from notice of the order admitting the
same, unless a different period is fixed by the court. This changes the procedure
under the former rule where such an answer was regarded as optional. 20 Thus, Lims
failure to file the required answer can give rise to default.
The trial court had been liberal with Lim. It considered her motion for
reconsideration as a motion to lift the order of default and gave her an opportunity
to explain her side. The court set her motion for hearing but Lims counsel did not
show up in court. She remained unable to show that her failure to file the required
answer was due to fraud, accident, mistake, or excusable negligence. And, although
she claimed that she had a meritorious defense, she was unable to specify what
constituted such defense.21
Lim points out that the RTC should have ordered the Arcinues motion for judgment
by default expunged from the records since it lacked the requisite explanation as to
why they resorted to service by registered mail in place of personal service.
There is no question that the Arcinues motion failed to comply with the requirement
of Section 11, Rule 13 of the 1997 Rules of Civil Procedure which provides:
SECTION 11. Priorities in modes of service and filing. Whenever practicable, the
service and filing of pleadings and other papers shall be done personally. Except
with respect to papers emanating from the court, a resort to other modes must be

209

accompanied by a written explanation, why the service or filing was not done
personally. A violation of this Rule may be cause to consider the paper as not filed.
But the above does not provide for automatic sanction should a party fail to submit
the required explanation. It merely provides for that possibility considering its use of
the term "may." The question is whether or not the RTC gravely abused its discretion
in not going for the sanction of striking out the erring motion.1wphi1
The Court finds no such grave abuse of discretion here. As the RTC pointed out,
notwithstanding that the Arcinues' failed to explain their resort to service by
registered mail rather than by personal service, the fact is that Lim's counsel
expressly admitted having received a copy of the Arcinues' motion for judgment by
default on December 7, 1998 or I 0 days before its scheduled hearing. This means
that the Arcinues were diligent enough to file their motion by registered mail long
before the scheduled hearing.
Personal service is required precisely because it often happens that hearings do not
push through because, while a copy of the motion may have been served by
registered mail before the date of the hearing, such is received by the adverse party
already after the hearing. Thus, the rules prefer personal service. But it does not
altogether prohibit service by registered mail when such service, when adopted,
ensures as in this case receipt by the adverse party.
WHEREFORE, the Court DENIES the petition and AFFIRMS the Court of Appeals
Decision in CA-G.R. SP 52842 dated March 23, 2007 and Resolution dated July 5,
2007 that upheld the orders of the Regional Trial Court in Civil Case 17352. The
Court DIRECTS the RTC to proceed with its hearing and adjudication of the case.
SO ORDERED.
REOBERTO A. ABAD
Associate Justice

Sec. 12. Proof of filing

Spouses Dela Cruz v. Ramiscal, G.R. No. 137882, February 4, 2005
SECOND DIVISION

[G.R. No. 137882. February 04, 2005]

SPS. ELIZABETH DE LA CRUZ and ALFREDO DE LA CRUZ, petitioners, vs.

OLGA RAMISCAL represented by ENRIQUE MENDOZA, respondent.
DECISION
CHICO-NAZARIO, J.:

210

This petition for review assails (1) the Resolution [1] dated 11 September 1998 of
the Court of Appeals which dismissed the appeal filed by petitioners from the
Decision dated 31 July 1997 of the Regional Trial Court (RTC), Branch 91, Quezon
City, for Demolition of Illegally Constructed Structure, and (2) the Resolution [2] dated
05 March 1999 denying the subsequent motion for reconsideration.
The following facts, as recapitulated by the trial court, are undisputed.
Respondent OLGA RAMISCAL is the registered owner of a parcel of land located
at the corner of 18th Avenue and Boni Serrano Avenue, Murphy, Quezon City,
covered by Transfer Certificate of Title (TCT) No. 300302 of the Register of Deeds for
Quezon City.[3] Petitioners SPS. ELIZABETH and ALFREDO DE LA CRUZ are occupants
of a parcel of land, with an area of eighty-five (85) square meters, located at the
back of Ramiscals property, and covered by TCT No. RT-56958 (100547) in the
name of Concepcion de la Pea, mother of petitioner Alfredo de la Cruz. [4]
The subject matter of this case is a 1.10-meter wide by 12.60-meter long strip
of land owned by respondent which is being used by petitioners as their pathway to
and from 18th Avenue, the nearest public highway from their property. Petitioners
had enclosed the same with a gate, fence, and roof. [5]
In 1976, respondent leased her property, including the building thereon, to Phil.
Orient Motors. Phil. Orient Motors also owned a property adjacent to that of
respondents. In 1995, Phil. Orient Motors sold its property to San Benito Realty.
After the sale, Engr. Rafael Madrid prepared a relocation survey and location plan for
both contiguous properties of respondent and San Benito Realty. It was only then
that respondent discovered that the aforementioned pathway being occupied by
petitioners is part of her property.[6]
Through her lawyer, respondent immediately demanded that petitioners
demolish the structure constructed by them on said pathway without her knowledge
and consent. As her letter dated 18 February 1995 addressed to petitioners went
unheeded, the former referred the matter to theBarangay for conciliation
proceedings, but the parties arrived at no settlement. Hence, respondent filed this
complaint with the RTC in Civil Case No. Q-95-25159, seeking the demolition of the
structure allegedly illegally constructed by petitioners on her property. Respondent
asserted in her complaint that petitioners have an existing right of way to a public
highway other than the current one they are using, which she owns. She prayed for
the payment of damages.[7]
In support of the complaint, respondent presented TCT No. RT-56958 (100547)
covering the property denominated as Lot 1-B in the name of Concepcion de la
Pea, mother of petitioner herein Alfredo de la Cruz. The aforesaid TCT reveals that
a portion of Lot 1-B, consisting of 85 square meters and denominated as Lot 1-B-2,
is being occupied by petitioners. To prove that petitioners have an existing right of
way to a public highway other than the pathway which respondent owns, the latter
adduced in evidence a copy of the plan of a subdivision survey for Concepcion de la
Pea and Felicidad Manalo prepared in 1965 and subdivision plan for Concepcion de
la Pea prepared in 1990. These documents establish an existing 1.50-meter wide
alley, identified as Lot 1-B-1, on the lot of Concepcion de la Pea, which serves as
passageway from the lot being occupied by petitioners (Lot 1-B-2), to Boni Serrano
Avenue.[8]
On the other hand, petitioners, in their Answer, admitted having used a 1.10meter wide by 12.60-meter long strip of land on the northern side of respondents
property as their pathway to and from 18 th Avenue, the nearest public highway from
their property, but claimed that such use was with the knowledge of respondent. [9]
Petitioners alleged in their Answer that in 1976, respondent initiated the
construction on her property of a motor shop known as Phil. Orient Motors and they,
as well as the other occupants of the property at the back of respondents land,
opposed the construction of the perimeter wall as it would enclose and render their
property without any adequate ingress and egress. They asked respondent to give
them a 1.50-meter wide and 40.15-meter long easement on the eastern side of her
property, which would be reciprocated with an equivalent 1.50-meter wide

211

easement by the owner of another adjacent estate. Respondent did not want to
give them the easement on the eastern side of her property, towards Boni Serrano
Avenue but, instead, offered to them the said 1.10-meter wide passageway along
the northern side of her property towards 18 th Avenue, which offer they had
accepted. [10]
Petitioners additionally averred in their Answer that they were made to sign a
document stating that they waived their right to ask for an easement along the
eastern side of respondents property towards Boni Serrano Avenue, which
document was among those submitted in the application for a building permit by a
certain Mang Puling,[11] the person in charge of the construction of the motor
shop. That was why, according to petitioners, the perimeter wall on respondents
property was constructed at a distance of 1.10-meters offset and away from
respondents property line to provide a passageway for them to and from
18th Avenue. They maintained in their Answer that respondent knew all along of the
1.10-meter pathway and had, in fact, tolerated their use thereof.
On 31 July 1997, the RTC handed down a Decision,[12] giving probative weight to
the evidence adduced by respondent. The decretal portion enunciates:
Plaintiffs claim for moral damages must be denied as no evidence in support
thereof was presented at all by her. Consequently, plaintiff is not entitled to
exemplary damages.[13] However, for having been compelled to file this suit and
incur expenses to protect her interest, plaintiff is entitled to an attorneys fees in the
amount of P10,000.00.
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiff and ordering the defendants to demolish the structure built by them along
the pathway on the eastern side of plaintiffs property towards 18 th Avenue, Murphy,
Quezon City and to pay [the] plaintiff the amount of P10,000.00 as and by way of
attorneys fees.
Costs against the defendants. [14]
The Court of Appeals dismissed the appeal filed by petitioners from the RTC
decision for failure to file brief within the reglementary period. The fallo of the Court
of Appeals Decision, provides:
WHEREFORE, for failure of the defendants-appellants to file brief within the
reglementary period, the instant appeal is hereby DISMISSED pursuant to Section
1(e), Rule 50 of the 1997 Rules of Civil Procedure.
The Compliance/Explanation filed by defendants-appellants, submitting the Letterwithdrawal of Atty. Judito Tadeo addressed to the said defendants-appellants is
NOTED.
Let a copy of this Resolution be likewise served on defendants-appellants
themselves.[15]
The motion for reconsideration filed by petitioners met the same fate in the
Resolution of the Court of Appeals dated 05 March 1999.
Petitioners now lay their cause before us through the present petition for review,
raising the following issues:
A.
WHETHER OR NOT THE DENIAL OF THE COURT OF APPEALS OF THE
PETITIONERS MOTION FOR RECONSIDERATION OF ITS RESOLUTION DATED
SEPTEMBER 11, 1998 IS SANCTIONED BY THE RULINGS AND LEGAL
PRONOUNCEMENTS OF THE HONORABLE SUPREME COURT?

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B.
WHETHER OR NOT THE PETITIONERS ARE NONETHELESS ENTITLED TO A
LEGAL EASEMENT OF RIGHT OF WAY, ASSUMING NO VOLUNTARY RIGHT OF WAY WAS
GRANTED THEM BY THE RESPONDENT?
C.
WHETHER OR NOT OPERATIVE EQUITABLE PRINCIPLE OF LACHES TO BAR THE
RESPONDENT FROM DEPRIVING THE PETITIONERS CONTINUED USE OF THE SAID
RIGHT OF WAY?[16]
The issues rivet on the adjective as well as on the substantive law, specifically:
(1) whether or not the Court Appeals erred in dismissing the appeal filed by
petitioners for failure to file appellants brief on time, (2) whether or not petitioners
are entitled to a voluntary or legal easement of right of way, and (3) whether or not
respondent is barred by laches from closing the right of way being used by
petitioners.
On the first issue, petitioners assert positively that the petition was filed on time
on 30 April 1998, which is well within the 45-day period reckoned from 17 March
1998, when the secretary of their former counsel received the notice to file appeal.
Petitioners arguments fail to persuade us.
Press earnestly as they would, the evidence on record, nevertheless, evinces
contrariety to petitioners assertion that they have beat the 45-day period to file
appellants brief before the appellate court. It is clear from the registry return
receipt card[17] that the Notice to File Brief was received on 12 March 1998 by one
May Tadeo from the Office of Atty. Judito Angelo C. Tadeo, petitioners previous
counsel. Thus, on 30 April 1998, when their new counsel entered his appearance
and at the same time filed an appellants brief, the 45 days have run out. For
failure of petitioners to file brief within the reglementary period, the Court of
Appeals correctly dismissed said appeal pursuant to Section 1(b), Rule 50 of the
1997 Rules of Civil Procedure.[18]
Neither can the members of this Court lend credence to petitioners contention
that the written note of Atty. Tadeos office on the face of the Order reads that the
said office received it on 17 March 1998.[19]
It is a rule generally accepted that when the service is to be made by registered
mail, the service is deemed complete and effective upon actual receipt by the
addressee as shown by the registry return card. [20] Thus, between the registry return
card and said written note, the former commands more weight. Not only is the
former considered as the official record of the court, but also as such, it is presumed
to be accurate unless proven otherwise, unlike a written note or record of a party,
which is often self-serving and easily fabricated. Further, this error on the part of
the secretary of the petitioners former counsel amounts to negligence or
incompetence in record-keeping, which is not an excuse for the delay of filing.
Petitioners justification that their former counsel belatedly transmitted said
order to them only on 20 March 1998 is not a good reason for departing from the
established rule. It was the responsibility of petitioners and their counsel to devise
a system for the receipt of mail intended for them. [21] Rules on procedure cannot be
made to depend on the singular convenience of a party.
Petitioners next take the stand that even assuming the brief was filed late, the
Court of Appeals still erred in dismissing their petition in light of the rulings of this
Court allowing delayed appeals on equitable grounds. [22] Indeed, in certain special
cases and for compelling causes, the Court has disregarded similar technical flaws
so as to correct an obvious injustice made. [23] In this case, petitioners, however,
failed to demonstrate any justifiable reasons or meritorious grounds for a liberal
application of the rules. We must remind petitioners that the right to appeal is not a
constitutional, natural or inherent right - it is a statutory privilege and of statutory
origin and, therefore, available only if granted or provided by statute. [24] Thus, it
may be exercised only in the manner prescribed by, and in accordance with, the
provisions of the law.[25]

213

Anent the second issue, an easement or servitude is a real right, constituted on

the corporeal immovable property of another, by virtue of which the owner has to
refrain from doing, or must allow someone to do, something on his property, for the
benefit of another thing or person.[26]The statutory basis for this right is Article 613,
in connection with Article 619, of the Civil Code, which states:
Art. 613. An easement or servitude is an encumbrance imposed upon an immovable
for the benefit of another immovable belonging to a different owner.
The immovable in favor of which the easement is established is called the dominant
estate; that which is subject thereto, the servient estate.
Art. 619. Easements are established either by law or by the will of the owners. The
former are called legal and the latter voluntary easements.
Did respondent voluntarily accord petitioners a right of way?
We rule in the negative. Petitioners herein failed to show by competent
evidence other than their bare claim that they and their tenants, spouses Manuel
and Cecilia Bondoc and Carmelino Masangkay, entered into an agreement with
respondent, through her foreman, Mang Puling, to use the pathway to 18 th Avenue,
which would be reciprocated with an equivalent 1.50-meter wide easement by the
owner of another adjacent estate. The hands of this Court are tied from giving
credence to petitioners self-serving claim that such right of way was voluntarily
given them by respondent for the following reasons:
First, petitioners were unable to produce any shred of document evidencing
such agreement. The Civil Code is clear that any transaction involving the sale or
disposition of real property must be in writing. [27] Thus, the dearth of corroborative
evidence opens doubts on the veracity of the naked assertion of petitioners that
indeed the subject easement of right of way was a voluntary grant from
respondent. Second, as admitted by the petitioners, it was only the foreman, Mang
Puling, who talked with them regarding said pathway on the northern side of
respondents property. Thus, petitioner Elizabeth de la Cruz testified that she did
not talk to respondent regarding the arrangement proposed to them by Mang Puling
despite the fact that she often saw respondent. [28] It is, therefore, foolhardy for
petitioners to believe that the alleged foreman of respondent had the authority to
bind the respondent relating to the easement of right of way. Third, their
explanation that said Mang Puling submitted said agreement to the Quezon City
Engineers Office, in connection with the application for a building permit but said
office could no longer produce a copy thereof, does not inspire belief. As correctly
pointed out by the trial court, [29] petitioners should have requested a
subpoena duces tecum from said court to compel the Quezon City Engineers Office
to produce said document or to prove that such document is indeed not available.
The fact that the perimeter wall of the building on respondents property was
constructed at a distance of 1.10 meters away from the property line, does not by
itself bolster the veracity of petitioners story that there was indeed such an
agreement. Further, as noted by the trial court, it was Atty. Federico R. Onandia,
counsel of Phil. Orient Motors, who wrote petitioners on 25 August 1994 advising
them that his client would close the pathway along 18 th Avenue, thereby implying
that it was Phil. Orient Motors, respondents lessee, which tolerated petitioners use
of said pathway.[30]
Likewise futile are petitioners attempts to show that they are legally entitled to
the aforesaid pathway under Article 649 of the Civil Code, to wit:
Art. 649. The owner, or any person who by virtue of a real right may cultivate or
use any immovable, which is surrounded by other immovables pertaining to other
persons, and without adequate outlet to a public highway, is entitled to demand a
right of way through the neighboring estates, after payment of the proper
indemnity.

214

The conferment of a legal easement of right of way under Article 649 is subject
to proof of the following requisites: (1) it is surrounded by other immovables and
has no adequate outlet to a public highway; (2) payment of proper indemnity; (3)
the isolation is not the result of its own acts; (4) the right of way claimed is at the
point least prejudicial to the servient estate; and (5) to the extent consistent with
the foregoing rule, where the distance from the dominant estate to a public highway
may be the shortest.[31] The first three requisites are not obtaining in the instant
case.
Contrary to petitioners contention, the trial court found from the records that
Concepcion de la Pea had provided petitioners with an adequate ingress and
egress towards Boni Serrano Avenue. The trial court, gave weight to TCT No. RT56958 (100547) covering the property denominated as Lot 1-B in the name of
Concepcion de la Pea, mother of petitioner herein Alfredo de la Cruz. Said TCT
indicates that a portion of Lot 1-B, consisting of 85 square meters and denominated
as Lot 1-B-2, is the one being occupied by petitioners. [32] In this connection, a copy
of the plan of a subdivision survey for Concepcion de la Pea and Felicidad Manalo
prepared in 1965 and subdivision plan for Concepcion de la Pea prepared in 1990
revealed an existing 1.50-meter wide alley, identified as Lot 1-B-1, on the lot of
Concepcion de la Pea, which serves as passageway from the lot being occupied by
petitioners (Lot 1-B-2) to Boni Serrano Avenue. [33] During the trial, petitioner
Elizabeth de la Cruz herself admitted knowledge of the existence of the subdivision
plan of Lot 1-B prepared for Concepcion de la Pea by Engr. Julio Cudiamat in 1990.
The Subdivision Plan subdivided Lot 1-B into three portions, namely:
(1)

Lot 1-B-1, which is an existing alley, consisting of 59.60 square

meters, towards Boni Serrano Avenue;

(2)

Lot 1-B-2, consisting of 85.20 square meters, which is being

occupied by petitioners; and

(3)

Lot 1-B-3, consisting also of 85.20 square meters, which is being

occupied by the sister of petitioner Alfredo dela Cruz. [34]

From petitioner Elizabeth de la Cruzs own admission, Lot 1-B-1 was intended by
the owner, Concepcion de la Pea, to serve as an access to a public highway for the
occupants of the interior portion of her property. [35] Inasmuch as petitioners have an
adequate outlet to a public highway (Boni Serrano Avenue), they have no right to
insist on using a portion of respondents property as pathway towards 18 th Avenue
and for which no indemnity was being paid by them.
Petitioner Elizabeth de la Cruz claimed before the trial court that although there
was indeed a portion of land allotted by Concepcion de la Pea to serve as their
ingress and egress to Boni Serrano Avenue, petitioners can no longer use the same
because de la Pea had constructed houses on it. As found by the trial court, the
isolation of petitioners property was due to the acts of Concepcion de la Pea, who
is required by law to grant a right of way to the occupants of her property. In the
trial courts rationale:
Article 649 of the Civil Code provides that the easement of right of way is not
compulsory if the isolation of the immovable is due to the proprietors own acts. To
allow defendants access to plaintiffs property towards 18 th Avenue simply because
it is a shorter route to a public highway, despite the fact that a road right of way,
which is even wider, although longer, was in fact provided for them by Concepcion
de la Pea towards Boni Serrano Avenue would ignore what jurisprudence has
consistently maintained through the years regarding an easement of right of way,
that mere convenience for the dominant estate is not enough to serve as its basis.
To justify the imposition of this servitude, there must be a real, not a fictitious or
artificial necessity for it. In Francisco vs. Intermediate Appellate Court, 177 SCRA
527, it was likewise held that a person who had been granted an access to the
public highway through an adjacent estate cannot claim a similar easement in an
alternative location if such existing easement was rendered unusable by the
owners own act of isolating his property from a public highway, such as what
Concepcion de la Pea allegedly did to her property by constructing houses on the

215

1.50 meter wide alley leading to Boni Serrano Avenue. And, if it were true that
defendants had already bought Lot 1-B-2, the portion occupied by them, from
Concepcion de la Pea, then the latter is obliged to grant defendants a right of way
without indemnity.[36]
We hasten to add that under the above-quoted Article 649 of the Civil Code, it is
the owner, or any person who by virtue of a real right may cultivate or use any
immovable surrounded by other immovable pertaining to other persons, who is
entitled to demand a right of way through the neighboring estates. In this case,
petitioners fell short of proving that they are the owners of the supposed dominant
estate. Nor were they able to prove that they possess a real right to use such
property. The petitioners claim to have acquired their property, denominated as Lot
1-B-2, from Concepcion de la Pea, mother of defendant Alfredo de la Cruz, who
owns Lot 1-B-3, an adjacent lot. However, as earlier noted, the trial court found that
the title to both lots is still registered in the name of Concepcion de la Pea under
TCT No. RT-56958 (100547).[37] Neither were petitioners able to produce the Deed of
Sale evidencing their alleged purchase of the property from de la Pea. Hence, by
the bulk of evidence, de la Pea, not petitioners, is the real party-in-interest to claim
a right of way although, as explained earlier, any action to demand a right of way
from de la Peas part will not lie inasmuch as by her own acts of building houses in
the area allotted for a pathway in her property, she had caused the isolation of her
property from any access to a public highway.
On the third issue, petitioners cannot find sanctuary in the equitable principle of
laches under the contention that by sleeping on her right to reclaim the pathway
after almost twenty years, respondent has, in effect, waived such right over the
same. It is not just the lapse of time or delay that constitutes laches. The essence
of laches is the failure or neglect, for an unreasonable and unexplained length of
time, to do that which, through due diligence, could or should have been done
earlier, thus giving rise to a presumption that the party entitled to assert it had
either abandoned or declined to assert it. [38]
The essential elements of laches are: (a) conduct on the part of the defendant,
or of one under whom he claims, giving rise to the situation complained of; (b) delay
in asserting complainants rights after he had knowledge of defendants acts and
after he has had the opportunity to sue; (c) lack of knowledge or notice by
defendant that the complainant will assert the right on which he bases his suit; and
(d) injury or prejudice to the defendant in the event the relief is accorded to the
complainant.[39]
The second and third elements, i.e., knowledge of defendant's acts and delay in
the filing of such suit are certainly lacking here. As borne by the records, it was only
in 1995 that respondent found out that the pathway being used by petitioners was
part of her property when a relocation survey and location plan of her property and
the adjacent land bought by San Benito Realty were prepared. [40] She immediately
demanded petitioners to demolish the structure illegally constructed by them on her
property without her knowledge and consent. As her letter dated 18 February 1995
addressed to petitioners fell on deaf ears, and as no settlement was arrived at by
the parties at the Barangay level, respondent seasonably filed her complaint with
the RTC in the same year.[41]
Respondent, in her Comment, [42] brings the Courts attention to petitioners
conversion of the pathway, subject matter of this case, into a canteen and videoke
bar, as shown by the pictures[43] showing the property bearing the signage,
FREDS[44] CANTEEN/VIDEOKE KAMBINGAN. Respondent, likewise, complains in her
Comment about the structures installed by petitioners that encroached on
respondents property line as a result of the commercial activities by petitioners on
the disputed property. Petitioners have implicitly admitted this conversion of the
propertys use by their silence on the matter in their Reply [45] and Memorandum.
[46]
Such conversion is a telltale sign of petitioners veiled pecuniary interest in
asserting a right over the litigated property under the pretext of an innocuous claim
for a right of way.

216

Viewed from all angles, from the facts and the law, the Court finds no
redeeming value in petitioners asseverations that merit the reversal of the assailed
resolutions.
WHEREFORE, the instant petition is DENIED. The Resolutions dated 11
September 1998 and 5 March 1999 of the Court of Appeals in CA-G.R. SP No. 68216
are AFFIRMED. The Decision dated 31 July 1997 of the Regional Trial Court is
likewise UPHELD. Costs against petitioners.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

Sec. 13. Proof of service

Po v. DOJ, G.R. No. 195198, February 11, 2013
G.R. No. 195198
February 11, 2013
LORELI
LIM
vs.
DEPARTMENT OF JUSTICE and JASPER T. TAN, Respondents.

PO, Petitioner,

x---------------x
G.R. No. 197098
ANTONIO
vs.
COURT OF APPEALS,
TAN, Respondents.

NG

CHIU, Petitioner,

DEPARTMENT

OF

JUSTICE

and

JASPER

T.

RESOLUTION
REYES, J.:
Herein private respondent, Jasper T. Tan (Tan), is a stockholder of Coastal Highpoint
Ventures, Inc. (CHVI), a real estate development company. Antonio Ng Chiu 1 (Chiu)
is its President. Tan claimed that Loreli Lim Po 2 (Po) is Chius personal accountant. Po
asserted otherwise and instead alleged that she is merely a consultant for CHVI.
Tan lamented that pertinent information relative to CHVIs operations were withheld
from him. His repeated requests for copies of financial statements and allowance to
inspect corporate books proved futile. Consequently, he filed before the Office of
the City Prosecutor of Cebu a complaint against Chiu and Po for violation of Section
74(2),3 in relation to Section 1444 of the Corporation Code of the Philippines, the
origin of the two consolidated petitions now before us.
On October 16, 2008, Assistant City Prosecutor Anna Lou B. Fernandez-Cavada
(Prosecutor Fernandez-Cavada) issued a Resolution 5 finding probable cause to indict
Chiu and Po based on the following grounds:
Complainant, as a stockholder, is entitled to inspect the corporate books and
records of the CHVI. The record clearly shows that complainant had been

217

demanding to inspect the corporate books, records of business and corporate

reports since 13 June 2007. Noticeably, though several demands/requests for
inspection of corporate records have been made by the complainant, the same
werenot (sic) granted until after the month of April 2008 or roughly 10 months
thereafter. The December 15, 2007 collective inspection cannot be regarded as
compliance with the request as complainant has never agreed thereto.
xxxx
The allegation of the respondent Chiu that the complainant could easily secure
copies of the corporate records for (sic) the Securities and Exchange Commission
cannot justify the refusal of the latters demand for inspection. As beneficial owner
of the business, the complainant has the right to know not only the financial
condition of the corporation but also how the corporate affairs are being managed,
so that if they find the conditions unsatisfactory, they may be able to take the
necessary measures to protect their investment.
Moreover, "records of all business transaction[s]" contemplated in Section 74 covers
more than the reportorial requirements mandated by the SEC. "Records of all
business transaction[s]" include books of inventories and balances, business
correspondence, letters, telegrams, contracts, memoranda, etc.[,] as well as
journals, ledgers and supporting documents fro (sic) tax purposes such as income
tax returns, vouchers and receipts, financial statements and voting trust
agreements.
From records of business transaction[s], the stockholder can find out how his
investment is being used and the actual financial condition of the corporation. x x x
Considering that the records may be voluminous and that a stockholder may find it
difficult to interpret them, the Supreme Court has held that a stockholder may make
copies, extracts and memoranda of such records. x x x.
x x x [I]t is quite inexplicable why the complainant is not made to inspect the
corporate records to the extent that is satisfactory to him. While the respondent
alleged that complainant through the inspection team was allowed to view/inspect
the following records, to wit:
xxxx
No proof has been shown by respondents that these books/documents were indeed
shown to the inspection team. A simple minute of the meeting/inspection signed by
the inspection team would have conveniently supported this assertion. x x x.
x x x [T]he assertion of the complainant that the inspection team was limited to see
the books of accounts for 2006 to 2007 with carry forward balances and not
detailed schedules of accounts except for bank reconciliation, lapsing schedule and
deposit on subscription has to be given credence considering that this was based on
the communication sent by and (sic) independent accounting company which has
no interest in the corporation and which does not stand to benefit from whatever
transaction that the corporation may have.6 (Citations omitted and underlining ours)
On April 30, 2009, Prosecutor Fernandez-Cavada issued a Resolution 7 denying Chiu
and Pos motions to reconsider the foregoing.

218

A petition for review was filed before the Department of Justice (DOJ). On March 2,
2010, then Undersecretary Ricardo R. Blancaflor issued a resolution reversing
Prosecutor Fernandez-Cavadas findings.
On April 30, 2010, then Acting DOJ Secretary Alberto C. Agra (Secretary Agra) issued
a Resolution8 granting Tans motion for reconsideration. Secretary Agra reversed the
Resolution dated March 2, 2010 and instead affirmed Prosecutor FernandezCavadas earlier disquisition. Chiu and Pos motions for reconsideration were denied
by Secretary Agra through a Resolution9 dated June 21, 2010.
Chiu and Po each filed before the Court of Appeals (CA) a Petition
for Certiorari under Rule 65 of the Rules of Court. 10 Po and Chius petitions were
docketed as CA-G.R. SP Nos. 05351 and 05352, respectively.
On December 15, 2010, the CA dismissed with finality Pos petition on technical
grounds,11 viz:
While petitioner had complied with the requirement on competent evidence of her
identity, she still failed to comply with the requirement on proper proof of service.
Proper proof of personal service requires that the affidavit of the party serving must
contain a full statement of the date, place and manner of service. Petitioners
attached affidavit of service lacked these pertinent details. As for the proof of
service by registered mail, post office receipts do not suffice for it is stated,
specifically in Section 10, Rule 13 of the Rules of Court, that service by registered
mail is complete upon actual receipt by the addressee, or after five (5) days from
the date he received the first notice of the postmaster, whichever is earlier. Verily,
registry receipts cannot be considered as sufficient proof of service; they are merely
evidence of the mail matter with the post office of the sender, not the delivery of
said mail matter by the post office to the addressee. 12 (Citations omitted and
underlining ours)
On the other hand, Chius petition was denied for lack of merit. 13 The CA declared
that:
Grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
the DOJ was not shown in the present case.
Here, the petitioner was criminally charged for violating Section 74 of the
Corporation Code in relation to Section 144 of the same Code. The requisites in
order for the penal provision under Section 144 of the Corporation Code to apply in
a case of violation of a stockholder or members right to inspect the corporate
books/records as provided for under Section 74 of the Corporation Code, are
enumerated in the recent case of Sy Tiong Shiou, et al. v[.] Sy Chim, et
al., citing Ang-Baya, et al. v[.] Ang:
First. A director, trustee, stockholder or member has made a prior demand in writing
for a copy of excerpts from the corporations records or minutes;
Second. Any officer or agent of the concerned corporation shall refuse to allow the
said director, trustee, stockholder or member of the corporation to examine and
copy said excerpts;
xxxx

219

The Court has reviewed the records and the pleadings of the parties and found that
the requisites mentioned above are present. It is noted that private respondent on
several occasions had expressed in writing his request to inspect CHVIs corporate
books and records but his written requests were turned down on the pretext that
the petitioner needed more time to prepare the documents requested by the private
respondent. The initial written demand was made on October 10, 2007 but it was
only on April 24, 2008 that the audit team sent by the private respondent was able
to inspect some of the documents of CHVI. However, it appears that the inspection
was ineffective since the petitioner and Loreli Lim Po refused to present the other
documents demanded by the inspection team. PO even prevented the team from
copying the corporate books and records.
Petitioner repeatedly insists that private respondents representatives were not
refused inspection of the corporate book or records and the latter were even
allowed to make copies of the documents during the meeting on April 24, 2008.
These are defenses which could be properly threshed out in a full-blown trial. x x x
[T]he purpose of determining probable cause is to ascertain that the person
accused of the crime is probably guilty thereof and should be held for trial. A finding
of probable cause needs only to rest on evidence showing that more likely than
not[,] a crime has been committed and was committed by the
suspect.1wphi1 Probable cause need not be based on clear and convincing
evidence of guilt, neither on evidence establishing guilt beyond reasonable doubt,
and definitely, not on evidence establishing absolute certainty of guilt.
Finally, it is once more appropriate to apply the Supreme Courts general policy of
non-interference with the prosecutors discretion to file or not to file a criminal case.
x x x The courts try and absolve or convict the accused but, as a rule, have no part
in the initial decision to prosecute him. The possible exception to this rule is where
there is an unmistakable showing of a grave abuse of discretion amounting to lack
or excess of jurisdiction that will justify judicial intrusion into the precincts of the
executive which is not the case herein.14 (Citations omitted and underlining ours)
Po is before us now with a Petition for Review on Certiorari filed under Rule 45 of the
Rules of Court ascribing grave error on the part of the CA in (a) allegedly imposing
upon her "an additional requirement of proof of service by registered mail of the
actual receipt thereof by the addressee," 15 and (b) "invoking Section 10,16 Rule 13 of
the Rules of Court on proof of service by registered mail when the applicable rule
should have been Section 1317 of the said Rule 13."18
On his part, Chiu filed before us a Petition for Certiorari under Rule 65 of the Rules of
Court alleging that the CA gravely abused its discretion in denying his petition
"considering that there are clear and sufficient elements allowing the courts to
conduct a judicial review."19
We deny the instant consolidated petitions.
Chius petition is procedurally-flawed.
Chiu filed his petition under Rule 65 of the Rules of Court when he should have
resorted instead to Rule 45 thereof. An appeal taken either to us or the CA by the
wrong or inappropriate mode shall be dismissed. 20
Even if we were to be liberal and consider his petition as having been filed under
Rule 45, it would still be susceptible of dismissal for non-compliance with Section

220

221 of the same rule. Chius counsel received a copy of the CAs resolution finally
denying his petition on April 8, 2011. 22 The petition now before us was filed on June
23, 2011, way beyond the 15-day period prescribed by Section 2 of Rule
45.23 Besides, what the petition essentially seeks is for us to re-evaluate the
evidence upon which Secretary Agra anchored his findings in holding that probable
cause exists to indict Chiu. The foregoing was affirmed by the CA. It is settled that a
re-calibration of evidence cannot be done in a petition filed under Rule 45.
Thus, Cirtek Employees Labor Union-Federation of Free Workers v. Cirtek
Electronics, Inc.24 is emphatic that:
This rule [Rule 45] provides that the parties may raise only questions of law,
because the Supreme Court is not a trier of facts. Generally, we are not duty-bound
to analyze again and weigh the evidence introduced in and considered by the
tribunals below. When supported by substantial evidence, the findings of
fact of the CA are conclusive and binding on the parties and are not
reviewable by this Court, unless the case falls under any of the recognized
exceptions[.]25 (Emphasis supplied and underlining ours)
Again, even if we were to take exception of Chius case by giving due course to his
petition either under Rule 45 or Rule 65, still, the result is its dismissal.
In Metropolitan Bank & Trust Co. (Metrobank) v. Tobias III, 26 we stated that:
Under the doctrine of separation of powers, the courts have no right to directly
decide matters over which full discretionary authority has been delegated to the
Executive Branch of the Government, or to substitute their own judgments for that
of the Executive Branch, represented in this case by the Department of Justice. The
settled policy is that the courts will not interfere with the executive determination of
probable cause for the purpose of filing an information, in the absence of grave
abuse of discretion. That abuse of discretion must be so patent and gross as to
amount to an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law or to act at all in contemplation of law, such as where the power is
exercised in an arbitrary and despotic manner by reason of passion or hostility. x x
x.
In this regard, we stress that a preliminary investigation for the purpose of
determining the existence of probable cause is not part of a trial. At a preliminary
investigation, the investigating prosecutor or the Secretary of Justice only
determines whether the act or omission complained of constitutes the offense
charged. Probable cause refers to facts and circumstances that engender a wellfounded belief that a crime has been committed and that the respondent is
probably guilty thereof. There is no definitive standard by which probable cause is
determined except to consider the attendant conditions; the existence of probable
cause depends upon the finding of the public prosecutor conducting the
examination, who is called upon not to disregard the facts presented, and to ensure
that his finding should not run counter to the clear dictates of reason. 27 (Citations
omitted and underlining ours)
In the case at bar, we find no grave abuse of discretion on the part of the CA when it
rendered its Decision28 dated January 11, 2011.
There is ample evidence on record to support the said decision. To name one,
accountants Creest O. Morales and Jay Arr T. Hernandez, who were part of the
Inspection Team sent by Tan to CHVI, executed a Joint Affidavit 29 stating that the
documents made available to them for inspection were limited. Further, they

221

claimed that on the day of the inspection, they brought a portable photocopying
machine to CHVIs premises but they were not allowed to use the same. The offense
punishable under Section 74, in relation to Section 144 of the Corporation Code, for
which Chiu was indicted, requires the unjustified disallowance or refusal by a
suspect, of a stockholders written request to examine or copy excerpts of a
corporations books or minutes. The absence of any ascribed ill motives on the part
of the aforementioned accountants to make statements adverse or unfavorable to
Chiu lends credibility to their declarations.
Besides, as we ruled in Metrobank,30 in a preliminary investigation, the prosecutor is
bound to determine merely the existence of probable cause that a crime has been
committed and that the accused has committed the same. The rules do not require
that a prosecutor has moral certainty of the guilt of a person for the latter to be
indicted for an offense after the conduct of a preliminary investigation. Further, we
have repeatedly ruled that the determination of probable cause, for purposes of
preliminary investigation, is an executive function. Such determination should be
free from the courts interference save only in exceptional cases where the DOJ
gravely abuses its discretion in the issuance of its orders or resolutions.
We likewise find no compelling reason to grant Pos petition.
Even if we were to declare that it was error to dismiss Po's petition on the ground
that the registry return cards were not attached thereto, still, remanding the case to
theCA would only prove circuitous. The crux of Po's petition filed with the CA was to
seek for a review of Secretary Agra's findings. The CA had already done so in
resolving Chiu's petition on the merits and no ground exists for us to once again
review the same.
WHEREFORE, IN VIEW OF THE FOREGOING, the instant consolidated petitions
are DENIED. The Decision and Resolution of the Court of Appeals dated January 11,
2011 and April 8, 2011, respectively, relative to CA- G.R. SP No. 05352, and
Resolutions issued on September 15, 2010 and December 15, 2010, relative to CAG.R. SP No. 05351, areAFFIRMED in toto.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
PNB v. CIR, G.R. No. 172458, December 14, 2011 (Supra.)

Republic of the Philippines

Supreme Court
Manila
FIRST DIVISION

222

PHILIPPINE NATIONAL BANK,

Petitioner,

G.R. No. 172458

Present:
CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.

- versus -

COMMISSIONER OF INTERNAL
REVENUE,
Respondent.

Promulgated:
December 14, 2011

x---------------------------------------------------- x
DECISION
LEONARDO-DE CASTRO, J.:
This Petition for Review on Certiorari[1] seeks to reverse and set aside the
January 27, 2006[2] and April 19, 2006[3]Resolutions of the Court of Tax
Appeals En Banc (CTA En Banc) in C.T.A. E.B. NO. 145, which dismissed
outright the Petition for Review filed by the Philippine National Bank (PNB) dated
December 27, 2005 for being filed four days beyond the additional 15 days granted
to file such petition.
On April 15, 1999, petitioner PNB filed with the Bureau of Internal Revenue
(BIR) its Tentative Return for 1998 with the documents enumerated in the List of
Attachments to Annual Income Tax Return Calendar Year Ended December 31,
1998 enclosed. On September 30, 1999, PNB filed its Amended Income Tax Return
for 1998, with the corresponding attachments to an amended annual income tax
return appended, including copies of the Certificates and Schedule of Creditable
Withholding Taxes for 1998. PNB likewise filed its Corporate Quarterly Returns for
the calendar year 1998.[4]
On February 8, 2001, PNB filed with respondent Commissioner of Internal
Revenue (CIR) an administrative claim for refund in the amount of 6,028,594.00,
which were payments made in excess of its income tax liability for 1998. [5]
As BIR did not act upon PNBs claim for refund, PNB, on March 30, 2001, filed
with the Second Division of the Court of Tax Appeals (CTA Division) a Petition for
Review,[6] and prayed that it be refunded or issued a tax credit certificate in the
amount of 6,028,594.00, representing creditable taxes withheld from PNBs income
from the sale of real property, rental income, commissions, and management fees
for the taxable year 1998.
In his Answer,[7] the CIR alleged that PNBs claim for refund/tax credit is
subject first to an investigation and that it failed to establish its right to a refund.
After PNB had rested its case, the CIR manifested that he would not be
presenting evidence. The parties were thereafter required to submit their
memoranda.[8]
On May 19, 2003, the BIR issued in PNBs favor Tax Credit Certificate No. SN
023837 for 4,154,353.42, leaving a balance of 1,874,240.58 out of PNBs total

223

claim of 6,028,594.00. PNB then informed the CTA Division of such tax credit
certificate, and manifested that its acceptance was without prejudice to recovering
the balance of its total claim.[9]
Consequently, the CIR filed a Motion, [10] asking that he be allowed to present
evidence on PNBs excluded claim. The CIR argued that the amount of
1,874,240.58 was disallowed because it was not remitted to the BIR, as verified by
its Regional Accounting Division.[11]
On August 11, 2005, the CTA Division rendered its Decision, [12] the dispositive
portion of which reads:
WHEREFORE, premises considered, the present Petition For
Review is hereby partially GRANTED. Respondent is hereby ORDERED
to REFUND or ISSUE a Tax Credit Certificate in favor of herein petitioner
in the amount of 1,428,661.66, representing the latters unutilized
creditable withholding tax for the year 1998. [13]
The CTA Division held that payments of withholding taxes for a certain
taxable year were creditable to the payees income tax liability as determined after
it had filed its income tax returns the following year. The CTA Division said that
since PNB posted net losses, it was not liable for any income tax and consequently,
the taxes withheld during the course of the taxable year, which was 1998, while
collected legally under Revenue Regulations No. 02-98, Section 2.57 (B), became
untenable and took on the nature of erroneously collected taxes at the end of that
year. The CTA Division averred that while the right to a refund is not automatic and
must be established by sufficient evidence, there is nothing in the Tax Code that
would suggest that the actual remittance of the withholding tax is a condition
precedent to claim for a tax refund. Moreover, the CTA Division added, that the CIR
failed to present the certification to prove his contention of PNBs non-remittance of
the disallowed amount. However, the CTA Division affirmed the disallowance of
eight transactions, amounting to 445,578.92 as they had already been reported as
income for other years, had not been recorded, or were not supported by pertinent
documents.[14]
On September 14, 2005, PNB filed a Motion for Partial Reconsideration,
asserting its entitlement to be refunded the amount of 445,578.92, by
explaining each transaction involved and pinpointed by the CTA Division. This
however was still denied by the CTA Division in its Resolution [16] dated November 15,
2005, for lack of merit.
[15]

Aggrieved, PNB, filed a partial appeal by way of Petition for Review [17] under
Section 18 of Republic Act No. 9282[18]before the CTA En Banc, to review and
modify the CTA Divisions August 11, 2005 Decision. This petition was received by
the CTA En Banc on December 27, 2005, four days beyond the additional 15 days
granted to PNB to file its petition.
Thus, on January 27, 2006, the CTA En Banc issued a Resolution[19] denying
due course and consequently dismissing PNBs petition for the following reasons:
1)
The Petition For Review was filed four (4) days late
on December 27, 2005, the reglementary deadline for the timely filing
of such petition being December 23, 2005.
Appeal is a statutory privilege and must be exercised in the
manner provided by law. Therefore, perfection of an appeal in the
manner and within the period prescribed by law is not only mandatory,
but jurisdictional, and non-compliance is fatal having the effect of
rendering the judgment final and executory (Cabellan vs. Court of
Appeals, 304 SCRA 119). Not only that, late appeals deprives the

224

appellate court of jurisdiction to alter the final judgment much less

entertain the appeal (Pedrosa vs. Hill, 257 SCRA 373).
2)
The petition is not accompanied by the duplicate
original or certified true copies of the assailed Decision dated August
11, 2005 and Resolution dated November 15, 2005, in violation
of Section 2, Rule 6 of the Revised Rules of the Court of Tax Appeals, in
relation to Section 6, Rule 43 of the Rules of Court.
3)
The Petition does not contain an Affidavit of
Service, in violation of Section 13, Rule 13 of the Rules of Court.
In the case of Policarpio vs. Court of Appeals, 269 SCRA 344,
351, the Supreme Court did not hesitate to dismiss the petition for
failure to attach an affidavit of service.
Lastly, Section 7 of Rule 43 of the Rules of Court provides that:
SEC. 7. Effect of failure to comply with requirements.The failure of the petitioner to comply with any of the foregoing
requirements regarding the payment of the docket and other
lawful fees, the deposit for costs, proof of service of the petition,
and the contents of and the documents which should
accompany the petition shall be sufficient ground for the
dismissal thereof.
Persistent in its claim, PNB filed a Motion for Reconsideration with
Manifestation of Compliance[20] on February 23, 2006, and answered each ground
propounded by the CTA En Banc in its Resolution.
PNB asserted that its petition was filed on December 23, 2005, which was the
last day of the additional 15-day period granted by the CTA En Banc, via LBC
Express, as shown by the copy of LBC Official Receipt No. 12990350 [21] dated
December 23, 2005. PNB explained that its counsel, Atty. Flerida P. ZaballaBanzuela, accompanied by her administrative assistant, tried to personally file the
petition with the CTA En Banc on December 23, 2005. However, PNB claimed, that
due to heavy traffic, Atty. Zaballa-Banzuela arrived at the CTA office in Quezon City
at 4:30 p.m., just as the CTA personnel were leaving the CTA premises in their
shuttle bus.[22]
PNB attached to its Motion the Affidavit[23] of Christopher Sarmiento, the
Security Guard who was then assigned at the CTA main gate. Sarmiento averred
that he did not allow Atty. Zaballa-Banzuela to enter the CTA compound because
there was no one left to receive her document. He also alleged that Atty. ZaballaBanzuela even tried to ask some of the CTA personnel who were on board the CTA
shuttle that passed her by, if they could receive her document, but they
declined. This was corroborated by Atty. Zaballa-Banzuelas administrative
assistant, Macrina J. Cataniag, in her Affidavit, [24] also annexed to PNBs Motion.
PNB argued that while its petition was deposited with LBC Express on
December 23, 2005, very well within the reglementary period, CTA En
Banc received it only on December 27, 2005, as December 24 to 26, 2005 were
holidays.[25]
Addressing the second ground that the CTA En Banc used to dismiss the
petition, PNB said that its non-submission of the duplicate original or certified true
copy of the CTA Divisions decision and resolution was not intended for delay but
was mere inadvertence and unintentional, but an honest mistake, an oversight, an
unintentional omission, and a human error occasioned by too much pressure of
work.[26]

225

In compliance, PNB attached to its Motion the Affidavit of Service [27] and
certified true copies of the CTA Divisions decision and resolution supposed to be
attached to its petition before the CTA En Banc.
On April 19, 2006, the CTA En Banc denied PNBs motion for lack of
merit. The CTA En Banc held that absent any cogent explanation [to not] comply
with the rules, the rules must apply to the petitioner as they do to all. [28] The
CTA En Bancratiocinated in this wise:
It is a jurisprudential rule that the date [of] delivery of pleadings to a
private letter-forwarding agency is not to be considered as the date of
filing thereof in court, and that in such cases, the date of actual receipt
by the court, and not the date of delivery to the private carrier, is
deemed the date of filing of that pleading (Benguet Electric
Corporation, Inc. vs. NLRC, 209 SCRA 60-61). Clearly, the present
Petition For Review was filed four (4) days late.
The instant Petition For Review is an appeal from the decision
of the Court in Division. Accordingly, the applicable rule is that the
fifteen-day reglementary period to perfect an appeal is mandatory and
jurisdictional in nature; that failure to file an appeal within the
reglementary period renders the assailed decision final and executory
and no longer subject to review (Armigos vs. Court of Appeals, 179
SCRA 1; Jocson vs. Baguio, 179 SCRA 550). Petitioner had thus lost its
right to appeal from the decision of this Court in Division. [29]
The CTA En Banc added:
Although petitioner subsequently attached to its present
motion, certified true copies of the assailed Decision, dated August 11,
2005, and Resolution, dated November 15, 2005, and the Affidavit of
Service, this did not stop the questioned decision from becoming final
and executory. It has been held that strict compliance with procedural
requirements in taking an appeal cannot be substituted by good faith
compliance. To rule otherwise would defeat the very purpose of the
rules of procedure, i.e., to facilitate the orderly administration of
justice (Santos vs. Court of Appeals, 198 SCRA 806, 810; Ortiz vs.
Court of Appeals, 299 SCRA 712).[30]
PNB thereafter filed a Petition for Review [31] before this Court on June 16,
2006, which was the last day of the additional thirty days it was granted [32] to file
such petition.
In order to convince this Court to allow its petition, PNB posits the following
arguments:
I
THE HONORABLE COURT OF TAX APPEALS EN BANC ERRED IN FAILING
TO CONSIDER THE EXPLANATION SUBMITTED BY PNB IN ITS MOTION
FOR RECONSIDERATION WITH MANIFESTATION OF COMPLIANCE WITH
RESPECT TO THE FILING OF THE PETITION ON DECEMBER 23, 2005
(THE DUE DATE FOR FILING THEREOF) VIA LBC SERVICE INSTEAD OF
REGISTERED MAIL WITH RETURN CARD.
II

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THE PROCEDURAL LAPSE OBSERVED BY THE HONORABLE COURT OF

TAX APPEALS SHOULD BE LIBERALLY CONSTRUED IN THE INTEREST OF
SUBSTANTIAL JUSTICE, AS POSTULATED IN VARIOUS SUPREME COURT
DECISIONS.
III
THE PETITION FILED BY PNB BEFORE THE CTA EN BANC RAISES A
MERITORIOUS LEGAL DEFENSE WARRANTING JUDICIAL RESOLUTION. [33]
PNB once again narrated the circumstances leading to its counsels decision
to mail its petition for review via LBC Express, a private letter-forwarding company,
instead of registered mail. It claims that since this Court has repeatedly pronounced
the primacy of substantive justice over technical rules, then its procedural lapses
should likewise be excused, especially since no substantial rights of the CIR are
affected.
This Courts Ruling
The only issue to be resolved here is whether or not this Court should require
the CTA En Banc to give due course to C.T.A. E.B. No. 145 despite PNBs failure to
comply with the formal requirements of the Revised Rules of the Court of Tax
Appeals and the Rules of Court in filing a petition for review with the CTA En Banc.
Not having been successfully convinced by PNB, we answer the above issue
in the negative.
This Court would like to underscore the fact that PNB failed to comply with
not just one, but three procedural rules when it filed its petition for review with the
CTA En Banc.

Petition was filed late

It is stated under Section 3, Rule 1 of the Revised Rules of the Court of Tax
Appeals that the Rules of Court shall apply suppletorily. Thus, the manner in which
petitions are filed before the CTA is also covered by the relevant provision of the
Rules of Court, to wit:
Rule 13. x x x.
xxxx
Sec. 3. Manner of filing. The filing of pleadings, appearances,
motions, notices, orders, judgments and all other papers shall be made
by presenting the original copies thereof, plainly indicated as such,
personally to the clerk of court or by sending them by registered
mail. In the first case, the clerk of court shall endorse on the pleading
the date and hour of filing. In the second case, the date of the mailing
of motions, pleadings, or any other papers or payments or deposits, as
shown by the post office stamp on the envelope or the registry
receipt, shall be considered as the date of their filing,
payment, or deposit in court. The envelope shall be attached to
the record of the case. (Emphases ours.)
To recall, PNB filed its petition with the CTA En Banc four days beyond
the extended period granted to it to file such petition. PNB argues that it was filed
on time since it was mailed on the last day of the extended period, which was on

227

December 23, 2005. It has been established that a pleading filed by ordinary mail
or by private messengerial service x x x is deemed filed on the day it is actually
received by the court, and not on the day it was mailed or delivered to the
messengerial service.[34] In Benguet Electric Cooperative, Inc. v. National Labor
Relations Commission,[35] we said:
The established rule is that the date of delivery of pleadings to a
private letter-forwarding agency is not to be considered as the date of
filing thereof in court, and that in such cases, the date of actual receipt
by the court, and not the date of delivery to the private carrier, is
deemed the date of filing of that pleading. [36]
It is worthy to note that PNB already asked for an additional period of 15 days
within which to file its petition for review with the CTA En Banc. This period expired
on December 23, 2005. Knowing fully well that December 23, 2005 not only fell on
a Friday, followed by three consecutive non-working days, but also belonged to the
busiest holiday season of the year, PNB should have exercised more prudence and
foresight in filing its petition.
It is, however, curious why PNB chose to risk the holiday traffic in an effort to
personally file its petition with the CTA En Banc, when it already filed a copy to the
other party, the CIR, via registered mail.[37] Considering the circumstances, it would
have been more logical for PNB to send its petition to the CTA En Banc on the same
occasion it sent a copy to the CIR, especially since that day was already the last day
given to PNB to file its petition. Moreover, PNB offered no justification as to why it
sent its petition via ordinary mail instead of registered mail. Service by ordinary
mail is allowed only in instances where no registry service exists. [38] Rule 13,
Section 7 reads:
Sec. 7. Service by mail. Service by registered mail shall be
made by depositing the copy in the post office, in a sealed envelope,
plainly addressed to the party or his counsel at his office, if known,
otherwise at his residence, if known, with postage fully pre-paid, and
with instructions to the postmaster to return the mail to the sender
after ten (l0) days if undelivered. If no registry service is available
in the locality of either the sender or the addressee, service
may be done by ordinary mail. (Emphasis ours.)
Petition was not accompanied by the
required duplicate originals or certified
true copies of the decision and resolution
being assailed, and Affidavit of Service
The following provisions are instructive:
Section 2, Rule 6 of the Revised Rules of the Court of Tax Appeals:
SEC. 2. Petition for review; contents. The petition for review
shall contain allegations showing the jurisdiction of the Court, a
concise statement of the complete facts and a summary statement of
the issues involved in the case, as well as the reasons relied upon for
the review of the challenged decision. The petition shall be verified
and must contain a certification against forum shopping as provided in
Section 3, Rule 46 of the Rules of Court. A clearly legible duplicate
original or certified true copy of the decision appealed from
shall be attached to the petition. (Emphasis supplied.)
Section 4(b), Rule 8 of the Revised Rules of the Court of Tax Appeals:

228

Sec. 4(b) An appeal from a decision or resolution of the Court in

Division on a motion for reconsideration or new trial shall be taken to
the Court by petition for review as provided in Rule 43 of the Rules of
Court. The Court en banc shall act on the appeal.
Sections 6, Rule 43 of the Rules of Court:
Sec. 6. Contents of the petition. The petition for review shall (a)
state the full names of the parties to the case, without impleading the
court or agencies either as petitioners or respondents; (b) contain a
concise statement of the facts and issues involved and the grounds
relied upon for the review; (c) be accompanied by a clearly legible
duplicate original or a certified true copy of the award,
judgment, final order or resolution appealed from, together with
certified true copies of such material portions of the record referred to
therein and other supporting papers; and (d) contain a sworn
certification against forum shopping as provided in the last paragraph
of section 2, Rule 42. The petition shall state the specific material
dates showing that it was filed within the period fixed
herein. (Emphasis ours.)

This Court has already upheld the mandatory character of attaching duplicate
originals or certified true copies of the assailed decision to a petition for review.
[39]
Moreover, pursuant to Section 7, Rule 43 of the Rules of Court, non-compliance
with such mandatory requirement is a sufficient ground to dismiss the petition, viz:
Sec. 7. Effect of failure to comply with requirements. The
failure of the petitioner to comply with any of the foregoing
requirements regarding the payment of the docket and other lawful
fees, the deposit for costs, proof of service of the petition, and
the contents of and the documents which should accompany
the petition shall be sufficient ground for the dismissal
thereof. (Emphasis ours.)
Anent the failure to attach the Affidavit of Service, Section 13, Rule 13 of the
Rules of Court provides:
Sec. 13. Proof of service. Proof of personal service shall consist
of a written admission of the party served, or the official return of the
server, or the affidavit of the party serving, containing a full statement
of the date, place and manner of service. If the service is by ordinary
mail, proof thereof shall consist of an affidavit of the person mailing of
facts showing compliance with section 7 of this Rule. If service is made
by registered mail, proof shall be made by such affidavit and the
registry receipt issued by the mailing office. The registry return card
shall be filed immediately upon its receipt by the sender, or in lieu
thereof the unclaimed letter together with the certified or sworn copy
of the notice given by the postmaster to the addressee.
Although the failure to attach the required affidavit of service is not fatal if
the registry receipt attached to the petition clearly shows service to the other
party, [40] it must be remembered that this was not the only rule of procedure PNB
failed to satisfy. InSuarez v. Judge Villarama, Jr.[41] we said:

229

It is an accepted tenet that rules of procedure must be faithfully

followed except only when, for persuasive and weighting reasons, they
may be relaxed to relieve a litigant of an injustice commensurate with
his failure to comply with the prescribed procedure. Concomitant to a
liberal interpretation of the rules of procedure, however, should be an
effort on the part of the party invoking liberality to adequately explain
his failure to abide by the rules.[42]
This Court agrees with the CTA En Banc that PNB has not demonstrated any
cogent reason for this Court to take an exception and excuse PNBs blatant
disregard of the basic procedural rules in a petition for review. Furthermore, the
timely perfection of an appeal is a mandatory requirement. One cannot escape the
rigid observance of this rule by claiming oversight, or in this case, lack of
foresight. Neither can it be trifled with as a mere technicality to suit the interest
of a party. Verily, the periods for filing petitions for review and for certiorari are to
be observed religiously. Just as [the] losing party has the privilege to file an appeal
within the prescribed period, so does the winner have the x x x right to enjoy the
finality of the decision.[43] In Air France Philippines v. Leachon,[44] we held:
Procedural rules setting the period for perfecting an appeal or
filing an appellate petition are generally inviolable. It is doctrinally
entrenched that appeal is not a constitutional right but a mere
statutory privilege. Hence, parties who seek to avail of the privilege
must comply with the statutes or rules allowing it. The requirements
for perfecting an appeal within the reglementary period specified in the
law must, as a rule, be strictly followed. Such requirements are
considered indispensable interdictions against needless delays, and
are necessary for the orderly discharge of the judicial business. For
sure, the perfection of an appeal in the manner and within the period
set by law is not only mandatory, but jurisdictional as well. Failure to
perfect an appeal renders the judgment appealed from final and
executory.[45]
While it is true that the Court may deviate from the foregoing rule, this is true
only if the appeal is meritorious on its face. The Court has not hesitated to relax the
procedural rules in order to serve and achieve substantial justice. In the
circumstances obtaining in this case however, the occasion does not warrant the
desired relaxation.[46] PNB has not offered any meritorious legal defense to justify
the suspension of the rules in its favor. The CTA Division has taken into
consideration all of the evidence submitted by the PNB, and actually allowed it a
refund of 1,428,661.66, in addition to the 4,154,353.42 the BIR already
gave. The CTA Division explained why it disallowed the remaining balance of
445,578.92 in its Decision dated August 11, 2005. When PNB moved to reconsider
this decision, it did not offer the CTA any other evidence or explanation aside from
the ones the CTA Division had already evaluated. Nevertheless, the CTA carefully
considered and deliberated anew PNBs grounds, albeit they found them lacking in
merit. Thus, it cannot be said that PNB was deprived of its day in court, as in fact, it
was given all the time it had asked for.
While PNB may believe that it has a meritorious legal defense, this must be
weighed against the need to halt an abuse of the flexibility of procedural rules. It is
well established that faithful compliance with the Rules of Court is essential for the
prevention and avoidance of unnecessary delays and for the organized and efficient
dispatch of judicial business.[47]
WHEREFORE, the petition is hereby DENIED for lack of merit.

230

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

Sec. 14. Notice of lis pendens

Cunanan v. Jumping Jap, G.R. No. 173834, April 24, 2009

SECOND DIVISION

ISABELITA CUNANAN, CAROLYN

CUNANAN and CARMENCITA F.
NEMOTO,
Petitioners,

G.R. No. 173834

Present:
CARPIO MORALES, J.*
Acting Chairperson,
TINGA,
VELASCO, JR.,
LEONARDO DE CASTRO,** and
BRION, JJ.

- versus -

JUMPING JAP TRADING

CORPORATION, represented by
REUBEN M. PROTACIO,
Respondent.

Promulgated:
April 24, 2009

x----------------------------------------------------------------------------x
DECISION
TINGA, J.:
This is a petition for review on certiorari [1] under Rule 45 of the
7 April 2006 decision of the Court of Appeals [2] and the 28 July 2006 resolution[3] of
the same court denying petitioners motion for reconsideration.
The pertinent facts as culled from the records follow.
Petitioner Carmencita Fradejas Nemoto (Carmencita) is the registered owner
of a 618 square meter-lot, with the house and improvements thereon, located at No.
167 Pili Drive, Ayala Alabang Village, Muntinlupa City and covered by Transfer
Certificate of Title (TCT) No. 213246 [4]. She acquired the property by virtue of a deed
of sale executed in her favor by Metropolitan Land Corporation (MLC).

231

On 22 March 2001, respondent Jumping Jap Trading Corporation (respondent),

represented by its President, Rueben Protacio (Protacio), filed Civil Case No. 01098 with the Regional
Trial Court (RTC) of Muntinlupa City seeking the annulment of both the deed of sale
and TCT No. 213246, as well as the reconveyance of the property. Respondent
anchored the complaint on its alleged superior right over the property by virtue of
the execution of a previous deed of conditional sale by MLC in its favor and its
having paid P18,300,000.00 by itself using corporate funds and P5,000,000.00 by
Protacio, or a total of P23,300,000.00 which was more than the P12,600,000.00 that
the spouses Nemoto had paid on the purchase price of P35,900,000.00. It was
allegedly agreed that Nobuyasu Nemoto (Nobuyasu), who is one of respondents
stockholders and also a friend of Protacio, would pay the remaining installment
of P12,600,000.00 and reimburse the amount already paid by respondent and
Protacio while the title, to be placed in the name of the minor daughter of spouses
Nemoto, Sakura Nemoto, would be in respondents possession. However, MLC did
not deliver the title to the property to respondent despite repeated oral demands.
Respondent later discovered that a deed of absolute sale was executed between
MLC
and
Carmencita
with
a
stated
consideration
of P12,500,000.00
and that TCT No. 213246 was issued in the name of Carmencita.[5]
Despite several demands and assurances in a span of more than three years, the
spouses Nemoto still failed to pay the purchase price advanced by respondent and
Protacio amounting to P23,400,000.00.
On 19 April 2001, respondent caused the annotation of a notice of lis
pendens involving Civil Case No. 01-098 on TCT No. 213246. Despite the notice
of lis pendens, Carmencita executed a deed of real estate mortgage [6] dated 20 July
2001 over the property in favor of petitioners Isabelita and Carolyn Cunanan (the
Cunanans) as security for the payment of a P10 million loan plus interest, as well as
all subsequent loans and obligations. She also executed a promissory note dated 22
July 2001,[7] undertaking to pay on or before 22 December 2001 the P10 million loan
with interest of 3% per month.
In an Order dated 18 July 2001, the RTC dismissed the case and ordered the
cancellation
of
the
notice
of lis
pendens.
Subsequently,
on 23 July 2001, the RTC issued an amended order[9] specifically ordering the
Register
of
Deeds
of
Muntinlupa
City
to
immediately
[10]
cancel the notice of lis pendens on TCT No. 213246. Within the
same day, the Register of Deeds cancelled the notice of lis pendens and,
immediately thereafter, annotated the deed of real estate mortgage. [11]
The RTC subsequently granted respondents motion for reconsideration of the
amended order of dismissal in its order dated24 October 2001. [12] Thereafter, the
Register of Deeds of Muntinlupa City re-annotated the notice of lis pendens on 12
December 2001.[13]
Ultimately, the RTC decided Civil Case No. 01-098 in favor of respondent in a
Decision[14] dated 26 February 2002.
In the meantime, the Cunanans effected the extra-judicial foreclosure
of the mortgage on the property on 17 July 2002.[15] This prompted
respondent to file on 12 August 2002 before the RTC of Muntinlupa City Civil
Case No. 02-189[16]seeking the nullification of mortgage deed and the extrajudicial foreclosure proceedings, as well as the cancellation of the mortgage
deed annotation on TCT No. 213246. In the complaint in that case, from
which the present case stemmed, respondent as plaintiff, averred that the
mortgage deed was executed fraudulently and deceitfully to deprive
respondent of its right over the property and that the Cunanans are
mortgagees in bad faith since Civil Case No. 01-098 was still pending when
the deed of real estate mortgage was executed in their favor. [17]

232

On 16 April 2004, the RTC rendered its decision [18] in favor of respondent. It
found that the execution of the real estate mortgage was done in bad faith for Civil
Case No. 01-098 was still pending as the dismissal thereof was not yet final and
executory and the notice of lis pendens was not yet cancelled by the Register of
Deeds. In fact, a timely motion for reconsideration of the order dismissing the
complaint and canceling the notice of lis pendens was filed and granted.
On appeal, the Court of Appeals affirmed the decision of the trial court per its
decision[19] of 7 April 2006. It found that the notice of lis pendens was subsisting at
the time the contract of real estate mortgage was executed between the
Cunanans and Carmencita. And even when the notice of lis pendens was cancelled
on 23 July 2001, the Cunanans were aware that the proceedings in Civil Case No.
01-098 was not yet terminated, as in fact, the notice was subsequently reannotated after the RTC had granted respondents motion for reconsideration.
Moreover, the Court of Appeals held that at the time of the extra-judicial foreclosure
sale of the property the notice of lis pendens had been reinstated by the RTC and
this tainted the Cunanans status as purchasers at the foreclosure sale with bad
faith.
Now, petitioners are before this Court.
Prefatorily, the Court agrees with the appellate court in affirming the trial
court ruling that Protacio is authorized to institute the complaint against the
petitioners. The certification issued by the majority of the directors clearly indicates
that he is authorized to demand and collect the corporations claims over the Ayala
Alabang property and the institution of actions in court. [20] The authority granted to
Protacio is broad enough to enable him to take any legal action necessary to protect
respondents interest in the disputed property. This Court has also held that the
power to institute actions necessarily includes the power to execute the verification
and certification against forum shopping[21] required in initiatory pleadings, such as
the complaint in Civil Case No. 02-189.
The sole remaining issue is whether or not the Cunanans are bound by the
notice of lis pendens which was ordered cancelled by the RTC.
A notice of lis pendens[22] is an announcement to the whole world that a
particular real property is in litigation, serving as a warning that one who acquires
an interest over said property does so at his own risk, or that he gambles on the
result of the litigation over the said property. [23] The filing of a notice of lis
pendens charges all strangers with a notice of the particular litigation referred to
therein and, therefore, any right they may thereafter acquire on the property is
subject to the eventuality of the suit. [24] Such announcement is founded upon public
policy and necessity, the purpose of which is to keep the properties in litigation
within the power of the court until the litigation is terminated and to prevent the
defeat of the judgment or decree by subsequent alienation. [25]
Under Section 77 of Presidential Decree (P.D.) No. 1529, [26] a notice of lis
pendens shall be deemed cancelled only upon the registration of a certificate of the
clerk of court in which the action or proceeding was pending stating the manner of
disposal thereof if there was a final judgment in favor of the defendant or the action
was disposed of terminating finally all rights of the plaintiff over the property in
litigation.
Given the antecedent facts in the present case, the Court should deny the
petition.
There is no question that the Register of Deeds cancelled the notice of lis
pendens annotated on TCT No. 213246 only on 23 July 2001 while the Cunanans
and Carmencita executed the deed of real estate mortgage three days before, or on
20 July 2001. The Cunanans are bound by the notice of lis pendens because on the

233

date they executed the mortgage deed with Carmencita the annotation was still
subsisting and had not yet been cancelled. The Order dated 18 July 2001 dismissing
the complaint and directing the cancellation of the notice of lis pendens did not
improve the situations of the Cunanans simply because said Order was not
registered at all and therefore did not preclude the notice of lis pendens from
continuing in effect.

Neither did the issuance and registration of the amended Order dated 23 July
2001, although it even commanded the Register of Deeds to cancel the notice of lis
pendens apart from containing the same directives as those in the 18 July 2001
Order. The simple reason this time is the fact that the last order was issued after the
execution of the mortgage deed. As the mortgage had already been executed and
therefore deemed valid and effective between the parties as of the date of its
execution, the Cunanans had taken a gamble on the result of the litigation referred
to in the notice of lis pendens when they accepted the properties as security.
The result in the present case would still be the same even if the parties
executed the mortgage deed after the Register of Deeds had cancelled the notice
of lis pendens. It is true that one who deals with property registered under
the Torrens system need not go beyond the same, but only has to rely on the face of
the title. He is charged with notice only of such burdens and claims as are
annotated on the title. However, this principle does not apply when the party has
actual knowledge of facts and circumstances that would impel a reasonably
cautious man to make such inquiry or when the purchaser or mortgagee has
knowledge of a defect or the lack of title in his vendor or mortgagor or of sufficient
facts to induce a reasonably prudent man to inquire into the status of the title of the
property in litigation. One who falls within the exception can neither be
denominated an innocent purchaser or mortgagee for value nor a purchaser or
mortgagee in good faith.[27] In the present case, the fact that the orders dismissing
the case and directing the cancellation of the notice of lis pendens was not yet final
and executory should have impelled the Cunanans to be wary of further
developments, as in fact plaintiff filed a motion for reconsideration and the RTC
granted the same. In short, the Cunanans knowledge of the existence of a pending
litigation involving the disputed property makes them mortgagees in bad faith.
Hence, respondent could still recover the property from the Cunanans.
Petitioners mistakenly rely on the Courts holding in Po Lam v. Court of
Appeals.[28] The case involves a dispute over two parcels of lands with notice of lis
pendens annotated on the titles. The trial court declared the predecessor-in-interest
of the petitioner spouses Po Lam as owners of the properties and ordered the
cancellation of the notice of lis pendens on both titles. The Register of Deeds was
only able to cancel the annotation on one of the titles. During the pendency of the
appeal to the Court of Appeals, the two properties were sold to the petitioners. It
was only after four years that the petitioners had the notice of lis pendens on the
title of the other property cancelled. New certificates of titles were issued to
petitioners. In declaring that the spouses Po Lam are not purchasers in bad faith, we
ruled, thus:
A possessor in good faith has been defined as one who is
unaware that there exists a flaw which invalidates his acquisition of the
thing (See Article 526, Civil Code). Good faith consists in
the possessors belief that the person from whom he received the
thing was the owner of the same and could convey his title (Pio v. CA,
198 SCRA 434 [1991]). In this case, while petitioners
bought Lot No. 2581 from LAHCO while a notice of lis

234

pendens was still annotated thereon, there was also existing a

court order canceling the same. Hence, petitioners cannot be
considered as being aware of a flaw which invalidates their
acquisition of the thing since the alleged flaw, the notice
of lis pendens, was already being ordered cancelled at the
time of the purchase. On this ground alone, petitioners can
already be considered buyers in good faith. (Emphasis ours.)
More importantly, however, the notice of lis pendens inscribed
on TCT No. 2581 was cancelled on May 20, 1974, pursuant to the order
of the trial court in Civil Case No. 2953. Felix Lim did not move for
the reinstatement of the cancelled notices of lis pendens. What
is the effect of this cancellation? To follow the prior ruling of the Court
in the instant case, the cancellation of the notice of lis pendens would
have no effect. Regardless of the cancellation of the notice of lis
pendens, the Po Lam spouses are still considered as having notice of a
possible defect in the title of LAHCO, making them purchasers in bad
faith.[29] (Emphasis ours.)
In the Po Lam case, the Register of Deeds only cancelled the notice of lis
pendens on one of the titles that were in dispute. It was almost a year passed when
the trial courts order was annotated on the title of the other property. The spouses
Po Lam purchased both properties at the same time several months after the trial
court declared their predecessor-in-interest as owner of the properties and ordered
the cancellation of the notice of lis pendens. There was no finding that the spouses
Po Lam were aware of any pending litigation over the property for no motion for
reconsideration or motion for reinstatement of the notice of lis pendenswas filed
with the trial court. The Court had no choice but to give effect to the trial courts
order and considered the petitioners as buyers in good faith.
In the present case, the mortgage deed was executed even before
the Register of Deeds had the chance to cancel the annotated
notice of lis pendens on the title of the disputed property. Moreover, the RTCs
orders had not even attained finality when the mortgage deed was executed. The
respondent in fact filed on 2 August 2001 a motion for reconsideration of the trial
courts order and sought the reinstatement of the cancelled notice of lis pendens.
On 24 October 2001, the trial court reconsidered its previous ruling and ordered the
reinstatement of the notice of lis pendens.
WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals in
CA-G.R. CV No. 82588. Cost against petitioners.
SO ORDERED.

Gagoomal v. Spouses Villacorta, G.R. No. 192813, January 18, 2012

THIRD DIVISION

235

VASHDEO GAGOOMAL,
Petitioner,

G.R. No. 192813

Present:
VELASCO, JR., J.,
Chairperson,
PERALTA,
ABAD,
MENDOZA, and
PERLAS-BERNABE, JJ.

- versus -

spouses ramon and natividad

villacorta,
Respondents.

Promulgated:
January 18, 2012

x------------------------------------------------------------------------------------------x
DECISION
PERLAS-BERNABE, J.:

Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court
is the Decision1 of the Court of Appeals (CA) dated March 8, 2010 in CA-G.R. SP
No. 109004, as well as the Resolution2 dated July 7, 2010 denying the motion for
reconsideration thereof. The dispositive portion of the assailed Decision reads:
WHEREFORE, premises considered, the petition is GRANTED. The
assailed Orders dated August 5, 2008 and March 20, 2009 issued by
Hon. Danilo S. Cruz of the Regional Trial Court, Branch 152, Pasig City
are hereby REVERSED and SET ASIDE and another one entered, the
Motion to Quash Writ of Possession filed by spouses Ramon and
Natividad
Villacorta
in
Civil
Case
No.
67381
is GRANTED. ACCORDINGLY, the Writ of Possession issued in Civil
Case No. 67381 is ordered QUASHED.
SO ORDERED.
The Facts
Albert Zearosa (Zearosa) was the registered owner of a parcel of land located in
Ayala Alabang Village, Alabang, Muntinlupa City, covered by Transfer Certificate of
Title (TCT) No. 170213. He mortgaged the same in favor of BPI Family Savings Bank
(BPI) which was duly annotated on the title on June 7, 1990.
Subsequently, Zearosa obtained a loan in the amount of $300,000.00 from RAM
Holdings Corporation (RAM), secured by a second mortgage 3 over the property
and a Promissory Note4. The parties likewise executed a Memorandum of
Agreement5 (MOA) dated March 2, 1995 whereby Zearosa, through an
Irrevocable Special Power of Attorney, authorized RAM, among others, to sell the
subject property in case of his failure to pay.
Zearosa failed to settle his obligations prompting RAM to file a Complaint 6 for
collection of sum of money with damages against him and BPI before the RTC of
Pasig City, Branch 152, docketed as Civil Case No. 67381. RAM also caused the
annotation of a notice of lis pendens on TCT No. 170213 on June 11, 1999.

236

Pending Civil Case No. 67381, Zearosa failed to pay his obligation to BPI resulting
in the foreclosure of the subject property. The certificate of sale was annotated on
TCT No. 170213 on March 24, 2000.
Meanwhile, RAM sold its rights and interests over the subject property to New
Summit International, Inc., represented by its President, Vashdeo Gagoomal, herein
petitioner. The assignment was annotated on TCT No. 170213 on October 16, 2000.
On August 29, 2002, one Luis P. Lorenzo, Jr. (Lorenzo) filed a complaint for
recovery of sum of money with application for a writ of preliminary attachment
against Zearosa before the RTC of Makati City, Branch 64, docketed as Civil Case
No. 02-1038. A writ of preliminary attachment was issued on September 20, 2002,
pursuant to which the Branch Sheriff of Makati City attached the subject property.
The lien was annotated on TCT No. 170213 on September 30, 2002.
On the other hand, Zearosa redeemed the foreclosed property from BPI on March
23, 2003. Thereafter, he sold the property to a certain Patricia A. Tan (Tan) in
whose favor TCT No. 102067 was issued on April 4, 2003. The annotations of the
notice of lis pendens in Civil Case No. 67381, as well as the notice of levy on
attachment in Civil Case No. 02-1038, were carried over to her title.
In the meantime, in Civil Case No. 02-1038, Lorenzo obtained a favorable decision
which had become final and executory. A notice of levy and execution on the subject
attached property was issued and annotated on the title. On January 15, 2004, the
property was sold at public auction to
Lorenzo for P9,034,166.00 and the Certificate of Sale was annotated on TCT No.
10206 on January 30, 2004, giving Zearosa until January 29, 2005 within which to
redeem the property.
Subsequently, or on April 30, 2004, the RTC rendered judgment in favor of RAM in
Civil Case No. 67381 for sum of money. 8 Pending Zearosa's appeal to the CA,
docketed as CA-G.R. CV No. 84523, RAM filed a motion for execution pending
appeal, which was granted.9 On December 14, 2004, the property subject of notice
of lis pendens was sold at public auction to petitioner, the successor-in-interest of
RAM, for P19,793,500.00.10 The certificate of sale was annotated on Tan's TCT No.
10206 on December 17, 2004.
On January 29, 2005, in view of Zearosa's failure to redeem the property from
Lorenzo, the title over the subject property was consolidated in the latter's name. A
writ of possession was issued in favor of Lorenzo, who subsequently sold the
property to Natividad Villacorta, one of the respondents herein, for P6,000,000.00.
Immediately after purchasing the property, respondents took possession thereof.
Meanwhile, Zearosa's appeal in CA-G.R. CV No. 84523 was dismissed, and the
decision in favor of RAM became final and executory on October 7, 2005. With a sale
annotated in its favor, and without Zearosa exercising his right of redemption, a
final Deed of Sale was issued in favor of petitioner, the successor-in-interest of RAM,
on December 14, 2005. By virtue of a writ of possession 11 issued by the RTC on
February 1, 2007 in Civil Case No. 67381, petitioner divested the respondents of
possession of the disputed property.
The foregoing developments prompted the respondents to file a Motion to Quash
Writ of Possession12 in Civil Case No. 67381 before the RTC of Pasig City, Branch
152, on March 20, 2007. They also filed a case for quieting of title and recovery of
possession before the RTC of Muntinlupa City, Branch 276, docketed as Civil Case
No. 08-011.
On August 5, 2008, the RTC of Pasig City, Branch 152, issued an Order 13 in Civil Case
No. 67381 denying respondents' Motion to Quash Writ of Possession. It also directed
the Registry of Deeds of Muntinlupa City to issue a new transfer certificate of title in
the name of petitioner Vashdeo Gagoomal. The motion for reconsideration 14 thereof
was similarly denied.15

237

Aggrieved, the respondents filed a petition for certiorari with prayer for injunctive
relief16 before the CA, ascribing grave abuse of discretion on the part of the RTC in
directing the transfer of title over the subject property to petitioner; in denying
their motion to quash the writ of possession; and in refusing to restore to them the
possession of the subject property.
In its assailed Decision, the CA granted respondents' petition, ratiocinating as
follows:
Records show that spouses Villacorta derived their rights in the
subject property from their predecessor-in-interest, Lorenzo, who
purchased the same in a sale on execution on January 15, 2004. The
title to the subject property was consolidated in favor of Lorenzo on
January 29, 2005 and said annotation was reflected on the certificate
of title. Gagoomal, on his part, maintains that he has a superior right
over Lorenzo because his predecessor-in-interest, Ram, was able to
cause the annotation of lis pendens ahead of Lorenzo's writ of
attachment.
The fact that the notice of lis pendens regarding to [sic] Civil Case No.
67381 was annotated ahead of the attachment of the subject property
in Civil Case No. 02-1038 is of no moment. Hence, We agree with
spouses Villacorta that Gagoomal did not acquire any title to the
property since what he purchased during the public auction on October
14, 2004 was only the remaining right of redemption of Zearosa.
xxx xxx xxx
In the present case, the annotation of Ram of the lis pendens was
improper because the case filed by Ram against Zearosa was purely a
personal action. Civil Case No. 67381, entitled Ram Holdings
Corporation vs. Albert Zearosa, et. al., is for Collection of Sum of
Money with Damages. It has been held that the doctrine of lis
pendens has no application to a proceeding in which the only object
sought is the recovery of a money judgment, though the title or right
of possession to property may be affected. It is essential that the
property be directly affected, as where the relief sought in the action
or suit includes the recovery of possession, or the enforcement of a
lien, or an adjudication between conflicting claims of title, possession,
or right of possession to specific property, or requiring its transfer or
sale [citation omitted]17
Essentially, the CA concluded that the RTC committed grave abuse of discretion
when it ordered the Register of Deeds to transfer to petitioner the title and
possession of the subject property notwithstanding unrebutted evidence that
Zearosa, the judgment debtor in Civil Case No. 67381, was no longer its owner and
had only the remaining right of redemption at the time the property was sold at
public auction to petitioner on December 14, 2004.
Corollary thereto, the CA held that the power of the RTC to execute its judgment
extends only to property belonging to the judgment debtor in Civil Case No. 67381,
Zearosa in this case, and did not include the respondents. The CA likewise refused
to give merit to petitioner's contentions that the respondents can no longer ask for
the modification or abrogation of the decision of the RTC which had already attained
finality, and that since the writ of possession had already been implemented, then it
can no longer be quashed.
The Issues

238

Hence, this petition advancing the following issues for Our resolution, to wit:
I.
RESPONDENTS DO NOT HAVE A RIGHTFUL CLAIM TO THE PROPERTY.
II.
RESPONDENTS HAD NO BASIS TO ASK FOR THE QUASHAL OF THE WRIT
OF POSSESSION.
III.
THE PASIG REGIONAL TRIAL COURT CAN RULE ON TRANSFER OF TITLE.
IV.
PETITIONER'S RIGHTS ARE SUPERIOR TO THAT OF RESPONDENT'S.
V.
THE HONORABLE
ISSUES.18

COURT

OF

APPEALS'

DECISION

OVERSTEPPED

The Ruling of the Court

The petition is bereft of merit.
A writ of possession is an order by which the sheriff is commanded to place a person
in possession of a real or personal property. We clarified in the case of Motos v. Real
Bank (A Thrift Bank), Inc. 19 that a writ of possession may be issued under any of the
following instances: (a) land registration proceedings under Section 17 of Act No.
49620; (b) judicial foreclosure, provided the debtor is in possession of the mortgaged
realty and no third person, not a party to the foreclosure suit, had intervened; and
(c) extrajudicial foreclosure of a real estate mortgage under Section 7 of Act No.
3135 as amended by Act No. 411821.
Corollary thereto, Section 33, Rule 39 of the Rules of Court provides:
SEC. 33. Deed and possession to be given at expiration of redemption
period; by whom executed or given. - If no redemption be made within
one (1) year from the date of the registration of the certificate of sale,
the purchaser is entitled to a conveyance and possession of the
property; or, if so redeemed whenever sixty (60) days have elapsed
and no other redemption has been made, and notice thereof given,
and the time for redemption has expired, the last redemptioner is
entitled to the conveyance and possession; but in all cases the
judgment obligor shall have the entire period of one (1) year from the
date of the registration of the sale to redeem the property. The deed
shall be executed by the officer making the sale or by his successor in
office, and in the latter case shall have the same validity as though the
officer making the sale had continued in office and executed it.
Upon the expiration of the right of redemption, the purchaser or
redemptioner shall be substituted to and acquire all the rights, title,
interest and claim of the judgment obligor to the property as of the
time of the levy. The possession of the property shall be given to the

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purchaser or last redemptioner by the same officer unless a third party

is actually holding the property adversely to the judgment obligor.
In this case, the writ of possession was issued and executed in favor of petitioner
under the foregoing provision. However, a punctilious review of the records will
show that its grant and enforcement against the subject property, over which the
respondents third parties to Civil Case No. 67381 claim an adverse interest, are
devoid of legal basis.
It is a basic principle of law that money judgments are enforceable only against
property incontrovertibly belonging to the judgment debtor, and if property
belonging to any third person is mistakenly levied upon to answer for another mans
indebtedness, such person has all the right to challenge the levy through any of the
remedies provided for under the Rules of Court. Section 16 22, Rule 39 thereof
specifically provides that a third person may avail himself of the remedies of
either terceria, to determine whether the sheriff has rightly or wrongly taken hold of
the property not belonging to the judgment debtor or obligor, or an independent
separate action to vindicate their claim of ownership and/or possession over the
foreclosed property.23 However, a person other than the judgment debtor who
claims ownership or right over the levied properties is not precluded from taking
other legal remedies to prosecute his claim. 24
In the present case, respondents filed a motion to quash the writ of possession
substantiating their preferential rights over the subject property which they had
purchased from Lorenzo. As earlier stated, Lorenzo, in Civil Case No. 021038, caused the annotation of a writ of preliminary attachment on September 30,
2002 and thereafter, a notice of levy and execution, finally acquiring the property in
a public auction sale on January 30, 2004. Similarly, respondents have instituted a
separate civil action for quieting of title and recovery of property before the RTC of
Muntinlupa City, Branch 276, docketed as Civil Case No. 08-011.
Petitioner's argument that he acquired a superior right over the subject property by
virtue of the earlier annotation of a notice of lis pendens on June 11, 1999 by his
predecessor-in-interest RAM on the same title cannot be given credence.
Section 14, Rule 13 of the Rules of Court provides:
Sec. 14. Notice of lis pendens. - In an action affecting the title or
the right of possession of real property, the plaintiff and the
defendant, when affirmative relief is claimed in his answer, may record
in the office of the registry of deeds of the province in which the
property is situated a notice of the pendency of the action. Said notice
shall contain the names of the parties and the object of the action or
defense, and a description of the property in that province affected
thereby. Only from the time of filing such notice for record shall a
purchaser, or encumbrancer of the property affected thereby, be
deemed to have constructive notice of the pendency of the action, and
only of its pendency against the parties designated by their real
names.
The notice of lis pendens hereinabove mentioned may be
cancelled only upon order of the court, after proper showing that the
notice is for the purpose of molesting the adverse party, or that it is
not necessary to protect the rights of the party who caused it to be
recorded. [emphasis ours]
The filing of a notice of lis pendens has a dual effect: (1) to keep the property
subject matter of the litigation within the power of the court until the entry of the
final judgment in order to prevent the defeat of the final judgment by successive
alienations; and (2) to bind a purchaser, bona fide or otherwise, of the property

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subject of the litigation to the judgment that the court will subsequently
promulgate.25
Relative thereto, a notice of lis pendens is proper in the following actions and their
concomitant proceedings:
(a) an action to recover possession of real estate;
(b) an action to quiet title thereto;
(c) an action to remove clouds thereon;
(d) an action for partition; and
(e) any other proceedings of any kind in Court directly affecting the title to the land
or the use or occupation thereof or the buildings thereon. 26
Thus, a notice of lis pendens is only valid and effective when it affects title over or
right of possession of a real property.
In this case, it cannot be denied that Civil Case No. 67381, which RAM, predecessorin-interest of petitioner, instituted against Zearosa was for collection of sum of
money with damages a purely personal action. Hence, the notice of lis pendens in
favor of RAM annotated on the cancelled TCT No. 170213 and carried over to Tan's
TCT No. 10206 conferred upon it no rights over the subject property and, as a
necessary consequence, upon petitioner, its successor-in-interest.
To be sure, in Atlantic Erectors, Inc. v. Herbal Cove Realty Corporation 27, We have
previously explained that the doctrine of lis pendens has no application to a
proceeding in which the only object sought is the recovery of a money judgment,
though the title or right of possession to property be incidentally affected. It is
essential that the property be directly affected such as when the relief sought in the
action or suit includes the recovery of possession, or the enforcement of a lien, or
an adjudication between conflicting claims of title, possession, or the right of
possession to specific property, or requiring its transfer or sale. Even if a party
initially avails of a notice of lis pendens upon the filing of a case in court, such
notice is rendered nugatory if the case turns out to be a purely personal action. In
such event, the notice of lis pendens becomes functus officio.
Accordingly, petitioner has not created a superior right over the subject property as
against respondents by reason of the prior annotation in 1999 of the notice of lis
pendens by his predecessor RAM. Hence, the subsequent levy on execution on
October 14, 2004 arising from the final money judgment in favor of petitioner
cannot prevail over the earlier annotated attachment made by Lorenzo on
September 30, 2002 and its subsequent notice of levy on execution and sale of the
property to respondents on January 30, 2004, who then took possession. On
October 14, 2004, what petitioner merely levied upon on execution was the
remaining redemption rights of Zearosa until January 29, 2005 which period
expired without any redemption having been made. Consequently, the writ of
possession issued as a result of a wrongful execution was not proper and cannot be
enforced against the respondents who are third parties in possession of and
claiming an adverse interest on the property in controversy.
It bears to stress that the court issuing the writ of execution may enforce its
authority only over properties or rights of the judgment debtor, and the sheriff acts
properly only when he subjects to execution property undeniably belonging to the
judgment debtor. Should the sheriff levy upon the assets of a third person in which
the judgment debtor has not even the remotest interest, then he is acting beyond
the limits of his authority. A judgment can only be executed or issued against a
party to the action, not against one who has not yet had his day in court. 28
Neither can We affirm petitioner's contention that in seeking the quashal of the writ
of possession, the respondents were, in effect, asking the RTC to abrogate its
decision, which had already attained finality. As correctly observed 29 by the CA, the
quashal of a writ of possession does not have the effect of modifying or abrogating

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the judgment of the RTC. The settled rule is that a judgment which has acquired
finality becomes immutable and unalterable, and hence may no longer be modified
in any respect except only to correct clerical errors or mistakes all the issues
between the parties being deemed resolved and laid to rest. 30 To reiterate,
however, the court's power with regard to execution of judgments extends only to
properties irrefutably belonging to the judgment debtor, which does not obtain in
this case.
Therefore, petitioner's contention that the writ of possession had already been
enforced and can no longer be quashed deserves scant consideration.
Unquestionably, the RTC has a general supervisory control over the entire execution
process, and such authority carries with it the right to determine every question
which may be invariably involved in the execution. 31 Respondents invoked this
supervisory power when they sought the quashal of the writ of possession.
Finally, considering the circumstances of this case, We cannot uphold the RTC's
directive to transfer the title over the subject property from respondents to
petitioner, for utter lack of legal basis. To emphasize, apart from the motion to
quash the writ of possession, respondents have instituted a case for quieting of title
and recovery of possession before the RTC of Muntinlupa City, docketed as Civil
Case No. 08-011.
In sum, We find that the RTC erred in implementing the writ of execution against the
subject property which does not irrefutably belong to Zearosa, the judgment
debtor in Civil Case No. 67381. Hence, the writ of possession issued relative thereto
was likewise improper and must necessarily be quashed, as correctly ruled by the
CA. Accordingly, since the respondents were unduly deprived of possession of the
subject property, they must be immediately restored into its possession, without
prejudice to the result of Civil Case No. 08-011.
WHEREFORE,
the
instant
petition
is DENIED.
The
assailed Decision and Resolution of the Court of Appeals are hereby AFFIRMED.
SO ORDERED.

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