Supreme Court of the Philippines

662 Phil. 572

EN BANC
G. R. No. 164195, April 05, 2011
APO FRUITS CORPORATION AND HIJO PLANTATION, INC., PETITIONERS, VS.
LAND BANK OF THE PHILIPPINES, RESPONDENT.
RESOLUTION
BRION, J.:
We resolve Land Bank of the Philippines' (LBP's) 2nd Motion for Reconsideration
of December 14, 2010 that addresses our Resolutions of October 12, 2010 and
November 23, 2010. This motion prays as well for the holding of oral arguments.
We likewise resolve the Office of the Solicitor General's (OSG) Motion for Leave to
Intervene and to Admit Motion for Reconsideration-in-Intervention dated February
15, 2011 in behalf of the Republic of the Philippines (Republic).
The Motion for Reconsideration
The LBP submits the following arguments in support of its 2 nd motion for
reconsideration:
a) the test of "transcendental importance" does not apply to the present case;
b) the standard of "transcendental importance" cannot justify the negation of the
doctrine of immutability of a final judgment and the abrogation of a vested right in
favor of the Government that respondent LBP represents;
c) the Honorable Court ignored the deliberations of the 1986 Constitutional
Commission showing that just compensation for expropriated agricultural property
must be viewed in the context of social justice; and
d) granting arguendo that the interest payment has factual and legal bases, only six
(6%) percent interest per annum may be validly imposed.
We have more than amply addressed argument (d) above in our October 12, 2010
Resolution, and we see no point in further discussing it. Without in any way
detracting from the overriding effect of our main and primary ruling that the present
2nd motion for reconsideration is a prohibited motion that the Court can no longer
entertain, and if only to emphatically signal an unequivocal finis to this case, we
examine for the last and final time the LBP's other arguments.

In the course of the Court's deliberations, Mr. Justice Roberto A. Abad questioned the
application of Section 3, Rule 15 of the Internal Rules of the Supreme Court to the
present 2nd motion for reconsideration. He posited that instead of voting
immediately on the present 2nd motion for reconsideration, the Court should instead
first consider the validity of our October 12, 2010 Resolution; he claimed that this
Resolution is null and void because the Court violated the above-cited provision of
the Internal Rules when it did not first vote on whether the Resolution's underlying
motion (itself a 3rd motion for reconsideration) should be entertained before voting
on the motion's merits. We shall lay to rest Mr. Justice Abad's observation before
dwelling on the merits of the present 2 nd motion for reconsideration.
Our Ruling
We find no merit in the LBP's second motion for reconsideration, and
reject as well the Mr. Justice Abad's observation on how to approach the
consideration of the present motion.
Mr. Justice Abad's Observations/Objections;
The Rules on 2nd Motions for Reconsideration.
Mr. Justice Abad's observation apparently stemmed from the peculiar history of the
present case.
a. A recap of the history of the case.
This case was originally handled by the Third Division of this Court. In its original
Decision of February 6, 2007, the Division affirmed the RTC's decision setting the
just compensation to be paid and fixing the interest due on the balance of the
compensation due at 12% per annum. In its Resolution of December 19, 2007, the
Third Division resolved the parties' motions for reconsideration by deleting the 12%
interest due on the balance of the awarded just compensation. The parties'
subsequent motions to reconsider this Resolution were denied on April 30, 2008; on
May 16, 2008, entry of judgment followed. Despite the entry of judgment, the
present petitioners filed a second motion for reconsideration that prayed as well
that the case be referred to the Court en banc. Finding merit in these motions, the
Third Division referred the case to the En Banc for its disposition. On December 4,
2009, the Court en banc denied the petitioners' second motion for reconsideration.
Maintaining their belief in their demand to be granted 12% interest, the petitioners
persisted in filing another motion for reconsideration. In the interim, the Court
promulgated its Internal Rules that regulated, among others, 2 nd motions for
reconsideration. On October 12, 2010, the Court en banc granted - by a vote of 8
for and 4 against - the petitioner's motion and awarded the 12% interests the
petitioners' prayed for, thus affirming the interests the RTC originally awarded. The
Court subsequently denied the respondent's motion for reconsideration, giving rise
to the present 2nd motion for reconsideration. It was at this point that the OSG

moved for leave to intervene.

b. The governing rules on
2nd motions for reconsideration
The basic rule governing 2nd motions for reconsideration is Section 2, Rule 52 (which
applies to original actions in the Supreme Court pursuant to Section 2, Rule 56) of
the Rules of Court. This Rule expressly provides:
Sec. 2. Second Motion for Reconsideration. No second motion for reconsideration of
a judgment or final resolution by the same party shall be entertained.
The absolute terms of this Rule is tempered by Section 3, Rule 15 of the Internal
Rules of the Supreme Court that provides:
Sec. 3. Second Motion for Reconsideration. - The Court shall not entertain a
second motion for reconsideration and any exception to this rule can only be
granted in the higher interest of justice by the Court en banc upon a vote of at
least two-thirds of its actual membership. There is reconsideration "in the
higher interest of justice" when the assailed decision is not only legally erroneous,
but is likewise patently unjust and potentially capable of causing unwarranted and
irremediable injury or damage to the parties. A second motion for
reconsideration can only be entertained before the ruling sought to be
reconsidered becomes final by operation of law or by the Court's
declaration. [Emphases supplied.]
Separately from these rules is Article VIII, Section 4 (2) of the 1987 Constitution
which governs the decision-making by the Court en banc of any matter before it,
including a motion for the reconsideration of a previous decision. This provision
states:
Section 4.
xxxx
(2) All cases involving the constitutionality of a treaty, international or executive
agreement, or law, which shall be heard by the Supreme Court en banc, and all
other cases which under the Rules of Court are required to be heard en
banc, including those involving the constitutionality, application, or operation of
presidential decrees, proclamations, orders, instructions, ordinances, and other
regulations, shall be decided with the concurrence of a majority of the
Members who actually took part in the deliberations on the issues in the case
and voted thereon.
Thus, while the Constitution grants the Supreme Court the power to promulgate
rules concerning the practice and procedure in all courts [1] (and allows the Court to

regulate the consideration of 2nd motions for reconsideration, including the vote that
the Court shall require), these procedural rules must be consistent with the
standards set by the Constitution itself. Among these constitutional standards is the
above quoted Section 4 which applies to "all other cases which under the Rules of
Court are required to be heard en banc," and does not make any distinction as
to the type of cases or rulings it applies to, i.e, whether
these cases are originally filed with the Supreme Court, or cases on appeal, or
rulings on the merits of motions before the Court. Thus, rulings on the merits by the
Court en banc on 2nd motions for reconsideration, if allowed by the Court to be
entertained under its Internal Rules, must be decided with the concurrence of a
majority of the Members who actually took part in the deliberations.
When the Court ruled on October 12, 2010 on the petitioners' motion for
reconsideration by a vote of 12 Members (8 for the grant of the motion and 4
against), the Court ruled on the merits of the petitioners' motion. This ruling
complied in all respects with the Constitution requirement for the votes that should
support a ruling of the Court.
Admittedly, the Court did not make any express prior ruling accepting or disallowing
the petitioners' motion as required by Section 3, Rule 15 of the Internal Rules. The
Court, however, did not thereby contravene its own rule on 2 nd motions for
reconsideration; since 12 Members of the Court opted to entertain the motion by
voting for and against it, the Court simply did not register an express vote, but
instead demonstrated its compliance with the rule through the participation by no
less than 12 of its 15 Members. Viewed in this light, the Court cannot even be
claimed to have suspended the effectiveness of its rule on 2 nd motions for
reconsideration; it simply complied with this rule in a form other than by express
and separate voting.
Based on these considerations, arrived at after a lengthy deliberation, the Court
thus rejected Mr. Justice Abad's observations, and proceeded to vote on the
question of whether to entertain the respondents' present 2nd motion for
reconsideration. The vote was 9 to 2, with 9 Members voting not to
entertain the LBP's 2nd motion for reconsideration. By this vote, the ruling
sought to be reconsidered for the second time was unequivocally upheld; its finality
- already declared by the Court in its Resolution of November 23, 2010 - was
reiterated. To quote the dispositive portion of the reiterated November 23, 2010
Resolution:
On these considerations, we hereby DENY the Motion for Reconsideration with
FINALITY. No further pleadings shall be entertained. Let entry of judgment be made
in due course.
Thus, this Court mandated a clear, unequivocal, final and emphatic finis to the
present case.

Landowner's right to just compensation:

a matter of public interest
In assailing our October 12, 2010 resolution, the LBP emphasizes the need to
respect the doctrine of immutability of final judgments. The LBP maintains that we
should not have granted the petitioners' motion for reconsideration in our October
12, 2010 Resolution because the ruling deleting the 12% interest had already
attained finality when an Entry of Judgment was issued. The LBP argues, too, that
the present case does not involve a matter of transcendental importance, as it does
not involve life or liberty. The LBP further contends that the Court mistakenly used
the concept of transcendental importance to recall a final ruling; this standard
should only apply to questions on the legal standing of parties.
In his dissenting opinion, Mr. Justice Roberto Abad agrees with the LBP's assertion,
positing that this case does not fall under any of the exceptions to the immutability
doctrine since it only involves money and does not involve a matter of overriding
public interest.
We reject the basic premise of the LBP's and Mr. Justice Abad's arguments for being
flawed. The present case goes beyond the private interests involved; it involves a
matter of public interest - the proper application of a basic constitutionallyguaranteed right, namely, the right of a landowner to receive just compensation
when the government exercises the power of eminent domain in its agrarian reform
program.
Section 9, Article III of the 1987 Constitution expresses the constitutional rule on
eminent domain - "Private property shall not be taken for public use without just
compensation." While confirming the State's inherent power and right to take
private property for public use, this provision at the same time lays down the
limitation in the exercise of this power. When it takes property pursuant to its
inherent right and power, the State has the corresponding obligation to pay the
owner just compensation for the property taken. For compensation to be
considered "just," it must not only be the full and fair equivalent of the property
taken;[2] it must also be paid to the landowner without delay. [3]
To fully and properly appreciate the significance of this case, we have to consider it
in its proper context. Contrary to the LBP's and Mr. Justice Abad's assertions, the
outcome of this case is not confined to the fate of the two petitioners alone. This
case involves the government's agrarian reform program whose success largely
depends on the willingness of the participants, both the farmers-beneficiaries and
the landowners, to cooperate with the government. Inevitably, if the government
falters or is seen to be faltering through lack of good faith in implementing the
needed reforms, including any hesitation in paying the landowners just
compensation, this reform program and its objectives would suffer major setbacks.
That the government's agrarian reform program and its success are matters of
public interest, to our mind, cannot be disputed as the program seeks to remedy
long existing and widespread social justice and economic problems.

In a last ditch attempt to muddle the issues, the LBP focuses on our use of the
phrase "transcendental importance," and asserts that we erred in applying this
doctrine, applicable only to legal standing questions, to negate the doctrine of
immutability of judgment. This is a very myopic reading of our ruling as the context
clearly shows that the phrase "transcendental importance" was used only to
emphasize the overriding public interest involved in this case. Thus, we said:
That the issues posed by this case are of transcendental importance is not hard to
discern from these discussions. A constitutional limitation, guaranteed under no less
than the all-important Bill of Rights, is at stake in this case: how can compensation
in an eminent domain case be "just" when the payment for the compensation for
property already taken has been unreasonably delayed? To claim, as the assailed
Resolution does, that only private interest is involved in this case is to forget that an
expropriation involves the government as a necessary actor. It forgets, too, that
under eminent domain, the constitutional limits or standards apply to government
who carries the burden of showing that these standards have been met. Thus, to
simply dismiss the case as a private interest matter is an extremely shortsighted
view that this Court should not leave uncorrected.
xxxx
More than the stability of our jurisprudence, the matter before us is of
transcendental importance to the nation because of the subject matter involved agrarian reform, a societal objective of that the government has unceasingly sought
to achieve in the past half century.[4]
From this perspective, our Resolution of October 12, 2010 only had to demonstrate,
as it did, that the higher interests of justice are duly served. All these, amply
discussed in the Resolution of October 12, 2010, are briefly summarized and
reiterated below.
LBP at fault for twelveyear delay in payment
In his dissenting opinion, Mr. Justice Abad insists that the LBP's initial valuation of
the petitioners' properties was fully in accord with Section 17 of the CARL. He posits
that when the RTC gave a significantly higher value to these lands, the LBP acted
well within its rights when it appealed the valuation. Thus, to him, it was wrong for
this Court to characterize the LBP's appeal as malicious or in bad faith.
A simple look at the attendant facts disproves the accuracy of this claim.
First, Mr. Justice Abad's allegation that the LBP correctly valued the petitioners'
properties is not at all accurate. Significantly, Mr. Justice Abad does not cite
any evidence on record to support his claim that "the Land Bank valued the

lands using the compensation formula that Section 17 of Republic Act 6657 and the
DAR's implementing rules provide."[5]
More to the point, this Court has already determined, in a final and executed
judgment, that the RTC's valuation of the petitioners' properties is the correct one.
To recall, the LBP initially fixed the value of Apo Fruits Corporation's (AFC) properties
at P165,484.47 per hectare or P16.00 per square meter (sqm), while it valued
Hijo Plantation Inc.'s (HPI) properties at P201,929.97 per hectare, or approximately
P20.00/sqm. In contrast, the Regional Trial Court fixed the valuation of the
petitioners' properties at P103.33/sqm., or more than five times the initial
valuation fixed by the LBP.
After reviewing the records, this Court affirmed the RTC's valuation in its February 6,
2007 decision, noting that it was based on the following evidence: (a) the
Commissioners' reports, (b) the Cuervo appraisers' report, (c) the schedule of
market values of the City of Tagum per its 1993 and 1994 Revision of Assessment
and Property Classification, (d) the value of the permanent improvements found on
the expropriated properties, and (e) the comparative sales of adjacent lands from
early 1995 to early 1997. The Court observed that the RTC valuation also took into
consideration the land's nature as irrigated land, its location along the highway,
market value, assessor's value, and the volume and value of its produce. This
valuation is fully in accordance with Section 17 of RA 6657, which states:
Section 17. Determination of Just Compensation. - In determining just
compensation, the cost of acquisition of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessment made by government
assessors, shall be considered. The social and economic benefits contributed by
the farmers and the farm workers and by government to the property as well as the
non-payment of taxes or loans secured from any government financing institution
on the said land shall be considered as additional factors to determine its valuation.
On its face, the staggering difference between the LBP's initial valuation of the
petitioners' properties (totaling P251,379,104.02) and the RTC's valuation (totaling
P1,383,179,000.00) - a difference of P1,131,799,895.98 amounting to 81% of
the total price - betrays the lack of good faith on the part of the government in
dealing with the landowners. The sheer enormity of the difference between the two
amounts cannot but lead us to conclude that the LBP's error was grievous and
amounted to nothing less than gross negligence in the exercise of its duty - in
this case, to properly ascertain the just compensation due to the petitioners.
Mr. Justice Abad further argues that interest on just compensation is due only where
there is delay in payment. In the present case, the petitioners allegedly did not
suffer any delay in payment since the LBP made partial payments prior to the taking
of their lands.

This argument completely overlooks the definition of just compensation already

established in jurisprudence. Apart from the requirement that compensation for
expropriated land must be fair and reasonable, compensation, to be "just,"
must also be made without delay.[6] In simpler terms, for the government's
payment to be considered just compensation, the landowner must receive it in full
without delay.
In the present case, it is undisputed that the government took the
petitioners' lands on December 9, 1996; the petitioners only received full
payment of the just compensation due on May 9, 2008. This circumstance, by
itself, already confirms the unconscionable delay in the payment of just
compensation.
Admittedly, a grain of truth exists in Justice Abad's observation that the petitioners
received partial payments from the LBP before the titles to their landholdings were
transferred to the government. The full and exact truth, however, is that the
partial payments at the time of the taking only amounted to a trifling five percent
(5%) of the actual value of the expropriated properties, as determined with
finality by this Court. Even taking into consideration the subsequent partial
payments made totaling P411,769,168.32 (inclusive of the amounts deposited prior
to the taking), these payments only constituted a mere one-third (1/3) of the
actual value of the petitioners' properties.
It should be considered - as highlighted in our October 12, 2010 Resolution - that
the properties the government took were fully operating and earning plantations at
the time of the taking. Thus, the landowners lost not only their properties, but the
fruits of these properties. These were all lost in 1996, leaving the landowners
without any replacement income from their properties, except for the possible
interest for the trifling payment made at the time of the taking that, together with
the subsequent payment, only amounted to a third of the total amount due. Thus,
for twelve long years, the amount of P971,409,831.68 was withheld from
the landowners.
An added dimension to this delayed payment is the impact of the delay. One impact
- as pointed out above - is the loss of income the landowners suffered. Another
impact that the LBP now glosses over is the income that the LBP earned from
the sizeable sum it withheld for twelve long years. From this perspective, the
unaccounted-for LBP income is unjust enrichment in its favor and an inequitable
loss to the landowners. This situation was what the Court essentially addressed
when it awarded the petitioners 12% interest.
Mr. Justice Abad goes on to argue that the delay should not be attributed to the LBP
as it could not have foreseen that it would take twelve years for the case to be
resolved. Justice Abad's stance could have been correct were it not for the fact that
the delay in this case is ultimately attributable to the government. Two significant
factors justify the attribution of the delay to the government.

The first is the DAR's gross undervaluation of the petitioners' properties - the
government move that started the cycle of court actions.
The second factor to consider is government inaction. Records show that after the
petitioners received the LBP's initial valuation of their lands, they filed petitions with
the DARAB, the responsible agency of the DAR, for the proper determination of just
compensation. Instead of dismissing these petitions outright for lack of jurisdiction,
the DARAB sat on these cases for three years. It was only after the petitioners
resorted to judicial intervention, filing their petitions for the determination of just
compensation with the RTC, that the petitioners' case advanced.
The RTC interpreted the DARAB's inaction as reluctance of the government to pay
the petitioners just compensation, a view this Court affirmed in its October 12, 2010
Resolution.
Expropriation for agrarian reform
requires the payment of just compensation
The LBP claims that the just compensation in this case should be determined within
the context of the article on social justice found in the 1987 Constitution. In the
LBP's opinion, when we awarded the petitioners 12% interest by way of potential
income, we removed from the taking of agricultural properties for agrarian reform
its main public purpose of righting the wrong inflicted on landless farmers.
By this argument, the LBP effectively attempts to make a distinction between the
just compensation given to landowners whose properties are taken for the
government's agrarian reform program and properties taken for other public
purposes. This perceived distinction, however, is misplaced and is more apparent
than real.
The constitutional basis for our agrarian reform program is Section 4, Article XIII of
the 1987 Constitution, which mandates:
Section 4. The State shall, by law, undertake an agrarian reform program founded
on the right of farmers and regular farm workers, who are landless, to own directly
or collectively the lands they till or, in the case of other farm workers, to receive a
just share of the fruits thereof. To this end, the State shall encourage and undertake
the just distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations, and subject to the payment
of just compensation.
This provision expressly provides that the taking of land for use in the government's
agrarian reform program is conditioned on the payment of just compensation.
Nothing in the wording of this provision even remotely suggests that the just
compensation required from the taking of land for the agrarian reform program

should be treated any differently from the just compensation required in any other
case of expropriation. As explained by Commissioner Roberto R. Concepcion during
the deliberations of the 1986 Constitutional Commission:
[T]he term "just compensation" is used in several parts of the Constitution, and,
therefore, it must have a uniform meaning. It cannot have in one part a meaning
different from that which appears in the other portion. If, after all, the party whose
property is taken will receive the real value of the property on just compensation,
that is good enough.[7]
In fact, while a proposal was made during the deliberations of the 1986
Constitutional Commission to give a lower market price per square meter for larger
tracts of land, the Commission never intended to give agricultural landowners less
than just compensation in the expropriation of property for agrarian reform
purposes.[8]
To our mind, nothing is inherently contradictory in the public purpose of land reform
and the right of landowners to receive just compensation for the expropriation by
the State of their properties. That the petitioners are corporations that used to own
large tracts of land should not be taken against them. As Mr. Justice Isagani Cruz
eloquently put it:
[S]ocial justice - or any justice for that matter - is for the deserving, whether he be a
millionaire in his mansion or a pauper in his hovel. It is true that, in case of
reasonable doubt, we are called upon to tilt the balance in favor of the poor, to
whom the Constitution fittingly extends its sympathy and compassion. But never is
it justified to prefer the poor simply because they are poor, or to reject the rich
simply because they are rich, for justice must always be served, for poor and rich
alike, according to the mandate of the law. [9]
Interest payments borne by government,
not by farmers-beneficiaries
Nor do we find any merit in the LBP's assertion that the large amount of just
compensation that we awarded the petitioners, together with the amount of interest
due, would necessarily result in making the farmers- beneficiaries endure another
form of bondage - the payment of an exorbitant amount for the rest of their lives.
As the petitioners correctly pointed out, the government's liability for the payment
of interest to the landowner for any delay attributable to it in paying just
compensation for the expropriated property is entirely separate and distinct from
the farmers-beneficiaries' obligations to pay regular amortizations for the properties
transferred to them.
Republic Act No. 6657 (The Comprehensive Agrarian Reform Law, or CARL) provides
for the specific source of funding to be used by the government in implementing the

agrarian reform program; this funding does not come directly from the payments
made by the farmers-beneficiaries.[10]
More to the point, under the CARL, the amount the farmers-beneficiaries must pay
the LBP for their land is, for the most part, subsidized by the State and is not
equivalent to the actual cost of the land that the Department of Agrarian Reform
paid to the original landowners. Section 26, Chapter VII of the CARL provides:
SEC. 26. Payment by Beneficiaries. - Lands awarded pursuant to this Act shall be
paid for by the beneficiaries to the LBP in thirty (30) annual amortizations at six
percent (6%) interest per annum. The payments for the first three (3) years after
the award may be at reduced amounts as established by the PARC: Provided, That
the first five (5) annual payments may not be more than five percent (5%)
of the value of the annual gross productions paid as established by the
DAR. Should the scheduled annual payments after the fifth year exceed ten percent
(10) of the annual gross production and the failure to produce accordingly is not due
to the beneficiary's fault, the LBP may reduce the interest rate or reduce the
principal obligation to make the payment affordable.
Interpreting this provision of the law, DAR Administrative Order No. 6, Series of 1993
provides:
A. As a general rule, land awarded pursuant to E.O. 229 and R.A. 6657 shall be
repaid by the Agrarian Reform Beneficiary (ARB) to LANDBANK in thirty (30)
annual amortizations at six (6%) percent interest per annum. The annual
amortization shall start one year from date of Certificate of Landownership
Award (CLOA) registration.
B. The payments by the ARBs for the first three (3) years shall be two and a half
percent (2.5%) of AGP [Annual Gross Production] and five percent (5.0%) of
AGP for the fourth and fifth years. To further make the payments affordable,
the ARBs shall pay ten percent (10%) of AGP or the regular amortization,
whichever is lower, from the sixth (6th) to the thirtieth (30th) year.
Clearly, the payments made by the farmers-beneficiaries to the LBP are
primarily based on a fixed percentage of their annual gross production, or
the value of the annual yield/produce of the land awarded to them. [11] The cost of
the land will only be considered as the basis for the payments made by the farmersbeneficiaries when this amount is lower than the amount based on the annual gross
production. Thus, there is no basis for the LBP to claim that our ruling has violated
the letter and spirit of the social justice provision of the 1987 Constitution. On the
contrary, our ruling is made in accordance with the intent of the 1987 Constitution.
Motion for Oral Arguments
We deny as well the LBP's motion to set the case for oral arguments. The
submissions of the parties, as well as the records of the case, have already provided

this Court with enough arguments and particulars to rule on the issues involved.
Oral arguments at this point would be superfluous and would serve no useful
purpose.
The OSG's Intervention
The interest of the Republic, for whom the OSG speaks, has been amply protected
through the direct action of petitioner LBP - the government instrumentality created
by law to provide timely and adequate financial support in all phases involved in the
execution of needed agrarian reform. The OSG had every opportunity to intervene
through the long years that this case had been pending but it chose to show its
hand only at this very late stage when its presence can only serve to delay the final
disposition of this case. The arguments the OSG presents, furthermore, are issues
that this Court has considered in the course of resolving this case. Thus, every
reason exists to deny the intervention prayed for.
WHEREFORE, premises considered, the respondent's second motion for
reconsideration and the motion to set the case for oral arguments are hereby
DENIED WITH ABSOLUTE FINALITY. The motion for intervention filed by the
Office of the Solicitor General is, likewise, denied. We reiterate, under pain of
contempt if our directive is disregarded or disobeyed, that no further pleadings shall
be entertained. Let judgment be entered in due course.
SO ORDERED.
Carpio Morales, Peralta, Bersamin, Del Castillo, Villarama, Jr., Perez, and Mendoza,
JJ., concur.
Corona, C.J., I join the dissent of J. Abad.
Carpio, J., no part, prior inhibition.
Velasco, Jr., J., I join the dissent of J.Abad.
Nachura, J., on leave.
Leonardo-De Castro, J., I maintain my vote for reduced interest rate.
Abad, J., please see my dissenting opinion.
Sereno, J., see concurring opinion.

[1]

Section 5.

(5) Promulgate rules concerning the protection and enforcement of constitutional

rights, pleading, practice, and procedure in all courts, the admission to the practice
of law, the integrated bar, and legal assistance to the under-privileged. Such rules
shall provide a simplified and inexpensive procedure for the speedy disposition of
cases, shall be uniform for all courts of the same grade, and shall not diminish,
increase, or modify substantive rights. Rules of procedure of special courts and
quasi-judicial bodies shall remain effective unless disapproved by the Supreme

Court.
[2]

Land Bank of the Philippines v. Orilla, G.R. No. 157206, June 27, 2008, 556 SCRA
102, 116-117.
[3]

Land Bank v. Rodriguez, G.R. No. 148892, May 6, 2010.

[4]

In our resolution dated October 12, 2010.

[5]

Justice Abad's Dissent, p. 2.

[6]

Land Bank v. Rodriguez, G.R. No. 148892, May 6, 2010.

[7]

III Record at 17, cited in Bernas, SJ. The Intent of the 1986 Constitution Writers,
1995 ed., p. 948.
[8]

Id. at 947; III Record at 17, where the Commissioners, in discussing just
compensation within the context of properties expropriated for redistribution to
farmers in pursuance of agrarian reform, stated thus:
Fr. Bernas: We discussed earlier the idea of a progressive system of compensation
and I must admit, that it was before I discussed it with Commissioner Monsod. I
think what is confusing the matter is the fact that when we speak of progressive
taxation, we mean the bigger the tax base, the higher the rate of tax. Here, what
we are saying is that the bigger the land is, the lower the value per square meter.
So, it is really regressive, not progressive.
Mr. Monsod: Yes, Madam President, it is true. It is progressive with respect to the
beneficiary and regressive with respect to the landowner.
Fr. Bernas: But is it the intention of the Committee that the owner should receive
less than the market value?
Mr. Monsod: It is not the intention of the Committee that the owner should
receive less than the just compensation.
[9]

[10]

Gelos v. Court of Appeals, G.R. No. 86186, May 8, 1992, 208 SCRA 608, 616.
Section 63 of Republic Act No. 6657 provides:

Section 63. Funding Source.- The initial amount needed to implement this Act for
the period of ten (10) years upon approval hereof shall be funded from the Agrarian
Reform Fund created under Sections 20 and 21 of Executive Order No.
229.Additional amounts are hereby authorized to be appropriated as and when
needed to augment the Agrarian Reform Fund in order to fully implement the
provisions of this Act.

Sources of funding or appropriations shall include the following:

(a) Proceeds of the sales of the Assets Privatization Trust;
(b) All receipts from assets recovered and from sale of ill-gotten wealth recovered
through the Presidential Commission on Good Government;
(c) Proceeds of the disposition of the properties of the Government in foreign
countries;
(d) Portion of amounts accruing to the Philippines from all sources or official foreign
aid grants and concessional financing from all countries, to be used for the specific
purposes of financing production credits, infrastructures, and other support services
required by this Act;
(e) Other government funds not otherwise appropriated.
All funds appropriated to implement the provisions of this Act shall be considered
continuing appropriations during the period of its implementation.
[11]

DAR Administrative Order No. 6, Series of 1993 defines Annual Gross Production
(AGP) as the "peso (P) value of the annual yield/produce per hectare of the land
awarded to farmer-beneficiaries (as established jointly by the Department of
Agrarian Reform (DAR) and the Land Bank of the Philippines [LBP] during the
valuation process) which is reflected in the valuation portion of the Claims Valuation
and Processing Form.

DISSENTING OPINION

ABAD, J.:
I am unable to agree with the ponencia of Mr. Justice Arturo D. Brion that the
respondent Land Bank of the Philippines (Land Bank) is guilty of delay and must,
therefore, pay petitioners Apo Fruits Corp. (AFC ) and Huo Plantation, Inc. (HPI) 12%
interest on the compensation awarded to them for their lands.
Brief Factual Background
On October 12, 1995 AFC-HPI voluntarily offered to sell their lands [1] to the
government under Republic Act 6657, otherwise known as the Comprehensive

Agrarian Reform Law (CARL). Land Bank valued the properties at P165,484.47 per
hectare, but AFC-HPI rejected the offer of that amount. Consequently, on
instruction of the Department of Agrarian Reform (DAR), Land Bank deposited
partial payments in AFC-HPI's bank accounts. Land Bank deposited for AFC and HPI
P26,409,549.86 and P45,481,706.76, respectively, or a total of P71,891,256.62.
Upon revaluation of the expropriated properties, Land Bank eventually made
additional deposits, placing the total amount paid at P411,769,168.32
(P71,891,256.62 + P339,877,911.70), an increase of nearly five times. Both AFCHPI withdrew the amounts. Still, they filed separate complaints for just
compensation with the DAR Adjudication Board (DARAB). But due to DARAB's
inaction, they later filed complaints for determination of just compensation with the
Regional Trial Court (RTC) of Tagum City.
On September 25, 2001 the RTC ruled in favor of AFC-HPI, fixing the just
compensation for 1,338.6027 hectares of land at P1,383,179,000.00
(P411,769,168.32 + P971,409,831.68), more than double the previous estimated
value, and ordering the payment of 12% interest per annum from the time of taking
until the finality of the decision plus attorney's fees.
The Third Division of this Court affirmed the RTC decision in its February 6, 2007
Decision. But, on motion for reconsideration, the Third Division deleted the award of
interest and attorney's fees in its December 19, 2007 resolution. Upon finality of
this resolution, entry of judgment was issued on May 16, 2008.
Undaunted, AFC-HPI filed a second motion for reconsideration with respect to
the denial of the award of legal interest and attorney's fees and a motion to refer
the second motion for reconsideration to the Court En Banc. The Third Division
subsequently referred the case to the En Banc. The Court En Banc accepted the
referral but on December 4, 2009 it denied with finality AFC-HPI's second motion for
reconsideration. An entry of its finality was duly recorded.
Still AFC-HPI filed a third motion for reconsideration on the issue of legal
interest. On October 12, 2010 the En Banc granted AFC-HPI's motion for
reconsideration and restored the additional award of 12% legal interest in their
favor equivalent to P1.331 billion. The Court held that although Land Bank's
deposits might have been sufficient for the purpose of immediate taking of the
properties, the deposits were insufficient to excuse Land Bank from the payment of
interest on the unpaid balance. It found Land Bank to have grossly undervalued
AFC-HPI's properties, thus resulting in a prolonged suit. On the issue of immutability
of judgment, the Court said that the matter was of transcendental importance since
it involved agrarian reform.
The Court voted 8-3-1 to issue the above resolution. Associate Justice Arturo D.
Brion wrote it; Associate Justices Conchita Carpio Morales, Presbitero J. Velasco, Jr.,
Mariano C. Del Castillo, Martin S. Villarama, Jr., Jose Portugal Perez, Jose Catral
Mendoza, and Maria Lourdes P. A. Sereno concurred. Associate Justice Lucas P.

Bersamin dissented along with Chief Justice Renato C. Corona and Associate Justice
Antonio Eduardo B. Nachura. Associate Justice Teresita J. Leonardo-De Castro
maintained her previous vote for a reduced interest of P400 million. Associate
Justice Antonio T. Carpio took no part. Associate Justices Roberto A. Abad and
Diosdado M. Peralta who earlier voted to deny the motion for reconsideration were
on leave when the voting took place.
Land Bank moved for reconsideration of this turn-around resolution but the En Banc
resolved to deny the same on November 23, 2010 under the same vote.
Consequently, Land Bank filed another motion asking for the deletion of the award
of legal interest.
The Issues Presented
Two issues emerged during the deliberation in this case:
1. Whether or not respondent Land Bank has been guilty of delay and, therefore,
should be made to pay AFC-HPI P1.331 billion in interest;
2. Whether or not it was error for the En Banc to have issued the October 12, 2010
resolution ordering payment of such interest, given that AFC-HPI's third motion for
reconsideration was absolutely prohibited and, even if it were to be treated as a
second motion for reconsideration, the En Banc violated its Internal Rules which
require a vote of two-thirds of its actual membership (10 votes) to entertain such a
motion.
Discussion
First. The ponencia blames Land Bank for the twelve-year delay in the payment of
compensation to AFC-HPI, claiming that had the government not grossly
undervalued the expropriated properties and thus betrayed lack of good faith, it
could have prevented the lengthy legal proceedings in the case.
But the fact that Land Bank did not readily agree with AFC-HPI regarding the value
of the lands should not mean that Land Bank acted in bad faith or deliberately
delayed payment of compensation. The records show that Land Bank valued the
lands, using the compensation formula that Section 17 of Republic Act 6657 and the
DAR's implementing rules provide. Can that be malicious or in bad faith?
Granted that Land Bank appealed the RTC decision, which awarded a compensation
of P1,383,179,000.00 to AFC-HPI (more than double what the CARL formula
provided) plus 12% interest per annum until the finality of its decision, such appeal
can hardly be regarded as dilatory and baseless. Indeed, although the Court
affirmed the principal amount that the RTC fixed, it ordered deleted the grossly
excessive interest of 12% counted from the date of taking or a period of about 12
years. Even if the Court changed its mind on a third motion for reconsideration and

after the finality of its judgment, it cannot be said, therefore, that Land Bank's
appeal was malicious or in bad faith.
The Court's ruling in Land Bank of the Philippines vs. Wycoco [2] is clear. Interest on
just compensation is due only in case of delay in payment, a fact which must be
adequately proved. If, for instance, property is taken for public use before
compensation is given or deposited in favor of the landowner, then there is delay
and the final compensation must include an award of interest.
Here, there is no evidence to prove that Land Bank was in delay. On the contrary,
pertinent amounts were deposited, specifically P26,409,549.86 for AFC and
P45,481,706.76 for HPI, within fourteen months after AFC-HPI filed the complaint for
just compensation before the RTC. Notably, Land Bank made the deposits prior to
AFC-HPI's titles being cancelled. The bank afterwards made additional payments
based on upgraded values, swelling its total payments to P411,769,168.32 even
before the RTC case was filed.
The ponencia points out that Land Bank paid only a trifling of the actual value of
properties as later determined by the Court. But I do not think that
P411,769,168.32, a third of the RTC award and paid even before the suit was filed,
can be regarded as trifling. AFC-HPI did not linger long to withdraw the deposits,
negating any notion that it suffered long with nothing to assuage its feelings about
the compensation.
Likewise, Land Bank could not have foreseen that it would take twelve years for the
case to be resolved. AFC-HPI themselves erroneously filed their complaints with the
DARAB instead of directly seeking recourse with the courts. The ponencia is
requiring Land Bank to pay for that error and the delays rooted in it.
To iterate, Land Bank had every right to defend an initial position dictated by law
and not risk sending bank officers to jail for giving undue benefit to others in
violation of the Anti-graft and Corrupt Practices Act. Land Bank should not be
penalized for taking such cautious position with respect to money belonging to the
government. The Court should not, by its present ruling, encourage government
agencies to pay more than what the law or the rules prescribe unless directed
differently by superior orders. Notably, when the Third Division of this Court handed
down its December 19, 2007 resolution, Land Bank immediately settled its unpaid
balance of P971,409,831.68 even before entry of judgment was issued in the case.
The ponencia states that a second motion for reconsideration is prohibited. But, it
must be remembered that the October 12, 2010 resolution which Land Bank assails
itself resulted from the grant of a third motion for reconsideration filed by AFC-HPI.
By then, the February 6, 2007 Decision and December 19, 2007 Resolution of this
Court had already become final and executory, and Land Bank had already complied
with the same by paying the judgment amounts. By the rule that the ponencia
invokes, the Court should not have reopened the case in the first place.

The immutability doctrine admits exceptions such as: a) the correction of clerical
errors; b) the nunc pro tunc entries that cause no prejudice to any party; c) void
judgments; and d) whenever circumstances transpire after the finality of the
decision rendering its execution unjust and inequitable. This case does not fall
under any of the exceptions, nor does it involve life or liberty--only money.
Second. The Court must recall its October 12, 2010 resolution granting AFC-HPI's
motion for reconsideration for having been voted on by the Justices present without
an inkling or awareness that it was actually a third motion for reconsideration.
It was not only a prohibited motion like second motions for reconsideration but,
evidently a motion in the category of the not-filed, beyond judicial cognizance, or
non-existent. The Court unwittingly made a mistake in acting on a "nothing"
motion. Consequently, it must rectify this mistake by immediately recalling such
resolution.
And, even if AFC-HPI's motion can be treated as another second motion for
reconsideration, which it is not, the Court En Banc violated Section 3, Rule 15, of
its Internal Rules which provides that it cannot entertain a second motion for
reconsideration except upon a vote of two-thirds of its actual membership in the
highest interest of justice. Thus:
SEC. 3. Second motion for reconsideration. - The Court shall not entertain
a second motion for reconsideration, and any exception to this rule can
only be granted in the higher interest of justice by the Court en banc upon
a vote of at least two-thirds of its actual membership. xxx
Justice Brion of course points out that since twelve Justices took part in acting on
AFC-HPI's motion for reconsideration, it may be assumed that such number agreed
to entertain the same. But this assumption will not do since the rules require the
taking of "a vote" on whether to entertain such a motion or not. An assumption of
concurrence is not the equivalent of the taking of a vote. Moreover, in truth, those
who voted to approve the October 12, 2010 resolution simply forgot to vote before
hand on whether or not to entertain AFC-HPI's motion for reconsideration.
Notably, it is inevitable that the procedure for entertaining second motions for
reconsideration should follow the two-step procedure observed when a Division
wants to refer a case to the En Banc for its consideration. This requires the En Banc
to first accept the referral before acting to decide the referred case. This was not
done in the present case. The Minutes do not show that the En Banc voted by at
least two-thirds of its actual membership to entertain the motion for reconsideration
before approving the draft resolution for release.
The omission is fatal to the resolution because the requirement of a two-thirds vote
of the En Banc's actual membership is a specially difficult bar that the Justices
precisely adopted unanimously to solve the problem of endless motions for
reconsideration that undermine the stability of the judgments of courts. If the En

Banc ignores this rule to accommodate an award of P1.331 billion in interest to AFCHPI, the public who will pay for it would probably not be able to understand the En
Banc's reason for making such an exception.
For the above reasons, I vote to RECALL the Court's Resolution dated October 12,
2010 and REINSTATE the Resolution dated December 4, 2009. This would render
moot and academic the question of whether or not to give due course to respondent
Land Bank's motion for reconsideration.

[1]

AFC owned 640.3483 hectares, while HPI owned 805.5308 hectares, for a total of
1,445.8791 hectares. However, the RTC later fixed just compensation for only
1,338.6027 hectares of land.
[2]

G.R. No. 140160, January 13, 2004, 419 SCRA 67.

CONCURRING OPINION
SERENO, J.:
I write separately to express my concern over what I perceive as an unhealthy
invocation of the Internal Rules of the Supreme Court, specifically Section 3, Rule
15, on the matter of entertaining second motions for reconsideration to set aside a
final judgment of this Court. Admittedly, having been appointed to the Court after
the effectivity of the said rule on 22 May 2010, I do not have the advantage of
knowing firsthand the history of the said rule, but I have heard enough, during the
deliberations on this case, of the problem that will continue to be engendered by
Section 3, Rule 15.
I understand that at the time the above rule was formulated, the Court did not
expect that a conscious two-step process would be so rigidly demanded by any of
its Members to the point that the rule would be used as basis to move to recall a
final judgment of this Court. Neither was it fully anticipated that the refusal to do so
would lead to concerns on the possible removal of Members of the Court for
violation of its own rules. Thus, I agree with the wise formulation of Justice Arturo D.
Brion that the requirement of the 1987 Constitution, specifically Article VIII, Section
4 (2) have been met by the fact that a majority of the Court took part in the
deliberation on 12 October 2010; and therefore, that the voting that took place
thereon was valid, and more important, that the satisfaction of this constitutional
requirement overrides any concern about the lack of a conscious, express super-

majority vote by the Court to entertain a second motion for reconsideration.

What is unhealthy from what I see is that the objection rising from a lack of a supermajority vote is raised in one case, but not raised in others by the same objecting
member -- Justice Roberto A. Abad. If Section 3, Rule 15 of the Internal Rules was
such an important bar that must be met in any motion for reconsideration, then it
should have been raised by him as well in the still unpromulgated ruling in the
Dinagat case.[1] The Court has realized the difficulty that the said rule introduces. It
should not be further invoked by any of its Members in a way that introduces further
instability and fuels the public perception of a flip-flopping Court. With more reason,
the rule should not have been invoked only in this case, but not in the two other
highly controversial flip-flopping cases, by any of the Court's Members who strongly
moved for the reconsideration of the original decision in League of Cities[2] and for
the recall of the entry of final judgment in Dinagat. Technically, Section 3, Rule 15
of the Internal Rules of Court, does not apply to the reconsideration of the original
Decision in League of Cities. Had there been a consistent intent to protect the
immutability of Supreme Court decisions, however, a similar rule in the 1997 Rules
of Civil Procedure could have been invoked, namely, Section 2, Rule 56, in relation
to Section 2, Rule 52, prohibiting the filing of second motions for reconsideration.
While the classic lines in Banogon v. Zerna[3] are writ in large part to litigants to
make them accept that the orderly administration of justice means that their causes
must end at some time, it is most earnestly and humbly believed that those lines
must be re-learned by this Court as well. This re-learning seems urgent, especially
with the reversal of the original Decision in League of Cities, followed by the
reversal of the fully executory Dinagat Decision.
To recall those lines:
Litigation must end and terminate sometime and somewhere and it is essential to
an effective and efficient administration of justice that, once a judgment has
become final, the winning party be not, through a mere subterfuge, deprived of the
fruits of the verdict. Courts must therefore guard against any scheme calculated to
bring about that result. Constituted as they are to put an end to controversies,
courts should frown upon any attempt to prolong them.
There should be a greater awareness on the part of litigants that the time of the
judiciary, much more so of this Court, is too valuable to be wasted or frittered away
by efforts, far from commendable, to evade the operation of a decision final and
executory, especially so, where, as shown in this case, the clear and manifest
absence of any right calling for vindication, is quite obvious and indisputable.
That this concern about the endlessness of litigation should morph --from one
regarding the behavior of litigants to one regarding the stability of the decisionmaking instincts of the Members of this Court -- is shared by Justices Antonio T.

Carpio and Arturo D. Brion as well in their Opinions in League of Cities and Dinagat.
To re-cast the lines of Banogon v. Serna, I would venture to say this:
There should be a greater awareness of the members of judiciary, that its time,
especially that of the Supreme Court, is too valuable to be wasted or frittered away
by efforts, far from commendable, that come from any quarter including its own, to
evade the operation of a decision final and executory, especially so, where, as
shown in this case, the clear and manifest absence of any right calling for
vindication, is quite obvious and indisputable.
What has been at stake in the flip-flopping cases and now in the puzzling invocation
of the Internal Rules of the Court in this case is no less than the risk that the moral
force of Supreme Court judgments will be undermined. The Supreme Court's word
is final because all the coercive forces of the state apparatus will ensure its
execution, by operation of the Constitution. The Members of the Court must never
lose sight of the fact that it owes the authority of its decisions only to the
Constitution and, hence, to the people themselves. When the moral force of the
decisions of the Supreme Court is lost because the people do not see in them the
application of procedural rules in an even manner, then it is conceivable that even
the automatic legal force given to its decisions may likewise be lost. That would be
a most sad period in its history.
While Justice Brion, in his Dissent in the latest Dinagat Decision, invokes the nonadherence to Sec. 3, Rule 15 of the Internal Rules of the Court as an additional
reason to object to the reversal of the Dinagat original Decision, his sentiments
must be taken in the context of the recent puzzling reversals of this Court. Thus,
while I am not convinced about the necessity of the above rule, I understand and
fully support the spirit in which it was made -- to restore belief and actual adherence
to the doctrine of immutability of judgments and its necessary by-product, the
stability of judicial decisions. There need actually be no hard and fast rule on the
matter if the members of this Court were to remember that there are behind every
good decision, whose dispositive effect must be immutable, lie fundamental rules of
sound legal reasoning. When these are absent, as in the reversals of the original
decision in League of Cities and Dinagat, for reasons that are hollow and even
appear unjust, then the convenient invocation or non-invocation of the technical
rules of procedure acquires a more egregious, distasteful taste. Such situation must
be avoided by any court with a long-term perspective of its role, and that
understands the need to guard its legacy.
On the substantial ruling in this case, while I have full sympathy for the financial
condition of the public respondent and the National Government, Justice Brion's
assessment of the respective legal rights and obligations of the parties is correct. In
an interim voting that took place in this case, I had wanted, and indeed voted for,
the imposition of a mere 6% interest and not a 12% interest on the principal amount
due petitioners. Thus, I do not fully agree with the rate of interest imposed by the
Decision. It is also correct, however, that a strong signal must be sent that the

Government cannot willfully refuse to promptly pay a just obligation. The problem
that remains unaddressed, though, is who should bear responsibility for the unjust
delay in payment that happened here. The ponencia has already named the various
government actors whose prompt resolution of petitioners' claim was required, and
who failed to discharge such duty. Unless these actors are made operationally liable
for the unjust delay, it will be the taxpayer who will ultimately bear the adverse
financial consequences of our findings and directive in this case, as usually happen
in most public accountability cases. Our public officers responsible for guarding the
coffers of our government from irresponsible acts of its officers must do more than
just accept the immediate effects of the fallo of the Decision in this case.

[1]

Navarro v. Executive Secretary, G.R. No 180050, 10 February 2010.

[2]

G.R. Nos. 176951, 177499, 178056, 18 November 2008.

[3]

G.R. No. L-35469, 9 October 1987, 154 SCRA 593.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

G.R. No. 172852

FIRST DIVISION
G.R. No. 172852, January 30, 2013
CITY OF CEBU, PETITIONER, VS. APOLONIO M. DEDAMO, JR., RESPONDENT.
RESOLUTION
REYES, 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 November 30, 2005 of the Court of
Appeals (CA) ordering petitioner City of Cebu (petitioner) to pay twelve percent
(12%) legal interest per annum on the unpaid balance of the just compensation paid
to respondent Apolonio Dedamo, Jr. (respondent). Likewise assailed is the
Resolution[2] dated May 9, 2006 denying reconsideration.
The ensuing facts are not disputed.[3]
The present controversy is an off-shoot of Civil Case No. CEB-14632 for eminent
domain over two (2) parcels of land owned by spouses Apolonio and Blasa Dedamo
(Spouses Dedamo), filed by the petitioner before the Regional Trial Court (RTC) of
Cebu City, Branch 13, on September 17, 1993. The petitioner immediately took
possession of the lots after depositing P51,156.00 with the Philippine National Bank
pursuant to Section 19 of Republic Act No. 7160. [4]
During the pendency of the case, or on December 14, 1994, the petitioner and
Spouses Dedamo entered into a Compromise Agreement whereby the latter agreed
to part with the ownership of the parcels of land in favor of the former in
consideration of ONE MILLION SEVEN HUNDRED EIGHTY-SIX THOUSAND FOUR
HUNDRED PESOS (P1,786,400.00) as provisional payment and just compensation in
an amount to be determined by a panel of commissioners.
Forthwith, the panel was constituted and a report was submitted to the RTC
recommending the sum of P20,826,339.50 as just compensation. The report was
adopted and approved by the RTC in its Order dated December 27, 1996. [5]
The RTC Order was affirmed by the CA and then by the Court, in a Decision dated
May 7, 2002, when the matter was elevated for review in a petition docketed as

G.R. No. 142971.

When the said decision became final and executory on September 20, 2002, the
case was remanded for execution to the RTC, before which, a motion for the
issuance of a writ of execution was filed by Spouses Dedamo on April 4, 2003. On
May 16, 2003, the RTC granted the motion and ordered the issuance of the writ.
In the meantime, Spouses Dedamo passed away and they were substituted in the
case by herein respondent.
On December 23, 2003, the petitioner paid the respondent the sum of
P19,039,939.50 which is the difference between the just compensation due and the
provisional payment already made.
On March 24, 2004, the respondent filed a Manifestation and Motion before the RTC
to order the petitioner to pay interest on the just compensation computed from the
time of actual taking of the lands.
On April 30, 2004, the RTC denied the motion and ruled that it can no longer amend
a final and executory judgment that did not specifically direct the payment of legal
interest. Adamant, the respondent sought recourse before the CA asserting that the
petitioner is liable to pay: (a) 12% legal interest on the unpaid balance of the just
compensation computed from the time of actual taking of the property up to the
date of payment of just compensation; and (b) 12% legal interest from the time the
decision awarding just compensation became final and executory on September 20,
2002 until its satisfaction on December 23, 2003.
The Ruling of the CA
In its Decision dated November 30, 2005, the CA rejected the respondents first
claim since the issue was belatedly raised during the execution stage and after the
judgment of just compensation attained finality.
Nonetheless, the CA found the respondents second contention meritorious. The CA
awarded legal interest accruing from the time the RTC Order dated December 27,
1996 awarding just compensation was affirmed with finality by the Supreme Court
up to the time of full payment thereof in line with the ruling in Eastern Shipping
Lines, Inc. v. Court of Appeals[6] that when a court judgment awarding a sum of
money becomes final and executory, it shall earn legal interest of 12% per annum
reckoned from such finality until satisfaction.
Accordingly, the decretal portion of the decision reads:
WHEREFORE, in view of the foregoing, the instant petition is partially GRANTED in
that the resolution dated April 30, 2004 is MODIFIED to GRANT payment of legal
interest of 12% per annum reckoned from the date of finality of the decision of the
Supreme Court on May 2, 2002 up to the time full payment for the just

compensation shall have been made.

No pronouncement as to cost.
SO ORDERED.[7]
The CA effectively reiterated the above decision when it denied [8] the petitioners
motion for reconsideration thereof. Both parties elevated the CA judgment to the
Court. The respondents petition was docketed as G.R. No. 172942 where he sought,
in the main, that the 12% interest rate be reckoned from the date of taking of the
property and not from the date of finality of the Decision dated May 7, 2002 in G.R.
No. 142971. The Court denied his petition on August 22, 2006 for failure to
sufficiently show that the CA committed any reversible error in the questioned
judgment. The respondents motion for reconsideration of the said decision was
denied with finality on November 27, 2006.[9]
At bar is the recourse interposed by the petitioner wherein he seeks the setting
aside of the same CA Decision dated November 30, 2005.
On October 20, 2006, the respondent moved for the consolidation of the present
petition with G.R. No. 172942.[10] The motion was denied in view of the prior denial
of G.R. No. 172942 on August 22, 2006.[11]
In the case at bar, the petitioner prays for the annulment of the award of 12% legal
interest made by the CA in view of the termination of the eminent domain case
upon payment of the just compensation in satisfaction of the writ of execution. The
petitioner further asserts that the final judgment in Civil Case No. CEB-14632 which
did not explicitly pronounce the payment of interest can no longer be modified lest
the basic principles of remedial law be defiled. [12]
For his part, the respondent avers [13] that Section 10, Rule 67 of the Rules of Court
mandating the payment of legal interest on just compensation forms part of every
judgment rendered in eminent domain cases even if the same was not directly
ordered therein.
The respondent also claims that the award of just compensation must be reckoned
from the date of taking of subject lots and not from the date of finality of G.R. No.
142971 because just compensation, before it is paid, constitutes loan or
forbearance of money that entails the imposition of a 12% interest per annum.
Ruling of the Court
The petition is denied on the ground of res judicata in the mode of conclusiveness of
judgment.
A perusal of the allegations in the present case evidently shows that the petitioner
broaches the issues similarly raised and already resolved in G.R. No. 172942.

Under the principle of conclusiveness of judgment, when a right or fact has been
judicially tried and determined by a court of competent jurisdiction, or when an
opportunity for such trial has been given, the judgment of the court, as long as it
remains unreversed, should be conclusive upon the parties and those in privity with
them.[14] Stated differently, conclusiveness of judgment bars the re-litigation in a
second case of a fact or question already settled in a previous case. [15]
The adjudication in G.R. No. 172942 has become binding and conclusive on the
petitioner who can no longer question the respondents entitlement to the 12%
legal interest awarded by the CA. The Courts determination in G.R. No. 172942 on
the reckoning point of the 12% legal interest is likewise binding on the petitioner
who cannot re-litigate the said matter anew through the present recourse.
Thus, the judgment in G.R. No. 172942 bars the present case as the relief sought in
the latter is inextricably related to the ruling in the former.
WHEREFORE, premises considered, the Petition is hereby DENIED.
SO ORDERED.
Sereno, C.J, (Chairperson), Leonardo-De Castro, Bersamin, and Villarama, Jr., JJ.,
concur.

[1]

Penned by Associate Justice Pampio A. Abarintos, with Associate Justices

Mercedes Gozo-Dadole and Enrico A. Lanzanas, concurring; rollo, pp. 30-40.
[2]

Id. at 42-43.

[3]

As culled from the Courts May 7, 2002 judgment in G.R. No. 142971 entitled The
City of Cebu v. Spouses Apolonio and Blasa Dedamo and from the herein assailed
CA Decision dated November 30, 2005; id. at 30-40.
[4]

Sec. 19. Eminent Domain. A local government unit may, through its chief
executive and acting pursuant to an ordinance, exercise the power of eminent
domain for public use, or purpose or welfare for the benefit of the poor and the
landless, upon payment of just compensation, pursuant to the provisions of the
Constitution and pertinent laws: Provided, however, That the power of eminent
domain may not be exercised unless a valid and definite offer has been previously
made to the owner, and such offer was not accepted: Provided, further, That the
local government unit may immediately take possession of the property upon the
filing of the expropriation proceedings and upon making a deposit with the proper
court of at least fifteen percent (15%) of the fair market value of the property based
on the current tax declaration of the property to be expropriated: Provided, finally,

That, the amount to be paid for the expropriated property shall be determined by
the proper court, based on the fair market value at the time of the taking of the
property.
[5]

The initial recommendation of the panel was P24,865,930.00 but the same was
later on amended to P20,826,339.50.
[6]

G.R. No. 97412, July 12, 1994, 234 SCRA 78.

[7]

Rollo, p. 37.

[8]

Id. at 42-43.

[9]

Id. at 113.

[10]

Id. at 96-97.

[11]

Id. at 114.

[12]

Id. at 13-28.

[13]

Id. at 49-89.

[14]

Noceda v. Arbizo-Directo, G.R. No. 178495, July 26, 2010, 625 SCRA 472, 480.

[15]

Layos v. Fil-Estate Golf and Development, Inc., G.R. No. 150470, August 6, 2008,
561 SCRA 75, 106.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

390 Phil. 489

THIRD DIVISION
A.M. MTJ-99-1199, July 06, 2000
FRANCISCO LU, COMPLAINANT, VS. JUDGE ORLANDO ANA F. SIAPNO, MTCURDANETA, PANGASINAN, DOMINGO S. LOPEZ, SHERIFF IV, RTC-URDANETA,
PANGASINAN, BRANCH 45 AND PRIVATE PROSECUTOR JOSELINO A. VIRAY,
RESPONDENTS.
DECISION
Francisco Lu is the defendant in a civil case for ejectment raffled to respondent
Judge Orlando Ana F. Siapno of the Municipal Trial Court of Urdaneta, Pangasinan
and docketed as Civil Case No. 4112. In his administrative complaint, Francisco Lu
alleges that he filed an Answer with Counterclaim to the Amended Complaint [1] for
ejectment which was later amended. Thereafter, he filed a Motion to Dismiss [2] the
ejectment case on the ground that plaintiffs therein were no longer the owners of
the land in question, the same having been sold to the Shahanis on February 7,
1995 and later transferred in the names of the latter under TCT No. 202393. On
September 7, 1995, respondent Judge Siapno rendered judgment [3] against Lu which
decision was allegedly received by Lu's counsel on September 13, 1995. [4] A notice
of appeal[5] was filed on the same day. On September 11, 1995, MTC-Clerk of Court
Celestina Corpuz issued a Writ of Execution [6] which was allegedly implemented by
Sheriff Domingo S. Lopez of the Regional Trial Court of Urdaneta, Pangasinan,
Branch 45 who forcibly ejected Lu from the premises.
While on appeal, the Regional Trial Court of Urdaneta, Pangasinan, Branch 47 issued
a preliminary mandatory injunction and declared the writ of execution earlier issued
by the MTC-Urdaneta, Pangasinan to be null and void. [7] On February 5, 1996, RTCBranch 47 rendered judgment modifying the MTC-judgment by deleting the
paragraph "(I)n accordance with the Rules, let a Writ of Execution be issued." [8]

Hence, Lu filed a petition for review with the Court of Appeals on February 21, 1996
which was docketed as CA-G.R. SP No. 39875. [9] Meanwhile, plaintiff's counsel filed
on February 19, 1996 a Motion for Execution [10] with MTC which was granted by
respondent Judge Siapno granted in the Order dated February 22, 1996 [11] allegedly
without notice and hearing. The writ of execution was issued by Clerk of Court
Corpuz on the same day.[12]
On April 2, 1996, Atty. Joselino Viray, plaintiff's counsel, filed an Ex-parte Motion to
Withdraw deposit praying that the amount deposited in the municipal treasurer be
withdrawn in order to satisfy the judgment. Said motion was granted in the Order
dated April 2, 1996.[13] On April 23, 1996, Atty. Viray filed a Motion for Special
Demolition which was likewise granted by respondent Judge Siapno, allegedly
without notice and hearing, in his Order of May 20, 1996 which order was later
amended on May 21, 1996 as the first order directed the plaintiff therein, instead of
the sheriff, to demolish the structure on the subject property. [14] On the same date,
May 21, 1991, Sheriff Lopez immediately implemented the order of demolition by
serving a copy of the said order upon complainant's wife and proceeding to
demolish the structure, building and other improvements on the land in question. [15]
The order of demolition was allegedly received by complainant's counsel on May 28,
1996.[16]
Hence, this complaint for gross incompetence, gross ignorance of the law,
abdication of official function and gross misconduct.
Respondent Siapno denied all the accusations against him. He filed his Comment
and Answer to the complaint against him. On the charge of gross incompetence in
the performance of his duties for not dismissing Civil Case No. 4112, respondent
Judge argues that complainant Lu filed a Motion to Dismiss the case on the ground
that the land subject of the controversy was already sold to the Shahanis but since
the said case is governed by the Rules on Summary Procedure, the court did not
take action on Lu's motion to dismiss being a prohibited pleading.
As regards the charge of gross ignorance of the law for rendering a decision
providing in its dispositive portion the issuance of a writ of execution without notice
and hearing, respondent Judge contends that he did not issue a writ of execution
implementing the decision since it was his Clerk of Court Celestina Corpuz who
signed the writ of execution without his authority. Respondent Judge further denies
the charge of partiality and bias in favor of the plaintiffs and against the defendant
(herein complainant) in the subject case. He denied having committed a mistake in
allowing the motion to withdraw deposit since his decision has been affirmed by the
Regional Trial Court and under the rules, the decision of the latter is immediately
executory. The motion for demolition was likewise granted in view of the affirmance
of his decision ordering the defendant to immediately vacate the premises. Hence,
respondent Judge prays for the dismissal of the instant case for lack of merit.
In the Counter-Affidavit (Answer) of respondent Sheriff Lopez, he alleges that the
writ of execution dated September 11, 1995 was not implemented because of the

appeal of the MTC-decision to the Regional Trial Court which nullified the writ; that
he was not the one who implemented the writ of execution but a certain Eduardo
Ramos, the Deputy Sheriff of RTC-Branch 47 since Lopez was detailed as sheriff of
the office of the Clerk of Court from October 1989 up to April 1997; that per Sheriff's
Return dated February 23, 1996, it was Sheriff Ramos who implemented the writ of
execution, a copy of the writ and the order having been served upon Lu who
voluntarily vacated the premises; that he (respondent Lopez) implemented the
order of demolition since there was no restraining order issued by the Court of
Appeals while the case was pending appeal and that complainant Lu already
voluntarily vacated the premises; and that a copy of the order of demolition was
served upon Lu's wife, Elvie, who allegedly refused to sign therein. Respondent
Sheriff Lopez claims that he performed what he believed to be his ministerial duty.
Respondent Sheriff Lopez filed a Manifestation stating that he applied for optional
retirement to take effect May 9, 1998 and requesting that the amount of P20,000.00
be retained to answer for any penalty that may be meted out to him. His request
was denied in this Court's Resolution dated March 24, 1999.
The case was referred to Judge Modesto C. Juanson of the Regional Trial Court of
Urdaneta City, Branch 46 for investigation, report and recommendation. He made
the following findings: (1) on the charge of gross incompetence in the performance
of his duties against respondent Judge, the same is belied by the RTC-decision
dismissing the appeal which was affirmed by the Court of Appeals; (2) on gross
ignorance of the law, the investigating judge opined that it was Clerk of Court
Corpuz who prepared, signed and issued the writ of execution without consulting
the respondent Judge thereby absolving the latter from any responsibility; (3) on the
charge of abdication of his official function, the investigating judge was of the view
that respondent Judge should not be faulted by the unauthorized action of her clerk
of court.
As regards respondent Sheriff Lopez, the investigating Judge found him guilty for
violating the rights of complainant Lu without giving the latter five (5) days notice to
remove his personal belongings.
Hence, the Investigating Judge made the following recommendation:
"1. Respondent Siapno is exonerated in all the charges;
2. Respondent Lopez is meted a penalty of P10,000.00 with warning that repetition
of the same shall be dealt with severely;
3. Celestina Corpuz, not being charged, but on the principle of res ipsa loquitor be
meted a fine of P10,000.00 with the warning that repetition of the same shall be
dealt with severely."
In the Memorandum dated February 10, 2000, the Court Administrator
recommended, inter alia, that the: (1) respondent Judge likewise fined in the

amount of P10,000.00 each. The Court Administrator opined that the respondent
Judge erred in including in the dispositive portion of his decision the directive that
"(I)n accordance with the Rules, let the Writ of Execution be issued" and by doing
so, respondent Judge had no other intention but to see to it that the decision is
"immediately executed" without any further action on the part of the plaintiffs
therein.
In the Resolution dated February 28, 2000, this Court forwarded the charge against
Atty. Joselino A. Viray to the Office of the Bar Confidant, for appropriate action, the
latter having exclusive jurisdiction over the case.
We agree with the Court Administrator that respondent Judge Siapno is guilty of
gross ignorance of the law when he rendered judgment providing, in the dispositive
portion, for its immediate execution. It should be noted that the Regional Trial Court,
while affirming the judgment of the respondent Judge, nevertheless deleted that
portion of the decision providing for immediate execution. Basic is the rule that a
judge may not order execution of judgment in the decision itself. [17] Section 21 of the
Rules on Summary Procedure likewise provides that the decision of the regional trial
court is immediately executory. Even if immediately executory, there must first be a
motion to that effect and a hearing called for that purpose. In an ejectment case,
the adverse party is entitled to notice before execution can be ordered. [18] In
disregarding the rules and settled jurisprudence, respondent Judge showed gross
ignorance, albeit without any malice or corrupt motive. The lack of malicious intent,
however, cannot completely free respondent Judge from liability. When the law is
elementary, so elementary not to know it constitutes gross ignorance of the law. [19]
As regards the charge of partiality and bias in favor of the plaintiffs, we find the
same to be unsubstantiated. Mere suspicion that the judge is partial to a party is
not enough; there should be adequate evidence to prove the charge. [20]
Clerk of Court Corpuz admitted that she issued and signed the writ of execution
without consulting the respondent judge. Sheriff Lopez likewise admitted that the
writ of execution dated September 11, 1995 was not implemented because of the
appeal to the RTC which nullified the writ. He claims, however, that he was not the
one who implemented the second writ of execution but it was Mr. Eduardo Ramos of
the RTC-Branch 47. In the Sheriff's Return dated February 23, 1996 submitted by
Ramos, it appears that Lu vacated the subject premises voluntarily.
As regards the writ of demolition, Sheriff Lopez argues that although the RTCdecision was appealed to the Court of Appeals, the latter did not issue any
restraining order, thus the implementation of the order of demolition following the
return of the writ issued on February 22, 1996.
The Clerk of Court and the Sheriff must be held responsible. The issuance of the writ
of execution and its subsequent implementation without motion and hearing and at
the time the copy of the judgment has not yet been received by defendant's
counsel, was precipitate and against all sense of fair play. Lu's counsel received the

MTC-decision on September 13, 1995 and filed a notice of appeal on the same day.
However, the writ of execution was issued by Clerk of Court Corpuz on September
11, 1995 and was implemented by Sheriff Lopez on said date. Clearly, there was a
violation of the rules of procedure. Even in the Rule on Summary Procedure, a
judgment must first be given to the losing party before it can be executed. [21]
Moreover, as found by Investigating Judge Juanson, Sheriff Lopez removed the
personal belongings of Lu without giving the latter five (5) days notice to remove
the same or to obtain remedies somewhere. Under the Rules of Court, the
immediate enforcement of a writ of execution in ejectment cases is carried out by
giving the defendant notice of such writ, and making a demand that defendant
comply therewith within a reasonable period, normally from three (3) to five (5)
days, and it is only after such period that the sheriff enforces the writ by the bodily
removal of the defendant and his personal belongings. [22] And if demolition is
involved, there must first be a hearing on motion and due notice for the issuance of
a special order under Section 14, Rule 39. [23]
While we agree with the recommendation of both the Court Administrator and the
Investigating Judge imposing a fine upon respondent Sheriff Lopez in the amount of
ten thousand pesos (P10,000.00), we find the same to be too harsh. So too is the
fine imposed upon respondent Judge as recommended by the Court Administrator.
Accordingly, the amount of fine is reduced to five thousand pesos (P5,000.00) in
both cases.
As regards Clerk of Court Corpuz, she was not impleaded in the instant
administrative complaint and should be given her day in court. The Court
Administrator is directed to institute a separate administrative case against her.
WHEREFORE, premises considered, respondent Judge Orlando Ana F. Siapno of the
Municipal Trial Court of Urdaneta, Pangasinan is hereby found guilty of gross
ignorance of the law and is FINED in the amount of Five Thousand Pesos
(P5,000.00).
For gross abuse of authority, respondent Sheriff Domingo S. Lopez, Sheriff IV of the
Regional Trial Court of Urdaneta, Pangasinan, Branch 45 is FINED in the amount of
Five Thousand Pesos (P5,000.00).
They are likewise warned that a repetition of the same or similar act shall be dealt
with more severely by this Court.
The Court Administrator is further directed to institute the appropriate
administrative case against Clerk of Court Celestina Corpuz.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.

[1]

Annex "B", p. 12, Rollo.

[2]

Annex "C", p. 15, Rollo.

[3]

Annex "D", pp. 21-23, Rollo.

[4]

Par. 5, Complaint-Affidavit, p. 1, Rollo.

[5]

Annex "E", p. 24, Rollo.

[6]

Annex "F", p. 25, Rollo.

[7]

Order of November 9, 1995, Annex "H", pp. 27-31, Rollo.

[8]

Annex "I", pp. 32-33, Rollo.

[9]

Annex "K", pp. 40-45, Rollo.

[10]

Annex "L", p. 48, Rollo.

[11]

Annex "M", pp. 49-50, Rollo.

[12]

Annex "N", p. 51, Rollo.

[13]

Annexes "O" & "P", pp. 52-54, Rollo.

[14]

Annexes "Q", "R" & "S", pp. 55-58, Rollo.

[15]

Par. 2.d, Counter-Affidavit (Answer), p. 64, Rollo.

[16]

Par. 2 of Annex "T", p. 59, Rollo.

[17]

Felongco vs. Dictado, 223 SCRA 696.

[18]

Kaw vs. Anunciacion, Jr., 242 SCRA 1.

[19]

Carpio vs. De Guzman, 262 SCRA 615.

[20]

Zamudio vs. Peas, Jr., 286 SCRA 367.

[21]

Felongco vs. Dictado, supra.

[22]

City of Manila vs. Court of Appeals, 204 SCRA 362.

[23]

Fuentes vs. Leviste, 117 SCRA 958.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

376 Phil. 9
SECOND DIVISION
A.M. No. RTJ-99-1505, October 29, 1999
ARSENIA T. BERGONIA, COMPLAINANT, VS. JUDGE ALICIA B. GONZALEZDECANO, RESPONDENT.
DECISION
BUENA, J.:
In an affidavit-complaint, Ms. Arsenia T. Bergonia charges Judge Alicia B. GonzalezDecano, RTC, Branch 48, Urdaneta City, Pangasinan, with bias and partiality and
conduct unbecoming of a judge and violation of Canon 3, Rule 3.04 of the Canons of
Judicial Conduct.

Complainant is the defendant in Civil Case No. U-6061 entitled Gretchen V.

Parayno, represented by her Attorney-in-Fact, Dr. Rodolfo E. Parayno, vs. Arsenia
Bergonia, for Recovery of Possession and Ownership with Damages, which was
heard and tried by respondent Judge.
On October 15, 1996, after due trial, respondent rendered a judgment in the said
civil case in favor of the plaintiff and against the defendant, ordering the latter to
vacate the property in question.[1]
Aggrieved by the Decision, complainant appealed the same to the Court of appeals
which dismissed the appeal in a Resolution dated June 25, 1998, for failure of the
appellant (herein complainant) to file the necessary appellants brief despite
extensions given to her. On July 21, 1998, plaintiff through counsel filed a Motion for
Execution and Demolition. The trial court set the hearing on the motion on August 4,
1998.
Complainant alleges in her complaint that during the said scheduled hearing,
respondent herein humiliated her by saying in open court, Bakit hindi ka pa
umalis? (referring to the property subject matter of the civil case), Naiintindihan
mo ba itong nakasulat dito? (referring to the motion for execution and demolition),
to which complainant answered, Mayroon po akong abogado and proceeded to
wait for her counsel. When complainants counsel arrived, he requested that he be
given ten (10) days within which to file an opposition to the motion for execution
and demolition, but was granted only five (5) days. This motion for execution and
demolition was denied by respondent Judge in an order dated August 18, 1998.
Complainant further alleges that on several occasions, whenever her counsel is late
for the hearings, respondent will say in open court, Siguro, hindi mo binabayaran
ang abogado mo?
Complainant claims that the actuations of respondent constitute conduct
unbecoming of a judge and are a clear case of bias and partiality in favor of the
plaintiff, Gretchen V. Parayno, who is the daughter of the incumbent mayor of
Urdaneta City, Pangasinan and is represented by her mayor-father, as attorney-infact, in this case.
On March 16, 1999, Senior Deputy Court Administrator Reynaldo L. Suarez required
the respondent Judge Decano to comment on the complaint.
In her Comment dated April 7, 1999, respondent alleged among others that: 1.) she
is an applicant for the position of Associate Justice of the Court of Appeals, by
reason of which, her name was published in newspapers of general circulation for
the purpose of informing the public; that some disgruntled lawyers made use of the
complainant to file this petty administrative case against her for lack of any
legitimate cause to pin her down, and to malign her reputation in an attempt to
poison the Judicial and Bar Council; and 2.) she denies the allegation of complainant
that she showed bias and partiality when, in a jesting manner, she told the latter
only once on August 4, 1998 and NOT on several occasions as alleged in the
complaint, that perhaps her lawyer is not around because he is not being paid for

his services; that Atty. Merrera, counsel for the defense, came late on that day; and
that comments such as these are made by some judges too, in a joking manner, but
they are not uttered to show any bias or prejudice against any litigant.
On April 19, 1999, complainant filed a Motion with Leave of Court to File Reply,
containing the following allegations:
1. Complainant was never influenced by anybody in the filing of this administrative
complaint against Judge Alicia Gonzalez-Decano. Complainants counsel on record
never had a hand in the filing of this case. In fact, disbarment proceedings against
said counsel had been initiated by complainant, on account of his negligence which
resulted in the dismissal of complainants appeal in the Court of Appeals.
2. Complainant has no knowledge or information that respondent Judge is an
applicant to the Court of Appeals. Complainant believes that she has a legitimate
cause in filing this administrative case against respondent.
3. Respondent admitted in her Comment that on August 4, 1998, she told
complainant that the latters lawyer is not around because she does not pay him,
but that this was said in a joking manner. This is a lie. Respondent was so serious
at that time and galit na galit. Besides, the court is not a venue for jokes. Serious
issues are being discussed in court. Respondents manner of saying those
statements caused humiliation and anxiety to complainant because there were a lot
of people present on that day in court.
4. On another occasion, respondent even told complainant, Umalis ka na sa loteng
ito! Bakit, hindi mo ba naiintindihan yung order ng Court of Appeals na talo ka?
This conduct of respondent clearly tarnishes the integrity of the judiciary.
5. The filing of this administrative complaint is not, as alleged by respondent in her
comment, motivated by the fact that complainant could not get the terms she
wanted from the Court of Appeals, and so her ire turned towards the respondent.
In filing this administrative case, complainant is, among others, questioning the
propriety of the premature hearing conducted by respondent on plaintiffs motion
for execution and demolition notwithstanding the fact that the records of the case
are still with the Court of Appeals and the latter has yet to issue the Entry of
Judgment. Respondents act of entertaining the motion despite knowledge that the
appeal has not attained finality is a clear indication of bias in favor of the plaintiff
who is the incumbent mayor of Urdaneta City, Pangasinan.
6. There are other similar litigants whom complainant knows to be victims also of
respondents improper conduct but who are afraid to file charges or make their
grievances known.
The charge of bias and partiality leveled against respondent is baseless and
unfounded, hence must be dismissed. Complainant avers that the hearing on the
motion for execution and demolition should have been deferred considering that the
Court of Appeals has yet to issue an Entry of Judgment and the original record,
together with its oral and documentary evidence is still with the Court of Appeals
and has not been remanded to the court of origin.

The respondent judge denied the defendants motion for execution and demolition
through an Order dated August 18, 1998 because what plaintiff submitted were only
certified xeroxed copies instead of certified true copies of the entry of the resolution
of the Court of Appeals. This circumstance defeats complainants claim that
respondent is biased and partial to the plaintiff.
Also, plaintiffs contention that the motion for execution should have been deferred
considering that the original records of the case together with the oral and
documentary evidence is still with the Court of Appeals and has not been remanded
to the court of origin, is erroneous.
There is no need to wait for the records of the case to be remanded to the court of
origin before moving for the execution of the judgment of the trial court. All that the
law requires is that the appeal be duly perfected and finally resolved before
execution may be applied for.
The second paragraph of Section 1, Rule 39 of the 1997 Rules of Civil Procedure
provides that:
If the appeal has been duly perfected and finally resolved, the
execution may forthwith be applied for in the court of origin, on motion of the
judgment obligee, submitting therewith certified true copies of the judgment
or judgments or final order or orders sought to be enforced and of the entry
thereof, with notice to the adverse party.
In his book, Remedial Law Compendium[2] Justice Florenz D. Regalado made the
following explanations relative to the above-quoted provision of the Rules of Court:
The second paragraph of this section is an innovation in response to
complaints over the delay caused by the former procedure in obtaining a writ
of execution of a judgment, which has already been affirmed on appeal, with
notice to the parties. As things then stood, after the entry of judgment in the
appellate court, the prevailing party had to wait for the records of the case to
be remanded to the court of origin when and where he could then move for
the issuance of a writ of execution. The intervening time could sometimes be
substantial, especially if the court a quo is in a remote province, and could
also be availed of by the losing party to delay or thwart actual execution.
On these considerations, the Supreme Court issued Circular No. 24-94,
dated April 18, 1994, approving and promulgating in advance this amended
Section 1 of Rule 39 and declaring the same effective as of June 1, 1994.
Under the present procedure, the prevailing party can secure certified
true copies of the judgment or final order of the appellate court and the entry
thereof, and submit the same to the court of origin with and to justify his
motion for a writ of execution, without waiting for its receipt of the records
from the appellate court. That motion must be with notice to the adverse
party, with a hearing when the circumstances so require, to enable him to file
any objection thereto or bring to the attention of said court matters which

may have transpired during the pendency of the appeal and which may have
a bearing on the execution sought to enforce the judgment.
With regard to the alleged act of respondent Judge of uttering, in open court,
insulting and offensive language directed towards complainant herein, thereby
humiliating her in the presence of so many people, we find that the judge thereby
deserves admonition.
While respondent admits having uttered the words Siguro, hindi mo binabayaran
ang abogado mo, she however claims that the same were said in jest.
Complainant, on the other hand, insists that this is not so. She maintains that the
statement was made in a serious and very angry tone.
After studying the records of the case, the Court is inclined to give more credence to
the allegations of the complaint. In the first place, complainant is an ordinary
person, wielding neither power nor influence. It is thus doubtful whether she will
institute the instant administrative complaint against respondent Judge unless she
is convinced that her allegations could withstand judicial scrutiny. In the second
place, complainant would not have exerted effort in filing a reply to respondents
comment to refute the latters allegations therein and to reiterate her grievances, if
she does not truly believe in the legitimacy of her cause.
Respondent, on the other hand, did not even bother to give an explanation with
respect to the other two (2) similarly insulting statements likewise allegedly uttered
by her, to wit: Bakit hindi ka pa umalis? Naiintindihan mo ba itong nakasulat dito?
and Umalis ka na sa loteng ito! Bakit, hindi mo ba naiintindihan yung order ng
Court of Appeals na talo ka?
Time and again, the Supreme Court has reminded judges that their official conduct
should be free from and be untainted by the appearance of impropriety, and his or
her personal behavior, not only upon the bench and in the performance of judicial
duties, but also in his or her everyday life, should be beyond reproach. [3]
Public confidence in the Judiciary is eroded by irresponsible or improper conduct of
judges. A judge must avoid all impropriety and the appearance thereof. Being the
subject of constant public scrutiny, a judge should freely and willingly accept
restrictions on conduct that might be viewed as burdensome by the ordinary citizen.
[4]

From the standpoint of conduct and demeanor expected of a judge, resort to

intemperate language only detracts from the respect due a member of the judiciary
and becomes self-destructive.[5]
Respondent has departed from the proper judicial decorum by using such
intemperate and insulting language directed towards complainant herein. Her
choice of words is not proper. As a judge, respondent should not resort to the use of
undignified language. Respondent forgets that a judge should be prudent and more
circumspect in his or her utterances, remembering that his or her conduct in and
outside the courtroom is under constant observation.

Canon 3, Rule 3.04 of the Code of Judicial Conduct provides that A judge should be
patient, attentive, and courteous to lawyers, especially the inexperienced, to
litigants, witnesses, and others appearing before the court. A judge should avoid
unconsciously falling into the attitude of mind that the litigants are made for the
courts, instead of the courts for the litigants.
Obviously, respondent Judge was remiss in observing the conduct expected of a
member of the judiciary. She failed to exert such courteousness and patience
expected and demanded of a judge.
WHEREFORE, respondent Judge Alicia B. Gonzalez-Decano, RTC, Branch 48,
Urdaneta, Pangasinan is ADMONISHED for exhibiting conduct unbecoming of a
judge, and for violation of Canon 3, Rule 3.04 of the Code of Judicial Conduct by
uttering uncalled-for statements during the trial of Civil Case No. U-6061. The
charges of bias and partiality against respondent is dismissed for lack of merit.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, and De Leon, Jr., JJ., concur.
Quisumbing, J., on official business.

[1]

Motion for Execution and Demolition, Rollo, p. 12.

[2]

6th Revised Edition, c. 1997, pp. 399-400.

[3]

Panganiban vs. Guerrero, Jr. 242 SCRA 11.

[4]

Padilla vs. Zantua, Jr., 237 SCRA 670.

[5]

Court Employees of the RTC, Br. 27, Gingoog City vs. Galon, 265 SCRA 770.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

667 Phil. 144

THIRD DIVISION
G.R. No. 150462, June 15, 2011
TOP MANAGEMENT PROGRAMS CORPORATION, PETITIONER, VS. LUIS
FAJARDO AND THE REGISTER OF DEEDS OF LAS PIAS CITY, RESPONDENTS.

DECISION
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari under Rule 45 seeking the reversal of
the Decision[1] dated May 30, 2001 and Resolution [2] dated October 23, 2001 of the
Court of Appeals (CA) in CA-G.R. CV No. 60712 which affirmed the Order [3] of the
Regional Trial Court (RTC) of Las Pias City, Branch 275 in Civil Case No. 94-564
dismissing petitioner's complaint for quieting of title and damages against private
respondent.
The factual antecedents:
On December 31, 1964, Emilio Gregorio (Gregorio) filed an application for
registration of title over Lots 1 to 4 of Plan Psu-204785 situated at Mag-asawang
Mangga, Las Pias, Rizal, before the then Court of First Instance (CFI) of Rizal,
Branch II (LRC Case No. N-5053, LRC Rec. No. N-27523). On January 4, 1966, said
court issued an order declaring as abandoned the reserved oppositions of Jose T.
Velasquez and Pablo Velasquez. Thereafter, the case proceeded to trial.
Meanwhile, on July 29, 1965, Jose T. Velasquez (Velasquez) filed an application for
registration of title over six lots denominated as Lots 7 and 9 of Psu-80886, Ap5538, and Lots 1, 7, 9 and 11 of Psu-56007 Amd., Ap-11135, situated at Almanza,
Las Pias, Rizal, in LRC Case No. N-5416, LRC Rec. No. N-28735, before the same
court.
On January 31, 1966, the CFI rendered a decision [4] in LRC Case No. N-5053
declaring Gregorio to be the absolute owner of Lots 1, 2, 3 and 4 described in Plan

Psu-204785. On March 9, 1966, an order was issued by said court for the issuance
of the decree of registration, stating that the January 31, 1966 had become final.
On March 30, 1966, the same court promulgated a decision in LRC Case No. N-5416
adjudicating Lots 1, 7, 9 and 11 of Psu-56007-Amd, plan Ap-11135, and Lots 7 and 9
of Psu-80886 (Ap-5538) to Jose T. Velasquez. On May 3, 1966, said court ordered
the issuance of a decree of registration in view of the finality of the March 30, 1966
decision.
In the meantime, on July 25, 1966, the LRA called the attention of the Director of
Lands regarding the overlapping of Lots 1, 7 and 11 of Psu-56007-Amd awarded to
Velasquez, with Lots 1 to 4 of Psu-204785 adjudicated to Gregorio, and requested
that portions of these lots that are not in conflict be segregated. On September 16,
1966, the LRA informed the CFI that Lots 1 and 7 of Psu-56007-Amd (Ap-11135) had
been amended by the Bureau of Lands to exclude therefrom portions covered by Lot
2, Psu-64894, Psu-96904, and Lots 1 to 4, Psu-204785 of Gregorio. [5] On the basis of
the LRA report, Velasquez petitioned the CFI to set aside the award earlier made in
favor of Gregorio in LRC Case No. N-5035 on the ground of lack of jurisdiction and to
give due course to his application over the said lots in LRC Case No. N-5416. On
November 23, 1966, the CFI issued an Order in LRC Case Nos. N-5053 and N-5416
declaring that the application of Velasquez be given due course insofar as Lots 1
and 7 of Ap-11135 which are identical to Lots 1 to 4, Plan Psu-204785, and the
January 31, 1966 decision in LRC Case No. N-5053 in favor of Gregorio respecting
the same lots as null and void.[6] On December 6, 1966, Decree Nos. N-111862 to
N-111865 and the corresponding certificates OCT Nos. 5677, 5678, 5679 and 5680
were issued in favor of Velasquez.
On January 7, 1967, Gregorio appealed the November 23, 1966 decision of the CFI
to the CA (CA-G.R. No. 40739-40-R). On July 30, 1971, the CA rendered its Decision [7]
reversing the CFI, as follows:
WHEREFORE, the order appealed from is hereby reversed and, in lieu thereof,
another is hereby rendered declaring null and void the Decision of the Court of First
Instance of Rizal, dated March 30, 1966, in Land Registration Case No. N-5416, LRC
Rec. No. N-28735, insofar as it adjudicates in favor of appellee Jose T. Velasquez
Lots Nos. 1 and 7 of Plan Ap-11315; and directing that the Order of March 9, 1966
for the issuance of the decree in Land Registration Case No. N-5053, LRC Rec. No. N27523, over Lots 1, 2, 3 and 4 of Plan Psu-204785, in the name of appellant Emilio
Gregorio, be given due course.
No costs.
IT IS SO ORDERED.[8]
Per entry of judgment issued by the CA, the above decision became final and
executory on February 1, 1972.[9] It appears, however, that a petition for review had

been filed by Velasquez with this Court, docketed as G.R. Nos. L-34239-40 ("Jose T.
Velasquez v. Emilio Gregorio"), which was given due course per Resolution dated
March 7, 1972 of the Second Division. Eventually, this Court denied the petition
under Resolution[10] dated February 8, 1984 stating that:
We have carefully scrutinized the arguments of the parties stated in their respective
briefs as well as the reasons adduced by the Court of Appeals to support its decision
sought to be reviewed and We have Resolved to RECONSIDER the resolution of
March 7, 1972, and enter instead another resolution DENYING the petition for lack of
merit with COSTS against the petitioners.[11]
The above resolution became final and executory on March 2, 1984 as per entry of
judgment[12] issued by this Court. Prior to this however, on October 31, 1972, Decree
No. N-141990 over Lots 1, 3 and 4 of Plan Psu-204785 were issued by the LRA and
the corresponding OCT No. 9587 in the name of Gregorio, was subsequently issued
on November 21, 1972.[13]
Lots 1, 3 and 4, Plan Psu-204785 covered by OCT No. 9587 also became the subject
of Civil Case No. 16977 of the CFI of Rizal. Gregorio sought the annulment of the
deed of sale over the said lots in favor of Luciana Parami. The CFI dismissed the
complaint of Gregorio in a decision rendered on May 8, 1974. Gregorio appealed to
the CA (CA-G.R. No. 56015-R, entitled "Emilio Gregorio v. Spouses Luciana and
Corpus Parami and the Register of Deeds of Rizal") which reversed the CFI. In its
decision dated February 7, 1978, the CA declared the aforesaid deed of sale null and
void, and ordered the cancellation of certificate of title (No. 38433) in the name of
the Paramis and issuance of an OCT in favor of Gregorio covering Lots 1, 3 and 4,
Plan Pasu-204785. On November 20, 1979, the court in the same case issued an
order declaring the children (Ana, Paz, Carmen, Remedios and Rolando, all
surnamed Gregorio) of the deceased Emilio Gregorio "as his compulsory heirs to
substitute the said plaintiff."[14] Pursuant to the said decision, OCT No. 9587 in the
name of Emilio Gregorio was cancelled and a new certificate of title, TCT No. S91911 in favor of his heirs was issued.[15]
In a Report dated September 12, 1984, the LRA informed the CFI in LRC Case No. N5416 that compliance with the July 30, 1971 CA decision in CA-G.R. No. 40739-40-R
adjudicating Lots 1, 3 and 4 of Plan Psu-204785 in favor of Gregorio will result in
duplication of titles over the said properties. The report further stated:
21. That based on the records of this Commission, Lots 1, 3 and 4 of plan Psu204785 were already covered by TCT No. S-91911 in the name of the Heirs of
Emilio Gregorio with several annotations of encumbrances x x x;
22. That among those encumbrances are the deeds of sale executed by them in
favor of Herminia Galman covering an undivided portion of aforesaid Lot 1, and of
Everlita Talusan of the whole Lots 3 and 4 denominated as Entry No. 21079/S97421, and that the latter vendee E. Talusan had already acquire[d] TCT No. S97421 over said two lots in her name also with several annotation of encumbrances

x x x;
23. That as per our verification from the Registry of Deeds of Makati, corresponding
titles were issued in the name of J.T. Velasquez denominated as OCT Nos. 5678,
5677, 5679 and 5680 x x x;
24. And that these certificates of title were all cancelled and assigned in favor of J.V.
Development Corporation as per Entry Nos. 99377/T-195606, 195605, 195605 and
19505 all inscribed on July 27, 1967.
WHEREFORE, these facts are respectfully brought to the attention of this Honorable
Court with the recommendation:
That Decree Nos. N-111862 to N-111865 issued on December 6, 1966 over Lots 1 to
4, Psu-204785, in favor of Jose T. Velasquez, as well as existing subsequent titles
emanating from the same shall be declared null and void and ordered cancelled. [16]
On April 9, 1984, the heirs of Emilio Gregorio filed an ex-parte motion for execution
before the RTC of Pasig, Metro Manila, Branch 152 in LRC Case Nos. N-5053 and N5416. On March 21, 1986, the RTC of Pasig issued the following Order [17]:
Considering that the Resolution issued on February 8, 1984 by the Supreme Court in
G.R. No. L-34239-40, entitled "Jose T. Velasquez vs. Emilio Gregorio", denying the
petition for review on certiorari of the judgment of the Court of Appeals in CA-G.R.
No. 40739-40-R, had on March 2, 1984 become final and executory in favor of Emilio
Gregorio, and considering further the recommendation contained in the Report
dated September 12, 1984 of the Acting Commissioner of Land Registration thru
Silverio G. Perez, Chief, Division of Original Registration, relative to LRC Case No. N5053, LRC Record No. N-27523, wherein Emilio Gregorio is the applicant and in LRC
Case No. N-5416, LRC Record No. N-28735, wherein Jose T. Velasquez is the
applicant, which report is hereby approved, the Court declares as null and void
Decree Nos. N-111862 to N-111865, inclusive, issued on December 6, 1966,
covering Lots 1, 2, 3 and 4, Psu-204785 in favor of Jose T. Velasquez in LRC Case No.
No. 5416 as well as all existing subsequent titles emanating therefrom, and any and
all encumbrances constituted against said Lots 1, 2, 3 and 4, Psu-204785 and other
acts of disposition affecting the same.
WHEREFORE, the Register of Deeds of Pasay City is hereby directed to cancel
Original Certificates of Title Nos. 5677, 5678, 5679 and 5680 issued in the name of
Jose T. Velasquez and all titles and transactions emanating therefrom and which are
annotated at the back of the said Certificates of Title, and to issue, in lieu thereof,
new Certificates of Title in the name of the Heirs of Emilio Gregorio, after paying the
prescribed fees therefor, pursuant to the Order for issuance of a decree dated March
9, 1966 in the LRC Case No. N-5053, Record No. N-27523.
SO ORDERED.[18]

On April 29, 1986, TCT Nos. 107727, 107728 and 107729 (covering Lot 1)[19] was
issued by the Register of Deeds of Pasay City in the name of the Heirs of Emilio
Gregorio. Subsequently, by virtue of a Partition Agreement with Herminia Galman,
the property was subdivided into two lots between the heirs of Gregorio (Lot 1-A
consisting of 20,000 sq. ms.) and Galman (Lot 1-B consisting of 27,536 sq. ms.).
Consequently, TCT No. 107729 was cancelled and in lieu thereof TCT No. 4635 in the
name of the heirs of Gregorio and TCT No. 4636 in the name of Herminia Galman,
were issued by the Register of Deeds of Las Pias. [20]
Undeniably, the duplication of titles over Lot 1, Psu-204785 with the issuance of
TCT No. S-91911 (transfer from OCT No. 9587) and TCT No. 107729 and its
derivative title, TCT No. 4635, both in the name of the same owners, gave rise to
the present controversy.
The Claim of Luis Fajardo
(TCT No. 27380, now
TCT No. T-34923)
As earlier mentioned, Gregorio appealed the November 23, 1966 CFI decision in LRC
Case Nos. N-5053 and N-5416 awarding Lots 1 to 4 of Psu-204785 in favor of
Velasquez, docketed as CA-G.R. No. 40739-40-R. Sometime after this, he entered
into an agreement with Tomas Trinidad (Trinidad) and Luis Fajardo (Fajardo) entitled
"Kasunduan na may Pambihirang Kapangyarihan." By virtue of this agreement,
Fajardo would finance the cost of the litigation and in return he would be entitled to
one-half of the subject property after deducting twenty per cent (20%) of the total
land area as attorney's fees for Trinidad if the appeal is successful.
After the CA rendered a favorable ruling on Gregorio's appeal, Fajardo and Trinidad
filed Civil Case No. 35305 before the RTC of Pasig, Branch 164 to enforce their
agreement with Gregorio. On May 8, 1986, said court rendered judgment in their
favor, as follows:
WHEREFORE, premises considered, judgment is hereby rendered ordering herein
defendants:
(1) to convey to Atty. Tomas Trinidad as honorarium for his services an area of
14,684 sq.m. which is twenty percent (20%) of 72,424 sq.m. the total area
of Lots 1, 2, 3 and 4;
(2) to convey to Luis Fajardo an area of 29,369 sq.m. representing fifty percent
(50%) of the remainder of the property after deducting the honorarium of
Atty. Trinidad.
(3) to pay the cost of suit and litigation expenses.
SO ORDERED.[21]

The heirs of Gregorio appealed the above decision but their appeal was declared
abandoned and dismissed by the CA. By virtue of an Entry of Judgment issued by
the CA dated December 8, 1988, Trinidad and Fajardo filed a motion for the issuance
of a writ of execution. However, the writ issued remained unsatisfied as per the
Return filed by the Sheriff on April 10, 1989. On August 14, 1989, the court
appointed Deputy Sheriff Marcial Estrellado to execute the deed of conveyance in
favor of the plaintiffs.
Deputy Sheriff Estrellado executed the Officer's Deed of Conveyance [22] dated
August 15, 1989 in favor of Trinidad and Fajardo. While the plaintiffs moved for the
approval of the subdivision plan needed for the transfer and issuance of separate
titles as per decision, the Register of Deeds of Las Pias wrote a letter-reply [23] to the
Deputy Sheriff indicating that the deed of conveyance and Order of the Court dated
August 14, 1989 entered as Entry No. 6503 and 6504 in their docket book could not
be pursued because the subject property was already sold to other parties.
In compliance with the order of the CFI, then Register of Deeds of Las Pias
Alejandro R. Villanueva submitted an official report [24] stating that TCT No. S-91911,
still existing in their records, should have been cancelled when TCT Nos. 107727,
107728 and 107729 were issued in compliance with the Order dated March 21,
1986 of the RTC of Pasig, and that such caused an anomalous situation of having
two separate and distinct certificates of title covering the same parcels of land
although in the name of the same registered owners. Villanueva opined that the
issuance of TCT Nos. 107727, 107728 and 107729 covering Lots 1, 3 and 4 of Psu204785, "placed TCT No. S-91911, as deemed cancelled, inasmuch as the latter
certificate of title covers one and the same parcels of land" and hence TCT No. S91911 should not anymore be subject of any transactions.
The CFI initially withdrew its Order dated August 14, 1989 but eventually reinstated
the same and ordered the Register of Deeds to annotate the Deed of Conveyance at
the back of TCT No. S-91911 within 24 hours upon receipt of the order. Said
directive was reiterated by the CFI on June 7, 1991. On June 26, 1991, the court
authorized the subdivision of Lot 1, Psu-204785 and directed the Register of Deeds
to issue separate titles in favor of plaintiffs Trinidad and Fajardo. Consequently, TCT
No. T-27380 [25] covering 29,369 sq. ms. portion of Lot 1, Psu-204785 in the name
of Luis Fajardo was issued on December 12, 1991. On April 26, 1993, said TCT No.
T-27380 was cancelled per Order[26] of the court dated March 13, 1992 and in lieu
thereof, TCT No. T-34923 [27] was issued, still in the name of Luis Fajardo and
without any of the encumbrances carried over from TCT No. S-91911.
The Claim of Top Management
Programs Corporation
(TCT No. T-8129)
On September 24, 1991, herein petitioner Top Management Programs Corporation
sought the annulment of the CFI orders in Civil Case No. 35305 reinstating the

August 14, 1989 order and directing the issuance of new certificates of title in the
name of Trinidad and Fajardo, on the ground of extrinsic fraud. Petitioner claimed
that by virtue of a Deed of Absolute Sale [28] dated November 29, 1988 which was
notarized on January 9, 1989, the heirs of Gregorio sold to it a parcel of land with an
area of 20,000 sq. ms., located at Las Pias and identified as Lot 1-A Psd-293076,
being a portion of Lot 1, Psu-204785 covered by TCT No. T-4635, and that on
February 20, 1989, TCT No. T-8129 [29] covering the said property was issued in its
name.
On November 28, 1991, the CA rendered its decision dismissing the petition for
annulment (CA-G.R. SP No. 26100). It held that there existed no extrinsic fraud
which would justify the annulment of the questioned orders. Petitioner sought the
reversal of the CA ruling before this Court via a petition for certiorari. By Decision[30]
dated May 28, 1993, this Court dismissed the petition and affirmed the CA
judgment. On the issue raised by petitioner as to whether the CA erred in holding
that petitioner's claim of title to Lot 1-A should be served as third-party claim on the
Deputy Sheriff who executed the Deed of Conveyance and caused its registration, or
to vindicate the claim to the property through a separate independent action, the
Court refrained from discussing the same since its resolution is inconsequential and
would not alter in any way the outcome of the petition. [31]
Civil Case No. 94-564
Thus, on February 10, 1994, petitioner filed before the RTC of Makati Civil Case No.
94-564 for Quieting of Title With Damages. Petitioner alleged that the issuance of
TCT No. T-27380 in the name of Fajardo -- who obtained the same from the court in
a case without the knowledge of petitioner who was not a party therein -- despite
the existence of TCT No. T-8129 in its name constitutes a cloud upon the title of
petitioner. Petitioner claimed that it acquired the same property in good faith and
for value from the original owners thereof.
In his Answer, private respondent Fajardo asserted that it is the title of petitioner
which originated from a void title. OCT No. 5678 from which TCT No. 4635 was
derived, was in effect declared null and void under this Court's Resolution dated
February 8, 1984 in G.R. No. L-34239-40 which dismissed petitioner's appeal from
the July 30, 1971 CA Decision in CA-G.R. No. 40739-40-R. The CA had nullified the
CFI decision dated March 30, 1966 in LRC Case No. N-5416 insofar as it adjudicates
the subject lots to Velasquez.
After petitioner's formal offer of evidence, private respondent filed a demurrer to
evidence, which the trial court granted in its Order [32] dated June 8, 1998, as follows:
WHEREFORE, premises considered, the case is hereby DISMISSED. No
pronouncement as to costs. The Register of Deeds of Las Pias City is hereby
ordered to cancel TCT No. T-8129 in the name of plaintiff Top Management Programs
Corporation.

SO ORDERED.[33]
Petitioner appealed to the CA and on May 30, 2001 said court rendered the assailed
Decision[34] affirming the trial court's dismissal of petitioner's complaint. The CA
held that petitioner cannot invoke the rule that the title which bears the earlier date
should prevail in view of the infirmity in TCT No. 107729 which on its face shows
that its origin was a title already voided by the appellate court. Petitioner's motion
for reconsideration was likewise denied by the CA.
Hence, this petition alleging that the CA erred in (a) declaring TCT No. T-8129 as
defective based on a mere clerical error despite acknowledgment of its issuance
resulting from a final determination by this Court of the validity of Emilio Gregorio's
claim over the subject property, and (b) affirming the validity of private
respondent's TCT No. T-27380 despite the clear nullity of its mother title (OCT No.
9587) which was issued pending the appeal filed by Velasquez from the decision of
the appellate court in CA-G.R. No. 40739-40-R to this Court.
Petitioner reiterates that an error was made on the entries in TCT No. 107729.
Instead of providing that said title, as well as TCT Nos. 107727 and 107728 issued in
the name of the Heirs of Emilio Gregorio, emanated from the application for
registration of Emilio Gregorio in LRC Case No. N-5053, LRC Rec. No. N-27523
pursuant to the Order of the RTC in LRC Case Nos. N-5416 and N-5053, the Register
of Deeds of Pasay City annotated on the face of said titles that these were derived
from Jose T. Velasquez's OCT No. 5678 under Decree No. N-111862. Petitioner
laments that deplorable situation of the legitimate successor of the winning litigant
holding a title wrongly annotated to have been derived from the voided title of the
loser in the case. The winning party was then given a title registered as derived
from the title he fought so hard to set aside. Moreover, there is no logic in the
appellate court's conclusion that petitioner's title traces its origin to a mother title
already voided, when in fact it is undisputed that TCT No. 107729 was issued
pursuant to the March 21, 1986 order of the RTC of Pasig in LRC Case Nos. N-5416
and N-5053 implementing the final and executory February 8, 1984 decision of this
Court in G.R. Nos. L-34239-40 denying Velasquez's appeal.
Petitioner further claims that it is a buyer in good faith who had no knowledge of
any defect in the title of his predecessor-in-interest. It paid the purchase price and
acquired its title long before it discovered the right to compensation of private
respondent through the Officer's Deed of Conveyance.
Finally, petitioner argues that the issuance of OCT No. 9587 during the pendency of
Velasquez's appeal to this Court renders said title null and void ab initio, citing the
ruling in Director of Lands v. Reyes[35]. Since OCT No. 9587 is a nullity, it follows that
its derivative title, private respondent's TCT No. T-27380, is likewise a nullity.
Private respondent counters that petitioner's assertion of the existence of clerical

errors in the annotations of the entries in TCT No. 8129 is, at the very least, an
admission that said title is indeed defective. Obviously, petitioner may not file a
petition to quiet its title and at the same time seek, in the same proceeding, the
corrections of the entries therein.
As to the issue of premature issuance of OCT No. 9587, private respondent points
out that the decision in LRC Case No. N-5053 dated January 31, 1966 as a
consequence of which Decree of Registration No. 141990 was issued, has already
attained finality even before Velasquez sought the annulment of the award in favor
of Emilio Gregorio utilizing the Report of the Commissioner of Land Registration
dated September 16, 1966, to the effect, among others, that a portion of the land
awarded in his favor overlapped with that adjudicated to Gregorio. Hence, the
prohibition mentioned in the case of Director of Lands v. Reyes (supra) has no
application to the case at bar, and therefore could not serve as basis to nullify OCT
No. 9587, the mother title of TCT No. T-27380 in the name of private respondent.
We deny the petition.
Quieting of title is a common law remedy for the removal of any cloud, doubt, or
uncertainty affecting title to real property. In an action for quieting of title, the
plaintiffs must show not only that there is a cloud or contrary interest over the
subject real property, but that they have a valid title to it. [36] The court is tasked to
determine the respective rights of the complainant and the other claimants, not
only to place things in their proper places, and to make the claimant, who has no
rights to said immovable, respect and not disturb the one so entitled, but also for
the benefit of both, so that whoever has the right will see every cloud of doubt over
the property dissipated, and he can thereafter fearlessly introduce the
improvements he may desire, as well as use, and even abuse the property as he
deems fit.[37]
Petitioner anchors its claim over the disputed lot on TCT No. T-8129 issued on
February 20, 1989 which is a transfer from TCT No. 107729 in the name of the Heirs
of Emilio Gregorio, from whom it bought the property in January 1989. On the
other hand, private respondent acquired the same land by virtue of the Officer's
Deed of Conveyance dated August 15, 1989 executed in their favor pursuant to the
final judgment in Civil Case No. 35305 of the RTC of Pasig, Branch 164 and was
issued TCT No. T-27380 in his name on December12, 1991.
In Degollacion v. Register of Deeds of Cavite[38] we held that if two certificates of
title purport to include the same land, whether wholly or partly, the better approach
is to trace the original certificates from which the certificates of title were derived.
Citing our earlier ruling in Mathay v. Court of Appeals[39] we declared:
x x x where two transfer certificates of title have been issued on different dates, to
two different persons, for the same parcel of land even if both are presumed to be
title holders in good faith, it does not necessarily follow that he who holds the
earlier title should prevail. On the assumption that there was regularity in the

registration leading to the eventual issuance of subject transfer certificates of title,

the better approach is to trace the original certificates from which the
certificates of title in dispute were derived. Should there be only one
common original certificate of title, x x x, the transfer certificate issued on an earlier
date along the line must prevail, absent any anomaly or irregularity tainting the
process of registration.[40]
From the recitals in the transfer certificates of title respectively held by petitioner
and private respondent, as well as the records of the LRA, there appears not just
one but two different original certificates. TCT No. T-8129 on its face shows that
the land covered was originally registered as OCT No. 5678 under Decree No. N111862 (Velasquez), while TCT No. T-27380 indicates the original registration as
OCT No. 9587 under Decree No. N-141990 (Gregorio). Both the LRC and CA found
TCT No. 107729 and its derivative titles TCT Nos. 4635 and T-8129 as void and
inexistent since OCT No. 5678 in the name of Velasquez had been nullified under
the order for execution of the final judgment in LRC Case Nos. N-5053 and N-5416 in
which Gregorio prevailed. Consequently, the lower courts upheld the title of private
respondent which alone can be traced to the original certificate in the name of
Emilio Gregorio (OCT No. 9578).
Petitioner, however, asserts that the entries in his TCT contain errors and insists that
TCT Nos. 107729, 4635 and T-8129 actually emanated from the application for
registration of Emilio Gregorio in LRC Case No. N-5053, LRC Record No. N-27523
pursuant to the Order of the Regional Trial Court in LRC Case Nos. N-5053 and N5416, as in fact TCT No. 107729 were issued along with TCT Nos. 107727 and
107728 covering two other lots also in the name of the Heirs of Emilio Gregorio by
way of implementing the final judgment of said court in the case between Gregorio
and Velasquez, as affirmed by the CA and this Court.
We disagree.
TCT No. 107729 in the name of the heirs of Emilio Gregorio issued on April 29, 1986,
on its face showed badges of irregularity in its issuance. First, the technical
description stated that it covers a portion of Lot 1, plan Psu-204785, LRC Case No.
N-5416 instead of N-5053. Second, the decree number and date of issuance, as
well as OCT number clearly indicate that the original decree pertained to Velasquez
and not Gregorio. Third, the name of the registered owner in the original certificate
is not Velasquez or Gregorio but "Delta Motor Corp." And fourth, the certificate from
which TCT No. 107729 was supposedly a transfer should have been the OCT (of
Gregorio) and not those unfamiliar TCT numbers indicated therein. The annotations
regarding the supposed original registration of TCT No. 107729 read as follows:
IT IS FURTHER CERTIFIED that said land was originally registered on the 12th day
of December in the year nineteen hundred and sixty-six in the Registration Book
of the Office of the Register of Deeds of Rizal Volume A-69 page 78 as Original
Certificate of Title No. 5678 pursuant to Decree No. N-111862 issued in L.R.C.

_____________ Record No. N-28735 Case No. N-5416 in the name of Delta Motor
Corp. .
This certificate is a transfer from Transfer Certificate of Title No. 27737/A/T145-A S-8722/T-41 which is cancelled by virtue hereof in so far as the abovedescribed land is concerned.[41] (Emphasis supplied.)
The foregoing errors are not mere typographical as petitioner claims, but serious
discrepancies in the registration process. In fact, it is not far-fetched that the
erroneous entries could have been intended to create the impression that TCT No.
107729 was a separate and distinct title from the previously issued TCT No. S-91911
even if they pertain to one and the same lot adjudicated to Emilio Gregorio. Such
conclusion is reinforced by the unexplained inaction or failure of the heirs of
Gregorio to rectify the alleged errors in their title before selling the property to
petitioner. The heirs of Gregorio knew that their TCT No. S-91911 bore
encumbrances in favor of third parties, notably the notice of pending litigation (Lis
Pendens) involving the property covered by said title before the CFI of Pasig, Metro
Manila in Civil Case No. 35305, which Trinidad caused to be annotated thereon. The
issuance of a new certificate with exactly identical entries as that of TCT No. S91911 (as to its original registration) would mean that the aforesaid annotations
had to be carried over to such new certificate. Strangely, it is TCT No. 107729 which
RD Alejandro R.Villanueva upheld in his February 5, 1989 Report notwithstanding its
later issuance and the glaring errors in the entries of its original registration. It
must be stressed that OCT No. 5677, 5678, 5679 and 5680 and its derivative titles
were ordered cancelled precisely because they were issued pursuant to Decree Nos.
N-111862 to N-111865 issued in LRC Case No. N-5416 in the name of Velasquez,
who lost in the final judgment rendered in CA-G.R. No. 40739-40-R, and whose claim
to the lots covered thereby were declared null and void. Logically, therefore, any
new certificate of title to be issued to the heirs of Gregorio by virtue of the aforesaid
final judgment adjudicating the land to Emilio Gregorio, could not possibly be a
transfer or replacement of the aforesaid void OCTs in the name of Velasquez.
But even granting that the subject entries in TCT No. 107729 were mere clerical
errors and assuming arguendo that said certificate was issued to implement the
final judgment in CA-G.R. No. 40739-40-R, such execution is tainted with infirmity.
The March 21, 1986 order issued by the RTC of Pasig did not only cancel OCT No.
5678 (and other titles in the name of Velasquez covering the same lots adjudicated
to Gregorio), it also ordered the issuance of new certificates of title in the name of
the heirs of Emilio Gregorio despite having been informed by the LRA and the
Register of Deeds that there was already issued OCT No. 9587 over the same lot in
the name of Emilio Gregorio, which was replaced with TCT No. S-91911 in the name
of the heirs of Emilio Gregorio following the decision rendered by the appellate court
(CA-G.R. No. 56015-R) in another case filed by Gregorio against spouses Parami
(Civil Case No. 16977).
At this point, it serves well to emphasize that upon finality of judgment in land

registration cases, the winning party does not file a motion for execution as in
ordinary civil actions. Instead, he files a petition with the land registration court for
the issuance of an order directing the Land Registration Authority to issue a decree
of registration, a copy of which is then sent to the Register of Deeds for inscription
in the registration book, and issuance of the original certificate of title. [42] The LRC
upon the finality of the judgment adjudicating the land to an applicant shall,
following the prescribed procedure, merely issues an order for the issuance of a
decree of registration and the corresponding certificate of title in the name of such
applicant.[43]
In this case, the RTC of Pasig, cognizant of a previous decree of registration instead
ordered the Register of Deeds to issue new certificates in favor of the heirs of
Gregorio, erroneously declaring that such certificates are in lieu of OCT Nos. 5677,
5678, 5679 and 5680. Said court exceeded its authority when it ordered the
issuance of transfer certificates in the name of the heirs of Gregorio despite the
existence of TCT No. S-91911 already issued to them covering the sae parcel of
land. This caused the duplication of titles held by the heirs of Gregorio over Lot 1.
Thus, while there was only one decree and original certificate issued to the common
predecessor-in-interest of petitioner and private respondent, Emilio Gregorio, the
latter's heirs were able to secure two transfer certificates covering the same land.
Indeed it could not order the issuance of another OCT as it would result to
duplication of titles or "double titling." [44] A land registration court has no jurisdiction
to order the registration of land already decreed in the name of another in an earlier
land registration case.[45] Issuance of another decree covering the same land is
therefore null and void.[46]
In the light of the LRA Report dated September 12, 1984 stating that compliance
with the July 30, 1971 final judgment rendered by the CA which reversed the LRC
decision and adjudicated Lots 1, 3 and 4 in favor of Emilio Gregorio, would result in
duplication of titles, it was grave error for the RTC of Pasig to grant the motion for
execution filed by the heirs of Emilio Gregorio who sought, -- in the guise of
implementing the July 30, 1971 CA decision -- the issuance of new titles in their
name notwithstanding the existence of OCT No. 9587 and TCT No. S-91911. Given
such vital information, there exists a compelling need for the land registration court
to ascertain the facts and "address the likelihood of duplication of titles x x x, an
eventuality that will undermine the Torrens system of land registration." [47]
Petitioner nonetheless assails OCT No. 9587 as null and void, having been issued
when the adverse decision of the appellate court in CA-G.R. No. 40739-40-R was
elevated by it to this Court. Following the doctrine in Director of Lands v. Reyes
(supra), it is asserted that OCT No. 9587 should not have been issued because the
decision in CA-G.R. No. 40739-40-R was not yet final at the time, pending resolution
by this Court of the appeal by Velasquez (G.R. No. L-34239-40).
In Director of Lands v. Reyes (supra), this Court laid down the rule that execution
pending appeal is not applicable in a land registration proceeding and the certificate
of title thereby issued is null and void. In that case, the assignee of the original

applicant applied for a motion for issuance of a decree of registration before the
lower court pending the approval of the Record on Appeal. The motion was opposed
by the Government which appealed the lower court's decision adjudicating the land
to the said assignee. We thus ruled:
Under the circumstances of this case, the failure of the appellants to serve a copy of
their Notice of Appeal to the counsel for the adjudicatee Roman C. Tamayo is not
fatal to the appeal because, admittedly, he was served with a copy of the original,
as well as the Amended Record on Appeal in both of which the Notice of Appeal is
embodied. Hence, such failure cannot impair the right of appeal.
What is more, the appeal taken by the Government was from the entire decision,
which is not severable. Thus, the appeal affects the whole decision.
In any event, We rule that execution pending appeal is not applicable in a land
registration proceeding. It is fraught with dangerous consequences. Innocent
purchasers may be misled into purchasing real properties upon reliance on a
judgment which may be reversed on appeal.
A Torrens title issued on the basis of a judgment that is not final is a nullity, as it is
violative of the explicit provisions of the Land Registration Act which requires that a
decree shall be issued only after the decision adjudicating the title becomes final
and executory, and it is on the basis of said decree that the Register of Deeds
concerned issues the corresponding certificate of title.
Consequently, the lower court acted without jurisdiction or exceeded its jurisdiction
in ordering the issuance of a decree of registration despite the appeal timely taken
from the entire decision a quo.[48]
OCT No. 9587 on its face showed that its basis was Decree No. N-141990 issued on
October 31, 1972 pursuant to the January 31, 1966 decision of the CFI in Land Reg.
Case No. N-5053 and CA decision dated July 30, 1971. Per records of this Court,
however, Velasquez had filed a petition for review of the CA decision. Be that as it
may, the premature issuance of the decree in favor of Emilio Gregorio and the
corresponding original certificate of title in his name did not affect his acquisition of
title over the subject land considering that Velasquez's petition was eventually
dismissed. Neither can petitioner, by reason alone of defective issuance of OCT No.
9587, claim a right over the subject land superior to that acquired by the private
respondent.
A reading of the annotations of encumbrances at the back of TCT No. T-27380 which
were carried over from TCT No. S-91911 in the name of the Heirs of Gregorio, would
show that during the pendency of Civil Case No. 35305 filed before the CFI of Rizal
by private respondent and Trinidad, the latter caused the annotation of a Notice of
Lis Pendens involving the same properties of the defendants therein, the heirs of
Emilio Gregorio. The notice of lis pendens was registered as Entry No. 21398[49] on

TCT No. S-91911.

Lis pendens, which literally means pending suit, refers to the jurisdiction, power or
control which a court acquires over property involved in a suit, pending the
continuance of the action, and until final judgment. Founded upon public policy
and necessity, lis pendens is intended 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. Its notice is an announcement to the
whole world that a particular property is in litigation and serves 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 said property. [50]
The filing of a notice of lis pendens has a two-fold effect: (1) to keep the subject
matter of the litigation within the power of the court until the entry of the final
judgment to prevent the defeat of the final judgment by successive alienations; and
(2) to bind a purchaser, bona fide or not, of the land subject of the litigation to the
judgment or decree that the court will promulgate subsequently. [51] Once a notice of
lis pendens has been duly registered, any subsequent transaction affecting the land
involved would have to be subject to the outcome of the litigation. [52]
Petitioner being a mere transferee at the time the decision of the RTC of Pasig in
Civil Case No. 35305 had become final and executory on December 6, 1988, it is
bound by the said judgment which ordered the heirs of Emilio Gregorio to convey
Lots 1, 2, 3 & 4, Psu-204875 in favor of private respondent and Trinidad. As such
buyer of one of the lots to be conveyed to private respondent pursuant to the
court's decree with notice that said properties are in litigation, petitioner merely
stepped into the shoes of its vendors who lost in the case. Such vested right
acquired by the private respondent under the final judgment in his favor may not be
defeated by the subsequent issuance of another certificate of title to the heirs of
Gregorio respecting the same parcel of land. For it is well-settled that being an
involuntary transaction, entry of the notice of lis pendens in the primary entry book
of the Register of Deeds is sufficient to constitute registration and such entry is
notice to all persons of such claim. [53]
"It is to be noted that the notation of the lis pendens on the back of the owner's
duplicate is not mentioned for the purpose of constituting a constructive notice
because usually such owner's duplicate certificate is presented for the purpose of
the annotation later, and sometimes not at all until [it is] ordered by the court." [54]
Strictly speaking, the lis pendens annotation is not to be referred to "as a part of the
doctrine of notice; the purchaser pendente lite is affected, not by notice, but
because the law does not allow litigating parties to give to others, pending the
litigation, rights to the property in dispute so as to prejudice the opposite party. The
doctrine rests upon public policy, not notice." [55] Thus we have held that one who
buys land where there is a pending notice of lis pendens cannot invoke the right of a
purchaser in good faith; neither can he have acquired better rights than those of his
predecessor in interest.[56]

In view of the foregoing, we hold that the CA did not err in affirming the trial court's
order dismissing petitioner's complaint for quieting of title and ordering the
cancellation of its TCT No. T-8129.
WHEREFORE, the petition is DENIED. The Decision dated May 30, 2001 and
Resolution dated October 23, 2001 of the Court of Appeals in CA-G.R. CV No. 60712
are AFFIRMED.
With costs against the petitioner.
SO ORDERED.
Carpio Morales, (Chairperson), Brion, Bersamin, and Sereno, JJ., concur.

[1]

Rollo, pp. 34-49. Penned by Associate Justice Fermin A. Martin, Jr., with Associate
Justices Mercedes Gozo-Dadole and Alicia L. Santos concurring.
[2]

Id. at 51-52. Penned by Associate Justice Mercedes Gozo-Dadole, with Associate

Justices Godardo A. Jacinto and Alicia L. Santos concurring.
[3]

Id. at 54-59. Penned by Judge Alfredo R. Enriquez.

[4]

Records (Vol. 2), pp. 460-463.

[5]

Id. at 479.

[6]

Id. at 479-480.

[7]

Records (Vol. 1), pp. 39-47.

[8]

Id. at 47.

[9]

Id. at 34.

[10]

Id. at 35-37.

[11]

Id. at 37.

[12]

Records (Vol. 2), p. 476.

[13]

Id. at 491.

[14]

Id. at 481-482.

[15]

Rollo, pp. 44-45.

[16]

Records (Vol. 2), p. 483.

[17]

Id. at 495-496.

[18]

Id.

[19]

Id. at 487-488.

[20]

Id. at 487 (back), 489-490.

[21]

Id. at 370.

[22]

Records (Vol. 1), pp. 14-15.

[23]

Records (Vol. 2), pp. 485-486.

[24]

Id. at 492-494.

[25]

Rollo, pp. 61-62.

[26]

Id. at 62.

[27]

Id. at 63.

[28]

Records (Vol. 1), pp. 7-11.

[29]

Rollo, p. 60.

[30]

Top Management Programs Corp. v. Court of Appeals, G.R. No. 102996, May 28,
1993, 222 SCRA 763.
[31]

Id. at 772.

[32]

Rollo, pp. 54-59.

[33]

Id. at 59.

[34]

Id. at 34-49.

[35]

Nos. L-27594 & 28144, November 28, 1975, 68 SCRA 177.

[36]

Secuya v. Vda. de Selma, G.R. No. 136021, February 22, 2000, 326 SCRA 244,
246.
[37]

Baricuatro, Jr. v. Court of Appeals, G.R. No. 105902, February 9, 2000, 325 SCRA

137, 146-147.
[38]

G.R. No. 161433, August 29, 2006, 500 SCRA 108, 115.

[39]

G.R. No. 115788, September 17, 1998, 295 SCRA 556.

[40]

Id. at 578.

[41]

Records (Vol. 2), p. 487.

[42]

Republic v. Heirs of Abrille, No. L-39248, May 7, 1976, 71 SCRA 57, 66; Realty
Sales Enterprises, Inc. v. IAC, No. L-67451, May 4, 1988, 161 SCRA 56, 61.
[43]

SEC. 30 of P.D. No. 1529 provides:

Sec. 30. When judgment becomes final; duty to cause issuance of decree. -x x x
After judgment has become final and executory, it shall devolve upon the court to
forthwith issue an order in accordance with Section 39 of this Decree to the
Commissioner for the issuance of the decree of registration and the corresponding
certificate of title in favor of the person adjudged entitled to registration.
[44]

See Heirs of the Late Jose De Luzuriaga v. Republic, G.R. Nos. 168848 & 169019,
June 30, 2009, 591 SCRA 299, 314.
[45]

Laburada v. Land Registration Authority, G.R. No. 101387, March 11, 1998, 287
SCRA 333, 343.
[46]

See Metropolitan Waterworks and Sewerage Systems v. Court of Appeals, G.R.

No. 103558, November 17, 1992, 215 SCRA 783, 788.
[47]

See Heirs of the Late Jose De Luzuriaga v. Republic, supra note 44.

[48]

Supra note 35 at 185-186.

[49]

Rollo, p. 62.

[50]

Associated Bank v. Pronstroller, G.R. No. 148444, July 14, 2008, 558 SCRA 113,
133, citing Romero v. Court of Appeals, G.R. No. 142406, May 16, 2005, 458 SCRA
483, 492.
[51]

Id., citing Romero v. Court of Appeals, id. at 492-493 and Heirs of Eugenio Lopez,
Sr. v. Enriquez, G.R. No. 146262, January 21, 2005, 449 SCRA 173, 186.
[52]

Vicente v. Avera, G.R. No. 169970, January 20, 2009, 576 SCRA 634, 643.

[53]

Director of Lands v. Reyes, supra note 35 at 188; Caviles, Jr. v. Bautista, G.R. No.

102648, November 24, 1999, 319 SCRA 24, 32, citing Levin v. Bass, et al., 91 Phil.
419, 437 (1952).
[54]

A. H. Noblejas and E. H. Noblejas, Registration of Land Titles and Deeds, 2007

Ed., pp. 436-437.
[55]

Id. at 437, citing 2 Bouvier's Law Dictionary and Concise Encyclopedia, p. 2033,
SCRA Annotation on Civil Law, the Public Land Act and the Property Registration
Decree, 1983 Ed., pp. 118-119 quoted in Tirado v. Sevilla, G.R. No. 84201, August 3,
1990, 188 SCRA 321, 326-327.
[56]

Yu v. Court of Appeals, G.R. No. 109078, December 25, 1995, 251 SCRA 509, 513514, citing Constantino v. Espiritu, No. L-23268, June 30, 1972, 45 SCRA 557, 563
and Tanchoco v. Aquino, No. L-30670, September 15, 1987, 154 SCRA 1, 15; see
Philippine National Bank v. Court of Appeals, No. L-34404, June 25, 1980, 98 SCRA
207, 232.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

G.R. No. 157644

THIRD DIVISION
G.R. No. 157644, November 17, 2010
SPOUSES ERNESTO AND VICENTA TOPACIO, AS REPRESENTED BY THEIR
ATTORNEY-IN-FACT MARILOU TOPACIO-NARCISO, PETITIONERS, VS. BANCO
FILIPINO SAVINGS AND MORTGAGE BANK, RESPONDENT.
DECISION
BRION, J.:
Before the Court is a petition for review on certiorari,[1] filed by petitioner spouses
Ernesto and Vicenta Topacio (petitioners), assailing the August 26, 2002 Decision [2]

of the Court of Appeals (CA) in CA-G.R. SP No. 32389, as well as its March 17, 2003
Resolution[3] denying the petitioners' motion for reconsideration. The CA Decision
and Resolution affirmed in toto the October 1, 1993 Order of the Regional Trial Court
of Valenzuela City, Branch 75, which issued an alias writ of possession in favor of
the respondent Banco Filipino Savings and Mortgage Bank (respondent).
THE BACKGROUND FACTS
The backgrounds facts, as culled from the records, are summarized below.
The petitioners obtained a loan amounting to P400,000.00 from the respondent. To
secure the loan, the petitioners executed on May 8, 1980, a real estate mortgage
over Lot 1224-B-1 LRC Psd-15436, covered by TCT No. T-191117 (now 13554) of the
Registry of Deeds of Bulacan, in favor of the respondent. The petitioners failed to
pay the loan, prompting the respondent to file a Petition for Extrajudicial Foreclosure
of Mortgage, pursuant to Act No. 3135. To satisfy the obligation, the Provincial
Sheriff of Bulacan, on November 8, 1982, sold the mortgaged property at public
auction, where the respondent emerged as the highest bidder. Accordingly, a
Certification of Sale was issued in favor of the respondent and registered with the
Registry of Deeds.[4]
On May 26, 1983, the respondent filed a Petition for the Issuance of a Writ of
Possession[5] over the mortgaged property before the Regional Trial Court, Branch
172, Valenzuela City (RTC). In an Order[6] dated December 12, 1983, the RTC
granted the petition, conditioned on the posting of a P100,000.00 bond. Upon
posting of the required bond, the RTC issued, on February 16, 1984, a writ of
possession, commanding the sheriff to place the respondent in possession of the
property.
The writ of possession was not implemented [7] because, on February 27, 1984, the
petitioners, filed with the RTC, a petition to set aside the auction sale and the writ of
possession (with application for a temporary restraining order and a writ of
preliminary injunction).[8] In an Order dated February 28, 1984, the RTC issued a
temporary restraining order enjoining the respondent and the Deputy Sheriff from
implementing the writ of possession it previously issued. [9] After hearing, the RTC,
issued on March 13, 1984, a writ of preliminary injunction ordering the respondent
and the Provincial Sheriff to desist from implementing the writ of possession and to
refrain from interfering with and disrupting the possession of the petitioners over
the subject parcel of land.[10]
Sometime in April 1984, the respondent filed with the RTC its Motion to Admit
Answer with Opposition to the Petition to Set Aside Auction Sale and Writ of
Possession with Motion to Dissolve or Lift Preliminary Injunction (Answer) which was
granted on April 26, 1984.[11] On May 21, 1984, the petitioners filed their Reply
thereto, praying that the writ of preliminary injunction previously issued be
maintained.[12]

More than two years after the filing of the Answer and the Reply, and after a series
of postponements at the instance of both parties, then Presiding Judge Teresita D.
Capulong issued an Order dated December 16, 1986, dismissing the respondent's
petition for the issuance of a writ of possession on the ground of "failure to
prosecute."[13] The Order reads in full:
When this case was called for hearing, counsel for the oppositors [now petitioners],
Atty. Constancio R. Gallamos, was present. Atty. Francisco Rivera [counsel for the
respondent] was absent despite notice. Upon petition of the counsel for the
oppositors, this case is hereby ordered dismissed for failure to prosecute.
SO ORDERED.
No copy of the above Order was served on the respondent [14] whose operations the
Monetary Board (Central Bank of the Philippines) shut down on January 25, 1985, for
reasons not relevant to the present case. [15]
Nearly six (6) years later (after the Court ordered the reorganization and resumption
of the respondent's operations in G.R. No. 70054) [16] or on August 19, 1992, the
respondent filed a Motion to Clarify the Order of December 16, 1986. In the same
motion, the respondent likewise moved for the issuance of an alias writ of
possession. [17]
In an Order[18] dated September 18, 1992, the RTC made a clarification that the
Order of Dismissal of December 16, 1986 refers to the dismissal of the "main case
for issuance of a writ of possession." In that same Order, the RTC denied the
respondent's motion for the issuance of an alias writ of possession.
On May 18, 1993, the respondent moved for the reconsideration [19] of the
September 18, 1992 Order. In an Order[20] dated June 2, 1993, the RTC, this time
presided by Judge Emilio L. Leachon, Jr., reconsidered and set aside the Order of
December 16, 1986 and granted the respondent's prayer for the issuance of an
alias writ of possession. The petitioners moved for a reconsideration of the June 2,
1993 Order and prayed that the implementation of the alias writ of possession be
held in abeyance.
The RTC Ruling
On October 1, 1993, the RTC, now presided by Judge Jaime F.
Bautista, issued the assailed Order[21] which denied the petitioners' motion for
reconsideration and reiterated its order for the issuance of an alias writ of
possession in favor of the respondent. The assailed RTC Order is summarized below.
First, the RTC ruled that the Order of Dismissal was granted on a "technicality" and
that "[t]he ground of failure to prosecute is manifestly unfounded." [22] The RTC held

that "the power of the trial court to dismiss an action on the ground of non
prosequitur is not unbounded. The real test x x x is whether under the facts and
circumstances, the plaintiff is chargeable with want of due diligence in [failing] to
proceed with reasonable promptitude." [23] In the present case, the RTC noted that
the records show that the case dragged on for years because of several
postponements at the request of both parties, particularly petitioner Ernesto Topacio
who went abroad for a long time during the pendency of the case. [24]
Second, the RTC held that the December 16, 1986 Dismissal Order cannot be
considered a dismissal on the merits as it was founded not on a substantial ground
but on a technical one; it does not amount to a "declaration of the law [on] the
respective rights and duties of the parties, based upon the ultimate x x x facts
disclosed by the pleadings and evidence, and upon which the right of recovery
depends, irrespective of formal, technical or dilatory objectives or contentions." [25]
Third, the RTC ruled that the revival by a motion for reconsideration (filed on May
18, 1993) of the February 16, 1984 Order, granting the writ of possession, was
seasonably filed by the respondent, pursuant to the period allowed under Section 6,
Rule 39 of the Rules of Court. Citing National Power Corporation v. Court of Appeals,
[26]
the RTC held that "[i]n computing the time [limit] for suing out an execution, x x
x the general rule is that there should not be included the time when execution is
stayed, either by agreement of the parties for a definite time, by injunction, by the
taking of an appeal or writ of error so as to operate as a supersedeas, by the death
of a party, or otherwise." The RTC noted that the running of the five-year period
under Section 6 of the Rules of Court had been interrupted by the erroneous
issuance of a writ of preliminary injunction; the February 16, 1984 Order never
attained finality and was overtaken by the issuance of the Order dated June 2, 1993,
granting the issuance of an alias writ of execution.[27]
Finally, the RTC held that the respondent, as the winning bidder, "has an absolute
right to a writ of possession,"[28] considering that: (1) a writ of possession had been
issued on February 16, 1984 and the corresponding bond had already been posted,
although the writ was not enforced because of the erroneous injunction issued by
Judge Capulong; and (2) there was no redemption by the petitioners. [29]
On October 20, 1993, the petitioners filed their Petition for Certiorari and Prohibition
under Rule 65 of the 1997 Rules of Court with prayer for the issuance of a
preliminary injunction (petition), docketed as CA-G.R. SP No. 32389.[30] Before the
CA, the petitioners argued that the RTC acted without jurisdiction or with grave
abuse of discretion when it: (1) reinstated the respondent's case more than seven
(7) years after the December 16, 1986 Dismissal Order became final and executory,
and (2) issued an alias writ of execution upon a mere motion for reconsideration and
not by an independent action pursuant to Section 6, Rule 39 of the Rules of Court.
The CA Ruling
On August 26, 2002, the CA denied the petitioners' petition and affirmed in toto the

June 2, 1993 and October 1, 1993 Orders of the RTC. The CA found that the
December 16, 1986 Order of the RTC does not amount to a dismissal on the merits
as it was based on purely technical grounds. It noted that the records show that the
respondent was not furnished a copy of the Dismissal Order; hence, the case cannot
be deemed to be final with respect to the respondent. The CA also agreed with the
RTC's conclusion that the delay in the resolution of the case cannot be solely
attributed to the respondent and did not warrant its outright dismissal. [31]
The CA held that an independent action for the revival of the writ of possession
need not be filed in order to enforce the writ of possession issued on December 12,
1983 since Section 6, Rule 39 of the Rules of Court applies only to civil actions and
not to special proceedings,[32] citing Heirs of Cristobal Marcos v. de Banuvar.[33]
The Petition
In the present petition,[34] the petitioners contend that the CA erred in affirming the
October 1, 1993 Order of the RTC considering that:
1) the December 16, 1986 Dismissal Order constitutes an adjudication on the merits
which has already attained finality, and
2) a writ of possession may not be enforced upon mere motion of the applicant after
the lapse of more than five (5) years from the time of its issuance.
On the first assignment of error, the petitioners submit that the December 16, 1986
Dismissal Order for failure to prosecute constitutes adjudication upon the merits,
considering that the RTC did not declare otherwise, pursuant to Section 3, Rule 17 of
the Rules of Court. The petitioners further contend that the Dismissal Order has
become final and executory since the respondent belatedly filed the Motion to
Clarify the Order of December 16, 1986 on August 19, 1992 or almost six years
later. On these premises, the petitioners argue that res judicata has set in and
consequently, the RTC had no jurisdiction to grant the motion for reconsideration
and to issue an alias writ of possession in favor of the respondent. [35]
On the second assignment of error, the petitioners contend that pursuant to Section
6, Rule 39 of the Rules of Court, the writ of possession issued on February 16, 1984
may no longer be enforced by a mere motion but by a separate action, considering
that more than five years had elapsed from its issuance. The petitioners also argue
that Section 6, Rule 39 of the Rules of Court applies to the present case since a
petition for the issuance of a writ of possession is neither a special proceeding nor a
land registration case.[36]
In their Memorandum, the petitioners additionally submit that they do not dispute
that the CA made a finding that the December 16, 1986 Dismissal Order was not
properly served. They, however, point out that the CA made no such finding with
respect to the September 18, 1992 Order of the RTC. The petitioners contend that
the Motion for Reconsideration, filed on May 18, 1993 or eight months later from the

September 18, 1992 Order by the respondent, was filed out of time. Thus, they
conclude that any subsequent ruling of the RTC, including the June 2, 1993 and
October 1, 1993 Orders, is barred by res judicata.[37]
OUR RULING
We deny the petition for lack of merit.
A. Preliminary Considerations
Our review of the records, particularly the CA decision, indicates that the CA did not
determine the presence or absence of grave abuse of discretion in the RTC decision
before it. Given that the petition before the CA was a petition for certiorari and
prohibition under Rule 65 of the Rules of Court, it appears that the CA instead
incorrectly reviewed the case on the basis of whether the RTC decision on the merits
was correct.
To put the case in its proper perspective, the task before us is to examine the CA
decision from the prism of whether it correctly determined the presence or absence
of grave abuse of discretion in the RTC decision before it. Stated otherwise, did the
CA correctly determine whether the RTC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in ruling on the case?
As discussed below, our review of the records and the CA decision shows that the
RTC did not commit grave abuse of discretion in issuing an alias writ of possession
in favor of the respondent.
B. Applicability of Res Judicata
Under the rule of res judicata, a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive of the rights of the parties or their privies, in all
later suits and on all points and matters determined in the previous suit. The term
literally means a "matter adjudged, judicially acted upon, or settled by
judgment."[38] The principle bars a subsequent suit involving the same parties,
subject matter, and cause of action. The rationale for the rule is that "public policy
requires that controversies must be settled with finality at a given point in time." [39]
The doctrine of res judicata embraces two (2) concepts: the first is "bar by prior
judgment" under paragraph (b) of Rule 39, Section 47 of the Rules of Court, and the
second is "conclusiveness of judgment" under paragraph (c) thereof. Res judicata
applies in the concept of "bar by prior judgment" if the following requisites concur:
(1) the former judgment or order must be final; (2) the judgment or order must be
on the merits; (3) the decision must have been rendered by a court having
jurisdiction over the subject matter and the parties; and (4) there must be, between
the first and the second action, identity of parties, of subject matter and of causes
of action.[40]

The petitioners claim that res judicata under the first concept applies in the present
case because all of the elements thereof are present. In response, the respondent
argues that res judicata did not set in as the first element is lacking.
We agree with the respondent.
The December 16, 1986 Dismissal Order never attained finality as it was
not properly served
The following provisions under Rule 13 of the Rules of Court define the proper
modes of service of judgments:[41]
SEC. 2. Filing and service, defined. - x x x
Service is the act of providing a party with a copy of the pleading or paper
concerned. x x x
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 party's or counsel's
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 pre-paid, 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.
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.
As a rule, judgments are sufficiently served when they are delivered personally, or
through registered mail to the counsel of record, or by leaving them in his office
with his clerk or with a person having charge thereof. After service, a judgment or
order which is not appealed nor made subject of a motion for reconsideration within
the prescribed 15-day period attains finality. [42]
In Philemploy Services and Resources, Inc. v. Rodriguez, [43] the Court ruled that the
Resolution of the National Labor Relations Commission, denying the respondent's
motion for reconsideration, cannot be deemed to have become final and executory
as there is no conclusive proof of service of the said resolution. In the words of the
Court, "there was no proof of actual receipt of the notice of the registered mail by
the respondent's counsel."[44] Based on these findings, the Court concluded that the
CA properly acquired jurisdiction over the respondent's petition for certiorari filed
before it; in the absence of a reckoning date of the period provided by law for the
filing of the petition, the Court could not assume that it was improperly or belatedly
filed.
Similarly, in Tomawis v. Tabao-Cudang,[45] the Court held that the decision of the
Regional Trial Court did not become final and executory where, from the records, the
respondent had not received a copy of the resolution denying her motion for
reconsideration.[46] The Court also noted that there was no sufficient proof that the
respondent actually received a copy of the said Order or that she indeed received a
first notice. Thus, the Court concluded that there could be no valid basis for the
issuance of the writ of execution as the decision never attained finality.
In the present case, we note that the December 16, 1986 Dismissal Order cannot be
deemed to have become final and executory in view of the absence of a valid
service, whether personally or via registered mail, on the respondent's counsel. We
note in this regard that the petitioners do not dispute the CA finding that the
"records failed to show that the private respondent was furnished with a copy of the
said order of dismissal[.]"[47] Accordingly, the Dismissal Order never attained
finality.
The petitioners now claim that the Motion for Reconsideration, filed by the
respondent on May 18, 1993 from the September 18, 1992 Order of the RTC, was
filed out of time. The petitioners make this claim to justify their contention that the
subsequent rulings of the RTC, including the June 2, 1993 and October 1, 1993
Orders, are barred by res judicata.
We reject this belated claim as the petitioners raised this only for the first time on
appeal, particularly, in their Memorandum. In fact, the petitioners never raised this
issue in the proceedings before the court a quo or in the present petition for review.

As a rule, a party who deliberately adopts a certain theory upon which the case is
tried and decided by the lower court will not be permitted to change the theory on
appeal.[48] Points of law, theories, issues and arguments not brought to the attention
of the lower court need not be, and ordinarily will not be, considered by a reviewing
court, as these cannot be raised for the first time at such late stage. It would be
unfair to the adverse party who would have no opportunity to present further
evidence material to the new theory, which it could have done had it been aware of
it at the time of the hearing before the trial court. [49] Thus, to permit the petitioners
in this case to change their theory on appeal would thus be unfair to the respondent
and offend the basic rules of fair play, justice and due process. [50]
C. Applicability of the Rule on Execution
by Motion or by Independent Action
The petitioners finally submit that the writ of possession, issued by the RTC on
February 16, 1984, may no longer be enforced by a mere motion, but by a separate
action, considering that more than five years had elapsed from its issuance,
pursuant to Section 6, Rule 39 of the Rules of Court, which states:
Sec. 6. Execution by motion or by independent action. - A final and executory
judgment or order may be executed on motion within five (5) years from the date of
its entry. After the lapse of such time, and before it is barred by the statute of
limitations, a judgment may be enforced by action. The revived judgment may also
be enforced by motion within five (5) years from the date of its entry and thereafter
by action before it is barred by the statute of limitations.
Section 6, Rule 39 of the Rules of Court only applies to civil actions
In rejecting a similar argument, the Court held in Paderes v. Court of Appeals[51] that
Section 6, Rule 39 of the Rules of Court finds application only to civil actions and not
to special proceedings. Citing Sta. Ana v. Menla,[52] which extensively discussed the
rationale behind the rule, the Court held:
In a later case [Sta. Ana v. Menla, 111 Phil. 947 (1961)], the Court also ruled that
the provision in the Rules of Court to the effect that judgment may be
enforced within five years by motion, and after five years but within ten
years by an action (Section 6, Rule 39) refers to civil actions and is not
applicable to special proceedings, such as land registration cases. x x x x
We fail to understand the arguments of the appellant in support of the above
assignment, except in so far as it supports his theory that after a decision in a land
registration case has become final, it may not be enforced after the lapse of a
period of 10 years, except by another proceeding to enforce the judgment or
decision. Authority for this theory is the provision in the Rules of Court to the effect
that judgment may be enforced within 5 years by motion, and after five years but
within 10 years, by an action (Sec. 6, Rule 39). This provision of the Rules refers

to civil actions and is not applicable to special proceedings, such as a land

registration case. This is so because a party in a civil action must
immediately enforce a judgment that is secured as against the adverse
party, and his failure to act to enforce the same within a reasonable time
as provided in the Rules makes the decision unenforceable against the
losing party. In special proceedings the purpose is to establish a status,
condition or fact; in land registration proceedings, the ownership by a
person of a parcel of land is sought to be established. After the ownership
has been proved and confirmed by judicial declaration, no further
proceeding to enforce said ownership is necessary, except when the
adverse or losing party had been in possession of the land and the
winning party desires to oust him therefrom.
Subsequently, the Court, in Republic v. Nillas,[53] affirmed the dictum in Sta. Ana and
clarified that "Rule 39 x x x applies only to ordinary civil actions, not to other or
extraordinary proceedings not expressly governed by the Rules of Civil Procedure
but by some other specific law or legal modality," viz:
Rule 39, as invoked by the Republic, applies only to ordinary civil actions, not to
other or extraordinary proceedings not expressly governed by the Rules of Civil
Procedure but by some other specific law or legal modality such as land registration
cases. Unlike in ordinary civil actions governed by the Rules of Civil Procedure, the
intent of land registration proceedings is to establish ownership by a person of a
parcel of land, consistent with the purpose of such extraordinary proceedings to
declare by judicial fiat a status, condition or fact. Hence, upon the finality of a
decision adjudicating such ownership, no further step is required to effectuate the
decision and a ministerial duty exists alike on the part of the land registration court
to order the issuance of, and the LRA to issue, the decree of registration.
In the present case, Section 6, Rule 39 of the Rules of Court is not applicable to an
ex parte petition for the issuance of the writ of possession as it is not in the nature
of a civil action[54] governed by the Rules of Civil Procedure but a judicial proceeding
governed separately by Section 7 of Act No. 3135 which regulates the methods of
effecting an extrajudicial foreclosure of mortgage. The provision states:
Section 7. Possession during redemption period. In any sale made under the
provisions of this Act, the purchaser may petition the [Regional Trial Court] where
the property or any part thereof is situated, to give him possession thereof during
the redemption period, furnishing bond in an amount equivalent to the use of the
property for a period of twelve months, to indemnify the debtor in case it be shown
that the sale was made without violating the mortgage or without complying with
the requirements of this Act. Such petition shall be made under oath and filed in
form of an ex parte motion in the registration or cadastral proceedings if the
property is registered, or in special proceedings in the case of property registered
under the Mortgage Law or under section one hundred and ninety-four of the
Administrative Code, or of any other real property encumbered with a mortgage

duly registered in the office of any register of deeds in accordance with any existing
law, and in each case the clerk of the court shall, upon the filing of such petition,
collect the fees specified in paragraph eleven of section one hundred and fourteen
of Act Numbered Four hundred and ninety-six, as amended by Act Numbered
Twenty-eight hundred and sixty-six, and the court shall, upon approval of the
bond, order that a writ of possession issue, addressed to the sheriff of the
province in which the property is situated, who shall execute said order
immediately.
The above-cited provision lays down the procedure that commences from the filing
of a motion for the issuance of a writ of possession, to the issuance of the writ of
possession by the Court, and finally to the execution of the order by the sheriff of
the province in which the property is located. Based on the text of the law, we have
also consistently ruled that the duty of the trial court to grant a writ of possession is
ministerial; the writ issues as a matter of course upon the filing of the proper motion
and the approval of the corresponding bond. [55] In fact, the issuance and the
immediate implementation of the writ are declared ministerial and mandatory under
the law.
Thus, in Philippine National Bank v. Adil,[56] we emphatically ruled that "once the writ
of possession has been issued, the trial court has no alternative but to enforce the
writ without delay." The issuance of a writ of possession to a purchaser in an
extrajudicial foreclosure is summary and ministerial in nature as such proceeding is
merely an incident in the transfer of title. The trial court does not exercise
discretion in the issuance thereof;[57] it must grant the issuance of the writ upon
compliance with the requirements set forth by law, and the provincial sheriff is
likewise mandated to implement the writ immediately.
Clearly, the exacting procedure provided in Act No. 3135, from the moment of the
issuance of the writ of possession, leaves no room for the application of Section 6,
Rule 39 of the Rules of Court which we consistently ruled, as early as 1961 in Sta.
Ana, to be applicable only to civil actions. From another perspective, the judgment
or the order does not have to be executed by motion or enforced by action within
the purview of Rule 39 of the Rules of Court. [58]
D. Conclusion
In sum, based on these considerations, we find that the RTC committed no grave
abuse of discretion in issuing an alias writ of possession in favor of the respondent.
WHEREFORE, the present petition is DENIED. The August 26, 2002 Decision and
the March 17, 2003 Resolution of the Court of Appeals in CA-G.R. SP No. 32389 are
AFFIRMED. Costs against the petitioners.
SO ORDERED.

Carpio Morales, (Chairperson), Brion, Bersamin, Villarama, Jr., and Sereno, JJ.

[1]

Under Rule 45 of the Rules of Court; rollo, pp. 9-26.

[2]

Penned by Associate Justice Bennie A. Adefuin-de la Cruz, and concurred in by

Associate Justice Wenceslao I. Agnir, Jr. and Associate Justice Regalado E.
Maambong (all retired); id. at 27-35.
[3]

Id. at 36.

[4]

Id. at 27.

[5]

Ibid.

[6]

Id. at 129.

[7]

Id. at 159.

[8]

Id. at 28.

[9]

Annex "P," Petition; id. at 130.

[10]

Annex "Q," Petition; id. at 131.

[11]

Id. at 28.

[12]

Id.

[13]

Annex "R," Petition; id. at 132.

[14]

Id. at 32.

[15]

On January 25, 1985, the Monetary Board issued MB Resolution No. 75 which
ordered the closure of the respondent. See Banco Filipino Savings & Mortgage Bank
v. Monetary Board, Central Bank of the Philippines, G.R. No. 70054, December 11,
1991, 204 SCRA 767, 781.
[16]

Ibid.

[17]

Rollo, pp. 133-136.

[18]

Id. at 214-216.

[19]

Id. at 29.

[20]

Annex "U," Petition; id. at 140-142.

[21]

Annex "V," Petition; id. at 143-151.

[22]

Id. at 149.

[23]

Citing Goldloop Properties, Inc. v. Court of Appeals, G.R. No. 99431, August 11,
1992, 212 SCRA 498, 509.
[24]

Supra note 22.

[25]

Citing de Ramos v. Court of Appeals, G.R. No. 86844, September 1, 1992, 213
SCRA 207, 218.
[26]

G.R. No. 93238, August 31, 1992, 213 SCRA 133, 137.

[27]

Rollo, p. 150.

[28]

Id. at 151, citing Bernardez v. Reyes, G.R. No. 71832, September 24, 1991, 201
SCRA 648; and Joven v. Court of Appeals, G.R. No. 80739, 20 August 1992, 212
SCRA 700.
[29]

Id. at 149-150.

[30]

Annex "C," Petition; id. at 37-57.

[31]

Id. at 31-32.

[32]

Id. at 34-35.

[33]

No. L-22110, September 28, 1968, 25 SCRA 316, 323-324.

[34]

Supra note 1. Filed after the CA's denial of the petitioners' Motion for
Reconsideration by the Resolution dated March 17, 2003.
[35]

Id. at 15-18.

[36]

Id. at 19-21.

[37]

Memorandum for the Petitioners; id. at 206.

[38]

Dela Cruz v. Joaquin, G.R. No. 162788, July 28, 2005, 464 SCRA 576, 589.

[39]

Ibid.

[40]

Superior Commercial Enterprises, Inc. v. Kunnan Enterprises Ltd., et al., G.R. No.

169974, April 20, 2010.

[41]

See Belen v. Chavez, G.R. No. 175334, March 26, 2008, 549 SCRA 472, 485-486.

[42]

Rubia v. Government Service Insurance System, G.R. No. 151439, June 21, 2004,
432 SCRA 529, 537.
[43]

G.R. No. 152616, March 31, 2006, 486 SCRA 302.

[44]

Id. at 321.

[45]

G.R. No. 166547, September 12, 2007, 533 SCRA 68.

[46]

Id. at 77.

[47]

Supra note 14.

[48]

Lianga Lumber Co. v. Lianga Timber Co., Inc., No. L-38685, March 31, 1977, 76
SCRA 197.
[49]

China Airlines Ltd. v. CA, et al., G.R. Nos. 45985 & 46036, May 18, 1990, 185
SCRA 449.
[50]

Siredy Enterprises, Inc. v. CA, et al., G.R. No. 129039, September 17, 2002, 389
SCRA 34.
[51]

G.R. Nos. 147074 and 147075, July 15, 2005, 463 SCRA 504, 526-527.

[52]

111 Phil. 947 (1961).

[53]

G.R. No. 159595, January 23, 2007, 512 SCRA 286, 297.

[54]

See Rayo v. Metropolitan Bank and Trust Company, G.R. No. 165142, December
10, 207, 539 SCRA 571, 580, citing De Vera v. Agloro, 448 SCRA 203, 215 (2005).
[55]

Samson v. Rivera, G.R. No. 154355, May 20, 2004, 428 SCRA 759, 768.

[56]

203 Phil. 492, 500 (1982).

[57]

GC Dalton Industries, Inc. v. Equitable PCI Bank, G.R. No. 171169, August 24,
2009, 596 SCRA 723, 729.
[58]

Supra note 53.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

SECOND DIVISION
G.R. No. 195443, September 17, 2014
JUANARIO G. CAMPIT, PETITIONER, VS. ISIDRA B. GRIPA, PEDRO BARDIAGA,
AND SEVERINO BARDIAGA, REPRESENTED BY HIS SON ROLANDO
BARDIAGA, RESPONDENTS.
DECISION

BRION, J.:
We review in this petition for review on certiorari[1] the decision[2] dated May 13,
2010 and resolution[3] dated January 27, 2011 of the Court of Appeals (CA) in CAG.R. CV No. 92356. The CA dismissed the appeal filed by petitioner Juanario Campit
to the decision[4] of the Regional Trial Court (RTC), Branch 38, Lingayen, Pangasinan,
which ordered him to surrender a Transfer Certificate of Title (TCT) that was found to
have been fraudulently issued in his name.
Factual Antecedents
Subject of this case is a 2.7360-hectare agricultural land situated in Umangan,
Mangatarem, Pangasinan, presently occupied by respondents Isidra B. Gripa, Pedro
Bardiaga, and Severino Bardiaga, represented by his son Rolando Bardiaga, but
covered by TCT No. 122237 issued in the petitioners name. [5] The petitioner
claimed to have purchased the property from his father Jose Campit in 1977. [6]
On the other hand, respondents Isidra Gripa, Pedro Bardiaga and Severino Bardiaga
(as represented by his son, Rolando Bardiaga) claimed to be the rightful owners of
the subject property, as earlier adjudged by the court in Civil Case No. 11858
decided on June 12, 1961, and in Civil Case No. 15357 decided on August 8, 1978. [7]
The Court, in these cases, cancelled the titles of the petitioner and his father Jose
because they were obtained through the misrepresentation of the petitioners
grandfather, Isidro Campit.[8] The respondents further contended that they have
long desired to divide the subject property among themselves, but the petitioner
adamantly refused to surrender his title to the property to them, or to the Register
of Deeds, despite their formal demand.[9]
Due to the petitioners continued refusal to surrender the subject TCT, the
respondents filed anew an action for annulment and cancellation of title with the
RTC on August 15, 2003, docketed as Civil Case No. 18421. [10]
The petitioner opposed the respondents action and argued that the August 8, 1978
decision in Civil Case No. 15357, which declared his title null and void, could no
longer be enforced because its execution was already barred by the Statute of
Limitations, as the said decision was never executed within 10 years from July 19,
1979 - the date of finality of the judgment.[11]
Noting that the action filed by the respondents was not one for revival of judgment,
the RTC proceeded to hear the case and, in a decision dated August 13, 2008, ruled
in the respondents favor, in this wise:
WHEREFORE, considering that the Transfer of Certificate of Title No. 122237 issued
in the name of defendant Juanario Campit had earlier been declared null and void in
the decision of the Court of First Instance of Pangasinan (sic) Civil Case No. 15357,
judgment is hereby rendered in favor of the plaintiffs, as follows:

a)

Ordering the defendant Juanario Campit to surrender the said Transfer of

Certificate of Title No. 122237 within a period of fifteen (15) days from finality of
this decision to the Register of (sic) Pangasinan for its cancellation;

b)

Ordering the Register of Deeds of Pangasinan to cancel TCT No. 122237 in the
event that Juanario Campit fails to surrender the same within the period given
to him, and to revive the title issued in the name of Mariano Campit.

Costs against the defendant.

SO ORDERED.
On appeal, the CA, in a decision dated May 13, 2010, affirmed the RTC and held
that:
Not being the true owner of the subject property, the subsequent issuance of a
certificate of title to the defendant-appellant does not vest him ownership over the
subject land. Registration of real property under the Torrens System does not create
or vest title because it is not a mode of acquiring ownership.
The petitioner moved to reconsider, but the CA denied his motion in a resolution
dated January 27, 2011, hence, the filing of the present petition for review on
certiorari with this Court.
The Petition
In his petition before this Court, the petitioner argues that his title to the subject
property must prevail not only because the August 8, 1978 decision in Civil Case No.
15357, which declared his title null and void, was never executed, but also because,
under the Torrens system of registration, a certificate of title is an indefeasible and
incontrovertible proof of ownership of the person, in whose favor it was issued, over
the land described therein. He now contends that he had acquired the property in
good faith and for valuable consideration and, thus, entitled to own and possess the
subject property.
Our Ruling
We find no merit in the petitioners arguments.
The issue on the validity of the petitioners title to the subject property has long
been settled in Civil Case No. 15357, where the court, in its decision dated August
8, 1978, which became final and executory on July 19, 1979, had found and
declared the petitioners title null and void by reason of fraud and
misrepresentation.
A matter adjudged with finality by a competent court having jurisdiction over the

parties and the subject matter already constitutes res judicata in another action
involving the same cause of action, parties and subject matter. The doctrine of res
judicata provides that a final judgment on the merits rendered by a court of
competent jurisdiction, is conclusive as to the rights of the parties and their privies
and constitutes as an absolute bar to subsequent actions involving the same claim,
demand, or cause of action.[12] Thus, the validity of petitioners title, having
been settled with finality in Civil Case No. 15357, could no longer be
reviewed in the present case.
The August 8, 1978 decision in Civil Case No. 15357, however, was not executed or
enforced within the time allowed under the law. Under Section 6, Rule 39 of the
Rules of Court, a final and executory judgment may be executed by the prevailing
party as a matter of right by mere motion within five (5) years from the entry of
judgment, failing which the judgment is reduced to a mere right of action which
must be enforced by the institution of a complaint in a regular court within ten (10)
years from finality of the judgment.[13]
It appears that no motion or action to revive judgment was ever filed by the
respondents - the prevailing party in Civil Case No. 15357, to execute and enforce
the August 8, 1978 decision. The title to the subject property, therefore, remained
registered under the petitioners name. As the petitioner argued, his title had
already become incontrovertible since the Torrens system of land registration
provides for the indefeasibility of the decree of registration and the certificate of
title issued upon the expiration of one (1) year from the date of entry of the
registration decree.[14]
We cannot, however, allow the petitioner to maintain his title and benefit from the
fruit of his and his predecessors fraudulent acts at the expense of the respondents
who are the rightful owners of the subject property. The Torrens system of
registration cannot be used to protect a usurper from the true owner, nor
can it be used as a shield for the commission of fraud, or to permit one to
enrich oneself at the expense of others.[15]
Notwithstanding the indefeasibility of the Torrens title, the registered owner can still
be compelled under the law to reconvey the property registered to the rightful
owner[16] under the principle that the property registered is deemed to be held in
trust for the real owner by the person in whose name it is registered. [17] The party
seeking to recover title to property wrongfully registered in another persons name
must file an action for reconveyance within the allowed period of time.
An action for reconveyance based on an implied or constructive trust prescribes in
ten (10) years from the issuance of the Torrens title over the property. [18] There is,
however, an exception to this rule where the filing of such action does not prescribe,
i.e. when the plaintiff is in possession of the subject property, the action,
being in effect that of quieting of title to the property, does not prescribe.
[19]

In the present case, the respondents, who are the plaintiffs in Civil Case No. 18421
(the action for annulment and cancellation of title filed in 2013), have always been
in possession of the subject property. Worth noting are the CAs findings on this
respect:
xxx Of course, the defendant-appellant (petitioner herein) has a
certificate of title in his favor. But it cannot be denied that he has never been
in possession of the subject property. Neither did he exercise acts of
ownership over the said land since the time he allegedly purchased it from
his father in 1977. Similarly, the defendant-appellant was not able to show
that his predecessor-in-interest, Jose Campit, claimed ownership or was ever
in possession of the said land. The defendant-appellant has admitted that he
has paid realty tax covering the subject land only once when he applied for
the issuance of title in his favor.
xxxx
On the other hand, the continuous possession of the subject premises by the
plaintiffs-appellees has not been denied or disputed by the defendantsappellants (sic). The possession in the concept of an owner by the plaintiffsappellees has also been confirmed by witness Charlie Martin. [20] (Emphasis ours)
Considering that the action for annulment and cancellation of title filed by the
respondents is substantially in the nature of an action for reconveyance based on an
implied or constructive trust, combined with the fact that the respondents have
always been in possession of the subject property, we shall treat Civil Case No.
18421 as an action to quiet title, the filing of which does not prescribe. Thus, we
find the respondents filing of Civil Case No.18421 to be proper and not barred by
the time limitations set forth under the Rules of Court in enforcing or executing a
final and executory judgment.
WHEREFORE, premises considered, we DENY the present petition for review on
certiorari and consequently AFFIRM the decision dated May 13, 2010 and
resolution dated January 27, 2011 of the Court of Appeals in CA-G.R. CV No. 92356.
Costs against petitioner Juanario G. Campit.
SO ORDERED.
Carpio, (Chairperson), Del Castillo, Villarama, Jr.,* and Leonen, JJ., concur.

Designated as Acting Member in lieu of Associate Justice Jose C. Mendoza, per

Special Order No. 1767 dated August 27, 2014.

[1]

Under Rule 45 of the Rules of Court; rollo, pp. 11-22.

[2]

Penned by CA Associate Justice Amelita G. Tolentino, with Associate Justices

Normandie B. Pizarro and Ruben C. Ayson, concurring; rollo, pp. 24-35.
[3]

Rollo, pp. 37-41.

[4]

Dated August 13, 2008; rollo, pp. 42-46.

[5]

Id. at. 25

[6]

Id. at 26.

[7]

Id. at 25

[8]

Id. at 25-26.

[9]

Id. at 26 and 55.

[10]

Id. at 26.

[11]

Id. at 44.

[12]

Taganas v. Emuslan, 457 Phil. 305 (2003), citing Allied Banking Corporation v.
Court of Appeals, G.R. No. 108089, January 10, 1994, 229 SCRA 252.
[13]

Villeza v. German Management and Services, Inc., G.R. No. 182937, August 8,
2010, 627 SCRA 425, 431.
[14]

Section 32 of Presidential Decree No. 1529.

[15]

Gustillo v. Maravilla, 48 Phil. 442 (1925); Sps. Lopez v. Sps. Lopez, G.R. No.
161925, November 25, 2009, 605 SCRA 358.
[16]

Amerol v. Bagumbaran, L-33261, September 30, 1987, 154 SCRA 396, 406-407.

[17]

Id.

[18]

Walstrom v. Mapa, Jr., G.R. No. L-38387, January 29, 1990, 181 SCRA 431, 442.

[19]

Heirs of Domingo Valientes v. Hon. Ramas, G.R. No. 157852, December 15, 2010,
638 SCRA 444.
[20]

Rollo, pp. 31-33.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

G.R. No. 191594

FIRST DIVISION
G.R. No. 191594, October 16, 2013
DAVID A. RAYMUNDO, PETITIONER, VS. GALEN REALTY AND MINING
CORPORATION, RESPONDENT.
DECISION
REYES, J.:
Assailed in the present Petition for Review on Certiorari under Rule 45[1] of the Rules
of Court is the Decision[2] dated October 30, 2009 and Resolution[3] dated March 10,
2010 of the Court of Appeals (CA) in CA-G.R. SP No. 105401, which dismissed
petitioner David A. Raymundos (Raymundo) special civil action for certiorari for lack
of merit.
Facts of the Case
Civil Case No. 18808 is an action for Reconveyance with Damages filed by
respondent Galen Realty and Mining Corporation (Galen) against Raymundo and
Tensorex Corporation (Tensorex). Subject of the case was a transaction between
Galen and Raymundo over a house and lot located in Urdaneta Village, Makati City
originally covered by Transfer Certificate of Title (TCT) No. S-105-651 in the name of
Galen. By virtue of a Deed of Sale dated September 9, 1987 executed between
Galen and Raymundo, title to the property was transferred to the latter, who later
on sold the property to Tensorex, which caused the issuance of TCT No. 149755 in
its name.
In a Decision dated April 12, 2000, the Regional Trial Court (RTC) of Makati City,
Branch 62, in Civil Case No. 18808, ruled that the transaction between Raymundo
and Galen was actually an equitable mortgage. [4] On appeal, the CA upheld the RTC
decision but modified the loan obligation of Galen and reduced the same to
P3,865,000.00. The dispositive portion of the CA Decision [5] dated May 7, 2004
provides:
WHEREFORE, PREMISES CONSIDERED, the Assailed Decision is
hereby MODIFIED as follows:

V) the Deed of Absolute Sale between plaintiff-appellant and

defendant-appellant David Raymundo is declared null and void, being a Deed
of Equitable Mortgage;
VI) the Deed of Sale between defendant-appellant David Raymundo and
defendant-appellant Tensorex [is] declared null and void;
VII) defendant-appellant David Raymundo to reconvey the subject
property to plaintiff-appellants [sic] upon plaintiff-appellant[s]
payment to defendant-appellant David Raymundo of [P]3,865,000.00
plus legal interest thereon from the date of filing of the complaint,
until it is fully paid, or if reconveyance is no longer feasible, for
defendants-appellants Raymundo and Tensorex to solidarily pay
plaintiff-appellant the fair market value of the subject property by
expert appraisal;
VIII) defendants-appellants Raymundo and Tensorex to solidarily pay plaintiffappellant, as follows:
a) [P]100,000.00 in exemplary damages;
b) [P]100,000.00 in attorneys fees;
c) Cost[s] of suit.
Defendants-appellants COUNTERCLAIM is hereby DISMISSED.
SO ORDERED.[6] (Emphasis ours)
Said CA decision eventually became final and executory on January 11, 2005, and
entry of judgment was made.[7]
Galen moved for the execution of the CA decision, submitting that the writ of
execution should order Raymundo and Tensorex to solidarily pay the following: (1)
the current fair market value of the property less Galens mortgage debt of
P3,865,000.00 with legal interest; and (2) the award of damages and costs of suit.
Raymundo and Tensorex opposed the motion, arguing that the CA decision provides
for two alternatives one, for Raymundo to reconvey the property to Galen after
payment of P3,865,000.00 with legal interest or, two, if reconveyance is no longer
feasible, for Raymundo and Tensorex to solidarily pay Galen the fair market value of
the property.[8]
In its Order[9] dated February 3, 2006, the RTC granted Galens motion and ordered
the issuance of a writ of execution. The property (land and improvements) was
appraised by Asian Appraisal, Inc. at P49,470,000.00. [10] Subsequently, the
appointed special sheriff issued a Notice of Reconveyance/Notice of Demand to
Pay[11] on March 8, 2007. The sheriff also issued on April 4, 2007 a Notice of Levy on
Execution[12] to the Register of Deeds of Makati City over the rights and interest of
Tensorex over the property, including all buildings and improvements covered by

TCT No. 149755.

On July 16, 2007, the special sheriff issued a Notice of Sheriffs Sale of Real Estate
Property,[13] stating that the total outstanding balance of mortgage indebtedness as
of January 25, 1988 and interest for 225 months with 2.25% interest is
[P]37,108,750.00 plus costs x x x,[14] and sale at public auction was set on August
8, 2007. Raymundo filed a Manifestation and Urgent Motion [15] objecting to the
auction sale and expressing his willingness to reconvey the property upon payment
in full by Galen of its indebtedness. Galen filed a Counter Manifestation and
Opposition[16] claiming that reconveyance is no longer feasible as the property is
heavily encumbered and title to the property is still in the name of Tensorex which
had already gone out of operations and whose responsible officers are no longer
accessible.
Raymundo also submitted on August 6, 2007 a duplicate copy of the Cancellation of
the Real Estate Mortgages[17] over the property. As regards the other entries on the
title, Raymundo stated that these do not affect his rights, interests and participation
over the property as the Notice of Lis Pendens of Civil Case No. 18808 inscribed on
September 27, 1990 was superior to these entries. [18] On the same date, the RTC
issued an Order[19] noting Raymundos motions, ordering him to show proof how his
willingness to reconvey the property can be realized, and holding the auction sale in
abeyance. The order also provided that [c]ompliance herein is enjoined x x x,
which proof shall consist primarily of a submission of the Transfer Certificate of Title
covering the subject property duly registered in Raymundos name. [20]
Raymundo filed a Compliance/Comment[21] to the RTCs order, contending that his
obligation to reconvey is not yet due pending payment of Galens own obligation.
On December 12, 2007, the RTC issued an Order [22] lifting the suspension of the
auction sale and directing Galen to coordinate with the deputy sheriff for the
enforcement of the decision. The RTC ruled that Raymundo failed to show proof that
the title was already registered in his name and thus, it resolves to deny his
compliance/comment.
Raymundo filed a Motion for Reconsideration[23] of the RTCs order but it was denied
per Order[24] dated August 15, 2008. As a result, the property was sold at a public
auction on November 26, 2008 for P37,108,750.00, with Galen as the highest
bidder, and a certificate of sale[25] was issued by the sheriff.
Raymundo then filed a special civil action for certiorari with the CA. In the assailed
Decision[26] dated October 30, 2009, the petition was dismissed for lack of merit. His
motion for reconsideration having been denied in the assailed CA Resolution [27]
dated March 10, 2010, Raymundo is now seeking recourse with the Court on
petition for review under Rule 45 of the Rules of Court.
Raymundo contends that the CA committed an error in upholding the validity of
RTCs writ of execution. He argues that the writ changed the tenor of the final and

executory CA decision as his obligation under said decision is to reconvey the

property upon Galens payment of its obligation. Raymundo also argues that the
sale on public auction of the property was void inasmuch as the RTCs conclusion, as
affirmed by the CA, that reconveyance is no longer feasible has no basis. [28]
Galen, on the other hand, claims that Raymundo was given the option to choose
between reconveyance and payment of the fair market value of the property but did
not manifest his choice. It was only when the property was set for sale at public
auction that Raymundo manifested his choice of reconveyance, which was opposed
by Galen because by that time, the property was still in the name of Tensorex and
was already heavily encumbered.[29] Galen maintains that the writ of execution and
the auction sale was valid inasmuch as payment of the fair market value of the
property is the only feasible way to satisfy the judgment.
Ruling of the Court
The manner of execution of a final judgment is not a matter of choice. It does not
revolve upon the pleasure or discretion of a party as to how a judgment should be
satisfied, unless the judgment expressly provides for such discretion. Foremost rule
in execution of judgments is that a writ of execution must conform strictly to every
essential particular of the judgment promulgated, and may not vary the terms of
the judgment it seeks to enforce, nor may it go beyond the terms of the judgment
sought to be executed.[30] As a corollary rule, the Court has clarified that a
judgment is not confined to what appears on the face of the decision, but extends
as well to those necessarily included therein or necessary thereto. [31]
In this case, the writ of execution issued by the RTC originated from Civil Case No.
18808, which is an action for Reconveyance with Damages filed by Galen against
Raymundo and Tensorex, where Galen sought recovery of the property subject of
the Deed of Absolute Sale between Galen and Raymundo. The RTC ruled in favor of
Galen, finding that the transaction between them is an equitable mortgage, which
was affirmed by the CA. Both the RTC and the CA, in the dispositive portions of their
respective decisions, ordered Raymundo to reconvey the subject property to
[Galen] upon [Galens] payment to x x x Raymundo x x x plus legal interest
thereon from the date of [the] filing of the complaint, until it is fully paid, or if
reconveyance is no longer feasible, for x x x Raymundo and Tensorex to
solidarily pay [Galen] the fair market value of the subject property by
expert appraisal.[32] In implementing said judgment, the RTC should have
considered the nature of the agreement between Galen and Raymundo. The rule is
that in case of ambiguity or uncertainty in the dispositive portion of a decision, the
body of the decision may be scanned for guidance in construing the judgment. [33]
Nevertheless, the import of the dispositive portion of the CA Decision dated May 7,
2004 is clear. The principal obligation of Raymundo under the judgment is to
reconvey the property to Galen; on the other hand, Galens principal obligation is to
pay its mortgage obligation to Raymundo. Performance of Raymundos obligation to

reconvey is upon Galens payment of its mortgage obligation in the amount of

P3,865,000.00 plus legal interest thereon from the date of the filing of the
complaint, until fully paid. This is in accord with the nature of the agreement as an
equitable mortgage where the real intention of the parties is to charge the real
property as security for a debt.[34] It was wrong for the RTC to require Raymundo to
show proof of his willingness to reconvey the property because as stressed earlier,
their agreement was an equitable mortgage and as such, Galen retained ownership
of the property.[35] In Montevirgen, et al. v. CA, et al.,[36] the Court was emphatic in
stating that the circumstance that the original transaction was subsequently
declared to be an equitable mortgage must mean that the title to the subject land
which had been transferred to private respondents actually remained or is
transferred back to [the] petitioners herein as owners-mortgagors, conformably to
the well-established doctrine that the mortgagee does not become the owner of the
mortgaged property because the ownership remains with the mortgagor. [37] Thus, it
does not devolve upon Raymundo to determine whether he is willing to reconvey
the property or not because it was not his to begin with. If Raymundo refuses to
reconvey the property, then the court may direct that the act be done by some
other person appointed by it as authorized by Section 10 of Rule 39 of the Rules of
Court, to wit:
Sec. 10. Execution of judgments for specific act. (a) conveyance,
delivery of deeds, or other specific acts; vesting title.If a judgment directs a
party to execute a conveyance of land or personal property, or to deliver
deeds or other documents, or to perform any other specific act in connection
therewith, and the party fails to comply within the time specified, the
court may direct the act to be done at the cost of the disobedient
party by some other person appointed by the court and the act when
so done shall have like effect as if done by the party. If real or personal
property is situated within the Philippines, the court in lieu of directing a
conveyance thereof may by an order divest the title of any party and vest it
in others, which shall have the force and effect of a conveyance executed in
due form of law. (Emphasis and underscoring ours)
The some other person appointed by the court can be the Branch Clerk of Court,
[38]
the Sheriff,[39] or even the Register of Deeds,[40] and their acts when done under
such authority shall have the effect of having been done by Raymundo himself. A
party cannot frustrate execution of a judgment for a specific act on the pretext of
inability to do so as the Rules provide ample means by which it can be satisfied.
Conversely, Galens obligation to pay the mortgage obligation is not subject to
Raymundos reconveyance of the property. If Galen refuses to pay, it is only then
that the court may direct the foreclosure of the mortgage on the property and order
its sale at public auction to satisfy Galens judgment debt against Raymundo,
pursuant to Rule 68 of the Rules of Court on Foreclosure. [41] If Raymundo,
meanwhile, unjustly refuses to accept Galens payment, the latters remedy is to
consign the payment with the court in accordance with the Civil Code provisions on

consignment.
It is only when reconveyance is no longer feasible that Raymundo and
Tensorex should pay Galen the fair market value of the property. In other
words, it is when the property has passed on to an innocent purchaser for value and
in good faith, has been dissipated, or has been subjected to an analogous
circumstance which renders the return of the property impossible that Raymundo
and/or Tensorex, is obliged to pay Galen the fair market value of the property.
In this case, it appears that the RTC accommodated Galens choice of payment of
the fair market value of the property and it became the main obligation of
Raymundo as well as Tensorex instead of being the alternative. Worse, it even
considered the subject property as absolutely owned by Tensorex and levied upon
the same to satisfy payment of the fair market value of the very property that has
only been pledged as security of Galens loan. While it indeed appears that
Raymundo was able to transfer title of the property to Tensorex, it should be noted
that the latter is a party to Civil Case No. 18808 and is necessarily bound by the
judgment. The dissolution of Tensorex is not a valid reason to avoid reconveyance
inasmuch as the court may order the transfer of title to Galen by some other person
appointed by the court in accordance with Section 10, Rule 39 of the Rules of Court.
The existence of subsequent encumbrances on the property is also not a sufficient
ground to insist on the payment of its fair market value. To begin with, it was Galen
which sought the return of the property by filing the civil case. Moreover, as
correctly pointed out by Raymundo, whatever transactions Tensorex entered into is
subject to the notice of lis pendens which serves as a constructive notice to
purchasers or other persons subsequently dealing with the same property. [42]
Further, having Raymundo and/or Tensorex keep the property (and later on levy
upon the same) and order the payment of its fair market value virtually amounts to
a sale, which goes against the RTC and CAs conclusion that the transaction subject
of Civil Case No. 18808 is not a sale but an equitable mortgage. It also violates the
very public policy that prohibits pactum commissorium.[43] In the early case of
Guanzon v. Hon. Argel,[44] which also involves an equitable mortgage, the Court
ruled
In no way can the judgment at bar be construed to mean that should
the Dumaraogs fail to pay the money within the specified period then the
party would be conveyed by the Sheriff to Guanzon. Any interpretation in that
sense would contradict the declaration made in the same judgment that the
contract between the parties was in fact a mortgage and not a pacto de retro
sale. x x x The mortgagors default does not operate to vest in the mortgagee
the ownership of the encumbered property, for any such effect is against
public policy, as enunciated by the Civil Code. The court can not be
presumed to have adjudged what would be contrary to law, unless it
be plain and inescapable from its final judgment. No such purport
appears or is legitimately inferable from the terms of the judgment
aforequoted. x x x.[45] (Citation omitted and emphasis ours)

The RTC, therefore, committed grave abuse of discretion in ordering the payment of
the fair market value of the subject property despite the fact that reconveyance is
still feasible under the circumstances of this case. Consequently, the CA committed
a reversible error in sustaining the assailed RTC orders and in dismissing
Raymundos special civil action for certiorari for lack of merit.
In Muoz v. Ramirez,[46] the Court stated:
In Lustan v. CA, where we established the reciprocal obligations of the
parties under an equitable mortgage, we ordered the reconveyance of the
property to the rightful owner therein upon the payment of the loan within
90 days from the finality of this decision.[47] (Emphasis ours)
Before concluding, the Court notes that under the final and executory CA Decision
dated May 7, 2004, Galen was adjudged to pay Raymundo the sum of
P3,865,000.00 with legal interest from the date of the filing of the complaint until
fully paid. Raymundo, meanwhile, was ordered to pay damages, attorneys fees and
costs of suit.
In Sunga-Chan v. Court of Appeals,[48] the Court, citing Eastern Shipping Lines, Inc. v.
Court of Appeals,[49] reiterated the rule on the rates and application of interests, viz:
Eastern Shipping Lines, Inc. synthesized the rules on the imposition of
interest, if proper, and the applicable rate, as follows: The 12% per annum
rate under CB Circular No. 416 shall apply only to loans or
forbearance of money, goods, or credits, as well as to judgments
involving such loan or forbearance of money, goods, or credit, while
the 6% per annum under Art. 2209 of the Civil Code applies when
the transaction involves the payment of indemnities in the concept
of damage arising from the breach or a delay in the performance of
obligations in general, with the application of both rates reckoned from
the time the complaint was filed until the [adjudged] amount is fully paid. In
either instance, the reckoning period for the commencement of the running
of the legal interest shall be subject to the condition that the courts are
vested with discretion, depending on the equities of each case, on the award
of interest.
Otherwise formulated, the norm to be followed in the future on the rates and
application thereof is:
x x x x
II.?With regard particularly to an award of interest in the concept of actual
and compensatory damages, the rate of interest, as well as the accrual
thereof, is imposed, as follows:

1. When the obligation [is] breached[, and it] consists in the payment of a
sum of money, i.e., a loan or forbearance of money, the interest due should
be that which may have been stipulated in writing. Furthermore, the interest
due shall itself earn legal interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 12% per
annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article
1169 of the Civil Code.
xxxx
3. When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest, whether the
case falls under paragraph 1 or paragraph 2, above, shall be 12% per
annum from such finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of credit. [50] (Citations
omitted and emphases and underscoring ours)
Recently, the Monetary Board of the Bangko Sentral ng Pilipinas issued Resolution
No. 796 dated May 16, 2013, revising the interest rate to be imposed for the loan or
forbearance of any money, goods or credits, in the absence of an express contract,
to six percent (6%) per annum. This was implemented by BSP Circular No. 799
dated June 21, 2013 and effective July 1, 2013.
Applying the foregoing guidelines, the following rates are to be imposed on the
parties respective obligations:
(a) Galens mortgage indebtedness shall earn interest at the rate of 12% per annum
from the date of the filing of the complaint on January 25, 1988 [51] until June 30,
2013; thereafter, it shall earn six percent (6%) interest per annum until fully paid.
The Court is constrained to retain the application of the interest rate from the filing
of the complaint until full payment because the CAs judgment on this score has
already attained finality and cannot be disturbed at this stage; [52] and
(b) The damages, attorneys fees and costs to be paid by Raymundo shall earn
interest at the rate of six percent (6%) per annum from the date of finality of the CA
Decision on May 7, 2004 until fully paid.
WHEREFORE, the petition is GRANTED. The Decision dated October 30, 2009 and
Resolution dated March 10, 2010 of the Court of Appeals in CA-G.R. SP No. 105401
are REVERSED and SET ASIDE. Accordingly, the assailed Orders dated August 6,
2007, December 12, 2007 and August 15, 2008 of the Regional Trial Court of Makti
City, Branch 62, as well as the writ of execution dated January 10, 2007 and all
other orders, writs and processes issued pursuant thereto are NULLIFIED.
The RTC of Makati City, Branch 62 is DIRECTED to implement the Decision dated

May 7, 2004 of the Court of Appeals in accordance with this Decision, and subject to
the interest rates discussed herein.
SO ORDERED.
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Villarama, Jr., JJ.,
concur.

[1]

Rollo, pp. 11-39.

[2]

Penned by Associate Justice Portia Alio-Hormachuelos (retired), with Associate

Justices Fernanda Lampas Peralta and Ramon R. Garcia, concurring; id. at 44-61.
[3]

Id. at 63-64.

[4]

See CA Decision dated May 7, 2004 in CA-G.R. CV No. 68294; id. at 75-90.

[5]

Penned by Associate Justice Andres B. Reyes, Jr., with Associate Justices Danilo B.
Pine and Edgardo F. Sundiam, concurring; id.
[6]

Id. at 89-90.

[7]

Id. at 92.

[8]

Id. at 97.

[9]

Id. at 97-98.

[10]

Id. at 96.

[11]

Id. at 99.

[12]

Id. at 100.

[13]

Id. at 101-102.

[14]

Id.

[15]

Id. at 103-108.

[16]

Id. at 185-188.

[17]

Id. at 114.

[18]

Id. at 111-113.

[19]

Id. at 109-110.

[20]

Id. at 110.

[21]

Id. at 115-120.

[22]

Id. at 130-131.

[23]

Id. at 132-136.

[24]

Id. at 137-138.

[25]

Id. at 139-140.

[26]

Id. at 44-61.

[27]

Id. at 63-64.

[28]

Id. at 33-37.

[29]

Id. at 168-169.

[30]

Tumibay v. Soro, G.R. No. 152016, April 13, 2010, 618 SCRA 169, 175-176, citing
Mahinay v. Asis, G.R. No. 170349, February 12, 2009, 578 SCRA 562, 574 and Ingles
v. Cantos, 516 Phil. 496, 506 (2006); B.E. San Diego, Inc. v. Alzul, 551 Phil. 841
(2007).
[31]

Tumibay v. Soro, id. at 176, citing DHL Philippines Corp. United Rank and File
Asso. Federation of Free Workers v. Buklod ng Manggagawa ng DHL Philippines
Corp., 478 Phil. 842, 853 (2004) and Jaban v. CA, 421 Phil. 896, 904 (2001).
[32]

Rollo, p. 48.

[33]

Pastor, Jr. et al. v. CA, et al., 207 Phil. 758, 767 (1983).

[34]

Muoz, Jr. v. Ramirez, G.R. No. 156125, August 25, 2010, 629 SCRA 38, 51.

[35]

Roberts v. Papio, 544 Phil. 280, 300-301 (2007).

[36]

198 Phil. 338 (1982).

[37]

Id. at 348, citing Civil Code, Article 2088.

[38]

See Balais-Mabanag v. Register of Deeds of Quezon City, G.R. No. 153142, March
29, 2010, 617 SCRA 1, 10.

[39]

Tumibay v. Soro, supra note 30, at 178-179, citing Buag v. CA, 363 Phil. 216
(1999).
[40]

Cruz v. Court of Appeals, 459 Phil. 264, 282 (2003).

[41]

Spouses Rosales v. Spouses Suba, 456 Phil. 127, 133 (2003).

[42]

Mahinay v. Gako, Jr., G.R. No. 165338, November 28, 2011, 661 SCRA 274, 297,
citing Yu v. CA, 321 Phil. 897, 901 (1995).
[43]

Article 2088 of the Civil Code provides that [t]he creditor cannot appropriate the
things given by way of pledge or mortgage, or dispose of them. Any stipulation to
the contrary is null and void. See also Briones-Vasquez v. Court of Appeals, 491
Phil. 81, 94-95 (2005), which ruled that the principle of pactum commissorium is
applicable to equitable mortgages.
[44]

144 Phil. 418 (1970).

[45]

Id. at 423-424.

[46]

G.R. No. 156125, August 25, 2010, 629 SCRA 38.

[47]

Id. at 54, citing Lustan v. CA, 334 Phil. 609, 620 (1997). See also Bacungan v. CA,
G.R. No. 170282, December 18, 2008, 574 SCRA 642, 650.
[48]

578 Phil. 262 (2008).

[49]

G.R. No. 97412, July 12, 1994, 234 SCRA 78.

[50]

Supra note 48, at 276-278.

[51]

Rollo, p. 47.

[52]

See Penta Capital Corporation v. Bay, G.R. No. 162100, January 18, 2012, 663
SCRA 192, 213-214.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

FIRST DIVISION
G.R. No. 201043, June 16, 2014
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE ARMED FORCES OF
THE PHILIPPINES FINANCE CENTER (AFPFC), PETITIONER, VS. DAISY R.
YAHON, RESPONDENT.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for review on certiorari under Rule 45 which seeks to
nullify and set aside the Decision[1] dated November 29, 2011 and Resolution [2]
dated March 9, 2012 of the Court of Appeals (CA) Mindanao Station in CA-G.R. SP
No. 02953-MIN. The CA affirmed the orders and decision of the Regional Trial Court
(RTC) of Cagayan de Oro City, Branch 22 granting temporary and permanent
protection orders, and denying the motion to lift the said temporary protection order
(TPO).
Daisy R. Yahon (respondent) filed a petition for the issuance of protection order
under the provisions of Republic Act (R.A.) No. 9262, [3] otherwise known as the AntiViolence Against Women and Their Children Act of 2004, against her husband,
S/Sgt. Charles A. Yahon (S/Sgt. Yahon), an enlisted personnel of the Philippine Army
who retired in January 2006. Respondent and S/Sgt. Yahon were married on June 8,
2003. The couple did not have any child but respondent has a daughter with her
previous live-in partner.
On September 28, 2006, the RTC issued a TPO, as follows:
Finding the herein petition for the Issuance of Protection Order to be sufficient in
form and substance and to prevent great and irreparable injury to the petitioner, a
TEMPORARY PROTECTION ORDER is forthwith issued to respondent, S/SGT. CHARLES
A. YAHON directing him to do the following acts:
1. Respondent is enjoined from threatening to commit or committing further
acts of physical abuse and violence against the petitioner;

2. To stay away at a distance of at least 500 meters from petitioner, her

residence or her place of work;
3. To refrain from harassing, annoying, intimidating, contacting or
communicating with petitioner;
4. Respondent is prohibited from using or possessing any firearm or deadly
weapon on occasions not related to his job;
5. To provide reasonable financial spousal support to the petitioner.
The Local Police Officers and the Barangay Officials through the Chairman in the
area where the petitioner and respondent live at Poblacion, Claveria, Misamis
Oriental and Bobuntogan, Jasaan, Misamis Oriental are directed to respond to any
request for assistance from the petitioner for the implementation of this order. They
are also directed to accompany the petitioner to their conjugal abode at Purok 2,
Bobuntogan, Jasaan, Misamis Oriental to get her personal belongings in order to
insure the safety of the petitioner.
The Deputy Sheriff of this Court is ordered to immediately serve the Temporary
Protection Order (TPO) upon the respondent personally and to seek and obtain the
assistance of law enforcement agents, if needed, for purposes of effecting the
smooth implementation of this order.
In the meantime, let copy of this order and petition be served upon the respondent
for him to file an OPPOSITION within a period of five (5) days from receipt hereof
and let a Preliminary Conference and hearing on the merits be set on October 17,
2006 at 2:00 oclock in the afternoon.
To insure that petitioner can receive a fair share of respondents
retirement and other benefits, the following agencies thru their heads are
directed to WITHHOLD any retirement, pension and other benefits of
respondent, S/SGT. CHARLES A. YAHON, a member of the Armed Forces of the
Philippines assigned at 4ID, Camp Evangelista, Patag, Cagayan de Oro City until
further orders from the court:
1. Commanding General/Officer of the Finance Center of the Armed Forces of
the Philippines, Camp Emilio Aguinaldo, Quezon City;
2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon City;
3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City.
VIOLATION OF THIS ORDER IS PUNISHABLE BY LAW.
IF THE RESPONDENT APPEARS WITHOUT COUNSEL ON THE DATE OF THE
PRELIMINARY CONFERENCE AND HEARING ON THE MERITS OF THE ISSUANCE OF A
PERMANENT PROTECTION ORDER, THE COURT SHALL NOT RESCHEDULE OR
POSTPONE THE PRELIMINARY CONFERENCE AND HEARING BUT SHALL APPOINT A
LAWYER FOR THE RESPONDENT AND IMMEDIATELY PROCEED WITH THE SAID

HEARING.
IF THE RESPONDENT FAILS TO APPEAR ON THE DATE OF THE PRELIMINARY
CONFERENCE AND HEARING ON THE MERITS DESPITE PROPER NOTICE, THE COURT
SHALL ALLOW EX-PARTE PRESENTATION OF EVIDENCE BY THE PETITIONER AND
RENDER JUDGMENT ON THE BASIS OF THE PLEADINGS AND EVIDENCE ON RECORD.
NO DELEGATION OF THE RECEPTION OF EVIDENCE SHALL BE ALLOWED.
SO ORDERED.[4] (Emphasis supplied.)
S/Sgt. Yahon, having been personally served with copy of the TPO, appeared during
the scheduled pre-trial but informed the court that he did not yet have a counsel
and requested for time to hire his own counsel. However, he did not hire a counsel
nor file an opposition or answer to the petition. Because of his failure to appear in
the subsequent hearings of the case, the RTC allowed the ex-parte presentation of
evidence to determine the necessity of issuance of a Permanent Protection Order
(PPO).
Meanwhile, as prayed for by respondent who manifested that S/Sgt. Yahon
deliberately refused to give her spousal support as directed in the TPO (she claimed
that she had no source of livelihood since he had told her to resign from her job and
concentrate on keeping their house), the RTC issued another order directing S/Sgt.
Yahon to give respondent spousal support in the amount of P4,000.00 per month
and fifty percent (50%) of his retirement benefits which shall be automatically
deducted and given directly to respondent. [5]
In her testimony, respondent also said that S/Sgt. Yahon never complied with the
TPO as he continued making threats and inflicting physical abuse on her person,
and failed to give her spousal support as ordered by the court.
On July 23, 2007, the RTC rendered its Decision, [6] as follows:
After careful review and scrutiny of the evidence presented in this case, this court
finds that there is a need to permanently protect the applicant, Daisy R. Yahon from
further acts of violence that might be committed by respondent against her.
Evidences showed that respondent who was a member of the Armed Forces of the
Philippines assigned at the Headquarters 4ID Camp Evangelista, Cagayan de Oro
City had been repeatedly inflicting physical, verbal, emotional and economic abuse
and violence upon the petitioner. Respondent in several instances had slapped,
mauled and punched petitioner causing her physical harm. Exhibits G and D are
medical certificates showing physical injuries suffered by petitioner inflicted by the
respondent at instances of their marital altercations. Respondent at the height of
his anger often poked a gun on petitioner and threatened to massacre her and her
child causing them to flee for their lives and sought refuge from other people. He
had demanded sex from petitioner at an unreasonable time when she was sick and
chilling and when refused poked a gun at her. Several police blotters were offered

as evidence by petitioner documenting the incidents when she was subjected to

respondents ill temper and ill treatment. Verbally, petitioner was not spared from
respondents abuses by shouting at her that he was wishing she would die and he
would celebrate if it happens and by calling and sending her threatening text
messages. These incidents had caused petitioner great psychological trauma
causing her [to] fear for her life and these forced her to seek refuge from the court
for protection. Economically, petitioner was also deprived by respondent of her
spousal support despite order of the court directing him to give a monthly support
of Php4,000.00. In view of the foregoing, this court finds a need to protect the life
of the petitioner not only physically but also emotionally and psychologically.
Based on the evidence presented, both oral and documentary, and there being no
controverting evidence presented by respondent, this Court finds that the applicant
has established her case by preponderance of evidence.
WHEREFORE, premises considered, judgment is hereby rendered GRANTING the
petition, thus, pursuant to Sec. 30 of A.M. No. 04-10-1-SC, let a PERMANENT
PROTECTION ORDER be issued immediately and respondent, S/Sgt. CHARLES A.
YAHON is ordered to give to petitioner, DAISY R. YAHON the amount of FOUR
THOUSAND PESOS (Php4,000.00) per month by way of spousal support.
Pursuant to the order of the court dated February 6, 2007, respondent, S/Sgt.
Charles A. Yahon is directed to give it to petitioner 50% of whatever
retirement benefits and other claims that may be due or released to him
from the government and the said share of petitioner shall be
automatically deducted from respondents benefits and claims and be
given directly to the petitioner, Daisy R. Yahon.
Let copy of this decision be sent to the Commanding General/Officer of Finance
Center of the Armed Forces of the Philippines, Camp Emilio Aguinaldo, Quezon City;
the Management of RSBS, Camp Emilio Aguinaldo, Quezon City and the Regional
Manager of PAG-IBIG, Mortola St., Cagayan de Oro City for their guidance and strict
compliance.
SO ORDERED.[7] (Emphasis supplied.)
Herein petitioner Armed Forces of the Philippines Finance Center (AFPFC), assisted
by the Office of the Judge Advocate General (OTJAG), AFP, filed before the RTC a
Manifestation and Motion (To Lift Temporary Protection Order Against the AFP) [8]
dated November 10, 2008. Stating that it was making a limited and special
appearance, petitioner manifested that on August 29, 2008, it furnished the AFP
Pension and Gratuity Management Center (PGMC) copy of the TPO for appropriate
action. The PGMC, on September 2, 2008, requested the Chief, AFPFC the
temporary withholding of the thirty-six (36) Months Lump Sum (MLS) due to S/Sgt.
Yahon. Thereafter, on October 29, 2008, PGMC forwarded a letter to the Chief of
Staff, AFP for the OTJAG for appropriate action on the TPO, and requesting for legal

opinion as to the propriety of releasing the 36 MLS of S/Sgt. Yahon. Petitioner

informed the RTC that S/Sgt. Yahons check representing his 36 MLS had been
processed and is ready for payment by the AFPFC, but to date said check has not
been claimed by respondent.
Petitioner further asserted that while it has initially discharged its obligation under
the TPO, the RTC had not acquired jurisdiction over the military institution due to
lack of summons, and hence the AFPFC cannot be bound by the said court order.
Additionally, petitioner contended that the AFPFC is not a party-in-interest and is a
complete stranger to the proceedings before the RTC on the issuance of TPO/PPO.
Not being impleaded in the case, petitioner lamented that it was not afforded due
process and it was thus improper to issue execution against the AFPFC.
Consequently, petitioner emphasized its position that the AFPFC cannot be directed
to comply with the TPO without violating its right to procedural due process.
In its Order[9] dated December 17, 2008, the RTC denied the aforesaid motion for
having been filed out of time. It noted that the September 28, 2006 TPO and July
23, 2007 Decision granting Permanent Protection Order (PPO) to respondent had
long become final and executory.
Petitioners motion for reconsideration was likewise denied under the RTCs Order [10]
dated March 6, 2009.
On May 27, 2009, petitioner filed a petition for certiorari before the CA praying for
the nullification of the aforesaid orders and decision insofar as it directs the AFPFC
to automatically deduct from S/Sgt. Yahons retirement and pension benefits and
directly give the same to respondent as spousal support, allegedly issued with
grave abuse of discretion amounting to lack of jurisdiction.
Respondent filed her Comment with Prayer for Issuance of Preliminary Injunction,
manifesting that there is no information as to whether S/Sgt. Yahon already received
his retirement benefit and that the latter has repeatedly violated the TPO,
particularly on the provision of spousal support.
After due hearing, the CAs Twenty-Second Division issued a Resolution [11] granting
respondents application, viz:
Upon perusal of the respective pleadings filed by the parties, the Court finds
meritorious private respondents application for the issuance of an injunctive relief.
While the 36-month lump sum retirement benefits of S/Sgt. Charles A. Yahon has
already been given to him, yet as admitted by petitioner itself, the monthly pension
after the mentioned retirement benefits has not yet been released to him. It
appears that the release of such pension could render ineffectual the eventual
ruling of the Court in this Petition.
IN VIEW OF THE FOREGOING, let a WRIT OF PRELIMINARY INJUNCTION issue
enjoining the Armed Forces of the Philippines Finance Center, its employees, agents,

representatives, and any all persons acting on its behalf, from releasing the
remaining pension that may be due to S/Sgt. Charles A. Yahon.
SO ORDERED.[12]
By Decision dated November 29, 2011, the CA denied the petition for certiorari and
affirmed the assailed orders and decision of the RTC. The CA likewise denied
petitioners motion for reconsideration.
In this petition, the question of law presented is whether petitioner military
institution may be ordered to automatically deduct a percentage from the
retirement benefits of its enlisted personnel, and to give the same directly to the
latters lawful wife as spousal support in compliance with a protection order issued
by the RTC pursuant to R.A. No. 9262.
A protection order is an order issued by the court to prevent further acts of violence
against women and their children, their family or household members, and to grant
other necessary relief. Its purpose is to safeguard the offended parties from further
harm, minimize any disruption in their daily life and facilitate the opportunity and
ability to regain control of their life.[13] The protection orders issued by the court
may be a Temporary Protection Order (TPO) or a Permanent Protection Order (PPO),
while a protection order that may be issued by the barangay shall be known as a
Barangay Protection Order (BPO).[14]
Section 8 of R.A. No. 9262 enumerates the reliefs that may be included in the TPO,
PPO or BPO, to wit:
(a) Prohibition of the respondent from threatening to commit or committing,
personally or through another, any of the acts mentioned in Section 5 of this Act;
(b) Prohibition of the respondent from harassing, annoying, telephoning, contacting
or otherwise communicating with the petitioner, directly or indirectly;
(c) Removal and exclusion of the respondent from the residence of the petitioner,
regardless of ownership of the residence, either temporarily for the purpose of
protecting the petitioner, or permanently where no property rights are violated, and
if respondent must remove personal effects from the residence, the court shall
direct a law enforcement agent to accompany the respondent to the residence,
remain there until respondent has gathered his things and escort respondent from
the residence;
(d) Directing the respondent to stay away from petitioner and any designated family
or household member at a distance specified by the court, and to stay away from
the residence, school, place of employment, or any specified place frequented by
the petitioner and any designated family or household member;

(e) Directing lawful possession and use by petitioner of an automobile and other
essential personal effects, regardless of ownership, and directing the appropriate
law enforcement officer to accompany the petitioner to the residence of the parties
to ensure that the petitioner is safely restored to the possession of the automobile
and other essential personal effects, or to supervise the petitioners or respondents
removal of personal belongings;
(f) Granting a temporary or permanent custody of a child/children to the petitioner;
(g) Directing the respondent to provide support to the woman and/or her child if
entitled to legal support. Notwithstanding other laws to the contrary, the
court shall order an appropriate percentage of the income or salary of the
respondent to be withheld regularly by the respondent's employer for the
same to be automatically remitted directly to the woman. Failure to remit
and/or withhold or any delay in the remittance of support to the woman
and/or her child without justifiable cause shall render the respondent or
his employer liable for indirect contempt of court;
(h) Prohibition of the respondent from any use or possession of any firearm or
deadly weapon and order him to surrender the same to the court for appropriate
disposition by the court, including revocation of license and disqualification to apply
for any license to use or possess a firearm. If the offender is a law enforcement
agent, the court shall order the offender to surrender his firearm and shall direct the
appropriate authority to investigate on the offender and take appropriate action on
matter;
(i) Restitution for actual damages caused by the violence inflicted, including, but not
limited to, property damage, medical expenses, child care expenses and loss of
income;
(j) Directing the DSWD or any appropriate agency to provide petitioner temporary
shelter and other social services that the petitioner may need; and
(k) Provision of such other forms of relief as the court deems necessary to protect
and provide for the safety of the petitioner and any designated family or household
member, provided petitioner and any designated family or household member
consents to such relief. (Emphasis supplied.)
Petitioner argues that it cannot comply with the RTCs directive for the automatic
deduction of 50% from S/Sgt. Yahons retirement benefits and pension to be given
directly to respondent, as it contravenes an explicit mandate under the law
governing the retirement and separation of military personnel.
The assailed provision is found in Presidential Decree (P.D.) No. 1638, [15] which
states:

Section 31. The benefits authorized under this Decree, except as provided herein,
shall not be subject to attachment, garnishment, levy, execution or any
tax whatsoever; neither shall they be assigned, ceded, or conveyed to any
third person: Provided, That if a retired or separated officer or enlisted man who is
entitled to any benefit under this Decree has unsettled money and/or property
accountabilities incurred while in the active service, not more than fifty per centum
of the pension gratuity or other payment due such officer or enlisted man or his
survivors under this Decree may be withheld and be applied to settle such
accountabilities. (Emphasis supplied.)
A similar provision is found in R.A. No. 8291, otherwise known as the Government
Service Insurance System Act of 1997, which reads:
SEC. 39. Exemption from Tax, Legal Process and Lien -- x x x
xxxx
The funds and/or the properties referred to herein as well as the benefits, sums or
monies corresponding to the benefits under this Act shall be exempt from
attachment, garnishment, execution, levy or other processes issued by the courts,
quasi-judicial agencies or administrative bodies including Commission on Audit
(COA) disallowances and from all financial obligations of the members, including his
pecuniary accountability arising from or caused or occasioned by his exercise or
performance of his official functions or duties, or incurred relative to or in
connection with his position or work except when his monetary liability, contractual
or otherwise, is in favor of the GSIS.
In Sarmiento v. Intermediate Appellate Court, [16] we held that a court order directing
the Philippine National Bank to refrain from releasing to petitioner all his retirement
benefits and to deliver one-half of such monetary benefits to plaintiff as the latters
conjugal share is illegal and improper, as it violates Section 26 of CA 186 (old GSIS
Law) which exempts retirement benefits from execution.
The foregoing exemptions have been incorporated in the 1997 Rules of Civil
Procedure, as amended, which governs execution of judgments and court orders.
Section 13 of Rule 39 enumerates those properties which are exempt from
execution:
SEC. 13. Property exempt from execution. Except as otherwise expressly
provided by law, the following property, and no other, shall be exempt from
execution:
xxxx
(l) The right to receive legal support, or money or property obtained as such

support, or any pension or gratuity from the Government; (Emphasis

supplied.)
It is basic in statutory construction that in case of irreconcilable conflict between
two laws, the later enactment must prevail, being the more recent expression of
legislative will.[17] Statutes must be so construed and harmonized with other
statutes as to form a uniform system of jurisprudence. [18] However, if several laws
cannot be harmonized, the earlier statute must yield to the later enactment. The
later law is the latest expression of the legislative will. [19]
We hold that Section 8(g) of R.A. No. 9262, being a later enactment, should be
construed as laying down an exception to the general rule above-stated that
retirement benefits are exempt from execution. The law itself declares that the
court shall order the withholding of a percentage of the income or salary of the
respondent by the employer, which shall be automatically remitted directly to the
woman [n]otwithstanding other laws to the contrary.
Petitioner further contends that the directive under the TPO to segregate a portion
of S/Sgt. Yahons retirement benefits was illegal because said moneys remain as
public funds, citing the case of Pacific Products v. Ong.[20] In that case, this Court
sustained the CA when it held that the garnishment of the amount of P10,500
payable to BML Trading and Supply while it was still in the possession of the Bureau
of Telecommunications was illegal and therefore, null and void. The CA therein
relied on the previous rulings in Director of Commerce and Industry v. Concepcion [21]
and Avendano v. Alikpala, et al.[22] wherein this Court declared null and void the
garnishment of the salaries of government employees.
Citing the two aforementioned cases, we thus declared in Pacific Products:
A rule, which has never been seriously questioned, is that money in the hands of
public officers, although it may be due government employees, is not liable to the
creditors of these employees in the process of garnishment. One reason is, that the
State, by virtue of its sovereignty may not be sued in its own courts except by
express authorization by the Legislature, and to subject its officers to garnishment
would be to permit indirectly what is prohibited directly. Another reason is that
moneys sought to be garnished, as long as they remain in the hands of the
disbursing officer of the Government, belong to the latter, although the defendant
in garnishment may be entitled to a specific portion thereof. And still another
reason which covers both of the foregoing is that every consideration of public
policy forbids it.[23]
We disagree.
Section 8(g) of R.A. No. 9262 used the general term employer, which includes in
its coverage the military institution, S/Sgt. Yahons employer. Where the law does
not distinguish, courts should not distinguish. Thus, Section 8(g) applies to all

employers, whether private or government.

It bears stressing that Section 8(g) providing for spousal and child support, is a
support enforcement legislation. In the United States, provisions of the Child
Support Enforcement Act[24] allow garnishment of certain federal funds where the
intended recipient has failed to satisfy a legal obligation of child support. As these
provisions were designed to avoid sovereign immunity problems and provide that
moneys payable by the Government to any individual are subject to child support
enforcement proceedings, the law is clearly intended to create a limited waiver of
sovereign immunity so that state courts could issue valid orders directed against
Government agencies attaching funds in their possession. [25]
This Court has already ruled that R.A. No. 9262 is constitutional and does not violate
the equal protection clause. In Garcia v. Drilon[26] the issue of constitutionality was
raised by a husband after the latter failed to obtain an injunction from the CA to
enjoin the implementation of a protection order issued against him by the RTC. We
ruled that R.A. No. 9262 rests on real substantial distinctions which justify the
classification under the law: the unequal power relationship between women and
men; the fact that women are more likely than men to be victims of violence; and
the widespread bias and prejudice against women.
We further held in Garcia that the classification is germane to the purpose of the
law, viz:
The distinction between men and women is germane to the purpose of R.A. 9262,
which is to address violence committed against women and children, spelled out in
its Declaration of Policy, as follows:
SEC. 2. Declaration of Policy. It is hereby declared that the State values the dignity
of women and children and guarantees full respect for human rights. The State also
recognizes the need to protect the family and its members particularly women and
children, from violence and threats to their personal safety and security.
Towards this end, the State shall exert efforts to address violence committed against
women and children in keeping with the fundamental freedoms guaranteed under
the Constitution and the provisions of the Universal Declaration of Human Rights,
the Convention on the Elimination of All Forms of Discrimination Against Women,
Convention on the Rights of the Child and other international human rights
instruments of which the Philippines is a party. [27]
Under R.A. No. 9262, the provision of spousal and child support specifically address
one form of violence committed against women economic abuse.
D. Economic abuse refers to acts that make or attempt to make a woman
financially dependent which includes, but is not limited to the following:
1. Withdrawal of financial support or preventing the victim from engaging in any

legitimate profession, occupation, business or activity, except in cases wherein the

other spouse/partner objects on valid, serious and moral grounds as defined in
Article 73 of the Family Code;
2. Deprivation or threat of deprivation of financial resources and the right to the use
and enjoyment of the conjugal, community or property owned in common;
3. Destroying household property;
4. Controlling the victims' own money or properties or solely controlling the conjugal
money or properties.[28]
The relief provided in Section 8(g) thus fulfills the objective of restoring the dignity
of women who are victims of domestic violence and provide them continued
protection against threats to their personal safety and security.
The scope of reliefs in protection orders is broadened to ensure that the victim or
offended party is afforded all the remedies necessary to curtail access by a
perpetrator to the victim. This serves to safeguard the victim from greater risk of
violence; to accord the victim and any designated family or household member
safety in the family residence, and to prevent the perpetrator from committing acts
that jeopardize the employment and support of the victim. It also enables the court
to award temporary custody of minor children to protect the children from violence,
to prevent their abduction by the perpetrator and to ensure their financial
support.[29]
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated
November 29, 2011 and Resolution dated March 9, 2012 of the Court of Appeals
Mindanao Station in CA-G.R. SP No. 02953-MIN are AFFIRMED and UPHELD.
No costs.
SO ORDERED.
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Reyes, JJ., concur.

[1]

Rollo, pp. 36-45. Penned by Associate Justice Edgardo A. Camello with Associate
Justices Pamela Ann Abella Maxino and Zenaida T. Galapate-Laguilles concurring.
[2]

[3]

Id. at 46-47.

AN ACT DEFINING VIOLENCE AGAINST WOMEN AND THEIR CHILDREN, PROVIDING

FOR PROTECTIVE MEASURES FOR VICTIMS, PRESCRIBING PENALTIES THEREFOR,
AND FOR OTHER PURPOSES.

[4]

Id. at 63-64.

[5]

Id. at 76.

[6]

Id. at 75-80. Penned by Presiding Justice Francisco L. Calingin.

[7]

Id. at 78-79.

[8]

Id. at 65-72.

[9]

Id. at 73-74.

[10]

Id. at 88.

[11]

CA rollo, pp. 222-223.

[12]

Id. at 223.

[13]

Sec. 4(o), A.M. No. 04-10-11-SC (Rule on Violence Against Women and Their
Children).
[14]

Sec. 11, Rule IV, Implementing Rules and Regulations of R.A. No. 9262.

[15]

Issued on September 10, 1979.

[16]

237 Phil. 106, 112-113 (1987).

[17]

Magno v. Commission on Elections, 439 Phil. 339, 347 (2002), citing Philippine
National Bank v. Cruz, 259 Phil. 696, 701-702 (1989).
[18]

Valera v. Tuazon, 80 Phil. 823 (1948).

[19]

Eraa v. Vergel de Dios, 85 Phil. 17 (1947); City of Naga vs. Agna, 71 SCRA 176
(1976).
[20]

260 Phil. 583 (1990).

[21]

43 Phil. 384 (1922).

[22]

120 Phil. 1331 (1964).

[23]

Supra note 20, at 591.

[24]

42 USCS. 659(a).

[25]

See Rose v. Rose, et al., 481 U.S. 619 (1987).

[26]

G.R. No. 179267, June 25, 2013, 699 SCRA 352.

[27]

Id. at 421.

[28]

Sec. 3, R.A. No. 9262.

[29]

RATIONALE OF THE PROPOSED RULE ON VIOLENCE AGAINST WOMEN AND THEIR

CHILDREN.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

SECOND DIVISION
G.R. No. 196950, June 18, 2014
HELEN E. CABLING, ASSISTED BY HER HUSBAND ARIEL CABLING,
PETITIONER, VS. JOSELIN TAN LUMAPAS, AS REPRESENTED BY NORY
ABELLANES, RESPONDENT.
DECISION
BRION, J.:
We review the present petition for review on certiorari[1] that assails the May 12,
2011 decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 110865. The CA
dismissed the petition for certiorari, prohibition and mandamus filed by petitioner
Helen E. Cabling, assisted by her husband Ariel Cabling, which questioned the July
14, 2009[3] and September 10, 2009[4] orders of the Regional Trial Court (RTC) 3rd
Judicial Region, Branch 75, Olongapo City, in Other Case No. 16-0-09.
The Facts
The petitioner was the highest bidder in an extrajudicial foreclosure sale conducted
on December 21, 2007 over a 216-square meter property situated in the Barrio of
Sta. Rita, Olongapo City and covered by Transfer Certificate of Title (TCT) No. T14852.[5] The Final Deed of Sale[6] was issued by the Sheriff of Olongapo City on
February 14, 2009 and the title to the property was duly transferred. TCT No. T14853 was issued to the petitioner on March 23, 2009. [7]
On May 6, 2009, the petitioner filed an Application [8] for the Issuance of a Writ of
Possession with the RTC.

On May 19, 2009, the RTC issued an order[9] granting the petitioners application,
and subsequently issued a Writ of Possession [10] and Notice to Vacate[11] dated May
20, 2009 and May 25, 2009, respectively.
On May 29, 2009, respondent Joselin Tan Lumapas, through counsel, filed a Motion
for Leave of Court for Intervention as Party Defendant (with Urgent Motion to Hold in
Abeyance Implementation of Writ of Possession)[12] and an Answer in Intervention,[13]
as a third party in actual possession of the foreclosed property. She claimed that the
property had previously been sold to her by Aida Ibabao, the propertys registered
owner and the judgment debtor/mortgagor in the extrajudicial foreclosure sale,
pursuant to a Deed of Conditional Sale. [14]
On June 1, 2009, the RTC issued an order [15] holding in abeyance the implementation
of the petitioners writ of possession until after the resolution of the respondents
motion. The following day, the RTC denied the respondents motion for intervention.
[16]
The respondent promptly filed a motion for reconsideration. [17]
The RTCs Orders
On July 14, 2009, the RTC issued the 1st assailed order[18] granting the respondents
motion for reconsideration. It recalled and rendered ineffective the writ of
possession issued to the petitioner, stating that an ex-parte writ of possession
issued pursuant to Act No. 335 (sic), as amended, cannot be enforced against a
third person who is in actual possession of the foreclosed property and who is not in
privity with the debtor/mortgagor. [19] Considering that the respondent was not a
party to the extrajudicial foreclosure, the RTC held that she cannot be ousted of her
possession by a mere ex-parte motion for the issuance of a possessory writ, and
that the petitioner must now resort to the appropriate judicial process in order to
recover the foreclosed property.
This time, the petitioner moved to reconsider the RTCs July 14, 2009 order, but the
RTC denied the petitioners motion in an order dated September 10, 2009 - the 2 nd
assailed order.[20]
The CA Ruling
Before the CA, the petitioner filed a petition for certiorari, prohibition and
mandamus, under Rule 65 of the Rules of Court, assailing the July 14, 2009 and
September 10, 2009 orders of the RTC.
In a decision dated May 12, 2011, the CA dismissed the petitioners Rule 65 petition
and affirmed in toto the RTCs assailed orders. It ruled that, while the issuance of a
writ of possession is generally a ministerial act, the RTC committed no grave abuse
of discretion in recalling the petitioners writ of possession because the obligation
of the trial court to issue a writ of possession ceases to be ministerial once it

appears that there is a third party in possession of the property claiming a right
adverse to that of the debtor/mortgagor[; and where] such third party exists, the
trial court should conduct a hearing to determine the nature of his adverse
possession.[21]
The Petition
The petitioner argues that the present case is not an exception to the ministerial
issuance of a writ of possession.
While recognizing the respondents actual possession of the subject property, the
petitioner contends that such possession is not adverse to that of the judgment
debtor/mortgagor. Neither is possession in the concept of an owner because in a
conditional sale, ownership is retained by the seller until the fulfillment of a positive
suspensive condition, that is, the full payment of the purchase price.
Our Ruling
We find merit in the petitioners arguments.
The well-settled rule is that in the extrajudicial foreclosure of real estate mortgages
under Act No. 3135[22] (as amended), the issuance of a writ of possession [23] is
ministerial upon the court after the foreclosure sale and during the redemption
period when the court may issue the order for a writ of possession upon the mere
filing of an ex parte motion and the approval of the corresponding bond. [24]
The writ of possession also issues as a matter of course, without need of a bond or
of a separate and independent action, after the lapse of the period of redemption, [25]
and after the consolidation of ownership and the issuance of a new TCT in
the purchasers name.[26]
There is, however, an exception to the rule.
Under Section 33,[27] Rule 39 of the Rules of Court, which is made applicable to
extrajudicial foreclosures of real estate mortgages, the possession of the property
shall be given to the purchaser or last redemptioner unless a third party is actually
holding the property in a capacity adverse to the judgment obligor. [28] Thus, the
courts obligation to issue an ex parte writ of possession in favor of the purchaser in
an extrajudicial foreclosure sale ceases to be ministerial when there is a third party
in possession of the property claiming a right adverse to that of the judgment
debtor/mortgagor.
We emphasize that the exception provided under Section 33, Rule 39 of the Rules of
Court contemplates a situation in which a third party holds the property by
adverse title or right, such as that of a co-owner, tenant or usufructuary, who
possesses the property in his own right, and is not merely the successor

or transferee of the right of possession of another co-owner or the owner

of the property.[29]
In the present case, the respondent cannot be said to possess the subject property
by adverse title or right as her possession is merely premised on the alleged
conditional sale of the property to her by the judgment debtor/mortgagor.
The execution of a contract of conditional sale does not immediately transfer title to
the property to be sold from seller to buyer. In such contract, ownership or title to
the property is retained by the seller until the fulfillment of a positive suspensive
condition which is normally the payment of the purchase price in the manner
agreed upon.[30]
In the present case, the Deed of Conditional Sale between the respondent (buyer)
and the subject propertys registered owner (seller) expressly reserved to the latter
ownership over the property until full payment of the purchase price, despite the
delivery of the subject property to the respondent. It is provided in paragraph 6 of
the parties contract that only upon full payment of the total sale value of P2.2
million that the seller shall execute a deed of absolute sale in favor of the
respondent.[31]
It likewise appears from the records that no deed of absolute sale over the subject
property has been executed in the respondents favor. Thus, the respondents
possession from the time the subject property was delivered to her by the seller
cannot be claimed as possession in the concept of an owner, as the ownership and
title to the subject property still then remained with the seller until the title to the
property was transferred to the petitioner in March 2009. In order for the
respondent not to be ousted by the ex parte issuance of a writ of possession, her
possession of the property must be adverse in that she must prove a right
independent of and even superior to that of the judgment
debtor/mortgagor.
Under these circumstances, the general rule, and not the exception, applies.
WHEREFORE, premises considered, we GRANT the petition for review on certiorari
and REVERSE and SET ASIDE the May 12, 2011 decision of the Court of Appeals in
CA-G.R. SP No. 110865.
Accordingly, we ORDER the Regional Trial Court, 3rd Judicial Region, Branch 75,
Olongapo City, to issue a Writ of Possession in favor of petitioner Helen E. Cabling.
SO ORDERED.
Del Castillo, Perez, Mendoza,** and Perlas-Bernabe, JJ., concur.

In lieu of Associate Justice Antonio T. Carpio per Special Order No. 1699 dated June
13, 2014.
**

Designated as Acting Member in lieu of Associate Justice Antonio T. Carpio per

Special Order No. 1696 dated June 13, 2014.
[1]

Filed under Rule 45 of the Rules of Court.

[2]

Rollo, pp. 20-28; penned by Associate Justice Jane Aurora C. Lantion, and
concurred in by Presiding Justice Andres B. Reyes, Jr. and Associate Justice Japar B.
Dimaampao.
[3]

Id. at 29-30; penned by Judge Raymond C. Viray.

[4]

Id. at 31.

[5]

Particularly described in a Certificate of Sale issued by the RTC on December 21,

2007; id. at 110-111.
[6]

Id. at 112-113.

[7]

Id. at 53-54.

[8]

Id. at 45-52.

[9]

Id. at 61.

[10]

Id. at 62.

[11]

Id. at 109.

[12]

Id. at 64-68.

[13]

Id. at 75-78.

[14]

Id. at 104-105.

[15]

Id. at 84.

[16]

In an order dated June 2, 2009; id. at 85-86.

[17]

In a motion for reconsideration dated June 11, 2009 and a Supplemental Motion
for Reconsideration dated June 19, 2009; id. at 87-88 and 118-120, respectively.
[18]

Supra note 3.

[19]

Rollo, p. 29.

[20]

Supra note 4.

[21]

Rollo, p. 26.

[22]

Also known as An Act to Regulate the Sale of Property under Special Powers
Inserted in or Annexed to Real-Estate Mortgages, approved on March 6, 1924.
[23]

A writ of possession is an order of the court commanding the sheriff to place a

person in possession of a real or personal property.
[24]

Section 7, Act No. 3135, as amended by Act No. 4118.

[25]

Bank of the Phil. Islands v. Icot, et al., 618 Phil. 320, 328-329 (2009).

[26]

Devt Bank of the Phils. v. Prime Neighborhood Assn., 605 Phil. 660, 669 (2009).

[27]

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 purchaser or last redemptioner by the same officer
unless a third party is actually holding the property adversely to the
judgment obligor. [emphasis ours, italics supplied]
[28]

See Bank of the Phil. Islands v. Icot, et al., supra note 25; Devt Bank of the Phils.
v. Prime Neighborhood Assn., supra note 26, at 671; Dayot v. Shell Chemical
Company, (Phils.), Inc., 552 Phil. 602, 616 (2007); and Philippine National Bank v.
Court of Appeals, 424 Phil. 757, 769 (2002).
[29]

China Banking Corp. v. Sps. Lozada, 579 Phil. 454, 478-480 (2008).

[30]

Gomez v. Court of Appeals, 395 Phil. 115, 124 (2000).

[31]

Rollo, p. 105.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

G.R. No. 182571

FIRST DIVISION
G.R. No. 182571, September 02, 2013
LIGAYA ESGUERRA, LOWELL ESGUERRA AND LIESELL ESGUERRA,
PETITIONERS, VS. HOLCIM PHILIPPINES, INC., RESPONDENT.
DECISION
REYES, J.:

The present petition is an offshoot of our final and executory decision promulgated
on December 27, 2002 in G.R. No. 120004, entitled Iluminada de Guzman v. Court
of Appeals and Jorge Esguerra.[1] Ligaya Esguerra (Ligaya), Lowell Esguerra
(Lowell), and Liesell Esguerra (Liesell) (petitioners) are heirs of Jorge Esguerra
(Esguerra) while herein respondent, HOLCIM Philippines, Inc. (HOLCIM) is the
successor-in-interest of Iluminada de Guzman (de Guzman).
In the instant petition, the petitioners assail the Decision [2] dated August 31, 2007
and Resolution[3] dated April 14, 2008 of the Court of Appeals (CA) in CA-G.R. SP No.
94838 which reversed and set aside the: (a) Order [4] dated December 1, 2005 of the
Regional Trial Court (RTC) of Malolos, Bulacan, Branch 16 granting the petitioners
motion for the issuance of the alias writ of execution of the Decision dated
December 27, 2002 in G.R. No. 120004, which ordered HOLCIM to pay the amount
equivalent to the total volume of limestones extracted from the subject property in
the sum of P91,872,576.72; (b) Order[5] dated December 20, 2005, which reiterated
the issuance of the alias writ of execution; and (c) Order [6] dated June 7, 2006, which
denied the motion for reconsideration of the above-mentioned orders and the
manifestation and motion for ocular inspection filed by HOLCIM. The CAs Resolution
dated April 14, 2008 denied herein petitioners motion for reconsideration of the
CAs Decision dated August 31, 2007.
Antecedent Facts
As a backgrounder and as stated in our Decision dated December 27, 2002 in G.R.
No. 120004, therein respondent Esguerra filed on December 12, 1989 with the RTC,
Malolos, Bulacan, Branch 16 an action to annul the Free Patent in the name of de
Guzman. Esguerra claimed that he was the owner of Lot 3308-B, located at Matiktik,
Norzagaray, Bulacan, covered by Transfer Certificate of Title No. T-1685-P (M) of the
Registry of Deeds of Bulacan, with an approximate area of 47,000 square meters.
Esguerra learned that the said parcel of land was being offered for sale by de
Guzman to Hi-Cement Corporation (now named HOLCIM Philippines, Inc.). The
former possessor of the land, Felisa Maningas, was issued Free Patent No. 575674
which was subsequently issued in the name of de Guzman over said parcel of land
located at Gidgid, Norzagaray, Bulacan with an area of 20.5631 hectares and
described in Psu-216349, covered by Original Certificate of Title (OCT) No. P-3876.
Esguerra also demanded that the portion of his property, which has been
encroached upon and included in de Guzmans Free Patent, be excluded. He later
amended his complaint to implead Hi-Cement as a co-defendant since the latter
was hauling marble from the subject land. He also prayed that Hi-Cement be
ordered to desist from hauling marble, to account for the marble already hauled and
to pay him.[7]
The RTC dismissed Esguerras complaint but on appeal, the CA reversed in the
Decision dated February 28, 1995 in CA-G.R. CV No. 40140. The dispositive portion
reads as follows:

WHEREFORE, premises considered, the decision appealed from is REVERSED and

SET ASIDE and another judgment is hereby rendered:
1. Declaring [de Guzmans] OCT No. P-3876 (Exh. B) null and void insofar as the
disputed area of 38,641 square meters, which is part of Lot 3308-B, covered by TCT
No. 1685-p (Exh. C) in the name of [Esguerra];
2. Ordering [de Guzman] to cause the segregation, at his expense, of the disputed
area of 38,641 square meters from OCT No. P-3876;
3. Ordering [de Guzman] to surrender her owners copy of OCT No. P-3876 to the
Register of Deeds of Bulacan who is in turn ordered to exclude from said OCT No. P3876 the disputed area of 38,641 square meters included in [Esguerras] TCT No. T1685;
4. Ordering [de Guzman] to immediately vacate and surrender to [Esguerra]
possession of the disputed area of 38,641 square meters;
5. Ordering defendant-appellee Hi-Cement Corporation to immediately cease and
desist from quarrying or extracting marble from the disputed area;
6. Ordering defendant-appellee Hi-Cement Corporation to make an accounting of
the compensation or royalty it has paid to defendant-appellee Iluminada de Guzman
for marbles quarried from the disputed area of 38,451 square meters from the time
of the filing of the amended complaint on March 23, 1990.
7. Ordering and sentencing defendant-appellee Iluminada de Guzman to pay and
turn over to [Esguerra] all such amounts that she has received from her codefendant Hi-Cement Corporation as compensation or royalty for marbles extracted
or quarried from the disputed area of 38,451 square meters beginning March 23,
1990; and
8. Ordering defendant-appellee Iluminada de Guzman to pay the costs.
SO ORDERED.[8]
In our Decision dated December 27, 2002 in G.R. No. 120004, the Court affirmed in
toto the aforesaid CAs decision. After attaining finality, the case was remanded to
the RTC for execution.[9]
Thereafter, the heirs of Esguerra, herein petitioners, filed an Omnibus Motion [10]
dated September 28, 2004 with the RTC, manifesting that the Courts decision in
G.R. No. 120004 has yet to be executed,[11] and thus prayed:
xxxx
1. That Sheriff Perlito Dimagiba be directed to submit his Return on the execution of

the judgment;
2. That defendant Iluminada de Guzman and Hi-Cement (now Union Cement
Corporation Matictic, Sapang Kawayn [sic], Norzagaray, Bulacan) be diverted [sic] to
appear before this Honorable Court x x x;
3. That the plaintiffs be granted other legal and equitable reliefs. [12]
On December 1, 2004, the RTC issued an Order [13], to wit:
Acting on the Omnibus Motion filed by the Heirs of Jorge Esguerra, through counsel,
Atty. Orlando Lambino, and pursuant to Secs. 36 and 37, Rule 39 of [the] 1997 Rules
of Civil Procedure, the Court hereby GRANTS the same
AS PRAYED FOR, x x x Sheriff Perlito Dimagiba is hereby directed to submit his
return of a Writ of Execution dated October 28, 2003 within five (5) days from
receipt of this Order.
Accordingly, defendant Iluminada de Guzman of Tanza, Malabon, Metro Manila and
the Hi-Cement (now Union Cement Corporation, Matictic, Sapang Kawayan,
Norzagaray, Bulacan) are hereby ordered to appear before this Court on December
6, 2004 at 8:30 oclock in the morning to be examined on the dispositive portion of
the judgment of the Court of Appeals, affirmed by the Supreme Court. [14]
However, contrary to the Order dated December 1, 2004, de Guzman and HOLCIM
were not examined. Rather, the petitioners presented Engineer Louie Balicanta who
testified that upon an examination of the topographical maps covering the land of
the deceased Esguerra, the estimated volume of limestone hauled or quarried
therefrom covering the years 1990 to 2003 was 3,535,020.471 cubic meters. On
May 16, 2005, the petitioners filed their Formal Offer of Exhibits. [15]
Later, the petitioners filed a Supplement to the Motion for Execution [16] dated August
16, 2005 and a Motion for Alias Writ of Execution [17] dated November 9, 2005. They
claimed that the royalties due them amounted to P10.00 per metric ton. Thus, for
the 9,187,257.67 metric tons[18] of limestone which HOLCIM allegedly acquired, the
petitioners should receive a total royalty of P91,872,576.72. [19]
On December 1, 2005, the RTC made a finding that the total volume of limestone
which HOLCIM allegedly quarried from the subject land amounted to
P91,872,576.72. It also ordered the issuance of an Alias Writ of Execution for the
royalties which were purportedly due to the petitioners. [20] The said order states:
Acting on the motion for alias writ of execution filed by the [petitioners], through
counsel, to be meritorious, the same is hereby granted, it appearing that the
decision subject matter of the writ of execution has not been satisfied by [de
Guzman] and Hi-Cement Corporation, and considering, further, that the Total
Volume Extracted Materials (LIMESTONE) at Lot #3308-B PSD-102661 (Annex A) was
properly proven during the hearing for the examination of judgment debtors

showing the claim of Php91,872,576.72 to be substantiated based on the Monthly

Mineral Commodity Price Monitor for January 2005 (Annex B), together with the O.R.
for Certification fee (Annex C).
AS PRAYED FOR, let an alias writ of execution be issued for the implementation of
the Decision of the Supreme Court in relation to the total volume extracted by HiCement (now HOLCIM) which is now the successor of defendant Iluminada de
Guzman.[21]
On December 8, 2005, the petitioners filed an Urgent Motion for Clarification [22]
praying that the alias writ of execution be clarified for the purpose of directing [de
Guzman] and/or Hi-Cement Corporation and/or HOLCIM to pay the petitioners the
amount of P91,872,576.72.
As prayed for, the RTC issued an Order[23] on December 20, 2005, stating thus:
In view of the Urgent Motion for Clarification filed by the [petitioners], through
counsel, and there being no comment/opposition filed by [de Guzman], let an alias
writ of execution be issued directing [de Guzman] and/or Hi-Cement Corporation
and/or HOLCIM to pay the [petitioners] the amount of Php 91,872,576.72
representing their liability for the minerals extracted from the subject property
pursuant to the Order of the Court, dated December 01, 2005. [24]
Subsequently, an alias writ of execution and notices of garnishment on several
banks, garnishing all amounts that may have been deposited or owned by HOLCIM,
were issued on December 20, 2005 and December 21, 2005 respectively. [25]
On January 5, 2006, HOLCIM filed a motion for reconsideration. [26] It alleged that it
did not owe any amount of royalty to the petitioners for the extracted limestone
from the subject land. HOLCIM averred that it had actually entered into an
Agreement[27] dated March 23, 1993 (Agreement) with the petitioners governing
their respective rights and obligations in relation to the limestone allegedly
extracted from the land in question. HOLCIM further asserted that it had paid
advance royalty to the petitioners from year 1993, in an aggregate sum of
P694,184.22, an amount more than the P218,693.10 which the petitioners were
entitled under the Agreement. [28]
On January 13, 2006, the petitioners filed its Opposition to [the] Motion for
Reconsideration[29] dated January 7, 2006, claiming that the Motion for
Reconsideration is barred by the omnibus motion rule because HOLCIM failed to
question the petitioners motion for execution of this Courts decision in G.R. No.
120004. The petitioners also averred that HOLCIM is barred by estoppel to question
the execution of the decision based on the Agreement, because said Agreement is
in contravention with the trial courts previous orders which required HOLCIM to
deposit to the clerk of court the royalties due the deceased Esguerra. The
petitioners also argued that the Agreement is a way to evade the trial courts orders
and has been procured by taking advantage of the petitioners financial distress
after Esguerra died.[30]

On February 21, 2006, HOLCIM filed a Manifestation and Motion (for Ocular
Inspection).[31] It asked the court to conduct an ocular inspection, advancing the
argument that HOLCIM did not extract limestone from any portion of the 47,000-sq
m property which Esguerra owned; and that the pictures, which the petitioners
presented to prove that HOLCIM has been extracting limestone from the subject
land until year 2005, were actually photographs of areas outside the contested land.
On June 7, 2006, the RTC denied HOLCIMs motion for reconsideration and motion
for ocular inspection. It held that the petitioners proved their entitlement to the
royalties totaling to P91,872,576.72. The RTC also blamed HOLCIM for not
presenting its own witnesses and evidence. It further stated that to grant the
motions for reconsideration and ocular inspection is to reopen the case despite the
fact that the trial court has no more power to do so since the execution of this
Courts decision in G.R. No. 120004 is now a matter of right on the petitioners part.
[32]

On June 13, 2006, HOLCIM filed a Petition for Certiorari (with Urgent Applications for
Temporary Restraining Order and/or Writ of Preliminary Injunction) [33] with the CA.
On June 30, 2006, the petitioners filed their Comment on [the] Petition for
Certiorari and Opposition,[34] to which HOLCIM filed a Reply[35] on July 25, 2006. On
August 31, 2007, the CA promulgated the now assailed decision finding merit in
HOLCIMs petition.[36] The dispositive portion states:
WHEREFORE, the foregoing considered, the instant petition is hereby GRANTED
and the assailed Orders REVERSED and SET ASIDE. No costs.
SO ORDERED.[37]
The motion for reconsideration thereof was denied in the CAs Resolution [38] dated
April 14, 2008.
Issues
Thus, the petitioners filed the present petition for review under Rule 45 of the 1997
Rules of Civil Procedure, raising the following assignment of errors:
A. THE [CA] GRAVELY ERRED IN NOT HOLDING THAT [HOLCIM] IS ESTOPPED TO
QUESTION THE JURISDICTION OF THE TRIAL COURT TO CONDUCT A HEARING ON
THE EXACT PAYMENT WHICH [HOLCIM] WAS SUPPOSED TO PAY TO THE
PETITIONERS;
B. THE [CA] GRAVELY ERRED IN NOT DISMISSING [HOLCIMS] PETITION FOR
CERTIORARI ON [THE] GROUND OF LACK OF BOARD RESOLUTION AUTHORIZING THE
FILING OF THE PETITION;
C. THE [CA] GRAVELY ERRED IN NOT DISMISSING THE PETITION FOR [CERTIORARI],
IT BEING NOT THE PROPER REMEDY, BUT AN APPEAL;

D. THE [CA] GRAVELY ERRED IN HOLDING THAT THE TRIAL COURT GRAVELY ABUSED
ITS DISCRETION IN THE EXECUTION OF THE DECISION BY CALLING FOR EVIDENCE
TO PROVE THE EXACT AMOUNT WHICH [HOLCIM] HAS TO PAY TO THE PETITIONERS;
E. THE [CA] GRAVELY ERRED IN HOLDING THAT THE ORDERS OF THE TRIAL COURT
OF DECEMBER 1, 2005, DECEMBER 20, 2005, AND JUNE 7, 2006 MODIFIED THE
DECISION OF THE CA G.R. CV NO. 40140 OF FEBRUARY 28, 1995[.] [39]
Our Ruling
The present petition has substantially complied with the requirements.
HOLCIM alleged that the present petition is fatally defective since all of the most
important pleadings before the RTC and the CA have not been attached to the
present petition. However, a review of the records of the case shows that the
petitioners attached to their petition the following: (a) the CAs Decision in CA-G.R.
SP No. 94838 dated August 31, 2007;[40] (b) the CAs Resolution in CA-G.R. SP No.
94838 dated April 14, 2008;[41] (c) the RTCs Order in Civil Case No. 725-M-89 dated
December 1, 2005;[42] (d) the RTCs Order in Civil Case No. 725-M-89 dated
December 20, 2005;[43] (e) the RTCs Order in Civil Case No. 725-M-89 dated June 7,
2006;[44] (f) HOLCIMs Manifestation and Motion (for Ocular Inspection) in Civil Case
No. 725-M-89 dated February 21, 2006 and its attachments; [45] (g) the Memorandum
of Agreement between Republic Cement Corporation and Spouses Juan and Maria
Bernabe dated December 1, 1991;[46] (h) the Price Monitor of the Department of
Environment and Natural Resources (DENR) on the price per metric ton of nonmetallic mines;[47] and (i) the Special Power of Attorney executed by Ligaya and
Liesell appointing Lowell as their attorney-in-fact. [48]
From the foregoing, the Court finds the same substantially compliant with the
requirements of Section 4, Rule 45 of the 1997 Rules of Civil Procedure. All of the
pertinent documents necessary for the Court to appreciate the circumstances
surrounding the case and to resolve the issues at hand were attached. Furthermore,
the parties subsequent comment and reply have sufficiently provided the Court the
needed information regarding the proceedings and acts of the trial court during the
execution of the final and executory decision of this Court in G.R. No. 120004 which
are the matters being questioned. In Shimizu Philippines Contractors, Inc. v.
Magsalin,[49] the Court proceeded to give due course to the petition when it found
the same and its attachments sufficient for the Court to access and resolve the
controversy.[50]
On the other hand, the petitioners claim that HOLCIMs petition for certiorari in the
CA failed to comply with the rules on Verification and Certification of Non-Forum
Shopping because the latter did not secure and/or attach a certified true copy of a
board resolution authorizing any of its officers to file said petition. [51] Thus, the CA
should have dismissed outright HOLCIMs petition before it.

The general rule is that a corporation can only exercise its powers and transact its
business through its board of directors and through its officers and agents when
authorized by a board resolution or its bylaws. The power of a corporation to sue
and be sued is exercised by the board of directors. The physical acts of the
corporation, like the signing of documents, can be performed only by natural
persons duly authorized for the purpose by corporate bylaws or by a specific act of
the board. Absent the said board resolution, a petition may not be given due course.
[52]

In Bank of the Philippine Islands v. Court of Appeals,[53] the Court held that the
application of the rules must be the general rule, and the suspension or even mere
relaxation of its application, is the exception. This Court may go beyond the strict
application of the rules only on exceptional cases when there is truly substantial
compliance with the rule.[54]
In the case at bar, HOLCIM attached to its Petition for Certiorari before the CA a
Secretarys Certificate authorizing Mr. Paul M. OCallaghan (OCallaghan), its Chief
Operating Officer, to nominate, designate and appoint the corporations authorized
representative in court hearings and conferences and the signing of court pleadings.
[55]
It also attached the Special Power of Attorney dated June 9, 2006, signed by
OCallaghan, appointing Sycip Salazar Hernandez & Gatmaitan and/or any of its
lawyers to represent HOLCIM;[56] and consequently, the Verification and Certification
of Non Forum Shopping signed by the authorized representative. [57] To be sure,
HOLCIM, in its Reply filed in the CA, attached another Secretarys Certificate,
designating and confirming OCallaghans power to authorize Sycip Salazar
Hernandez & Gatmaitan and/or any of its lawyers to file for and on behalf of
HOLCIM, the pertinent civil and/or criminal actions in Civil Case No. 725-M-89
pending before the RTC, including any petition to be filed with the CA and/or the
Supreme Court in connection with the Orders dated December 1, 2005, December
20, 2005 and June 7, 2006.[58]
The foregoing convinces the Court that the CA did not err in admitting HOLCIMs
petition before it. HOLCIM attached all the necessary documents for the filing of a
petition for certiorari before the CA. Indeed, there was no complete failure to attach
a Certificate of Non-Forum Shopping. In fact, there was such a certificate. While the
board resolution may not have been attached, HOLCIM complied just the same
when it attached the Secretarys Certificate dated July 17, 2006, thus proving that
OCallaghan had the authority from the board of directors to appoint the counsel to
represent them in Civil Case No. 725-M-89. The Court recognizes the compliance
made by HOLCIM in good faith since after the petitioners pointed out the said
defect, HOLCIM submitted the Secretarys Certificate dated July 17, 2006,
confirming the earlier Secretarys Certificate dated June 9, 2006. For the Court, the
ruling in General Milling Corporation v. NLRC [59] is applicable where the Court
rendered a decision in favor of the petitioner despite its failure to attach the
Certification of Non- Forum Shopping. The Court held that there was substantial
compliance when it eventually submitted the required documents. Substantial

justice dictates that technical and procedural rules must give way because a
deviation from the rigid enforcement of the rules will better serve the ends of
justice. The Court ratiocinated:
The rules of procedure are intended to promote, rather than frustrate, the ends of
justice, and while the swift unclogging of court dockets is a laudable objective, it,
nevertheless, must not be met at the expense of substantial justice. Technical and
procedural rules are intended to help secure, not suppress, the cause of justice and
a deviation from the rigid enforcement of the rules may be allowed to attain that
prime objective for, after all, the dispensation of justice is the core reason for the
existence of courts.[60] (Citation omitted)
HOLCIMs filing in the CA of a petition for certiorari under Rule 65 of the
1997 Rules of Civil Procedure is proper.
The petitioners also argue that the CA gravely erred when it did not dismiss
HOLCIMs petition for certiorari on the ground of improper remedy. The petitioners
contend that HOLCIM should have filed an appeal because when the RTC allowed
the petitioners to adduce evidence to determine the exact amount to be paid by
HOLCIM during the execution stage, it was implementing the dispositive portion of
the decision of the CA in CA-G.R. CV No. 40140 as affirmed by the Court. As ruled by
the trial court, a case in which an execution has been issued is regarded as still
pending so that all proceedings on the execution are proceedings in the suit.
Accordingly, the court that rendered the judgment maintains a general supervisory
control over its process of execution, and this power carries with it the right to
determine questions of fact and law, which may be involved in the execution. [61]
Thus, for the petitioners, the RTC neither acted in excess of its jurisdiction nor with
grave abuse of discretion, which would call for HOLCIM to file a petition for
certiorari.[62]
The Court disagrees with the petitioners mental acrobatics. Their arguments are
contrary to Section 1(f), Rule 41 of the Rules of Court, which provides:
Sec. 1. Subject of appeal.An appeal may be taken from a judgment or final order
that completely disposes of the case, or of a particular matter therein when
declared by these Rules to be appealable.
No appeal may be taken from:
xxxx
(f) an order of execution;
xxxx
In all the above instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule 65.

The foregoing provision is explicit that no appeal may be taken from an order of
execution and a party who challenges such order may file a special civil action for
certiorari under Rule 65 of the Rules of Court. [63] An order of execution, when issued
with grave abuse of discretion amounting to lack or excess of jurisdiction, may be
the subject of a petition for certiorari under Rule 65.[64] Thus, HOLCIM did not err in
filing a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.
HOLCIM is not estopped to question the jurisdiction of the trial court to
conduct a hearing and to accept evidence on the exact amount of royalty
HOLCIM should pay the petitioners.
The petitioners argue that HOLCIM is estopped from questioning the jurisdiction of
the RTC in conducting a hearing on the exact amount of royalty that HOLCIM must
pay the petitioners. They allege that: (a) HOLCIM expressed willingness to pay the
royalty to whoever would be adjudged the rightful owner of the subject land; (b)
HOLCIM and de Guzman did not appear in the hearing nor oppose the Omnibus
Motion dated September 28, 2004; (c) HOLCIM did not file any opposition or
comment on the petitioners Formal Offer of Evidence, Supplement to the Motion for
Execution and Motion for Alias Writ of Execution; and (d) HOLCIM is now the new
owner of de Guzmans property. As such, it has acquired the rights, interests and
liabilities of de Guzman. The petitioners insist that HOLCIM must not only account
for the royalty it paid de Guzman, but it must also turn over said payments to the
petitioners.[65]
HOLCIM counter-argues that when it expressed willingness to pay the royalties to
whoever would be declared the rightful owner of the subject land, it simply
manifested its good faith in fulfilling its obligations. It adds that the petitioners and
HOLCIM entered into an Agreement regarding the amount of royalty it should pay to
the landowner; and subsequently, the petitioners voluntarily accepted and retained
the amount of P694,184.22 paid by HOLCIM. In fact, HOLCIM stresses that the said
amount was more than what was stipulated in the Agreement. HOLCIM also asserts
that jurisdiction is conferred by law, and not by laches, estoppel or by agreement
among the parties and such lack of jurisdiction may be raised at any stage of the
proceedings.[66] Furthermore, HOLCIM avers that it is even the DENR panel of
arbitrators which has jurisdiction over the case pursuant to Section 77 of the
Philippine Mining Act of 1995.[67] Lastly, HOLCIM claims that it eventually acquired
de Guzmans property, maintaining that the said property did not overlap with
Esguerras property. Thus, HOLCIMs ownership and quarrying operations on lands
outside the disputed area would have no bearing whatsoever on the petitioners
claim for royalties on extractions done within the disputed area. HOLCIM also
asseverates that the obligation to turn over any royalty paid to de Guzman is not a
real obligation which attaches to the disputed area or to the land itself or which
follows the property to whoever might subsequently become its owner; rather,
HOLCIM argues that the obligation is purely a personal obligation of de Guzman and
thus, not transferable to HOLCIM.
What is clear is that the present case emanates from the petitioners desire to

implement the CA decision in CA-G.R. CV No. 40140 which was affirmed by the
Court in the Decision of December 27, 2002 in G.R. No. 120004. At the execution
stage, the only thing left for the trial court to do is to implement the final and
executory judgment; and the dispositive portion of the decision controls the
execution of judgment. The final judgment of this Court cannot be altered or
modified, except for clerical errors, misprisions or omissions. [68]
In the instant case, the CAs decision which this Court affirmed in G.R. No. 120004
rendered, among others, the following judgment:
(a) Insofar as then defendant-appellee de Guzman is concerned, the CA declared
OCT No. P-3876 in her possession null and void in relation to the disputed area of
38,641 sq m; the same CAs decision subsequently ordered de Guzman
[i] to segregate at her expense the disputed area of 38,641 sq m from OCT No. P3876;
[ii] to surrender her owners copy of OCT No. P-3876 to the Register of Deeds of
Bulacan;
[iii] to immediately vacate and surrender to then plaintiff-appellant Esguerra
possession of the disputed area;
[iv] to pay and turn over to plaintiff-appellant Esguerra all the amount she received
from her co-defendant Hi-Cement Corporation (now HOLCIM) as compensation or
royalty for marbles extracted or quarried from the disputed area of 38,451 sq m
beginning March 23, 1990; and
[v] to pay the costs.
(b) Insofar as HOLCIM is concerned, the CAs decision ordered HOLCIM
[i] to immediately cease and desist from quarrying or extracting marble from the
disputed area; and
[ii] to make an accounting of the royalty it paid to de Guzman.
Indeed, the final judgment does not direct HOLCIM nor its predecessor Hi-Cement
to pay a certain amount to Esguerra and his heirs. What was required from HOLCIM
to do was merely to account for the payments it made to de Guzman. Apparently,
this was not enforced. It may be deduced from the records that when the petitioners
filed the Omnibus Motion dated September 28, 2004, they asked for the
examination of de Guzman and Hi-Cement (HOLCIM) under Sections 36 and 37 of
Rule 39 of the Rules of Court. This motion was subsequently granted by the trial
court.
Sections 36[69] and 37[70] of Rule 39 of the Rules of Court are resorted to only when
the judgment remains unsatisfied, and there is a need for the judgment obligor to

appear and be examined concerning his property and income for their application to
the unsatisfied amount in the judgment. In the instant case, the decision in CA-G.R.
CV No. 40140 as affirmed by the Court calls on HOLCIM to simply make an
accounting of the royalty paid to de Guzman. Unfortunately, the trial court, instead
of facilitating the accounting of payments made by HOLCIM to de Guzman,
proceeded to adduce evidence on the amount of limestone extracted from the
disputed area and imposed the monetary liability on HOLCIM.
It is rather unfortunate that HOLCIM did not register a whimper upon petitioners
presentation of evidence. Notwithstanding, it cannot be denied that the trial court
committed grave abuse of discretion in issuing the questioned orders without giving
HOLCIM the chance to be heard. Indeed, when the decision has been rendered
unenforceable on account of the undetermined amount to be awarded, it was
incumbent upon the trial court to receive evidence from both parties to determine
the exact amount due to the petitioners. [71] Since HOLCIM was not given an
opportunity to rebut the petitioners evidence, considering that the formers
Manifestation and Motion for Ocular Inspection was denied, justice will be better
served if the trial court determines first the existence of documents relative to
HOLCIMs payments made to de Guzman, and if the same is not done, to receive
further evidence, this time, from both parties. It must be emphasized, however, that
the evidence to be adduced here is in relation to the amount of royalty paid to de
Guzman by HOLCIM for marbles extracted from the disputed area of 38,451 sq m
beginning March 23, 1990 up to the time HOLCIM ceased to operate in the subject
area. In the event that the petitioners claim is beyond the subject area and period,
and HOLCIM denies such indebtedness, the governing rule should be Section 43,
Rule 39 of the Rules of Court, to wit:
SEC. 43. Proceedings when indebtedness denied or another person claims the
property. If it appears that a person or corporation, alleged to have
property of the judgment obligor or to be indebted to him, claims an
interest in the property adverse to him or denies the debt, the court may
authorize, by an order made to that effect, the judgment obligee to
institute an action against such person or corporation for the recovery of
such interest or debt, forbid a transfer or other disposition of such interest or
debt within one hundred twenty (120) days from notice of the order, and may
punish disobedience of such order as for contempt. Such order may be modified or
vacated at any time by the court which issued it, or by the court in which the action
is brought, upon such terms as may be just. (Emphasis ours)
Pursuant to this Rule, in the examination of a person, corporation, or other juridical
entity who has the property of such judgment obligor or is indebted to him (Rule 39,
Section 37), and such person, corporation, or juridical entity denies an
indebtedness, the court may only authorize the judgment obligee to institute an
action against such person or corporation for the recovery of such interest or debt.
Nothing in the Rules gives the court the authority to order such person or
corporation to pay the judgment obligee and the court exceeds its jurisdiction if it
orders the person who denies the indebtedness to pay the same. In Atilano II v.

Asaali,[72] the Court held that an [e]xecution of a judgment can only be issued
against one who is a party to the action, and not against one who, not being a party
thereto, did not have his day in court. Due process dictates that a court decision can
only bind a party to the litigation and not against innocent third parties. [73]
Finally, the Court does not agree with petitioners argument that the person of de
Guzman is now merged in the person of HOLCIM or that HOLCIM has assumed her
personal liability or the judgment rendered against her. [74] Nothing in the records
shows that HOLCIM admitted of assuming all the liabilities of de Guzman prior to the
sale of the subject property. HOLCIM, however, expresses its willingness to pay
royalty only to the rightful owner of the disputed area. Thus, in the event that the
amount paid by HOLCIM to de Guzman has been proven, de Guzman is ordered to
turn over the payment to the petitioners. [75] If the petitioners insist that HOLCIM
owed them more than what it paid to de Guzman, the petitioners cannot invoke the
CAs decision which was affirmed by the Court in G.R. No. 120004 to ask for
additional royalty. As earlier discussed, this must be addressed in a separate action
for the purpose. All told, the Court finds no reversible error with the decision of the
CA in nullifying the orders of the RTC for having been issued in excess of its
jurisdiction.
WHEREFORE, the Decision dated August 31, 2007 and the Resolution dated April
14, 2008 of the Court of Appeals in CA-G.R. SP No. 94838 are hereby AFFIRMED.
SO ORDERED.
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Villarama, Jr., JJ.,
concur.

[1]

442 Phil. 534 (2002).

[2]

Penned by Associate Justice Josefina Guevara-Salonga, with Associate Justices

Aurora Santiago-Lagman and Normandie B. Pizarro, concurring; rollo, pp. 47-66.
[3]

Id. at 67-69.

[4]

Id. at 70.

[5]

Id. at 71.

[6]

Id. at 72-76.

[7]

Supra note 1, at 537-538.

[8]

Id. at 541-542.

[9]

Rollo, p. 50.

[10]

Id. at 202-205.

[11]

Id. at 51.

[12]

Id. at 204.

[13]

CA rollo, p. 122.

[14]

Id.

[15]

Id. at 123-136; rollo, p. 51.

[16]

Id. at 153-154.

[17]

Id. at 158-160.

[18]

Total volume extracted in metric tones; id. at 155.

[19]

Rollo, pp. 51-52.

[20]

Id. at 52, 70; CA rollo, p. 48.

[21]

Id. at 70; CA rollo, p. 48.

[22]

CA rollo, pp. 164-166.

[23]

Rollo, p. 71.

[24]

Id.

[25]

Id. at 52, 207-210.

[26]

Id. at 211-217.

[27]

Id. at 218-220.

[28]

Id. at 52.

[29]

Id. at 265-282.

[30]

Id. at 53.

[31]

CA rollo, pp. 281-291.

[32]

Rollo, pp. 72-76.

[33]

Id. at 287-328.

[34]

Id. at 332-368.

[35]

Id. at 369-399.

[36]

Id. at 47-66.

[37]

Id. at 65.

[38]

Id. at 67-69.

[39]

Id. at 18-19.

[40]

Id. at 47-66.

[41]

Id. at 67-69.

[42]

Id. at 70.

[43]

Id. at 71.

[44]

Id. at 72-76.

[45]

CA rollo, pp. 281-293.

[46]

Rollo, pp. 90-93.

[47]

Id. at 94-109.

[48]

Id. at 110-111.

[49]

G.R. No. 170026, June 20, 2012, 674 SCRA 65.

[50]

Id. at 73.

[51]

Rollo, pp. 31-33.

[52]

Salenga v. Court of Appeals, G.R. No. 174941, February 1, 2012, 664 SCRA 635,
656, 662.
[53]

[54]

G.R. No. 168313, October 6, 2010, 632 SCRA 322.

Id. at 332-333, citing Tible & Tible Company, Inc. v. Royal Savings and Loan
Association, G.R. No. 155806, April 8, 2008, 550 SCRA 562, 580-581.

[55]

Rollo, p. 331.

[56]

Id. at 329.

[57]

Id. at 328.

[58]

Id. at 401.

[59]

442 Phil. 425 (2002).

[60]

Id. at 428.

[61]

Rollo, p. 35.

[62]

Id.

[63]

BPI Employees Union-Metro Manila v. BPI, G.R. No. 178699, September 21, 2011,
658 SCRA 127, 142; A & C Minimart Corporation v. Villareal, 561 Phil. 591, 602
(2007); Manila International Airport Authority. v. Judge Gingoyon, 513 Phil. 43, 49-50
(2005); United Coconut Planters Bank v. United Alloy Phils. Corp., 490 Phil. 353, 361
(2005).
[64]

United Coconut Planters Bank v. United Alloy Phils. Corp., id.

[65]

Rollo, pp. 20-23.

[66]

Id. at 177-179.

[67]

Id. at 169-170.

[68]

Id. at 64.

[69]

Sec. 36. Examination of judgment obligor when judgment unsatisfied.-When the

return of a writ of execution issued against the property of a judgment obligor, or
any one of several obligors in the same judgment, shows that the judgment remains
unsatisfied, in whole or in part, the judgment obligee, at any time after such return
is made, shall be entitled to an order from the court which rendered the said
judgment, requiring such judgment obligor to appear and be examined concerning
his property and income before such court or before a commissioner appointed by
it, at a specified time and place; and proceedings may thereupon be had for the
application of the property and income of the judgment obligor towards the
satisfaction of the judgment. But no judgment obligor shall be so required to appear
before a court or commissioner outside the province or city in which such obligor
resides or is found.
[70]

Sec. 37. Examination of obligor of judgment obligor.-When the return of a writ of

execution against the property of a judgment obligor shows that the judgment

remains unsatisfied, in whole or in part, and upon proof to the satisfaction of the
court which issued the writ, that a person, corporation, or other juridical entity has
property of such judgment obligor or is indebted to him, the court may, by an order,
require such person, corporation, or other juridical entity, or any officer or member
thereof, to appear before the court or a commissioner appointed by it, at a time and
place within the province or city where such debtor resides or is found, and be
examined concerning the same. The service of the order shall bind all credits due
the judgment obligor and all money and property of the judgment obligor in the
possession or in the control of such person, corporation, or juridical entity from the
time of service; and the court may also require notice of such proceedings to be
given to any party to the action in such manner as it may deem proper.
[71]

Heirs of Dialdas v. CA, 412 Phil. 491, 505 (2001).

[72]

G.R. No. 174982, September 10, 2012, 680 SCRA 345.

[73]

Id. at 351, citing Panotes v. City Townhouse Development, Corp., 541 Phil. 260,
267 (2007) and Maricalum Mining Corporation v. Hon. Brion, 517 Phil. 309, 323
(2006).
[74]

Rollo, p. 192.

[75]

Supra note 8.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

642 Phil. 420

THIRD DIVISION
G.R. No. 186571, August 11, 2010
GERBERT R. CORPUZ, PETITIONER, VS. DAISYLYN TIROL STO. TOMAS AND
THE SOLICITOR GENERAL, RESPONDENTS.
DECISION
BRION, J.:
Before the Court is a direct appeal from the decision [1] of the Regional Trial Court
(RTC) of Laoag City, Branch 11, elevated via a petition for review on certiorari[2]
under Rule 45 of the Rules of Court (present petition).
Petitioner Gerbert R. Corpuz was a former Filipino citizen who acquired Canadian
citizenship through naturalization on November 29, 2000. [3] On January 18, 2005,
Gerbert married respondent Daisylyn T. Sto. Tomas, a Filipina, in Pasig City. [4] Due to
work and other professional commitments, Gerbert left for Canada soon after the
wedding. He returned to the Philippines sometime in April 2005 to surprise
Daisylyn, but was shocked to discover that his wife was having an affair with
another man. Hurt and disappointed, Gerbert returned to Canada and filed a
petition for divorce. The Superior Court of Justice, Windsor, Ontario, Canada
granted Gerbert's petition for divorce on December 8, 2005. The divorce decree
took effect a month later, on January 8, 2006. [5]
Two years after the divorce, Gerbert has moved on and has found another Filipina to
love. Desirous of marrying his new Filipina fiance in the Philippines, Gerbert went
to the Pasig City Civil Registry Office and registered the Canadian divorce decree on
his and Daisylyn's marriage certificate. Despite the registration of the divorce
decree, an official of the National Statistics Office (NSO) informed Gerbert that the
marriage between him and Daisylyn still subsists under Philippine law; to be
enforceable, the foreign divorce decree must first be judicially recognized by a
competent Philippine court, pursuant to NSO Circular No. 4, series of 1982. [6]
Accordingly, Gerbert filed a petition for judicial recognition of foreign
divorce and/or declaration of marriage as dissolved (petition) with the RTC.
Although summoned, Daisylyn did not file any responsive pleading but submitted
instead a notarized letter/manifestation to the trial court. She offered no opposition
to Gerbert's petition and, in fact, alleged her desire to file a similar case herself but
was prevented by financial and personal circumstances. She, thus, requested that
she be considered as a party-in-interest with a similar prayer to Gerbert's.
In its October 30, 2008 decision,[7] the RTC denied Gerbert's petition. The RTC

concluded that Gerbert was not the proper party to institute the action for judicial
recognition of the foreign divorce decree as he is a naturalized Canadian citizen. It
ruled that only the Filipino spouse can avail of the remedy, under the second
paragraph of Article 26 of the Family Code,[8] in order for him or her to be able to
remarry under Philippine law.[9] Article 26 of the Family Code reads:
Art. 26. All marriages solemnized outside the Philippines, in accordance with the
laws in force in the country where they were solemnized, and valid there as such,
shall also be valid in this country, except those prohibited under Articles 35(1), (4),
(5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the Filipino spouse shall
likewise have capacity to remarry under Philippine law.
This conclusion, the RTC stated, is consistent with the legislative intent behind the
enactment of the second paragraph of Article 26 of the Family Code, as determined
by the Court in Republic v. Orbecido III;[10] the provision was enacted to "avoid the
absurd situation where the Filipino spouse remains married to the alien spouse who,
after obtaining a divorce, is no longer married to the Filipino spouse." [11]
THE PETITION
From the RTC's ruling,[12] Gerbert filed the present petition.[13]
Gerbert asserts that his petition before the RTC is essentially for declaratory relief,
similar to that filed in Orbecido; he, thus, similarly asks for a determination of his
rights under the second paragraph of Article 26 of the Family Code. Taking into
account the rationale behind the second paragraph of Article 26 of the Family Code,
he contends that the provision applies as well to the benefit of the alien spouse. He
claims that the RTC ruling unduly stretched the doctrine in Orbecido by limiting the
standing to file the petition only to the Filipino spouse - an interpretation he claims
to be contrary to the essence of the second paragraph of Article 26 of the Family
Code. He considers himself as a proper party, vested with sufficient legal interest,
to institute the case, as there is a possibility that he might be prosecuted for bigamy
if he marries his Filipina fiance in the Philippines since two marriage certificates,
involving him, would be on file with the Civil Registry Office. The Office of the
Solicitor General and Daisylyn, in their respective Comments, [14] both support
Gerbert's position.
Essentially, the petition raises the issue of whether the second paragraph of
Article 26 of the Family Code extends to aliens the right to petition a court
of this jurisdiction for the recognition of a foreign divorce decree.
THE COURT'S RULING

The alien spouse can claim no right under the second paragraph of Article
26 of the Family Code as the substantive right it establishes is in favor of
the Filipino spouse
The resolution of the issue requires a review of the legislative history and intent
behind the second paragraph of Article 26 of the Family Code.
The Family Code recognizes only two types of defective marriages - void [15] and
voidable[16] marriages. In both cases, the basis for the judicial declaration of
absolute nullity or annulment of the marriage exists before or at the time of the
marriage. Divorce, on the other hand, contemplates the dissolution of the lawful
union for cause arising after the marriage.[17] Our family laws do not recognize
absolute divorce between Filipino citizens. [18]
Recognizing the reality that divorce is a possibility in marriages between a Filipino
and an alien, President Corazon C. Aquino, in the exercise of her legislative powers
under the Freedom Constitution, [19] enacted Executive Order No. (EO) 227,
amending Article 26 of the Family Code to its present wording, as follows:
Art. 26. All marriages solemnized outside the Philippines, in accordance with the
laws in force in the country where they were solemnized, and valid there as such,
shall also be valid in this country, except those prohibited under Articles 35(1), (4),
(5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the Filipino spouse shall
likewise have capacity to remarry under Philippine law.
Through the second paragraph of Article 26 of the Family Code, EO 227 effectively
incorporated into the law this Court's holding in Van Dorn v. Romillo, Jr.[20] and Pilapil
v. Ibay-Somera.[21] In both cases, the Court refused to acknowledge the alien
spouse's assertion of marital rights after a foreign court's divorce decree between
the alien and the Filipino. The Court, thus, recognized that the foreign divorce had
already severed the marital bond between the spouses. The Court reasoned in Van
Dorn v. Romillo that:
To maintain x x x that, under our laws, [the Filipino spouse] has to be
considered still married to [the alien spouse] and still subject to a wife's
obligations x x x cannot be just. [The Filipino spouse] should not be obliged to
live together with, observe respect and fidelity, and render support to [the alien
spouse]. The latter should not continue to be one of her heirs with possible rights to
conjugal property. She should not be discriminated against in her own
country if the ends of justice are to be served.[22]

As the RTC correctly stated, the provision was included in the law "to avoid the
absurd situation where the Filipino spouse remains married to the alien spouse who,
after obtaining a divorce, is no longer married to the Filipino spouse." [23] The
legislative intent is for the benefit of the Filipino spouse, by clarifying his or her
marital status, settling the doubts created by the divorce decree. Essentially, the
second paragraph of Article 26 of the Family Code provided the Filipino
spouse a substantive right to have his or her marriage to the alien spouse
considered as dissolved, capacitating him or her to remarry. [24] Without the
second paragraph of Article 26 of the Family Code, the judicial recognition of the
foreign decree of divorce, whether in a proceeding instituted precisely for that
purpose or as a related issue in another proceeding, would be of no significance to
the Filipino spouse since our laws do not recognize divorce as a mode of severing
the marital bond;[25] Article 17 of the Civil Code provides that the policy against
absolute divorces cannot be subverted by judgments promulgated in a foreign
country. The inclusion of the second paragraph in Article 26 of the Family Code
provides the direct exception to this rule and serves as basis for recognizing the
dissolution of the marriage between the Filipino spouse and his or her alien spouse.
Additionally, an action based on the second paragraph of Article 26 of the Family
Code is not limited to the recognition of the foreign divorce decree. If the court
finds that the decree capacitated the alien spouse to remarry, the courts can
declare that the Filipino spouse is likewise capacitated to contract another
marriage. No court in this jurisdiction, however, can make a similar declaration for
the alien spouse (other than that already established by the decree), whose status
and legal capacity are generally governed by his national law. [26]
Given the rationale and intent behind the enactment, and the purpose of the second
paragraph of Article 26 of the Family Code, the RTC was correct in limiting the
applicability of the provision for the benefit of the Filipino spouse. In other words,
only the Filipino spouse can invoke the second paragraph of Article 26 of the Family
Code; the alien spouse can claim no right under this provision.
The foreign divorce decree is presumptive evidence of a right that clothes
the party with legal interest to petition for its recognition in this
jurisdiction
We qualify our above conclusion - i.e., that the second paragraph of Article 26 of the
Family Code bestows no rights in favor of aliens - with the complementary
statement that this conclusion is not sufficient basis to dismiss Gerbert's petition
before the RTC. In other words, the unavailability of the second paragraph of Article
26 of the Family Code to aliens does not necessarily strip Gerbert of legal interest to
petition the RTC for the recognition of his foreign divorce decree. The foreign
divorce decree itself, after its authenticity and conformity with the alien's national
law have been duly proven according to our rules of evidence, serves as a
presumptive evidence of right in favor of Gerbert, pursuant to Section 48, Rule 39 of

the Rules of Court which provides for the effect of foreign judgments. This Section
states:
SEC. 48. Effect of foreign judgments or final orders.--The effect of a judgment or
final order of a tribunal of a foreign country, having jurisdiction to render
the judgment or final order is as follows:
(a) In case of a judgment or final order upon a specific thing, the judgment or final
order is conclusive upon the title of the thing; and
(b) In case of a judgment or final order against a person, the judgment or
final order is presumptive evidence of a right as between the parties and
their successors in interest by a subsequent title.
In either case, the judgment or final order may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
fact.
To our mind, direct involvement or being the subject of the foreign judgment is
sufficient to clothe a party with the requisite interest to institute an action before
our courts for the recognition of the foreign judgment. In a divorce situation, we
have declared, no less, that the divorce obtained by an alien abroad may be
recognized in the Philippines, provided the divorce is valid according to his or her
national law.[27]
The starting point in any recognition of a foreign divorce judgment is the
acknowledgment that our courts do not take judicial notice of foreign judgments
and laws. Justice Herrera explained that, as a rule, "no sovereign is bound to give
effect within its dominion to a judgment rendered by a tribunal of another
country."[28] This means that the foreign judgment and its authenticity must be
proven as facts under our rules on evidence, together with the alien's applicable
national law to show the effect of the judgment on the alien himself or herself. [29]
The recognition may be made in an action instituted specifically for the purpose or
in another action where a party invokes the foreign decree as an integral aspect of
his claim or defense.
In Gerbert's case, since both the foreign divorce decree and the national law of the
alien, recognizing his or her capacity to obtain a divorce, purport to be official acts
of a sovereign authority, Section 24, Rule 132 of the Rules of Court comes into play.
This Section requires proof, either by (1) official publications or (2) copies attested
by the officer having legal custody of the documents. If the copies of official records
are not kept in the Philippines, these must be (a) accompanied by a certificate
issued by the proper diplomatic or consular officer in the Philippine foreign service
stationed in the foreign country in which the record is kept and (b) authenticated by
the seal of his office.

The records show that Gerbert attached to his petition a copy of the divorce decree,
as well as the required certificates proving its authenticity, [30] but failed to include a
copy of the Canadian law on divorce. [31] Under this situation, we can, at this point,
simply dismiss the petition for insufficiency of supporting evidence, unless we deem
it more appropriate to remand the case to the RTC to determine whether the divorce
decree is consistent with the Canadian divorce law.
We deem it more appropriate to take this latter course of action, given the Article 26
interests that will be served and the Filipina wife's (Daisylyn's) obvious conformity
with the petition. A remand, at the same time, will allow other interested parties to
oppose the foreign judgment and overcome a petitioner's presumptive evidence of
a right by proving want of jurisdiction, want of notice to a party, collusion, fraud, or
clear mistake of law or fact. Needless to state, every precaution must be taken to
ensure conformity with our laws before a recognition is made, as the foreign
judgment, once recognized, shall have the effect of res judicata[32] between the
parties, as provided in Section 48, Rule 39 of the Rules of Court. [33]
In fact, more than the principle of comity that is served by the practice of reciprocal
recognition of foreign judgments between nations, the res judicata effect of the
foreign judgments of divorce serves as the deeper basis for extending judicial
recognition and for considering the alien spouse bound by its terms. This same
effect, as discussed above, will not obtain for the Filipino spouse were it not for the
substantive rule that the second paragraph of Article 26 of the Family Code
provides.
Considerations beyond the recognition of the foreign divorce decree
As a matter of "housekeeping" concern, we note that the Pasig City Civil Registry
Office has already recorded the divorce decree on Gerbert and Daisylyn's
marriage certificate based on the mere presentation of the decree. [34] We
consider the recording to be legally improper; hence, the need to draw attention of
the bench and the bar to what had been done.
Article 407 of the Civil Code states that "[a]cts, events and judicial decrees
concerning the civil status of persons shall be recorded in the civil register." The
law requires the entry in the civil registry of judicial decrees that produce legal
consequences touching upon a person's legal capacity and status, i.e., those
affecting "all his personal qualities and relations, more or less permanent in nature,
not ordinarily terminable at his own will, such as his being legitimate or illegitimate,
or his being married or not."[35]
A judgment of divorce is a judicial decree, although a foreign one, affecting a
person's legal capacity and status that must be recorded. In fact, Act No. 3753 or
the Law on Registry of Civil Status specifically requires the registration of divorce
decrees in the civil registry:

Sec. 1. Civil Register. - A civil register is established for recording the civil
status of persons, in which shall be entered:
(a) births;
(b) deaths;
(c) marriages;
(d) annulments of marriages;
(e) divorces;
(f) legitimations;
(g) adoptions;
(h) acknowledgment of natural children;
(i) naturalization; and
(j) changes of name.
xxxx
Sec. 4. Civil Register Books. -- The local registrars shall keep and preserve in their
offices the following books, in which they shall, respectively make the proper entries
concerning the civil status of persons:
(1) Birth and death register;
(2) Marriage register, in which shall be entered not only the marriages
solemnized but also divorces and dissolved marriages.
(3) Legitimation, acknowledgment, adoption, change of name and naturalization
register.
But while the law requires the entry of the divorce decree in the civil registry, the
law and the submission of the decree by themselves do not ipso facto authorize the
decree's registration. The law should be read in relation with the requirement of a
judicial recognition of the foreign judgment before it can be given res judicata
effect. In the context of the present case, no judicial order as yet exists recognizing
the foreign divorce decree. Thus, the Pasig City Civil Registry Office acted totally
out of turn and without authority of law when it annotated the Canadian divorce
decree on Gerbert and Daisylyn's marriage certificate, on the strength alone of the
foreign decree presented by Gerbert.
Evidently, the Pasig City Civil Registry Office was aware of the requirement of a
court recognition, as it cited NSO Circular No. 4, series of 1982, [36] and Department
of Justice Opinion No. 181, series of 1982[37] - both of which required a final order
from a competent Philippine court before a foreign judgment, dissolving a marriage,
can be registered in the civil registry, but it, nonetheless, allowed the registration of
the decree. For being contrary to law, the registration of the foreign divorce decree
without the requisite judicial recognition is patently void and cannot produce any
legal effect.

Another point we wish to draw attention to is that the recognition that the RTC may
extend to the Canadian divorce decree does not, by itself, authorize the
cancellation of the entry in the civil registry. A petition for recognition of a foreign
judgment is not the proper proceeding, contemplated under the Rules of Court, for
the cancellation of entries in the civil registry.
Article 412 of the Civil Code declares that "no entry in a civil register shall be
changed or corrected, without judicial order." The Rules of Court supplements
Article 412 of the Civil Code by specifically providing for a special remedial
proceeding by which entries in the civil registry may be judicially cancelled or
corrected. Rule 108 of the Rules of Court sets in detail the jurisdictional and
procedural requirements that must be complied with before a judgment, authorizing
the cancellation or correction, may be annotated in the civil registry. It also requires,
among others, that the verified petition must be filed with the RTC of the province
where the corresponding civil registry is located; [38] that the civil registrar and all
persons who have or claim any interest must be made parties to the proceedings; [39]
and that the time and place for hearing must be published in a newspaper of
general circulation.[40] As these basic jurisdictional requirements have not been met
in the present case, we cannot consider the petition Gerbert filed with the RTC as
one filed under Rule 108 of the Rules of Court.
We hasten to point out, however, that this ruling should not be construed as
requiring two separate proceedings for the registration of a foreign divorce decree
in the civil registry - one for recognition of the foreign decree and another
specifically for cancellation of the entry under Rule 108 of the Rules of Court. The
recognition of the foreign divorce decree may be made in a Rule 108 proceeding
itself, as the object of special proceedings (such as that in Rule 108 of the Rules of
Court) is precisely to establish the status or right of a party or a particular fact.
Moreover, Rule 108 of the Rules of Court can serve as the appropriate adversarial
proceeding[41] by which the applicability of the foreign judgment can be measured
and tested in terms of jurisdictional infirmities, want of notice to the party, collusion,
fraud, or clear mistake of law or fact.
WHEREFORE, we GRANT the petition for review on certiorari, and REVERSE the
October 30, 2008 decision of the Regional Trial Court of Laoag City, Branch 11, as
well as its February 17, 2009 order. We order the REMAND of the case to the trial
court for further proceedings in accordance with our ruling above. Let a copy of this
Decision be furnished the Civil Registrar General. No costs.
SO ORDERED.
Carpio Morales, (Chairperson), Bersamin, *Abad, and Villarama, Jr., JJ., concur.

Designated additional Member of the Third Division, in view of the retirement of

Chief Justice Reynato S. Puno, per Special Order No. 843 dated May 17, 2010.
[1]

Dated October 30, 2008, penned by Judge Perla B. Querubin; rollo, pp. 24-31.

[2]

Id. at 3-20.

[3]

Id. at 27.

[4]

Marriage Certificate, id. at 37.

[5]

Certificate of Divorce, id. at 38.

[6]

Id. at 47-50; the pertinent portion of NSO Circular No. 4, series of 1982, states:

It would therefore be premature to register the decree of annulment in the Register

of Annulment of Marriages in Manila, unless and until final order of execution of
such foreign judgment is issued by competent Philippine court.
[7]

Supra note 1.

[8]

Executive Order No. 209, enacted on July 6, 1987.

[9]

Rollo, p. 31.

[10]

G.R. No. 154380, October 5, 2005, 472 SCRA 114.

[11]

Id. at 121.

[12]

Gerbert's motion for reconsideration of the RTC's October 30, 2008 decision
was denied in an order dated February 17, 2009; rollo, p. 32.
[13]

Supra note 2.

[14]

Rollo, pp. 79-87 and 125-142, respectively.

[15]

The void marriages are those enumerated under Articles 35, 36, 37, 38, 40, 41,
44, and 53 in relation to Article 52 of the Family Code.
[16]

The voidable marriages are those enumerated under Article 45 of the Family
Code.
[17]

[18]

Garcia v. Recio, G.R. No. 138322, October 2, 2001, 366 SCRA 437, 452.

Ibid. See A. Tolentino, Commentaries and Jurisprudence on the Civil Code of the
Philippines, Volume One, with the Family Code of the Philippines (2004 ed.), p. 262.

[19]

Proclamation No. 3, issued on March 25, 1996.

[20]

G.R. No. L-68470, October 8, 1985, 139 SCRA 139.

[21]

G.R. No. 80116, June 30, 1989, 174 SCRA 653.

[22]

Van Dorn v. Romillo, supra note 20 at 144.

[23]

Republic v. Orbecido, supra note 10 at 121.

[24]

The capacity of the Filipino spouse to remarry, however, depends on whether the
foreign divorce decree capacitated the alien spouse to do so.
[25]

See Article 17 in relation to Article 15 of the Civil Code:

Art. 15. Laws relating to family rights and duties, or to the status, condition and
legal capacity of persons are binding upon citizens of the Philippines, even though
living abroad.
xxxx
Art. 17. x x x Prohibitive laws concerning persons, their acts or property, and
those which have for their object public order, public policy and good customs shall
not be rendered ineffective by laws or judgments promulgated, or by determinations
or conventions agreed upon in a foreign country.
[26]

Parenthetically, we add that an alien's legal capacity to contract is evidenced by

a certificate issued by his or her respective diplomatic and consular officials, which
he or she must present to secure a marriage license (Article 21, Family Code). The
Filipino spouse who seeks to remarry, however, must still resort to a judicial action
for a declaration of authority to remarry.
[27]

Garcia v. Recio, supra note 17 at 447; citing Van Dorn v. Romillo, supra note 20.

[28]

Remedial Law, Volume II, Rules 23-56 (2007 ed.), p. 529.

[29]

Republic v. Orbecido III, supra note 10 at 123 and Garcia v. Recio, supra note 17
at 448; see also Bayot v. Court of Appeals, G.R. No. 155635, November 7, 2008, 570
SCRA 472.
[30]

[31]

Rollo, pp. 38-41.

The foreign divorce decree only stated that the marriage between Gerbert and
Daisylyn was dissolved by the Canadian court. The full text of the court's judgment
was not included.

[32]

Literally means "a thing adjudged," Black's Law Dictionary (5 th ed.), p. 1178; it
establishes a rule that a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive of the rights of the parties or their privies in all
later suits, on points and matters determined in the former. Supra note 28 at 462.
[33]

See Philsec Investment Corporation v. Court of Appeals, G.R. No. 103493, June
19, 1997, 274 SCRA 102, 110, where the Court said:
While this Court has given the effect of res judicata to foreign judgments in several
cases, it was after the parties opposed to the judgment had been given ample
opportunity to repel them on grounds allowed under the law. It is not necessary for
this purpose to initiate a separate action or proceeding for enforcement of the
foreign judgment. What is essential is that there is opportunity to challenge the
foreign judgment, in order for the court to properly determine its efficacy. This is
because in this jurisdiction, with respect to actions in personam, as distinguished
from actions in rem, a foreign judgment merely constitutes prima facie evidence of
the justness of the claim of a party and, as such, is subject to proof to the contrary.
[34]

On the face of the marriage certificate, the word "DIVORCED" was written in big,
bold letters; rollo, p. 37.
[35]

Silverio v. Republic, G.R. No. 174689, October 22, 2007, 537 SCRA 373, 390,
citing Beduya v. Republic, 120 Phil. 114 (1964).
[36]

Rollo, pp. 47-50.

[37]

Id. at 51.

[38]

Section 1, Rule 108, Rules of Court.

[39]

Section 3, Rule 108, Rules of Court.

[40]

Section 4, Rule 108, Rules of Court.

[41]

When the entry sought to be corrected is substantial (i.e., the civil status of a
person), a Rule 108 proceeding is deemed adversarial in nature. See Co v. Civil
Register of Manila, G.R. No. 138496, February 23, 2004, 423 SCRA 420, 430.

Supreme Court of the Philippines

557 Phil. 668

THIRD DIVISION

G.R. No. 156596, August 24, 2007

ADELAIDA INFANTE, PETITIONER, VS. ARAN BUILDERS, INC., RESPONDENT.*
DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of
Court, seeking the reversal of the Decision [1] of the Court of Appeals (CA)
promulgated on August 12, 2002, which upheld the Order dated September 4, 2001,
issued by the Regional Trial Court of Muntinlupa City (RTC).
The undisputed facts and issues raised in the lower courts are accurately
summarized by the CA as follows:
Before the Regional Trial Court of Muntinlupa City (or "Muntinlupa RTC"; Branch
276), presided over by Hon. Norma C. Perello (or "respondent judge"), was an action
for revival of judgment filed on June 6, 2001 by Aran Builders, Inc. (or "private
respondent") against Adelaida Infante (or "petitioner"), docketed as Civil Case No.
01-164.
The judgment sought to be revived was rendered by the Regional Trial Court of
Makati City (or "Makati RTC"; Branch 60) in an action for specific performance and
damages, docketed as Civil Case No. 15563.
The Makati RTC judgment, which became final and executory on November 16,
1994, decreed as follows:
26.WHEREFORE, the Court hereby renders judgment as follows:
26.1 The defendant ADELAIDA B. INFANTE is ordered to do the following within thirty
(30) days from finality hereof:

26.1.1. To deliver to the plaintiff ARAN BUILDERS, INC. the following: (a) the
complete plans (lot plan, location map and vicinity map); (b) Irrevocable Power of
Attorney; (c) Real Estate Tax clearance; (d) tax receipts; (e) proof of up to date
payment of Subdivision Association dues referred to in the "CONTRACT TO SELL"
dated November 10, 1986 (Exh. A or Exh. 1);

26.1.2. To execute the deed of sale of Lot No. 11, Block 9, Phase 3-A1, Ayala
Alabang Subdivision covered by TCT No. 114015 for P500,000.00 in favor of the
plaintiff;

26.1.3. To pay the capital gains tax, documentary stamp taxes and other taxes
which the Bureau of Internal Revenue may assess in connection with the sale

mentioned in the preceding paragraph and to submit to the plaintiff proof of such
payment;

26.1.4. To secure the written conformity of AYALA CORPORATION to the said sale and
to give such written conformity to the plaintiff;

26.1.5. To register the deed of sale with the Registry of Deeds and deliver to AYALA
CORPORATION the certificate of title issued in the name of plaintiff pursuant to such
registration;

26.2 Upon the compliance of the defendant with the preceding directives, the
plaintiff must immediately pay to the defendant the sum of P321,918.25;

26.3 The defendant is ordered to pay plaintiff P10,000.00 as attorney's fees;

26.4 The Complaint for moral and exemplary damages is DISMISSED;

26.5 The COUNTERCLAIM is DISMISSED; and

26.6 Cost is taxed against the defendant.

Petitioner filed a motion to dismiss the action (for revival of judgment) on the
grounds that the Muntinlupa RTC has no jurisdiction over the persons of the parties
and that venue was improperly laid. Private respondent opposed the motion.
On September 4, 2001, the Muntinlupa RTC issued an order which reads:
The MOTION TO DISMISS is denied.
Admittedly, the Decision was rendered by the Makati Regional Trial Court, but it
must be emphasized that at that time there was still no Regional Trial Court in
Muntinlupa City, then under the territorial jurisdiction of the Makati Courts, so that
cases from this City were tried and heard at Makati City. With the creation of the
Regional Trial Courts of Muntinlupa City, matters involving properties located in this
City, and cases involving Muntinlupa City residents were all ordered to be litigated
before these Courts.
The case at bar is a revival of a judgment which declared the plaintiff as the owner
of a parcel of land located in Muntinlupa City. It is this judgment which is sought to

be enforced thru this action which necessarily involves the interest, possession,
title, and ownership of the parcel of land located in Muntinlupa city and adjudged to
Plaintiff. It goes without saying that the complaint should be filed in the latter City
where the property is located, as there are now Regional Trial Courts hereat.
Defendant may answer the complaint within the remaining period, but no less than
five (5) days, otherwise a default judgment might be taken against her.
It is SO ORDERED.
Her motion for reconsideration having been denied per order dated September 28,
2001, petitioner came to this Court [CA] via the instant special civil action for
certiorari. She ascribes grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of respondent judge for "erroneously holding that Civil Case
No. 01-164 is a revival of judgment which declared private respondent as the owner
of a parcel of land located in Muntinlupa City and (that) the judgment rendered by
the (Makati RTC) in Civil Case No. 15563 sought to be enforced necessarily involves
the interest, possession, title and ownership of the parcel of land located in
Muntinlupa City."
Petitioner asserts that the complaint for specific performance and damages before
the Makati RTC is a personal action and, therefore, the suit to revive the judgment
therein is also personal in nature; and that, consequently, the venue of the action
for revival of judgment is either Makati City or Paraaque City where private
respondent and petitioner respectively reside, at the election of private respondent.
On the other hand, private respondent maintains that the subject action for revival
judgment is "quasi in rem because it involves and affects vested or adjudged right
on a real property"; and that, consequently, venue lies in Muntinlupa City where the
property is situated.[2]
On August 12, 2002, the CA promulgated its Decision ruling in favor of herein
private respondent. The CA held that since the judgment sought to be revived was
rendered in an action involving title to or possession of real property, or interest
therein, the action for revival of judgment is then an action in rem which should be
filed with the Regional Trial Court of the place where the real property is located.
Petitioner moved for reconsideration of the CA Decision but the motion was denied
per Resolution dated January 7, 2003.
Hence, herein petition. Petitioner claims that the CA erred in finding that the
complaint for revival of judgment is an action in rem which was correctly filed with
the RTC of the place where the disputed real property is located.
The petition is unmeritorious.
Petitioner insists that the action for revival of judgment is an action in personam;
therefore, the complaint should be filed with the RTC of the place where either

petitioner or private respondent resides. Petitioner then concludes that the filing of
the action for revival of judgment with the RTC of Muntinlupa City, the place where
the disputed property is located, should be dismissed on the ground of improper
venue.
Private respondent is of the opinion that the judgment it is seeking to revive
involves interest over real property. As such, the present action for revival is a real
action, and venue was properly laid with the court of the place where the realty is
located.
Thus, the question that must be answered is: where is the proper venue of the
present action for revival of judgment?
Section 6, Rule 39 of the 1997 Rules of Civil Procedure provides that after the lapse
of five (5) years from entry of judgment and before it is barred by the statute of
limitations, a final and executory judgment or order may be enforced by action. The
Rule does not specify in which court the action for revival of judgment should be
filed.
In Aldeguer v. Gemelo,[3] the Court held that:
x x x an action upon a judgment must be brought 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. (Emphasis supplied)[4]
but emphasized that other provisions in the rules of procedure which fix the venue
of actions in general must be considered. [5]
Under the present Rules of Court, Sections 1 and 2 of Rule 4 provide:
Section 1. Venue of real actions. - Actions affecting title to or possession of real
property, or interest therein, shall be commenced and tried in the proper court
which has jurisdiction over the area wherein the real property involved, or a portion
thereof, is situated.
xxxx
Section 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.
Thus, the proper venue depends on the determination of whether the present action
for revival of judgment is a real action or a personal action. Applying the aforequoted rules on venue, if the action for revival of judgment affects title to or
possession of real property, or interest therein, then it is a real action that must be
filed with the court of the place where the real property is located. If such action

does not fall under the category of real actions, it is then a personal action that may
be filed with the court of the place where the plaintiff or defendant resides.
In support of her contention that the action for revival of judgment is a personal
action and should be filed in the court of the place where either the plaintiff or
defendant resides, petitioner cites the statements made by the Court in Aldeguer v.
Gemelo[6] and Donnelly v. Court of First Instance of Manila[7]. Petitioner, however,
seriously misunderstood the Court's rulings in said cases.
In Aldeguer, what the Court stated was that "[t]he action for the execution of a
judgment for damages is a personal one, and under section 377 [of the Code of
Civil Procedure], it should be brought in any province where the plaintiff or the
defendant resides, at the election of the plaintiff" [8] (Emphasis and underscoring
supplied). Petitioner apparently took such statement to mean that any action for
revival of judgment should be considered as a personal one. This thinking is
incorrect. The Court specified that the judgment sought to be revived in said case
was a judgment for damages. The judgment subject of the action for revival did not
involve or affect any title to or possession of real property or any interest therein.
The complaint filed in the revival case did not fall under the category of real actions
and, thus, the action necessarily fell under the category of personal actions.
In Donnelly, the portion of the Decision being relied upon by petitioner stated thus:
Petitioner raises before this Court two (2) issues, namely: (a) whether an action for
revival of judgment is one quasi in rem and, therefore, service of summons may be
effected thru publication; and (b) whether the second action for revival of judgment
(Civil Case No. 76166) has already prescribed. To our mind, the first is not a
proper and justiciable issue in the present proceedings x x x. Nevertheless,
let it be said that an action to revive a judgment is a personal one. (Emphasis
supplied)[9]
The Court clearly pointed out that in said case, the issue on whether an action for
revival of judgment is quasi in rem was not yet proper and justiciable. Therefore,
the foregoing statement cannot be used as a precedent, as it was merely an
obiter dictum. Moreover, as in Aldeguer, the judgment sought to be revived in
Donnelly involved judgment for a certain sum of money. Again, no title or interest in
real property was involved. It is then understandable that the action for revival in
said case was categorized as a personal one.
Clearly, the Court's classification in Aldeguer and Donnelly of the actions for revival
of judgment as being personal in character does not apply to the present case.
The allegations in the complaint for revival of judgment determine whether it is a
real action or a personal action.
The complaint for revival of judgment alleges that a final and executory judgment
has ordered herein petitioner to execute a deed of sale over a parcel of land in Ayala

Alabang Subdivision in favor of herein private respondent; pay all pertinent taxes in
connection with said sale; register the deed of sale with the Registry of Deeds and
deliver to Ayala Corporation the certificate of title issued in the name of private
respondent. The same judgment ordered private respondent to pay petitioner the
sum of P321,918.25 upon petitioner's compliance with the aforementioned order. It
is further alleged that petitioner refused to comply with her judgment obligations
despite private respondent's repeated requests and demands, and that the latter
was compelled to file the action for revival of judgment. Private respondent then
prayed that the judgment be revived and a writ of execution be issued to enforce
said judgment.
The previous judgment has conclusively declared private respondent's right to have
the title over the disputed property conveyed to it. It is, therefore, undeniable that
private respondent has an established interest over the lot in question; and to
protect such right or interest, private respondent brought suit to revive the previous
judgment. The sole reason for the present action to revive is the enforcement of
private respondent's adjudged rights over a piece of realty. Verily, the action falls
under the category of a real action, for it affects private respondent's interest over
real property.
The present case for revival of judgment being a real action, the complaint should
indeed be filed with the Regional Trial Court of the place where the realty is located.
Section 18 of Batas Pambansa Bilang 129 provides:
Sec. 18. Authority to define territory appurtenant to each branch. - The Supreme
Court shall define the territory over which a branch of the Regional Trial
Court shall exercise its authority. The territory thus defined shall be
deemed to be the territorial area of the branch concerned for purposes of
determining the venue of all suits, proceedings or actions, whether civil or
criminal, as well as determining the Metropolitan Trial Courts, Municipal Trial Courts
and Municipal Circuit Trial Courts over which the said branch may exercise appellate
jurisdiction. The power herein granted shall be exercised with a view to making the
courts readily accessible to the people of the different parts of the region and
making the attendance of litigants and witnesses as inexpensive as possible.
(Emphasis supplied)
From the foregoing, it is quite clear that a branch of the Regional Trial Court
shall exercise its authority only over a particular territory defined by the
Supreme Court. Originally, Muntinlupa City was under the territorial jurisdiction of
the Makati Courts. However, Section 4 of Republic Act No. 7154, entitled An Act to
Amend Section Fourteen of Batas Pambansa Bilang 129, Otherwise Known As The
Judiciary Reorganization Act of 1981, took effect on September 4, 1991. Said law
provided for the creation of a branch of the Regional Trial Court in Muntinlupa. Thus,
it is now the Regional Trial Court in Muntinlupa City which has territorial jurisdiction
or authority to validly issue orders and processes concerning real property within
Muntinlupa City.

Thus, there was no grave abuse of discretion committed by the Regional Trial Court
of Muntinlupa City, Branch 276 when it denied petitioner's motion to dismiss; and
the CA did not commit any error in affirming the same.
WHEREFORE, the petition is DENIED. The Decision dated August 12, 2002 and
Resolution dated January 7, 2003 of the Court of Appeals are AFFIRMED.
SO ORDERED.
Ynares-Santiago, (Chairperson), Chico-Nazario, Nachura, and Reyes, JJ., concur.

The Court of Appeals was originally impleaded as respondent. Per Section 4, Rule
45 of the Rules of Court, the Court of Appeals is deleted from the title of the case.
[1]

Penned by Associate Justice Edgardo P. Cruz, with Associate Justices Hilarion L.

Aquino and Regalado E. Maambong, concurring, rollo, pp. 19-26.
[2]

Rollo, pp. 19-23.

[3]

68 Phil. 421 (1939).

[4]

Id. at 424-425.

[5]

Id. at 423.

[6]

Supra note 3.

[7]

150-A Phil. 167 (1972).

[8]

Supra note 3, at p. 423.

[9]

Donnelly v. Court of First Instance of Manila, supra note 7, at 169.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

G.R. No. 203241

SECOND DIVISION
G.R. No. 203241, July 10, 2013
RIZAL COMMERCIAL BANKING CORPORATION, PETITIONER, VS. FEDERICO
A. SERRA, RESPONDENT.
DECISION
CARPIO, J.:
The Case
This Petition for Review on Certiorari[1] with prayer for the issuance of a Writ of
Preliminary Injunction and/or Temporary Restraining Order assails the 16 February
2012[2] and 26 July 2012[3] Orders of the Regional Trial Court of Makati City, Branch
134 (RTC Makati).
The Facts
Respondent Federico A. Serra (Serra) is the owner of a 374 square meter parcel of
land located along Quezon Street, Masbate, Masbate. On 20 May 1975, Serra and
petitioner Rizal Commercial Banking Corporation (RCBC) entered into a Contract of
Lease with Option to Buy, wherein Serra agreed to lease his land to RCBC for 25

years. Serra further granted RCBC the option to buy the land and improvement
(property) within 10 years from the signing of the Contract of Lease with Option to
Buy.
On 4 September 1984, RCBC informed Serra of its decision to exercise its option to
buy the property. However, Serra replied that he was no longer interested in selling
the property. On 14 March 1985, RCBC filed a Complaint for Specific Performance
and Damages against Serra (Specific Performance case) in the RTC Makati. The RTC
Makati initially dismissed the complaint. However, in an Order dated 5 January
1989, the RTC Makati reversed itself and ordered Serra to execute and deliver the
proper deed of sale in favor of RCBC.[4]
Serra appealed to the Court of Appeals (CA). On 18 May 1989, Serra donated the
property to his mother, Leonida Ablao (Ablao). On 20 April 1992, Ablao sold the
property to Hermanito Liok (Liok). A new land title was issued in favor of Liok. Thus,
RCBC filed a Complaint for Nullification of Deed of Donation and Deed of Sale with
Reconveyance and Damages against Liok, Ablao and Serra (Annulment case)
before the RTC of Masbate City (RTC Masbate).
Meanwhile, the CA, and later the Supreme Court, affirmed the order of the RTC
Makati in the Specific Performance case. In a Decision dated 4 January 1994, this
Court declared that the Contract of Lease with Option to Buy was valid, effective,
and enforceable. On 15 April 1994, the decision in the Specific Performance case
became final and executory upon entry of judgment. [5]
On 22 October 2001, the RTC Masbate ruled in favor of RCBC, declaring the donation
in favor of Ablao and the subsequent sale to Liok null and void. [6] In a Decision dated
28 September 2007, the CA affirmed the RTC Masbate decision. The CA held that
the donation to Ablao was simulated and was done solely to evade Serras
obligation to RCBC. Since Ablao had no right to transfer the property and Liok was
not a buyer in good faith, the subsequent sale to Liok was likewise null and void.
Thus, Liok filed a Petition for Review on Certiorari, docketed as G.R. No. 182478,
while Serra and Ablao filed a Petition for Certiorari, docketed as G.R. No. 182664,
before this Court. In separate Resolutions dated 30 June 2008 and 22 October
2008, which became final and executory on 27 August 2008 [7] and 3 March 2009,[8]
respectively, this Court found neither reversible error nor grave abuse of discretion
on the CAs part.
On 25 August 2011, RCBC moved for the execution of the decision in the Specific
Performance case. RCBC alleged that it was legally impossible to ask for the
execution of the decision prior to the annulment of the fraudulent transfers made by
Serra. Thus, the period to execute by motion was suspended during the pendency of
the Annulment case. On 22 September 2011, Serra filed his comment and
opposition to the motion. Serra insisted that the motion for execution was already
barred by prescription and laches, and that RCBC was at fault for failing to register
as lien in the original title the Contract of Lease with Option to Buy.

In an Order dated 16 February 2012, the RTC Makati denied RCBCs motion for
execution. The RTC Makati opined that [RCBC] should have asked for the execution
of the deed of sale and have the same registered with the Registry of Deeds, so that
even if [Serra] sold or transferred the subject property to any person the principle of
caveat emptor would set in.[9]
In an Order dated 26 July 2012, the RTC Makati denied RCBCs motion for
reconsideration. Thus, RCBC filed this petition.
In a Resolution dated 3 December 2012, this Court granted RCBCs Temporary
Restraining Order against the implementation of the questioned Orders upon RCBCs
filing of a bond.
The Issue
RCBC raises this sole issue for resolution:
WHETHER OR NOT THE COURT A QUO ERRED IN HOLDING THAT PETITIONER RCBC IS
BARRED FROM HAVING ITS 05 JANUARY 1989 DECISION EXECUTED THROUGH
MOTION, CONSIDERING THAT UNDER THE CIRCUMSTANCES OBTAINING IN THIS
CASE, RCBC WAS UNLAWFULLY PREVENTED BY THE RESPONDENT FROM ENFORCING
THE SAID DECISION.[10]

The Ruling of the Court

The petition has merit.
The Rules of Court provide that a final and executory judgment may be executed by
motion within five years from the date of its entry or by an action after the lapse of
five years and before prescription sets in. [11] This Court, however, allows exceptions
when execution may be made by motion even after the lapse of five years. These
exceptions have one common denominator: the delay is caused or occasioned by
actions of the judgment obligor and/or is incurred for his benefit or advantage. [12]
In Camacho v. Court of Appeals,[13] we held that where the delays were occasioned
by the judgment debtors own initiatives and for her advantage as well as beyond
the judgment creditors control, the five-year period allowed for enforcement of the
judgment by motion is deemed to have been effectively interrupted or suspended.
In the present case, there is no dispute that RCBC seeks to enforce the decision
which became final and executory on 15 April 1994. This decision orders Serra to
execute and deliver the proper deed of sale in favor of RCBC. However, to evade his
obligation to RCBC, Serra transferred the property to his mother Ablao, who then
transferred it to Liok. Serras action prompted RCBC to file the Annulment case.

Clearly, the delay in the execution of the decision was caused by Serra for his own
advantage. Thus, the pendency of the Annulment case effectively suspended the
five-year period to enforce through a motion the decision in the Specific
Performance case. Since the decision in the Annulment case attained finality on 3
March 2009 and RCBCs motion for execution was filed on 25 August 2011, RCBCs
motion is deemed filed within the five-year period for enforcement of a decision
through a motion.
This Court has reiterated that the purpose of prescribing time limitations for
enforcing judgments is to prevent parties from sleeping on their rights. [14] Far from
sleeping on its rights, RCBC has pursued persistently its action against Serra in
accordance with law. On the other hand, Serra has continued to evade his obligation
by raising issues of technicality. While strict compliance with the rules of procedure
is desired, liberal interpretation is warranted in cases where a strict enforcement of
the rules will not serve the ends of justice. [15]
WHEREFORE, we GRANT the petition. We SET ASIDE the assailed Orders of the
Regional Trial Court of Makati City dated 16 February 2012 and 26 July 2012. The
Temporary Restraining Order issued by this Court on 3 December 2012 is made
permanent. The Regional Trial Court of Makati City is DIRECTED to issue the writ of
execution in Civil Case No. 10054 for the enforcement of the decision therein. Costs
against petitioner.
SO ORDERED.
Perez, Mendoza,* and Perlas-Bernabe, JJ., concur.

Designated additional member per Special Order No. 1484 dated 9 July 2013.

[1]

Under Rule 45 of the 1997 Rules of Civil Procedure.

[2]

Rollo, pp. 39-42. Penned by Judge Perpetua Atal-Pao.

[3]

Id. at 43-44.

[4]

Serra v. Court of Appeals, G.R. No. 103338, 4 January 1994, 229 SCRA 60, 66. The
RTC Order states:
WHEREFORE, the Court reconsiders its decision dated June 6, 1988, and hereby
renders judgment as follows:
1. The defendant is hereby ordered to execute and deliver the proper deed of sale in
favor of plaintiff selling, transferring and conveying the property covered by and
described in the Original Certificate of Title 0-232 of the Registry of Deeds of
Masbate for the sum of Seventy Eight Thousand Five Hundred Forty Pesos

(P78,540.00), Philippine currency;

2. Defendant is ordered to pay plaintiff the sum of Five Thousand (P5,000.00) Pesos
as attorneys fees;
3. The counter claim of defendant is hereby dismissed; and
4. Defendants shall pay the costs of suit.
[5]

Rollo, p. 50.

[6]

Rollo (G.R. No. 182664), p. 35. The Decision states:

PREMISES CONSIDERED, the Deed of Donation executed by defendant Federico

Serra on May 18, 1989, in favor of his mother Leonida Ablao as well as the Deed of
Sale executed by Leonida Ablao on April 10, 1992, in favor of defendant Hermanito
Liok are declared null and void. The Register of Deeds of the Province of Masbate is
ordered to cancel TCT Nos. 7434 and T-8432.
xxxx
[7]

Rollo, p. 51.

[8]

Id. at 52.

[9]

Id. at 41.

[10]

Id. at 18.

[11]

Rules of Court, Rule 39, Section 6.

[12]

Zamboanga Barter Traders Kilusang Bayan, Inc. v. Plagata, G.R. No. 148433, 30
September 2008, 567 SCRA 163; Yau v. Silverio, Sr., G.R. No. 158848, 4 February
2008, 543 SCRA 520; Central Surety and Insurance Company v. Planters Products
Inc., 546 Phil. 479 (2007); Francisco Motors Corp. v. Court of Appeals, 535 Phil. 736
(2006); Republic of the Phils. v. Court of Appeals, 329 Phil. 115 (1996).
[13]

351 Phil. 108 (1998).

[14]

Republic of the Phils. v. Court of Appeals, supra note 12.

[15]

Philippine Veterans Bank v. Solid Homes, Inc., G.R. No. 170126, 9 June 2009, 589
SCRA 40 citing Central Surety and Insurance Company v. Planters Products, Inc.,
546 Phil. 479 (2007).

Copyright 2016 - Batas.org

Supreme Court of the Philippines

G.R. No. 165585

SECOND DIVISION
G.R. No. 165585, November 20, 2013
GOVERNMENT SERVICE INSURANCE SYSTEM, PETITIONER, VS. PRUDENTIAL
GUARANTEE AND ASSURANCE, INC., DEVELOPMENT BANK OF THE
PHILIPPINES, AND LAND BANK OF THE PHILIPPINES, RESPONDENTS.
[G.R. NO. 176982]

GOVERNMENT SERVICE INSURANCE SYSTEM, PETITIONER, VS. PRUDENTIAL

GUARANTEE AND ASSURANCE, INC., RESPONDENT.
DECISION
PERLAS-BERNABE, J.:
Assailed in these consolidated petitions for review on certiorari[1] are separate
issuances of the Court of Appeals (CA) in relation to the complaint for sum of money
filed by Prudential Guarantee and Assurance, Inc. (PGAI) against the Government
Service Insurance System (GSIS) before the Regional Trial Court of Makati City,
Branch 149 (RTC), docketed as Civil Case No. 01-1634.
In particular, the petition in G.R. No. 165585 assails the Decision [2] dated May 26,
2004 and Resolution[3] dated October 6, 2004 of the CA in CA-G.R. SP No. 69289
which affirmed the Order[4] dated February 14, 2002, as well as the Order, [5] Notices
of Garnishment,[6] and Writ of Execution,[7] all dated February 19, 2002, issued by
the RTC authorizing execution pending appeal.
On the other hand, the petition in G.R. No. 176982 assails the Decision [8] dated
October 30, 2006 and Resolution [9] dated March 12, 2007 of the CA in CA-G.R. CV
No. 73965 which dismissed the appeal filed by GSIS, affirming with modification the
Order[10] dated January 11, 2002 of the RTC rendering judgment on the pleadings.
The Facts
Sometime in March 1999, the National Electrification Administration (NEA) entered
into a Memorandum of Agreement[11] (MOA) with GSIS insuring all real and personal
properties mortgaged to it by electrical cooperatives under an Industrial All Risks
Policy (IAR policy).[12] The total sum insured under the IAR policy was
P16,731,141,166.80, out of which, 95% or P15,894,584,108.40 was reinsured by
GSIS with PGAI for a period of one year or from March 5, 1999 to March 5, 2000. [13]
As reflected in Reinsurance Request Note No. 99-150 [14] (reinsurance cover) and the
Reinsurance Binder[15] dated April 21, 1999 (reinsurance binder), GSIS agreed to pay
PGAI reinsurance premiums in the amount of ?32,885,894.52 per quarter or a total
of P131,543,578.08.[16] While GSIS remitted to PGAI the reinsurance premiums for
the first three quarters, it, however, failed to pay the fourth and last reinsurance
premium due on December 5, 1999 despite demands. This prompted PGAI to file, on
November 15, 2001, a Complaint[17] for sum of money (complaint) against GSIS
before the RTC, docketed as Civil Case No. 01-1634.
In its complaint, PGAI alleged, among others, that: (a) after it had issued the IAR
policy, it further reinsured the risks covered under the said reinsurance with
reputable reinsurers worldwide such as Lloyds of London, Copenhagen Re, Cigna
Singapore, CCR, Generali, and Arig;[18] (b) the first three reinsurance premiums were
paid to PGAI by GSIS and, in the same vein, NEA paid the first three reinsurance
premiums due to GSIS;[19] (c) GSIS failed to pay PGAI the fourth and last reinsurance

premium due on December 5, 1999;[20] (d) the IAR policy remained in full force and
effect for the entire insurable period and, in fact, the losses/damages on various
risks reinsured by PGAI were paid and accordingly settled by it; [21] (e) PGAI is under
continuous pressure from its reinsurers in the international market to settle the
matter;[22] and (f) GSIS acknowledged its obligation to pay the last reinsurance
premium as it, in turn, demanded from NEA the fourth and last reinsurance
premium.[23]
In its Answer,[24] GSIS admitted, among others, that: (a) its request for reinsurance
cover was accepted by PGAI in a reinsurance binder; [25] (b) it remitted to PGAI the
first three reinsurance premiums which were paid by NEA;[26] and (c) it failed to
remit the fourth and last reinsurance premium to PGAI. [27] It, however, denied, inter
alia, that: (a) it had acknowledged its obligation to pay the last quarters
reinsurance premium to PGAI;[28] and (b) the IAR policy remained in full force and
effect for the entire insurable period of March 5, 1999 to March 5, 2000. [29] GSIS also
proffered the following affirmative defenses: (a) the complaint states no cause of
action against GSIS because the non-payment of the last reinsurance premium only
renders the reinsurance contract ineffective, and does not give PGAI a right of
action to collect;[30] (b) pursuant to the regulations issued by the Commission on
Audit, GSIS is prohibited from advancing payments to PGAI occasioned by the failure
of the principal insured, NEA, to pay the insurance premium; [31] and (c) PGAIs cause
of action lies against NEA since GSIS merely acted as a conduit. [32] By way of
counterclaim, GSIS prayed that PGAI be ordered to pay exemplary damages,
including litigation expenses, and costs of suit. [33]
On December 18, 2001, PGAI filed a Motion for Judgment on the Pleadings [34]
averring that GSIS essentially admitted the material allegations of the complaint,
such as: (a) the existence of the MOA between NEA and GSIS; (b) the existence of
the reinsurance binder between GSIS and PGAI; (c) the remittance by GSIS to PGAI
of the first three quarterly reinsurance premiums; and (d) the failure/refusal of GSIS
to remit the fourth and last reinsurance premium. [35] Hence, PGAI prayed that the
RTC render a judgment on the pleadings pursuant to Section 1, Rule 34 of the Rules
of Court (Rules). GSIS opposed[36] the foregoing motion by reiterating the allegations
and defenses in its Answer.
On January 11, 2002, the RTC issued an Order [37] (January 11, 2002 Order) granting
PGAIs Motion for Judgment on the Pleadings. It observed that the admissions of
GSIS that it paid the first three quarterly reinsurance premiums to PGAI affirmed the
validity of the contract of reinsurance between them. As such, GSIS cannot now
renege on its obligation to remit the last and remaining quarterly reinsurance
premium.[38] It further pointed out that while it is true that the payment of the
premium is a requisite for the validity of an insurance contract as provided under
Section 77 of Presidential Decree No. (PD) 612, [39] otherwise known as The
Insurance Code, it was held in Makati Tuscany Condominium Corp. v. CA[40] (Makati
Tuscany) that insurance policies are valid even if the premiums were paid in
installments, as in this case.[41] Thus, in view of the foregoing, the RTC ordered GSIS
to pay PGAI the last quarter reinsurance premium in the sum of ?32,885,894.52,

including interests amounting to ?6,519,515.91 as of July 31, 2000 until full

payment, attorneys fees, and costs of suit. [42] Dissatisfied, GSIS filed a notice of
appeal.[43]
Meanwhile, PGAI filed a Motion for Execution Pending Appeal [44] based on the
following reasons: (a) GSIS appeal was patently dilatory since it already
acknowledged the validity of PGAIs claim;[45] (b) GSIS posted no valid defense as its
Answer raised no genuine issues; [46] and (c) PGAI would suffer serious and
irreparable injury as it may be blacklisted as a consequence of the non-payment of
premiums due.[47] PGAI also manifested its willingness to post a sufficient surety
bond to answer for any resulting damage to GSIS. [48] The latter opposed[49] the
motion asserting that there lies no sufficient ground or urgency to justify execution
pending appeal. It also claimed that all its funds and properties are exempted from
execution citing Section 39 of Republic Act No. (RA) 8291, [50] otherwise known as
The Government Service Insurance System Act of 1997. [51]
On February 14, 2002, the RTC issued an Order [52] (February 14, 2002 Order)
granting PGAIs Motion for Execution Pending Appeal, conditioned on the posting of
a bond. It further held that only the GSIS Social Insurance Fund is exempt from
execution. Accordingly, PGAI duly posted a surety bond which the RTC approved
through an Order[53] dated February 19, 2002, resulting to the issuance of a writ of
execution[54] and notices of garnishment[55] (February 19, 2002 issuances), all of
even date, against GSIS.
The CA Proceedings Antecedent to G.R. No. 165585
Aggrieved by the RTCs February 14, 2002 Order, as well as the February 19, 2002
issuances, GSIS without first filing a motion for reconsideration (from the said
order of execution) or a sufficient supersedeas bond[56] filed on February 26, 2002
a petition for certiorari [57] before the CA, docketed as CA-G.R. SP No. 69289,
against the RTC and PGAI. It also impleaded in the said petition the Land Bank of the
Philippines (LBP) and the Development Bank of the Philippines (DBP) as nominal
parties so as to render them subject to the writs and processes of the CA. [58]
In its petition, GSIS argued that: (a) none of the grounds proffered by PGAI justifies
the issuance of a writ of execution pending appeal; [59] and (b) all funds and assets of
GSIS are exempt from execution and levy in accordance with RA 8291. [60]
On April 4, 2002, the CA issued a temporary restraining order (TRO) [61] enjoining the
garnishment of GSIS funds with LBP and DBP. Nevertheless, since the TROs
effectivity lapsed, GSIS funds with the LBP were eventually garnished. [62]
On May 26, 2004, the CA rendered a Decision [63] dismissing GSIS petition,
upholding, among others, the validity of the execution pending appeal pursuant to
the RTCs February 14, 2002 Order as well as the February 19, 2002 issuances. It
found that the impending blacklisting of PGAI constitutes a good reason for allowing

the execution pending appeal (also known as discretionary execution) considering

that the imposition of international sanctions on any single local insurance company
puts in grave and immediate jeopardy not only the viability of that company but
also the integrity of the entire local insurance system including that of the state
insurance agency. It pointed out that the insurance business thrives on credibility
which is maintained by honoring financial commitments.
On the claimed exemption of GSIS funds from execution, the CA held that such
exemption only covers funds under the Social Insurance Fund which remains liable
for the payment of benefits like retirement, disability and death compensation and
not those covered under the General Insurance Fund, as in this case, which are
meant for investment in the business of insurance and reinsurance. [64]
GSIS motion for reconsideration[65] was denied by the CA in a Resolution [66] dated
October 6, 2004. Hence, the petition for review on certiorari in G.R. No. 165585.[67]
The CA Proceedings Antecedent to G.R. No. 176982
Separately, GSIS also assailed the RTCs January 11, 2002 Order which granted
PGAIs Motion for Judgment on the Pleadings through an appeal [68] filed on October
7, 2002, docketed as CA G.R. CV No. 73965.
GSIS averred that the RTC gravely erred in: (a) rendering judgment on the pleadings
since it specifically denied the material allegations in PGAIs complaint; (b) ordering
execution pending appeal since there are no justifiable reasons for the same; and
(c) effecting execution against funds and assets of GSIS given that RA 8291
exempts the same from levy, execution and garnishment. [69]
For its part, PGAI maintained that: (a) the judgment on the pleadings was in order
given that GSIS never disputed the facts as alleged in its complaint; (b) the
discretionary execution was proper in view of the dilatory methods employed by
GSIS in order to evade the payment of a valid obligation; and (c) the general
insurance fund of GSIS, which was attached and garnished by the RTC, is not
exempt from execution.[70]
In a Decision[71] dated October 30, 2006, the CA sustained the RTCs January 11,
2002 Order but deleted the awards of interest and attorneys fees for lack of factual
and legal basis.[72]
The CA ruled that judgment on the pleadings was proper since GSIS did not
specifically deny the genuineness, due execution, and perfection of its reinsurance
contract with PGAI.[73] In fact, PGAI even settled reinsurance claims during the
covering period rendering the reinsurance contract not only perfected but partially
executed as well.[74]
Passing on the issue of the exemption from execution of GSIS funds, the CA, citing

Rubia v. GSIS[75] (Rubia), held that the exemption provided for by RA 8291 is not
absolute since it only pertains to the social security benefits of its members; thus,
funds used by the GSIS for business investments and commercial ventures, as in
this case, may be attached and garnished. [76]
GSIS motion for reconsideration[77] was denied by the CA in a Resolution [78] dated
March 12, 2007. Hence, the present petition for review on certiorari in G.R. No.
176982.[79]
The Issues Before the Court
In these consolidated petitions, the essential issues are the following: (a) in G.R.
No. 165585, whether the CA erred in (1) upholding the RTCs February 14, 2002
Order authorizing execution pending appeal, and (2) ruling that only the Social
Insurance Fund and not the General Fund of the GSIS is exempt from garnishment;
and (b) in G.R. No. 176982, whether the CA erred in sustaining the RTCs January
11, 2002 Order rendering judgment on the pleadings.
The Courts Ruling
The petitions are partly meritorious.
A. Good reasons to allow execution pending
appeal and the nature of the exemption under
Section 39 of RA 8291.
The execution of a judgment pending appeal is an exception to the general rule that
only a final judgment may be executed.[80] In order to grant the same pursuant to
Section 2,[81] Rule 39 of the Rules, the following requisites must concur: (a) there
must be a motion by the prevailing party with notice to the adverse party; (b) there
must be a good reason for execution pending appeal; and (c) the good reason must
be stated in a special order.[82]
Good reasons call for the attendance of compelling circumstances warranting
immediate execution for fear that favorable judgment may yield to an empty
victory. In this regard, the Rules do not categorically and strictly define what
constitutes good reason, and hence, its presence or absence must be determined
in view of the peculiar circumstances of each case. As a guide, jurisprudence
dictates that the good reason yardstick imports a superior circumstance that will
outweigh injury or damage to the adverse party. [83] Corollarily, the requirement of
good reason does not necessarily entail unassailable and flawless basis but at the
very least, an invocation thereof must be premised on solid footing. [84]
In the case at bar, the RTC, as affirmed by the CA, granted PGAIs motion for
execution pending appeal on the ground that the impending sanctions against it by
foreign underwriters/reinsurers constitute good reasons therefor. It must, however,

be observed that PGAI has not proffered any evidence to substantiate its claim, as it
merely presented bare allegations thereon. It is hornbook doctrine that mere
allegations do not constitute proof. As held in Real v. Belo,[85] [i]t is basic in the rule
of evidence that bare allegations, unsubstantiated by evidence, are not equivalent
to proof. In short, mere allegations are not evidence. [86] Hence, without any
sufficient basis to support the existence of its alleged good reasons, it cannot be
said that the second requisite to allow an execution pending appeal exists. To
reiterate, the requirement of good reasons must be premised on solid footing so
as to ensure that the superior circumstance which would impel immediate
execution is not merely contrived or based on speculation. This, however, PGAI
failed to demonstrate in the present case. In fine, the Court therefore holds that the
CAs affirmance of the RTCs February 14, 2002 Order authorizing execution pending
appeal, as well as the February 19, 2002 issuances related thereto, was improper.
Nevertheless, while an execution pending appeal should not lie in view of the
above-discussed reasons, it must be noted that the funds and assets of GSIS may
after the resolution of the appeal and barring any provisional injunction thereto be
subject to execution, attachment, garnishment or levy since the exemption under
Section 39 of RA 8291[87] does not operate to deny private entities from properly
enforcing their contractual claims against GSIS. [88] This has been established in the
case of Rubia wherein the Court held as follows:
[T]he declared policy of the State in Section 39 of the GSIS Charter granting GSIS
an exemption from tax, lien, attachment, levy, execution, and other legal processes
should be read together with the grant of power to the GSIS to invest its excess
funds under Section 36 of the same Act. Under Section 36, the GSIS is granted the
ancillary power to invest in business and other ventures for the benefit of the
employees, by using its excess funds for investment purposes. In the exercise of
such function and power, the GSIS is allowed to assume a character similar to a
private corporation. Thus, it may sue and be sued, as also explicitly granted by its
charter. Needless to say, where proper, under Section 36, the GSIS may be
held liable for the contracts it has entered into in the course of its
business investments. For GSIS cannot claim a special immunity from liability in
regard to its business ventures under said Section. Nor can it deny contracting
parties, in our view, the right of redress and the enforcement of a claim,
particularly as it arises from a purely contractual relationship of a private
character between an individual and the GSIS. [89] (Emphases supplied and
citations omitted)
Thus, the petition in G.R. No. 165585 is partly granted.
B. Propriety of judgment on the pleadings.
Judgment on the pleadings is appropriate when an answer fails to tender an issue,
or otherwise admits the material allegations of the adverse partys pleading. The
rule is stated in Section 1, Rule 34 of the Rules which reads as follows:

Sec. 1. Judgment on the pleadings. Where an answer fails to tender an issue, or

otherwise admits the material allegations of the adverse partys pleading, the court
may, on motion of that party, direct judgment on such pleading. x x x.
In this relation, jurisprudence dictates that an answer fails to tender an issue if it
does not comply with the requirements of a specific denial as set out in Sections
8[90] and 10,[91] Rule 8 of the Rules, resulting in the admission of the material
allegations of the adverse partys pleadings. [92] As such, it is a form of judgment that
is exclusively based on the submitted pleadings without the introduction of
evidence as the factual issues remain uncontroverted. [93]
In this case, records disclose that in its Answer, GSIS admitted the material
allegations of PGAIs complaint warranting the grant of the relief prayed for. In
particular, GSIS admitted that: (a) it made a request for reinsurance cover which
PGAI accepted in a reinsurance binder effective for one year; [94] (b) it remitted only
the first three reinsurance premium payments to PGAI; [95] (c) it failed to pay PGAI
the fourth and final reinsurance premium installment; [96] and (d) it received demand
letters from PGAI.[97] It also did not refute the allegation of PGAI that it settled
reinsurance claims during the reinsured period. On the basis of these admissions,
the Court finds that the CA did not err in affirming the propriety of a judgment on
the pleadings.
GSIS affirmative defense that the non-payment of the last reinsurance premium
merely rendered the contract ineffective pursuant to Section 77 [98] of PD 612 no
longer involves any factual issue, but stands solely as a mere question of law in the
light of the foregoing admissions hence allowing for a judgment on the pleadings.
Besides, in the case of Makati Tuscany, the Court already ruled that the nonpayment of subsequent installment premiums would not prevent the insurance
contract from taking effect; that the parties intended to make the insurance
contract valid and binding is evinced from the fact that the insured paid and the
insurer received several reinsurance premiums due thereon, although the former
refused to pay the remaining balance, viz.:
We hold that the subject policies are valid even if the premiums were paid on
installments. The records clearly show that petitioner and private respondent
intended subject insurance policies to be binding and effective notwithstanding the
staggered payment of the premiums. The initial insurance contract entered into in
1982 was renewed in 1983, then in 1984. In those three (3) years, the insurer
accepted all the installment payments. Such acceptance of payments speaks loudly
of the insurers intention to honor the policies it issued to petitioner. Certainly, basic
principles of equity and fairness would not allow the insurer to continue collecting
and accepting the premiums, although paid on installments, and later deny liability
on the lame excuse that the premiums were not prepaid in full.
We therefore sustain the Court of Appeals. contained in its Resolution denying the
motion to reconsider its Decision

While the import of Section 77 is that prepayment of premiums is strictly

required as a condition to the validity of the contract, We are not prepared
to rule that the request to make installment payments duly approved by
the insurer, would prevent the entire contract of insurance from going into
effect despite payment and acceptance of the initial premium or first
installment. Section 78 of the Insurance Code in effect allows waiver by the
insurer of the condition of prepayment by making an acknowledgment in the
insurance policy of receipt of premium as conclusive evidence of payment so far as
to make the policy binding despite the fact that premium is actually unpaid.
Section 77 merely precludes the parties from stipulating that the policy is
valid even if premiums are not paid, but does not expressly prohibit an
agreement granting credit extension, and such an agreement is not
contrary to morals, good customs, public order or public policy (De Leon,
the Insurance Code, at p. 175). So is an understanding to allow insured to pay
premiums in installments not so proscribed. At the very least, both parties
should be deemed in estoppel to question the arrangement they have
voluntarily accepted.
[I]n the case before Us, petitioner paid the initial installment and thereafter
made staggered payments resulting in full payment of the 1982 and 1983
insurance policies. For the 1984 policy, petitioner paid two (2) installments
although it refused to pay the balance.
It appearing from the peculiar circumstances that the parties actually
intended to make three (3) insurance contracts valid, effective and
binding, petitioner may not be allowed to renege on its obligation to pay
the balance of the premium after the expiration of the whole term of the
third policy (No. AH-CPP-9210651) in March 1985. Moreover, as correctly observed
by the appellate court, where the risk is entire and the contract is indivisible, the
insured is not entitled to a refund of the premiums paid if the insurer was
exposed to the risk insured for any period, however brief or momentary. [99]
(Emphases supplied and citation omitted)
Thus, owing to the identical complexion of Makati Tuscany with the present case,
the Court upholds PGAIs right to be paid by GSIS the amount of the fourth and last
reinsurance premium pursuant to the reinsurance contract between them. All told,
the petition in G.R. No. 176982 is denied.
WHEREFORE, the petition in G.R. No. 165585 is PARTLY GRANTED. The Decision
dated May 26, 2004 and Resolution dated October 6, 2004 of the Court of Appeals
in CA-G.R. SP No. 69289 are MODIFIED only insofar as it upheld the validity of
Prudential Guarantee and Assurance, Inc.s execution pending appeal. In this
respect, the Order dated February 14, 2002 of the Regional Trial Court of Makati,
Branch 149 as well as all other issuances related thereto are set aside.

On the other hand, the petition in G.R. No. 176982 is DENIED. The Decision dated
October 30, 2006 and Resolution dated March 12, 2007 in CA-G.R. CV No. 73965 are
hereby AFFIRMED.
SO ORDERED.
Carpio, (Chairperson), Brion, Del Castillo, and Perez, JJ., concur.

[1]

Rollo (G.R. No. 165585), pp. 3-35; rollo (G.R. No. 176982) pp. 9-29.

[2]

Rollo (G.R. No. 165585), pp. 39-50. Penned by Associate Justice Godardo A.
Jacinto, with Associate Justices Elvi John S. Asuncion and Rosmari D. Carandang,
concurring.
[3]

Id. at 51-54. Penned by Associate Justice Godardo A. Jacinto, with Associate

Justices Rosmari D. Carandang and Rosalinda Asuncion Vicente, concurring.
[4]

CA rollo (CA-G.R. SP No. 69289), pp. 166-168. Penned by Judge Zeus C. Abrogar.

[5]

Rollo (G.R. No. 165585), p. 60.

[6]

CA rollo (CA-G.R. SP No. 69289), pp. 161-164.

[7]

Rollo (G.R. No. 165585), pp. 61-62.

[8]

Rollo (G.R. No. 176982), pp. 143-161. Penned by Associate Justice Fernanda
Lampas Peralta, with Associate Justices Bienvenido L. Reyes (now Associate Justice
of the Supreme Court) and Myrna Dimaranan-Vidal, concurring.
[9]

Id. at 174.

[10]

Id. at 103-107.

[11]

Id. at 42-45.

[12]

Rollo (G.R. No. 165585), p. 40.

[13]

Id.

[14]

Rollo (G.R. No. 176982), p. 46.

[15]

Rollo (G.R. No. 165585), p. 40.

[16]

Id.

[17]

Rollo (G.R. No. 176982), pp. 31-41. Dated November 12, 2001.

[18]

Id. at 33.

[19]

Id.

[20]

Id.

[21]

Id. at 34.

[22]

Id. at 35.

[23]

Id. at 36.

[24]

Id. at 81-88. Dated December 12, 2001.

[25]

Id. at 82.

[26]

Id.

[27]

Id.

[28]

Id. at 83.

[29]

Id. at 82.

[30]

Id. at 84.

[31]

Id. at 86.

[32]

Id. at 86-87.

[33]

Id. at 87.

[34]

Id. at 90-93. Dated December 17, 2001.

[35]

Id. at 90.

[36]

Id. at 95-101. Opposition to Motion for Judgment on the Pleadings and Motion to
Set Affirmative Defenses for Preliminary Hearing dated January 2, 2002.
[37]

Id. at 103-107.

[38]

Id. at 107.

[39]

Entitled Ordaining and Instituting an Insurance Code of the Philippines.

[40]

G.R. No. 95546, November 6, 1992, 215 SCRA 462.

[41]

Rollo (G.R. No. 176982), p. 107.

[42]

Id.

[43]

CA rollo (CA-G.R. SP No. 69289), p. 112. Dated January 15, 2002.

[44]

Id. at 113-120. Dated January 17, 2002.

[45]

Id. at 114-115.

[46]

Id. at 117-118.

[47]

Id. at 119.

[48]

Id.

[49]

Id. at 123-133. Opposition to Motion for Execution Pending Appeal dated January
29, 2002.
[50]

An Act Amending Presidential Decree No. 1146, as amended, Expanding and

Increasing the Coverage and Benefits of the Government Service Insurance System,
Instituting Reforms Therein and for Other Purposes.
[51]

CA rollo (CA-G.R. SP No. 69289), p. 124.

[52]

Id. at 166-168.

[53]

Rollo (G.R. No. 165585), p. 60.

[54]

Id. at 61-62.

[55]

CA rollo (CA-G.R. SP No. 69289), pp. 161-164.

[56]

Rollo (G.R. No. 165585), p. 42.

[57]

CA rollo (CA-G.R. SP No. 69289), pp. 4-26. Petition (with Urgent Motion for
Issuance of TRO and Writ of Preliminary Injunction).
[58]

Id. at 6.

[59]

Id. at 13-17.

[60]

Id. at 17-19.

[61]

Id. at 172-173.

[62]

Rollo (G.R. No. 165585), p. 43.

[63]

Id. at 39-50.

[64]

Id. at 47-48.

[65]

CA rollo (CA. G.R. SP No. 69289), pp. 332-346.

[66]

Rollo (G.R. No. 165585), pp. 51-54.

[67]

Id. at 3-35.

[68]

Rollo (G.R. No. 176982), pp. 111-141. Brief for Defendant-Appellant dated
October 4, 2002.
[69]

Id. at 115-116.

[70]

Id. at 289-290. See Brief for Plaintiff-Appellee dated November 19, 2002.

[71]

Id. at 143-161.

[72]

Id. at 160.

[73]

Id. at 150.

[74]

Id. at 152-153.

[75]

G.R. No. 151439, June 21, 2004, 432 SCRA 529.

[76]

Rollo (G.R. No. 176982), pp. 157-159.

[77]

Id. at 163-172. Motion for Reconsideration dated November 21, 2006.

[78]

Id. at 174.

[79]

Id. at 9-29.

[80]

Diesel Construction Company, Inc. v. Jollibee Foods Corp., 380 Phil. 813, 818
(2000).
[81]

Sec. 2. Discretionary execution.

(a) Execution of a judgment or final order pending appeal. On motion of the

prevailing party with notice to the adverse party filed in the trial court while it has
jurisdiction over the case and is in possession of either the original record or the

record on appeal, as the case may be, at the time of the filing of such motion, said
court may, in its discretion, order execution of a judgment or final order even before
the expiration of the period to appeal.
After the trial court has lost jurisdiction the motion for execution pending appeal
may be filed in the appellate court.
Discretionary execution may only issue upon good reasons to be stated in a special
order after due hearing.
xxxx
[82]

Archinet International, Inc. v. Becco Philippines, Inc., G.R. No. 183753, June 19,
2009, 590 SCRA 168, 180-181 (citations omitted).
[83]

Diesel Construction Company v. Jollibee Foods Corp., supra note 80, at 829.

[84]

National Power Corporation, v. Adiong, A.M. No. RTJ-07-2060, July 27, 2011, 654
SCRA 391, 404.
[85]

542 Phil. 109 (2007).

[86]

Id. at 122.

[87]

Sec. 39. Exemption from Tax, Legal Process and Lien. - It is hereby declared to be
the policy of the State that the actuarial solvency of the funds of the GSIS shall be
preserved and maintained at all times and that contribution rates necessary to
sustain the benefits under this Act shall be kept as low as possible in order not to
burden the members of the GSIS and their employers. Taxes imposed on the GSIS
tend to impair the actuarial solvency of its funds and increase the contribution rate
necessary to sustain the benefits of this Act. Accordingly, notwithstanding any laws
to the contrary, the GSIS, its assets, revenues including all accruals thereto, and
benefits paid, shall be exempt from all taxes, assessments, fees, charges, or duties
of all kinds. These exemptions shall continue unless expressly and specifically
revoked and any assessment against the GSIS as of the approval of this Act are
hereby considered paid. Consequently, all laws, ordinances, regulations, issuances,
opinions or jurisprudence contrary to or in derogation of this provision are hereby
deemed repealed, superseded and rendered ineffective and without legal force and
effect.
Moreover, these exemptions shall not be affected by subsequent laws to the
contrary unless this section is expressly, specifically and categorically revoked or
repealed by law and a provision is enacted to substitute or replace the exemption
referred to herein as an essential factor to maintain or protect the solvency of the
fund, notwithstanding and independently of the guaranty of the national
government to secure such solvency or liability.

The funds and/or the properties referred to herein as well as the benefits, sums or
monies corresponding to the benefits under this Act shall be exempt from
attachment, garnishment, execution, levy or other processes issued by the
courts, quasi-judicial agencies or administrative bodies including
Commission on Audit (COA) disallowances and from all financial obligations of the
members, including his pecuniary accountability arising from or caused or
occasioned by his exercise or performance of his official functions or duties, or
incurred relative to or in connection with his position or work except when his
monetary liability, contractual or otherwise, is in favor of the GSIS. (Emphasis
supplied)
[88]

See GSIS v. Regional Trial Court of Pasig City, Branch 71, G.R. No. 175393 and
G.R. No. 177731, December 18, 2009, 608 SCRA 552, 582-584.
[89]

Rubia v. GSIS, supra note 75, at 541-543.

[90]

Sec. 8. How to contest such documents. When an action or defense is founded

upon a written instrument, copied in or attached to the corresponding pleading as
provided in the preceding Section, the genuineness and due execution of the
instrument shall be deemed admitted unless the adverse party, under oath
specifically denies them, and sets forth what he claims to be the facts; but the
requirement of an oath does not apply when the adverse party does not appear to
be a party to the instrument or when compliance with an order for an inspection of
the original instrument is refused.
[91]

Sec. 10. Specific denial. A defendant must specify each material allegation of
fact the truth of which he does not admit and, whenever practicable, shall set forth
the substance of the matters upon which he relies to support his denial. Where a
defendant desires to deny only a part of an averment, he shall specify so much of it
as is true and material and shall deny only the remainder. Where a defendant is
without knowledge or information sufficient to form a belief as to the truth of a
material averment made in the complaint, he shall so state, and this shall have the
effect of a denial.
[92]

Mongao v. Pryce Properties Corporation, G.R. No. 156474, August 16, 2005, 467
SCRA 201, 209.
[93]

See Luzon Development Bank v. Conquilla, G.R. No. 163338, September 21,
2005, 470 SCRA 533, 549.
[94]

Rollo (G.R. No. 176982), p. 82. See also CA rollo, p. 45.

[95]

Id.

[96]

Id.

[97]

Id. at 83.

[98]

Sec. 77. An insurer is entitled to payment of the premium as soon as the thing
insured is exposed to the peril insured against. Notwithstanding any agreement to
the contrary, no policy or contract of insurance issued by an insurance company is
valid and binding unless and until the premium thereof has been paid, except in the
case of a life or an industrial life policy whenever the grace period provision applies.
[99]

Makati Tuscany Condominium Corp. v. CA, supra note 40, at 467-468.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

674 Phil. 28
FIRST DIVISION
A.M. No. P-11-2972 (FORMERLY OCA I.P.I. NO. 10-3430-P), September 28,
2011
YOLANDA LEACHON CORPUZ, COMPLAINANT, VS. SERGIO V. PASCUA,
SHERIFF III. MUNICIPAL TRIAL COURT IN CITIES, TRECE MARTIRES CITY,
CAVITE. RESPONDENT.
DECISION
LEONARDO-DE CASTRO, J.:

Before the Court is an administrative case for grave abuse of authority and gross
ignorance of the law filed by Yolanda Leachon Corpuz (Yolanda) against Sergio V.
Pascua (Pascua), Sheriff III, Municipal Trial Court in Cities (MTCC), Trece Martires City,
Cavite.
The facts of the case are as follows:
Upon the complaint of Alicia Panganiban (Panganiban), Criminal Case Nos. 2079 to
2082 for violations of Batas Pambansa Blg. 22 were instituted against Juanito
Corpuz (Juanito) before the MTCC. In an Order[1] dated June 16, 2009, the MTCC
approved the Compromise Agreement[2] dated May 25, 2009 executed between
Panganiban and Juanito (in which Juanito promised to pay Panganiban the sum of
P330,000.00) and dismissed provisionally Criminal Case Nos. 2079 to 2082. On
January 25, 2010, the MTCC allegedly rendered a judgment based on the
Compromise Agreement, but there was no copy of said judgment in the records of
this case. When Juanito failed to comply with his obligations under the Compromise
Agreement, Panganiban filed Motions for Execution dated January 4, 2010 and
February 25, 2010 of the MTCC judgment. On March 17, 2010, the MTCC acted
favorably on Panganiban's Motions and issued a Writ of Execution addressed to the
Sheriff of the MTCC of Trece Martires City, with the following decree:
NOW, THEREFORE, you are hereby commanded to proceed to accused Juanito
Corpuz who resides at No. 118 Lallana, Trece Martires City, for him to pay private
complainant the amount of Php330,000.00 less the amount of Php50,000.00
allegedly paid for the first installment.
In (sic) the judgment obligor cannot pay all or part of the obligation in cash, certified
bank check or other mode of payment acceptable to the judgment obligee, you
shall levy upon the properties of the judgment obligor of every kind and nature
whatsoever which may be disposed of for value and not otherwise exempt for
execution, giving the latter, the option to immediately choose which property may
be levied upon, sufficient to satisfy the judgment. If the judgment obligor does not
exercise the option, you shall first levy on the personal properties of any and then
on the real properties, if the personal properties are insufficient to answer for the.
You shall only (sic) so much of the personal or real property as is sufficient to satisfy
the judgment and lawful fees, and make a report to this Court every thirty (30) days
on the proceeding taken, until the judgment is satisfied in full, or its effectivity
expires.[3]
On June 2, 2010, Yolanda, Juanito's wife, and her daughter were in her office at the
Cavite Provincial Engineering Office of Trece Martires City. At around three o'clock in
the afternoon, Sheriff Pascua arrived at Yolanda's office and demanded that Yolanda
surrender the Toyota Town Ace Noah with Plate No. 471, which was registered in
Yolanda's name, threatening to damage the said vehicle if Yolanda would refuse to
do so. Sheriff Pascua tried to forcibly open the vehicle. Yolanda called her brother
to ask for help. Yolanda's brother arrived after one hour. Yolanda, with her daughter

and brother, went out of the office to face Sheriff Pascua. Deeply embarrassed and
humiliated, and to avoid further indignities, Yolanda surrendered the key to the
vehicle to Sheriff Pascua, but she did not sign any document which Sheriff Pascua
asked her to sign.
Offended, humiliated, and embarrassed, Yolanda was compelled to file the present
administrative complaint[4] against Sheriff Pascua. In addition to the
aforementioned incident on June 2, 2010, Yolanda alleged in her complaint that
Sheriff Pascua kept possession of the vehicle and even used the same on several
occasions for his personal use. Yolanda attached to her complaint pictures to prove
that Sheriff Pascua, instead of parking the vehicle within the court premises, in
accordance with the concept of custodia legis, parked the vehicle in the garage of
his own house. Yolanda also claimed that her vehicle was illegally confiscated or
levied upon by Sheriff Pascua because the Writ of Execution, which Sheriff Pascua
was implementing, was issued against Juanito, Yolanda's husband. Yolanda further
pointed out that Sheriff Pascua has not yet posted the notice of sale of personal
property, as required by Rule 39, Section 15 of the Rules of Court.
In his Comment,[5] Sheriff Pascua denied that he threatened and used force in
levying upon the vehicle in question, and avowed that he was the one maligned
when he served the Writ of Execution at Yolanda's residence on April 21, 2010 and
at Yolanda's office on June 2, 2010. Yolanda delivered unsavory remarks in an
unconscionable manner, maligning Sheriff Pascua in the presence of other people,
during both occasions. When Sheriff Pascua first served the Writ of Execution,
Yolanda uttered to him, "Ipaglalaban ko ng patayan kapag kumuha kayo ng gamit
dito, matagal ko ng pag-aari ang mga ito."[6]
Sheriff Pascua averred that after the levy, he politely informed Yolanda that he
would temporarily keep the vehicle at his place as there was no safe parking within
the court premises. The lower floors of the building where the courts are located
are being used as classrooms of the Cavite State University, and the vacant lot
thereat serves as parking area for judges, prosecutors, and doctors and staff of the
City Health Office. Sheriff Pascua believed that it was not safe to park the vehicle
within the City Hall premises because of his personal experience, when the battery
of his owner-type jeep, parked in the vicinity, was stolen. Sheriff Pascua already
stated in the Sheriff's Return dated June 4, 2010 that he was keeping temporary
custody of Yolanda's vehicle. He asserted that he never used the vehicle as he
owns an owner-type jeep, which he uses for serving writs and other court processes,
as well as for his family's needs. He likewise contradicted Yolanda's claim that no
public auction has been scheduled. In fact, Yolanda already received on July 9, 2010
the Notice to Parties of Sheriff's Public Auction Sale and Notice of Sale of Execution
of Personal Property.
Lastly, Sheriff Pascua argued that he only took Yolanda's vehicle after verification
from the Land Transportation Office (LTO) that it was registered in Yolanda's name.
Yolanda is the wife of Juanito, the accused in Criminal Case Nos. 2079 to 2082, and
the vehicle is their conjugal property, which could be levied upon in satisfaction of a

Writ of Execution against Juanito.

Yolanda filed a Reply[7] dated September 17, 2010, belying the averments in Sheriff
Pascua's Comment. Yolanda insisted that Sheriff Pascua committed an error in
levying upon the vehicle solely registered in her name to satisfy a Writ of Execution
issued against her husband and an impropriety in parking the vehicle at his (Sheriff
Pascua's) home garage.
In his Rejoinder[8] dated October 5, 2010, Sheriff Pascua maintained that he acted in
accordance with law. It was not his duty as sheriff to show proof that the personal
property he was levying upon to execute the civil aspect of the judgment was
conjugal; rather, the burden fell upon Yolanda to prove that the said property was
paraphernal. Sheriff Pascua further reiterated that he never used Yolanda's vehicle
for his needs. The pictures submitted by Yolanda only showed that the vehicle was
parked at his home garage. No picture or evidence was presented to prove that he
used the vehicle. Sheriff Pascua lastly averred that he had no intention of delaying
the public auction of the vehicle and was merely following the proper procedure for
the reasonable appraisal of the same. He had already filed a Notice of
Attachment/Levy upon Personal Property with the Register of Deeds of Trece
Martires City, requested certified true copies or photocopies of the Official Receipt
and Certificate of Registration of the vehicle to be used for the auction sale, and
gave notice of the auction sale to Yolanda six days prior to the scheduled sale. He
also gave Yolanda the opportunity to file a Third-Party Claim or proof that the
vehicle was her paraphernal property, but Yolanda failed to file anything until the
day of the auction sale.
On November 17, 2010, the Office of the Court Administrator (OCA) submitted its
report,[9] with the following recommendation:
RECOMMENDATION: Respectfully submitted for consideration of the Honorable
Court our recommendation that:
1. The instant administrative complaint be RE-DOCKETED as a regular
administrative matter;
2. Sergio V. Pascua, Sheriff III, Municipal Trial Court in Cities, Trece Martires City,
Cavite, be REPRIMANDED for impropriety in taking the vehicle and parking
the same at his garage; and
3. Sergio V. Pascua, be SUSPENDED for a period of one (1) month and one (1)
day for Simple Neglect of Duty, with a stern warning that a repetition of the
same or similar act shall be dealt with more severely. [10]
In a Resolution[11] dated February 9, 2011, we required the parties to manifest within
10 days from notice if they were willing to submit the matter for resolution based on
the pleadings filed.
Sheriff Pascua[12] and Yolanda[13] submitted their Manifestations dated April 11, 2011

and April 12, 2011, respectively, stating that they were submitting the case for
resolution based on the pleadings filed.
Resultantly, the case was already submitted for resolution.
After a thorough review of the records, the Court finds that Sheriff Pascua, in levying
upon Yolanda's vehicle even though the judgment and writ he was implementing
were against Juanito, then parking the same vehicle at his home garage, is guilty of
simple misconduct.
A sheriff performs a sensitive role in the dispensation of justice. He is duty-bound to
know the basic rules in the implementation of a writ of execution and be vigilant in
the exercise of that authority.[14]
Sheriffs have the ministerial duty to implement writs of execution promptly. Their
unreasonable failure or neglect to perform such function constitutes inefficiency and
gross neglect of duty. When writs are placed in the hands of sheriffs, it is their
ministerial duty to proceed with reasonable speed and promptness to execute such
writs in accordance with their mandate.[15]
At the same time, sheriffs are bound to discharge their duties with prudence,
caution, and attention which careful men usually exercise in the management of
their affairs. Sheriffs, as officers of the court upon whom the execution of a final
judgment depends, must be circumspect and proper in their behavior. [16]
In the instant case, Sheriff Pascua failed to live up to the standards of conduct for
his position.
Despite the undisputed facts that the MTCC Judgment and Writ of Execution in
Criminal Case Nos. 2079 to 2082 were against Juanito only, and the Toyota Town Ace
Noah with Plate No. 471 was registered in Yolanda's name solely, Sheriff Pascua
proceeded to levy upon the vehicle, invoking the presumption that it was conjugal
property.
The power of the court in executing judgments extends only to properties
unquestionably belonging to the judgment debtor alone. [17] An execution can be
issued only against a party and not against one who did not have his day in court.
The duty of the sheriff is to levy the property of the judgment debtor not that of a
third person. For, as the saying goes, one man's goods shall not be sold for another
man's debts.[18]
A sheriff is not authorized to attach or levy on property not belonging to the
judgment debtor. The sheriff may be liable for enforcing execution on property
belonging to a third party. If he does so, the writ of execution affords him no
justification, for the action is not in obedience to the mandate of the writ. [19]
Sheriff Pascua cannot rely on the presumption that the vehicle is the conjugal

property of Juanito and Yolanda.

Indeed, Article 160 of the New Civil Code provides that "[a]ll property of the
marriage is presumed to belong to the conjugal partnership, unless it be proved that
it pertains exclusively to the husband or to the wife." However, for this presumption
to apply, the party who invokes it must first prove that the property was acquired
during the marriage. Proof of acquisition during the coverture is a condition sine
qua non to the operation of the presumption in favor of the conjugal partnership.
Thus, the time when the property was acquired is material. [20] There is no such
proof in the records of the present case.
Sheriff Pascua's assertions of diligence do not exculpate him from administrative
liability. After inquiry from the LTO, he already discovered that the vehicle was
registered in Yolanda's name only. This fact should have already prompted Sheriff
Pascua to gather more information, such as when Juanito and Yolanda were married
and when did Yolanda acquire the vehicle, which, in turn, would have determined
whether or not Sheriff Pascua could already presume that the said vehicle is
conjugal property.
Moreover, when Sheriff Pascua proceeded in levying upon Yolanda's vehicle, he
digressed far from the procedure laid down in Section 9, Rule 39 of the Rules of
Court for the enforcement of judgments, pertinent portions of which read:
SEC. 9. Execution of judgments for money, how enforced. (a) Immediate payment on demand. - The officer shall enforce an execution of a
judgment for money by demanding from the judgment obligor the immediate
payment of the full amount stated in the writ of execution and all lawful fees. The
judgment obligor shall pay in cash, certified bank check payable to the judgment
obligee, or any other form of payment acceptable to the latter, the amount of the
judgment debt under proper receipt directly to the judgment obligee or his
authorized representative if present at the time of payment. x x x.
xxxx
(b) Satisfaction by levy. - If the judgment obligor cannot pay all or part of the
obligation in cash, certified bank check or other mode of payment acceptable to the
judgment obligee, the officer shall levy upon the properties of the judgment obligor
of every kind and nature whatsoever which may be disposed of for value and not
otherwise exempt from execution giving the latter the option to immediately choose
which property or part thereof may be levied upon, sufficient to satisfy the
judgment. If the judgment obligor does not exercise the option, the officer shall first
levy on the personal properties, if any, and then on the real properties if the
personal properties are insufficient to answer for the judgment. (Underscoring
supplied.)

As the aforequoted provision clearly state, the levy upon the properties of the
judgment obligor may be had by the executing sheriff only if the judgment obligor
cannot pay all or part of the full amount stated in the writ of execution. If the
judgment obligor cannot pay all or part of the obligation in cash, certified bank
check, or other mode acceptable to the judgment obligee, the judgment obligor is
given the option to immediately choose which of his property or part thereof, not
otherwise exempt from execution, may be levied upon sufficient to satisfy the
judgment. If the judgment obligor does not exercise the option immediately, or
when he is absent or cannot be located, he waives such right, and the sheriff can
now first levy his personal properties, if any, and then the real properties if the
personal properties are insufficient to answer for the judgment. Therefore, the
sheriff cannot and should not be the one to determine which property to levy if the
judgment obligor cannot immediately pay because it is the judgment obligor who is
given the option to choose which property or part thereof may be levied upon to
satisfy the judgment.[21]
In this case, Sheriff Pascua totally ignored the established procedural rules. Without
giving Juanito the opportunity to either pay his obligation under the MTCC judgment
in cash, certified bank check, or any other mode of payment acceptable to
Panganiban; or to choose which of his property may be levied upon to satisfy the
same judgment, Sheriff Pascua immediately levied upon the vehicle that belonged
to Juanito's wife, Yolanda.
To make matters worse, Sheriff Pascua parked the vehicle at his home garage,
believing that the parking area within the court premises was unsafe based on his
personal experience.
In previous administrative cases, sheriffs had already proffered the same excuse,
i.e., lack of court storage facilities for the property attached or levied upon, so as to
justify their delivery of the said property to the party-creditors. In Caja v. Nanquil,[22]
we rejected the excuse, thus:
Respondent sheriff argues that he never delivered said personal properties to the
judgment creditor but merely kept the same in a secured place owned by the latter.
He brought them there because the Sheriff's Office and the Regional Trial Court of
Olongapo City had no warehouse or place to keep levied personal properties. In
support thereto, he presented John Aquino, Clerk of Court of the Regional Trial Court
of Olongapo City, who testified that they have no designated warehouse or building
where sheriffs can keep levied personal properties. In so far as large motor vehicles,
the practice as to where to keep them is left at the discretion of the sheriff.
Respondent sheriff's argument that he kept the levied personal properties at the
judgment creditor's place because the Regional Trial Court of Olongapo City does
not have any warehouse or place to keep the same does not hold water. A levying
officer must keep the levied properties securely in his custody. The levied property
must be in the substantial presence and possession of the levying officer who

cannot act as special deputy of any party litigant. They should not have been
delivered to any of the parties or their representative. The court's lack of storage
facility to house the attached properties is no justification. Respondent sheriff could
have deposited the same in a bonded warehouse or could have sought prior
authorization from the court that issued the writ of execution. [23] (Underscoring
supplied.)
Sheriff Pascua's explanation for parking Yolanda's vehicle at his home garage is just
as unacceptable. Granted that it was unsafe to park the vehicle within the court
premises, Sheriff Pascua should have kept the said vehicle in a bonded warehouse
or sought prior authorization from the MTCC to park the same at another place.
Although there is no evidence that Sheriff Pascua had also used the vehicle, the
Court understands how easy it is for other people to suspect the same because the
vehicle was parked at his home garage. Sheriff Pascua's actuations smacked of
unprofessionalism, blurring the line between his official functions and his personal
life.
Time and again, the Court has held that sheriffs and deputy sheriffs play a
significant role in the administration of justice. They are primarily responsible for
the execution of a final judgment which is "the fruit and end of the suit and is the
life of the law."[24] Thus, sheriffs must at all times show a high degree of
professionalism in the performance of their duties. As officers of the court, they are
expected to uphold the norm of public accountability and to avoid any kind of
behavior that would diminish or even just tend to diminish the faith of the people in
the judiciary.[25] Measured against these standards, Sheriff Pascua disappointingly
fell short.
The OCA recommends that Sheriff Pascua be held administratively liable for
impropriety and simple neglect of duty. The Court though determines that Sheriff
Pascua's improper actions more appropriately constitute simple misconduct.
Misconduct is a transgression of an established rule of action. More
particularly, misconduct is the unlawful behavior of a public officer. It means the
"intentional wrongdoing or deliberate violation of a rule of law or standard of
behavior, especially by a government official." [26] In order for misconduct to
constitute an administrative offense, it should be related to or connected with the
performance of the official functions and duties of a public officer. [27]
Under Section 22, Rule XIV of the Omnibus Rules Implementing Book V of Executive
Order No. 292 (otherwise known as The Administrative Code of 1987) and Section
52(B)(2), Rule IV of the Revised Uniform Rules on Administrative Cases in the Civil
Service, simple misconduct is a less grave offense with a penalty ranging from
suspension for one (1) month and one (1) day to six (6) months for the first offense,
and dismissal for the second offense.
WHEREFORE, respondent Sheriff Sergio V. Pascua is found GUILTY of simple
misconduct and is SUSPENDED for TWO (2) MONTHS WITHOUT PAY, with a

stern warning that a repetition of the same or similar act shall be dealt with more
severely.
SO ORDERED.
Bersamin, Del Castillo, Perez,** and Mendoza,*** JJ., concur.

Per Special Order No. 1092 dated September 21, 2011.

**

Per Special Order No. 1080 dated September 13, 2011.

Per Special Order No. 1093 dated September 21, 2011.

***
[1]

Rollo, p. 9.

[2]

Id. at 8.

[3]

Id. at 11.

[4]

Id. at 1-2.

[5]

Id. at 21-22.

[6]

Id. at 21.

[7]

Id. at 38-43.

[8]

Id. at 45-46.

[9]

Id. at 48-52.

[10]

Id. at 52.

[11]

Id. at 53.

[12]

Id. at 64.

[13]

Id. at 65-66.

[14]

Sarmiento v. Mendiola, A.M. No. P-07-2383, December 15, 2010.

[15]

Bernabe v. Eguia, 458 Phil. 97, 107-108 (2003).

[16]

Eduarte v. Ramos, A.M. No. P-94-1069, November 9, 1994, 238 SCRA 36, 41.

[17]

Republic v. Enriquez, 248 Phil. 838, 841 (1988); Wong v. Intermediate Appellate
Court, G.R. No. 70082, August 19, 1991, 200 SCRA 792, 802-803.
[18]

MR Holdings, Ltd. v. Bajar, 430 Phil. 443, 473 (2002).

[19]

Johnson & Johnson (Phils.), Inc. v. Court of Appeals, 330 Phil. 856, 873 (1996).

[20]

Imani v. Metropolitan Bank and Trust Company, G.R. No. 187023, November 17,
2010, 635 SCRA 357, 369.
[21]

Sarmiento v. Mendiola, supra note 14.

[22]

A.M. No. P-04-1885, September 13, 2004, 438 SCRA 174.

[23]

Id. at 195-196.

[24]

Viaje v. Dizon, A.M. No. P-07-2402, October 15, 2008, 569 SCRA 45, 50.

[25]

Id. at 49-50.

[26]

Tenorio v. Perlas, A.M. No. P-10-2817, January 26, 2011.

[27]

Id.

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Supreme Court of the Philippines

670 Phil. 5
SECOND DIVISION
A.M. No. P-11-2888 (formerly A.M. OCA I.P.I. No. 09-3252-P), July 27, 2011
GOLDEN SUN FINANCE CORPORATION, REPRESENTED BY RACHELLE L.
MARMITO, COMPLAINANT, VS. RICARDO R. ALBANO, SHERIFF III,
METROPOLITAN TRIAL COURT (METC), BRANCH 62, MAKATI CITY,
RESPONDENT.
DECISION
BRION, J.:
Ricardo R. Albano (respondent), Sheriff III, Metropolitan Trial Court (MeTC), Branch
62, Makati City, was charged with negligence and grave misconduct by the
Golden Sun Finance Corporation (complainant), represented by Rachelle L. Marmito,
the complainant's Head Auditor.
THE COMPLAINT
In a verified letter-complaint dated September 1, 2009, the complainant alleged
that on January 7, 2009, it filed a complaint for the recovery of a Honda Civic Sedan

with the Regional Trial Court (RTC), Quezon City, Branch 81, against one Lucila S.
Reyes, docketed as Civil Case No. 0964026. The subject motor vehicle, registered in
the name of Reyes, was encumbered in its favor, as shown in the Certificate of
Registration issued by the Land Transportation Office.
The RTC decided in favor of the complainant and issued a writ of replevin. However,
the complainant found out that the motor vehicle had already been levied upon by
the respondent by virtue of a writ of execution issued on March 27, 2009 by the
MeTC, Makati City, Branch 62, in Criminal Case Nos. 353822-23 for violation of
Batas Pambansa Bilang 22 against Reyes. It was sold at a public auction conducted
by the respondent on April 29, 2009, with the Royal Makati Credit Resource as the
highest bidder. On the same day, a Certificate of Sale was issued in favor of the
Royal Makati Credit Resource.
The complainant averred that the levy and sale of the motor vehicle by the
respondent was illegal. It claimed that the respondent was negligent when he
levied upon the motor vehicle and proceeded with the auction sale without looking
into the car's Certificate of Registration to determine whether it was encumbered or
not. The encumbrance on the motor vehicle having been made prior to the suit filed
by the Royal Makati Credit Resource, the complainant posited that its claim should
have priority over the former's claims.
Required by the Office of the Court Administrator (OCA) to comment on the charges
against him, [1] the respondent contended that he had no knowledge that the car
was encumbered because the Certificate of Registration was never shown to him.
He also had no knowledge that the car was the subject of a writ of replevin in Civil
Case No. 0964026. [2] Thus, the respondent asked for the dismissal of the complaint,
stressing that he had acted within the scope of his duty as sheriff when he enforced
the writ of execution.
THE OCA'S REPORT AND RECOMMENDATION
In a Memorandum Report dated November 3, 2010,
complaint and submitted its findings:

[3]

the OCA evaluated the

The encumbrance in the instant case has been properly recorded in the Land
Transportation Office and, as attested to by the complainant, in the Register of
Deeds of Rizal Province. Such record is constructive notice of its contents and all
interests, legal and equitable, included therein. This presumption cannot be
defeated by lack of notice or knowledge of what the public record contains any
more than one may be permitted to show that he was ignorant of the provisions of
law. Hence, the respondent is charged with knowledge of the duly registered
encumbrance on the property he levied.
In the case of Caja vs. Nanquil, the Court has declared that "the respondent sheriff's
act of levying complainant's real property despite its being mortgaged is
tantamount to negligence. As an officer of the court, he knew fully well that the

property cannot be used to satisfy the judgment debt since the mortgagee is the
preferred creditor in relation to the said property."
In the instant administrative complaint, the respondent not only levied the
encumbered vehicle, but sold it in an execution sale, the proceeds of which would
not satisfy the judgment debt because of the existing encumbrance. Thus, the
implementation of the writ of execution, although impressively carried out with such
celerity and promptness, had been to naught. It must be pointed out that the
recovery of the vehicle itself was the subject of Civil Case No. 0964026 filed by
GSFC before the Quezon City Regional Trial Court, Branch 81.
The OCA recommended that - (1) the complaint be redocketed as a regular
administrative matter, (2) the respondent be held administratively liable for simple
neglect of duty, and (3) the respondent be suspended without pay for one (1) month
and one (1) day, with a stern warning that the commission of the same or similar
offense in the future shall be dealt with more severely.
The Court, as recommended, (a) directed that the complaint be redocketed as a
regular administrative matter, and (b) required the parties to manifest whether they
were willing to submit the case for decision based on the pleadings/records already
filed and submitted. [4]
Both the complainant and the respondent complied, manifesting that they were
submitting the case for decision based on the pleadings/records on file. [5]
THE COURT'S RULING
We disagree with the OCA's recommendation. We fail to find sufficient
basis to declare the respondent administratively liable for simple neglect
of duty.
Section 9(b), Rule 39 of the Rules of Court states the manner by which judgments
for money may be satisfied by levy:
SEC. 9. Execution of judgments for money, how enforced. -xxxx
(b) Satisfaction by levy. -- If the judgment obligor cannot pay all or part of the
obligation in cash, certified bank check or other mode of payment acceptable to the
judgment obligee, the officer shall levy upon the properties of the judgment
obligor of every kind and nature whatsoever which may be disposed of for
value and not otherwise exempt from execution giving the latter the option to
immediately choose which property or part thereof may be levied upon, sufficient to
satisfy the judgment. If the judgment obligor does not exercise the option,
the officer shall first levy on the personal properties, if any, and then on

the real properties if the personal properties are insufficient to answer for
the judgment.
The sheriff shall sell only a sufficient portion of the personal or real property of the
judgment obligor which has been levied upon.
When there is more property of the judgment obligor than is sufficient to satisfy the
judgment and lawful fees, he must sell only so much of the personal or real property
as is sufficient to satisfy the judgment and lawful fees.
Real property, stocks, shares, debts, credits, and other personal property, or any
interest in either real or personal property, may be levied upon in like manner and
with like effect as under a writ of attachment.
In determining properties to be levied upon, the Rules require the sheriff to levy
only on those "properties of the judgment debtor" which are "not otherwise exempt
from execution." For purposes of the levy, a property is deemed to belong to the
judgment debtor if he holds a beneficial interest in such property that he can sell or
otherwise dispose of for value. [6] In a contract of mortgage, the debtor retains
beneficial interest over the property notwithstanding the encumbrance, since the
mortgage only serves to secure the fulfillment of the principal obligation. [7] Indeed,
even if the debtor defaults, this fact does not operate to vest in the creditor the
ownership of the property; [8] the creditor must still resort to foreclosure
proceedings. Thus, a mortgaged property may still be levied upon by the sheriff to
satisfy the judgment debtor's obligations, as what happened in the present case.
After ascertaining the judgment debtor's (Reyes') interest over the car, the
respondent properly enforced the levy thereon -- an act that, to our mind, is in
accordance with the Rules of Court.
It was thus irrelevant for the complainant to argue that had the respondent checked
the car's certificate of registration, the respondent would have been aware of the
encumbrance. The encumbrance, until foreclosed, will not in any way affect the
judgment debtor's rights over the property or exempt the property from the levy.
Even the pendency of the proceeding for replevin that the complainant instituted
would not serve to prevent the sheriff from levying on the car, since Reyes' default
and the complainant's right to foreclose still had to be settled in the proceeding. [9]
The OCA's recommendation was based supposedly on our ruling in Caja v. Nanquil.
[10]
We find, however, that the OCA has read our ruling out of context. In that case,
the Court held Sheriff Atilano Nanquil administratively liable, not so much for
levying on the property of the judgment debtor that was already mortgaged to a
third party, but for levying on the judgment debtor's real properties without
checking if there were other personal properties that could satisfy the judgment
debt. "[Sheriff Nanquil] should have exhausted all means before going after the real
property," [11] as required under Section 9(b), Rule 39 of the Rules of Court. We also
found Sheriff Nanquil liable for levying properties of the judgment debtor far from

and in excess of the value of the judgment debt.

[12]

We emphasize that a sheriff's duty to execute a writ is simply ministerial, [13] and he
is bound to perform only those tasks stated under the Rules of Court and no more.
Any interest a third party may have on the property levied upon by the sheriff to
enforce a judgment is the third party's responsibility to protect through the
remedies provided under Rule 39 of the Rules of Court. [14] Thus, we can not hold
the respondent liable on the ground that the complainant cites. If at all, the
respondent should have required, as a matter of sound established practice, the
production of the certificate of registration, but this is an altogether different matter
that we do not here pass upon.
WHEREFORE, premises considered, the administrative charges for negligence and
grave misconduct against Ricardo R. Albano, Sheriff III, Metropolitan Trial Court,
Branch 62, Makati City, are DISMISSED. Costs against the complainant Golden Sun
Finance Corporation.
SO ORDERED.
Carpio, (Chairperson), Leonardo-De Castro, * Peralta,** and Perez, JJ., concur.

Designated as Acting Member of the Second Division per Special Order No. 1006
dated June 10, 2011.
**

Designated as Acting Member of the Second Division per Special Order No. 1040
dated July 6, 2011 vice Associate Justice Maria Lourdes P.A. Sereno, on official leave.
[1]

1st Indorsement dated October 6, 2009; rollo, p. 12.

[2]

Id. at 13-14.

[3]

Id. at 45-48.

[4]

Id. at 49.

[5]

Id. at 51-53.

[6]

Feria and Noche, Civil Procedure Annotated, Volume II (2001 ed.), p. 45, citing
Reyes v. Grey, 21 Phil. 73, 76 (1911).
[7]

CIVIL CODE, Article 2085(1). The following requisites are essential to the contracts
of pledge and mortgage: (1) That they be constituted to secure the fulfillment of a
principal obligation[.]

[8]

CIVIL CODE, Article 2088. The creditor cannot appropriate the things given by way
of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null
and void.
[9]

In Fort Bonifacio Development Corporation v. Yllas Lending Corporation (G.R. No.

158997, October 6, 2008, 567 SCRA 454, 471), we ruled:
When the mortgagee seeks a replevin in order to effect the eventual foreclosure of
the mortgage, it is not only the existence of, but also the mortgagor's default on,
the chattel mortgage that, among other things, can properly uphold the right to
replevy the property.
[10]

481 Phil. 488 (2004).

[11]

Id. at 508.

[12]

Id. at 512.

[13]

Philippine Bank of Communications v. Torio, 348 Phil. 74, 84 (1998).

[14]

SEC. 12. Effect of levy on execution as to third persons. -- The levy on execution
shall create a lien in favor of the judgment obligee over the right, title and interest
of the judgment obligor in such property at the time of the levy, subject to liens and
encumbrances then existing.
xxxx
SEC. 16. Proceedings where property claimed by third person. -- If the property
levied on is claimed by any person other than the judgment obligor or his agent,
and such person makes an affidavit of his title thereto or right to the possession
thereof, stating the grounds of such right or title, and serves the same upon the
officer making the levy and a copy thereof upon the judgment obligee, the officer
shall not be bound to keep the property, unless such judgment obligee, on demand
of the officer, files a bond approved by the court to indemnify the third-party
claimant in a sum not less than the value of the property levied on. In case of
disagreement as to such value, the same shall be determined by the court issuing
the writ of execution. No claim for damages for the taking or keeping of the property
may be enforced against the bond unless the action therefor is filed within one
hundred twenty (120) days from the date of the filing of the bond.
The officer shall not be liable for damages for the taking or keeping of the property,
to any third-party claimant if such bond is filed. Nothing herein contained shall
prevent such claimant or any third person from vindicating his claim to the property
in a separate action, or prevent the judgment obligee from claiming damages in the
same or a separate action against a third-party claimant who filed a frivolous or
plainly spurious claim.

When the writ of execution is issued in favor of the Republic of the Philippines, or
any officer duly representing it, the filing of such bond shall not be required, and in
case the sheriff or levying officer is sued for damages as a result of the levy, he
shall be represented by the Solicitor General and if held liable therefor, the actual
damages adjudged by the court shall be paid by the National Treasurer out of such
funds as may be appropriated for the purpose.

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