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SECOND DIVISION ground of the latters sexual infidelity; the dissolution of their

conjugal property relations and the division of the net


[G.R. No. 132592. January 23, 2002] conjugal assets; the forfeiture of respondents one-half share
in the net conjugal assets in favor of the common children;
AIDA P. BAEZ, petitioner, vs. GABRIEL B. the payment to petitioners counsel of the sum of P100,000
BAEZ, respondent. as attorneys fees to be taken from petitioners share in the
net assets; and the surrender by respondent of the use and
[G.R. No. 133628. January 23, 2002] possession of a Mazda motor vehicle and the smaller
residential house located at Maria Luisa Estate Park
AIDA P. BAEZ, petitioner, vs. GABRIEL B. Subdivision to petitioner and the common children within 15
BAEZ, respondent. days from receipt of the decision.

DECISION Thereafter, petitioner filed an urgent ex-parte motion to


modify said decision, while respondent filed a Notice of
QUISUMBING, J.: Appeal.

These two petitions stem from the decision[1] dated The trial court granted petitioner Aida Banez urgent ex-
September 23, 1996 of the Regional Trial Court of Cebu, parte motion to modify the decision on October 1, 1996 by
Branch 20, in Civil Case No. CEB-16765. The first[2] seeks the approving the Commitment of Fees dated December 22,
reversal of the Court of Appeals decision dated March 21, 1994; obliging petitioner to pay as attorneys fees the
1997, setting aside the orders dated October 1 and equivalent of 5% of the total value of respondents ideal
November 22, 1996 of the Regional Trial Court. The share in the net conjugal assets; and ordering the
second[3] prays for the reversal of the resolution dated administrator to pay petitioners counsel, Atty. Adelino B.
February 10, 1998, of the Court of Appeals in CA-G.R. No. Sitoy, the sum of P100,000 as advance attorneys fees
CV-56265, denying the motion to dismiss. chargeable against the aforecited 5%.[4]

The antecedent facts, as gathered from the parties In another motion to modify the decision, petitioner
pleadings, are as follows: Aida Baez sought moral and exemplary damages, as well as
litigation expenses. On October 9, 1996, she filed a motion
On September 23, 1996, the Regional Trial Court of for execution pending appeal. Respondent Gabriel Baez filed
Cebu, Branch 20, decided Civil Case No. CEB-16765, a consolidated written opposition to the two motions, and
decreeing among others the legal separation between also prayed for the reconsideration of the October 1, 1996
petitioner Aida Baez and respondent Gabriel Baez on the order.
On November 22, 1996, the trial court denied Aidas WHEREFORE, the Order dated October 1, 1996 and the
motion for moral and exemplary damages and litigation Omnibus Order dated November 22, 1996, insofar as (1) it
expenses but gave due course to the execution pending authorized the release of the sum of P100,000.00 to private
appeal. Thus: respondents counsel as the advanced share of private
respondent [Aida Baez] in the net remaining conjugal
WHEREFORE, in view of all the foregoing premises, the assets, and (2) granted the motion for execution pending
petitioners motion to modify decision is hereby ordered appeal by ordering petitioner [Gabriel Baez] to vacate the
denied. But, petitioners motion for execution of decision premises of the small residential house situated in Maria
pending appeal is hereby granted. Consequently, let a writ Luisa Estate Park Subdivision, Lahug, Cebu City, and to
of execution be issued in this case to enforce the decision surrender the use and possession of the Mazda Motor
for (1) respondent to vacate the premises of the small vehicle to private respondent are hereby SET ASIDE. The
residential house situated in Maria Luisa Estate Park writ of execution dated December 2, 1996 and the Order
Subdivision, Lahug, Cebu City and for (2) respondent to dated December 10, 1996 granting the motion filed by the
surrender the use and possession of said Mazda motor sheriff to make symbolic delivery of the subject house and
vehicle together with its keys and accessories thereof to motor vehicle to the administrator of the partnership are
petitioner. also SET ASIDE.

Atty. Edgar Gica, the Special Administrator, appointed in this As prayed for by petitioner, the Administrator of the
case, is hereby ordered to make the necessary computation conjugal partnership is hereby ordered to cause the
of the value of the one-half (1/2) share of petitioner in the reimbursement by counsel for the private respondent [Aida
net remaining conjugal assets of the spouses within 10 days Baez] of the amount of P100,000.00 released to him as
from receipt of this order. advance payment of attorneys fees.

The petitioner is hereby ordered to post a bond in the SO ORDERED.[6]


amount of P1,500,000.00 to answer for all the damages that
respondent may suffer arising from the issuance of said writ On February 10, 1998, the Court of Appeals denied
of execution pending appeal and to further answer for all the Aidas motion for reconsideration. Hence, the petition in G.R.
advances that petitioner may have received from the No. 132592, filed by herein petitioner.
Special Administrator in this case pending final termination
of this present case.[5] In the meantime, the trial court gave due course to
Gabriels Notice of Appeal and elevated on April 15, 1997 the
In turn, in a petition for certiorari, Gabriel Baez elevated entire case records to the Court of Appeals. Aida filed with
the case to the Court of Appeals. On March 21, 1997, the the Court of Appeals a motion to dismiss the appeal on the
appellate court rendered its decision, thus: ground that Gabriel had failed to file with the appellate court
a Record on Appeal. On February 10, 1998, the Court of ... IN SETTING ASIDE THE GRANT OF EXECUTION PENDING
Appeals decided the motion, thus: APPEAL BY THE TRIAL COURT OF THE PORTIONS OF ITS
DECISION ORDERING RESPONDENT TO VACATE THE
WHEREFORE, premises considered, the petitionerappellants SMALLER RESIDENTIAL HOUSE LOCATED AT THE MARIA
motion to dismiss filed on November 3, 1997 is hereby LUISA ESTATE PARK SUBDIVISION, CEBU CITY, AND TO PAY
DENIED. The appointment of the petitioner-appellee as P100,000.00 TO PETITIONERS COUNSEL AS ATTORNEYS
administratix of the conjugal properties is hereby AFFIRMED. FEES TO BE TAKEN FROM HER SHARE IN THE NET CONJUGAL
ASSETS.[8]
In view of petitioners Motion to Withdraw her own appeal
filed on November 27, 1997, and for failing to pay the II. G.R. No. 133628:
required docket fee within the prescribed period under Rule
41, Section 4 of the 1997 Rules of Civil Procedure, the ... IN NOT GRANTING PETITIONERS MOTION TO DISMISS
appeal instituted by the petitioner Aida P. Baez is hereby RESPONDENTS ORDINARY APPEAL AND/OR NOT RETURNING
DISMISSED. THE RECORDS OF CIVIL CASE NO. CEB-16765 TO THE
REGIONAL TRIAL COURT OF CEBU.[9]
In continuance of the appeal of respondent-appellant
[Gabriel Baez], he is hereby ordered to file his brief with the In G.R. No. 132592, petitioner manifested that she no
court within 45 days from receipt of this resolution. The longer questions the Court of Appeals decision on the Mazda
petitioner-appellee [Aida Baez] shall file her own brief with vehicle because respondent repossessed it. As to the
the court within 45 days from receipt of the petitioner- residential house, she claimed that being conjugal in nature,
appellants [Gabriel Baez] brief. justice requires that she and her children be allowed to
occupy and enjoy the house considering that during the
SO ORDERED.[7] entire proceedings before the trial court, she did not have
the chance to occupy it. Further, she posted a bond
The appellate court also denied herein petitioners motion for of P1,500,000 for the damages which respondent may
reconsideration, hence, the petition in G.R. No. 133628. suffer.[10] For these reasons, she asked for execution pending
appeal. The amount of P100,000 as advance payment to her
On January 19, 2000, we consolidated the two petitions. counsel was a drop in the bucket compared to the bond she
Petitioner Aida Baez now avers that the Court of Appeals posted, according to her. She also suggested as an
erred: alternative that she simply be required to put up an
additional bond. She also agreed to submit to an accounting
I. G.R. No. 132592 as regular administratrix and the advance attorneys fees be
charged to her share in the net conjugal assets.
In his comment, respondent denied petitioners Similarly, we are not persuaded that the P100,000
allegation that she did not have the chance to occupy the advance payment to petitioners counsel was properly
residential house. He averred that she could have, had she granted. We see no justification to pre-empt the judgment
chosen to. According to him, as the inventory of the couples by the Court of Appeals concerning said amount of P100,000
properties showed, petitioner owned two houses and lots at the time that the trial courts judgment was already on
and two motor vehicles in the United States, where she is a appeal.
permanent resident. Respondent contended that there was
no compelling reason for petitioner to have the judgment In G.R. No. 133628, petitioner Aida Baez contends that
executed pending appeal. an action for legal separation is among the cases where
multiple appeals may be taken. According to her, the filing
Essentially, the core issue in G.R. No. 132592 is whether of a record on appeal, pursuant to Section 2(a), Rule 41 of
execution of judgment pending appeal was justified. the Rules of Court,[13] is required in this case. She concludes
that respondents appeal should have been dismissed for his
As held in Echaus vs. Court of Appeals, 199 SCRA 381, failure to file the record on appeal within the reglementary
386 (1991), execution pending appeal is allowed when period, as provided under Section 1-b, Rule 50 of the Rules
superior circumstances demanding urgency outweigh the of Court.[14]
damages that may result from the issuance of the writ.
Otherwise, instead of being an instrument of solicitude and Petitioner likewise prays that, in the event that we do
justice, the writ may well become a tool of oppression and not dismiss Gabriel Baez appeal, we should direct the
inequity.[11] appellate court to return the records of the case to the RTC
of Cebu.Thereafter, according to her, respondent should file
In this case, considering the reasons cited by petitioner, his record on appeal for approval and transmittal to the
we are of the view that there is no superior or urgent Court of Appeals. In the alternative, she prays that the
circumstance that outweighs the damage which respondent appellate court retain only the pleadings and evidence
would suffer if he were ordered to vacate the house. We necessary to resolve respondents appeal pursuant to
note that petitioner did not refute respondents allegations Section 6, Rule 44[15] and Section 6, Rule 135[16] of the Rules
that she did not intend to use said house, and that she has of Court, and return the rest of the case records to the RTC.
two (2) other houses in the United States where she is a
permanent resident, while he had none at all. Merely putting In turn, respondent argues that Section 39 of B.P.
up a bond is not sufficient reason to justify her plea for 129[17] expressly abolished the requirement of a record on
execution pending appeal. To do so would make execution appeal, except in appeals in special proceedings in
routinary, the rule rather than the exception.[12] accordance with Rule 109,[18] and other cases wherein
multiple appeals are allowed. An action for legal separation,
he avers, is neither a special proceeding nor one where
multiple appeals are allowed.
Now, is an action for legal separation one where Petitioners alternative prayers that in case we do not
multiple appeals are allowed? We do not think so. dismiss the appeal, we return the records to the trial court
and require respondent to file a record on appeal, or we
In Roman Catholic Archbishop of Manila v. Court of return the records to the trial court and retain only the
Appeals, 258 SCRA 186, 194 (1996), this Court held: pleadings and orders relevant to the appeal, are untenable.
If we grant the first, we are effectively saying that the
xxx Multiple appeals are allowed in special proceedings, in instant case is one involving multiple appeals, which it is
actions for recovery of property with accounting, in actions not. If we allow the second, we are effectively applying by
for partition of property with accounting, in the special civil analogy, Section 6, Rule 44 and Section 6, Rule 135 of the
actions of eminent domain and foreclosure of mortgage. The Rules of Court, without petitioner showing support therefor
rationale behind allowing more than one appeal in the same in law or jurisprudence.[21]
case is to enable the rest of the case to proceed in the event
that a separate and distinct issue is resolved by the court WHEREFORE, the instant petitions are DENIED for lack
and held to be final. of merit. The decision and resolution of the Court of Appeals
in CA-G.R. SP No. 42663 and CA-G.R. No. CV-56265,
In said case, the two issues raised by therein petitioner respectively, are hereby AFFIRMED, so that the Order dated
that may allegedly be the subject of multiple appeals arose October 1, 1996, of the Regional Trial Court authorizing the
from the same cause of action, and the subject matter release of P100,000 to petitioners counsel; the Omnibus
pertains to the same lessor-lessee relationship between the Order dated November 22, 1996 granting the motion
parties. Hence, splitting the appeals in that case would only pending appeal; the writ of execution dated December 2,
be violative of the rule against multiplicity of appeals. 1996; and the Order dated December 10, 1996 granting the
motion by the sheriff to make symbolic delivery of the house
The same holds true in an action for legal and vehicle are SET ASIDE. Further, the Administrator of the
separation. The issues involved in the case will necessarily conjugal partnership is ORDERED to cause the
relate to the same marital relationship between the reimbursement by petitioners counsel of the released
parties. The effects of legal separation, such as entitlement amount of P100,000. The Court of Appeals is hereby
to live separately, dissolution and liquidation of the absolute DIRECTED to give due course to respondents appeal, and
community or conjugal partnership, and custody of the the Division Clerk of Court of this Court is likewise DIRECTED
minor children, follow from the decree of legal separation. to promptly remand the record of these cases to the Court
[19]
They are not separate or distinct matters that may be of Appeals.
resolved by the court and become final prior to or apart
from the decree of legal separation. Rather, they are mere Costs against petitioner.
incidents of legal separation.[20] Thus, they may not be
subject to multiple appeals. SO ORDERED.
Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Complainant, who is one of the plaintiffs in [Civil Case No.
Jr., JJ., concur. MTCC-2266 entitled Spouses Fernando Fajardo and
Evangeline Perez vs. Maria Datuin], alleged that the
complaint for ejectment which they filed on July 17, 1997
was finally decided on July 29, 1999 against the defendant.
THIRD DIVISION The decision was appealed to the Regional Trial Court but it
was dismissed on November 29, 1999, and the decision
[A.M. No. P-02-1535. March 28, 2003] became final and executory. His lawyer filed a Motion for
Execution, and on March 7, 2000, the Court issued a Writ of
FERNANDO FAJARDO, complainant, vs. Sherif Execution which was brought by the respondent Sheriff to
RODOLFO V. QUITALIG, Municipal Trial Court in the defendant Maria Datuin on March 9, 2000.
Cities, San Carlos City,
Pangasinan, respondent. Complainant claimed that after the Writ of Execution was
served, defendant asked for a period of two (2) weeks for
DECISION her to remove her personal properties on the land. After two
(2) weeks he went to Sheriff Quitalig so that the Writ of
PANGANIBAN, J.: Execution may be implemented but he was told that a
restraining order was issued, but when he asked for it, the
As frontline officials of the justice system, sheriffs must respondent told him that he left it in the office.
always strive to maintain public trust in the performance of
their duties. Hence, they must see to it that the final stage Complainant stated that on March 24, 2000, he and his
in the litigation process is completed without unnecessary lawyer went to the court to verify whether a restraining
delay. order has really been issued but they found out that there
was none; so he told the respondent to implement the Writ
The Case and the Facts of Execution. Respondent, accompanied by a policeman and
the barangay captain went to the place where the Writ of
In a Sworn Complaint[1] dated April 11, 2000, Sheriff Execution is to be implemented at 10:00 that morning but
Rodolfo V. Quitalig of the Municipal Trial Court in Cities when they reached the place, respondent did not do
(MTCC) of San Carlos City was charged by Reverend anything except to ask the defendant to bring out her
Fernando Fajardo with conduct prejudicial to the best personal properties. His reason is that an employee of the
interest of the service and/or dereliction of duty. Probation Office, Mr. Leonardo Martinez, talked to him. At
5:30 p.m., the restraining order was brought to the place,
and the respondent told him that the writ of execution can
The factual antecedents of the case are summarized by
no longer be implemented.
the Office of the Court Administrator (OCA) as follows:
Complainant asserted that respondent favored, or showed The Writ of Execution was finally and/or implemented only
partiality in favor of the defendant to his prejudice.[2] on August 24, 2000, as shown in the Report submitted by
the respondent in court. Complainant claimed that the
In his Comment[3] dated October 3, 2000, respondent respondent was reluctant to implement the Writ of
denied the charge. He asked for the dismissal of the case, Execution because a certain Leonardo Martinez intervened.
because he had already implemented the Writ on August 24, This allegation of the complainant was not denied by the
2000 as evidenced by his August 25, 2000 Report of respondent in his Comment. Respondent just stated in his
Service.[4] He also pointed out that he had made an Comment that he implemented the Writ of Execution on
inventory of the personal properties recovered from the August 24, 2000, and made inventory of the personal
subject premises. That he had done so was attested to by properties pulled out from the building and signed by
defendants mother, Rufina Datuin, and witnessed by the defendants mother and Barangay Captain Nestor Poquiz.
barangay captain and two councilors. Respondents deliberate refusal to traverse or refute the
charges is an admission that the allegations are true and he
The OCAs Finding and Recommendation cannot deny them.[6] (Citation omitted)

In its October 29, 2001 Report, [5] the OCA found The OCA recommended that respondent be ordered to
respondent to have been negligent in the performance of his pay a fine of P5,000 and warned that a repetition of the
duty as a sheriff. It said thus: same or a similar offense would be dealt with more severely.
[7]

Respondent was negligent in the performance of his duty as


sheriff. The Writ of Execution was issued on March 7, 2000, This Courts Ruling
and was served on the judgment obligor on March 9, 2000.
Respondent admitted that the judgment obligor promised to We agree with the OCAs findings and recommendation.
vacate the premises on March 29, 2000, but he was not able
to implement the Writ of Execution because on March 24, Respondents Administrative Liability
2000, RTC, Branch 56, San Carlos, Pangasinan issued a
Temporary Restraining Order. The Temporary Restraining As frontline officials of the justice system, sheriffs must
Order did not ripen into an injunction so it lapsed after always strive to maintain public trust in the performance of
twenty (20) days from the date it was issued, but the Writ of their duties. Having the forsworn duty to uphold the majesty
Execution was implemented only [on] August 24, 2000 of the law, they must see to it that the final stage in the
which is more than four (4) months from the date the litigation process is carried out without unnecessary delay. [8]
restraining order lapsed. It is the duty of the sheriff to
enforce a writ of execution without delay once it is given to A review of the records of this case reveals that
him unless restrained. respondent enforced the Writ of Execution dated March 7,
2000 only on August 24, 2000, as shown by his August 25, that he was finally able to execute the Writ on August 24,
2000 Report of Service. Within 30 days from receipt thereof 2000 and to submit his Return thereof on the next day.
and every 30 days thereafter until the judgment is fully
satisfied, a sheriff is required by the Rules of Court to render We find respondents explanation to be utterly wanting.
a report on the action taken on a writ of execution. Section He is guilty of dereliction of his duty as a sheriff, because he
14 of Rule 39 of the Rules provides the manner in which the failed to (1) execute the Writ within 30 days from his receipt
execution is to be implemented, as follows: thereof, (2) submit his Report of Service within the same
period, (3) make periodic reports to the MTCC until the
SEC. 14. Return of Writ of Execution. The writ of execution judgment was fully satisfied, and (4) furnish the parties with
shall be returnable to the court issuing it immediately after copies of the Reports.
the judgment has been satisfied in part or in full. If the
judgment cannot be satisfied in full within thirty days (30) By his own words, respondent admitted his dereliction
days after his receipt of the writ, the officer shall report to of duty. First, as we have said earlier, he should have
the court and state the reason therefore. Such writ shall immediately executed the Writ when he served it upon the
continue in effect during the period within which the defendant on March 9, 2000.
judgment may be enforced by motion. The officer shall
make a report to the court every thirty (30) days on the Second, he should have immediately reported to the
proceedings taken thereon until the judgment is satisfied in MTCC that he was unable to enforce the Writ because
full, or its effectivity expires. The returns or periodic reports another court had issued a TRO enjoining him from doing
shall set forth the whole of the proceedings taken, and shall so. Third, he should have informed the parties, particularly
be filed with the court and copies thereof promptly furnished the plaintiff or his counsel, about his inability to enforce the
the parties. Writ. Fourth, he should have immediately enforced it twenty
days after its issuance.
Evidently, respondent was not only remiss in his
implementation of the Writ, but likewise derelict in Fifth, he should have made periodic Reports to the
his submission of the returns thereof. MTCC until the judgment was fully satisfied and the parties
furnished a copy thereof. Sixth, within thirty days from his
Respondent should have immediately implemented and receipt of the Writ, he should have promptly made his
made a return of the Writ after duly serving it upon the Return, a copy of which he should have immediately
defendant on March 9, 2000. Nonetheless, because of the furnished the parties.
request of the defendant and her promise that she would
vacate the premises on March 23, 2000, he allowed her to Clearly, the actuations of respondent constitute
remain there. However, when he came back on March 24, disrespect, if not outright defiance, of the MTCCs authority.
2000, he was unable to enforce the Writ because of a TRO In the absence of instructions to the contrary, a sheriff has
issued by the RTC of San Carlos, Pangasinan. He averred
the duty to execute a Writ with reasonable celerity and When a writ of execution is placed in the hands of a sheriff,
promptness in accordance with its mandate. it is his duty, in the absence of contrary instructions, to have
it implemented forthwith. The sheriff is primarily responsible
In several cases,[9] the Court has said that the failure to for the speedy and efficient service of all court processes
make a return of a writ within the required period is and writs originating from the court and its branches,
nonfeasance. In Bautista v. De Castro,[10] the provincial including such as may be properly delegated to him by
sheriff of Zambales and his deputy were suspended without other courts. The delay of more than seven months, from
pay for 30 and 15 days, respectively, for dereliction of the time the writ of execution was issued by the court on 07
duty. In Barola v. Abogatal,[11] a sheriff who had received a August 1998 to the time when respondent sheriff posted the
writ of execution on January 15, 1978, but made a return notice of sale or levy on 23 March 1999, is an inordinately
thereof only on May 22, 1978, was fined a months salary. long period for respondent to act thereon. The importance of
In Lapea v. Pamarang,[12] a sheriff whose Return was four the role played by all court personnel in the administration
days late was fined P2,000. of justice is never to be taken lightly. It is the sheriffs
particularly who are depended on, and who must properly
Casal v. Concepcion Jr.[13] ordered the dismissal of attend to, the proper implementation of court decrees and
respondent sheriff from the service and the forfeiture of all orders, and they are expected to do so with utmost diligence
his benefits, with prejudice to his reemployment in any and dispatch.[16]
branch or service of the government including government-
owned and controlled corporations. After the lapse of two WHEREFORE, Sheriff Rodolfo V. Quitalig is found guilty
years from the issuance of the original Writ in a simple of dereliction of duty and is ORDERED to pay a FINE of five
ejectment case, he not only failed to exert reasonable thousand pesos (P5,000). Considering that he has already
efforts to fully implement its subsequent issuances, but retired from the service, this amount is hereby ordered
likewise failed to account for the amounts he got from deducted from his retirement benefits.
complainant. Furthermore, he abandoned his work during
the time that the charges against him were being SO ORDERED.
investigated.
Puno, (Chairman), Sandoval-Gutierrez,
In Concerned Citizen v. Torio,[14] the respondent therein Corona, and Carpio-Morales, JJ., concur.
was suspended for a year without pay when he failed to act
promptly on the Writs of Execution issued from 1998-
2001. And in Lumbre v. Dela Cruz,[15] respondent, after being
found guilty of an inexcusable seven-month delay in EN BANC
carrying out a lawful Writ of Execution was
fined P5,000. Justifying the penalty, the Court said:
JEFFREY L. SANTOS, G.R. No. 164439
Petitioner, the Basis of Erroneous Canvass/Tallies of Votes. Santos
alleged that he was a victim of dagdag-bawas and that his
- versus - votes were reduced in the Statement of Votes while Asistios
COMMISSION ON ELECTIONS Promulgated: votes were increased. Santos further alleged that based on
and MACARIO E. ASISTIO III, the certified true copies of the NAMFRELs [4] election returns
Respondents. January 23, 2006 as well as the Certificates of Votes submitted by the poll
watchers in the Second District of Caloocan City, he
x-------------------------------------------- obtained 46,361 votes while Asistio garnered only 45,514
------x votes. Santos prayed for the nullification of the proclamation
of Asistio and for his declaration as the duly elected
DECISION Councilor of the Second District of Caloocan City.

CARPIO, J.:

The Case The Ruling of the COMELEC First Division

In a Resolution promulgated on 29 June 2004, the COMELEC


[1]
Before this Court is a petition for certiorari assailing First Division dismissed SPC No. 04-233 for lack of merit.
the Resolution[2] of the Commission on Elections (COMELEC)
First Division in SPC No. 04-233 and Resolution No. 7257 [3] of The COMELEC First Division ruled that: (1) Santos
the COMELEC En Banc. The COMELEC promulgated the two lack of watchers and counsel during the early stages of the
Resolutions on 29 June 2004. canvassing proceedings is not a proper ground for the
annulment of Asistios proclamation; (2) the documents
submitted by Santos, consisting of a compilation and
The Antecedent Facts tabulation of votes which he himself prepared, and which he
based on certified true copies of NAMFRELs election returns
Jeffrey L. Santos (Santos) and Macario E. Asistio III (Asistio) and the originals of various Certificates of Votes submitted
were candidates for the position of Councilor for the Second by the poll watchers, are not admissible in evidence; and (3)
District of Caloocan City in the 10 May 2004 Elections. On 18 Santos should have assailed the proceedings via a pre-
May 2004, the City Board of Canvassers proclaimed Asistio proclamation controversy, or through an election protest
as councilor-elect for the Second District of Caloocan City. within ten days after the proclamation of Asistio, instead of
Based on the Canvass of Election Returns and the Statement a petition for annulment of proclamation.
of Votes, Asistio garnered 45,163 votes and secured the
sixth and last slot for the position of Councilor while Santos On 29 June 2004, or on the same date of the promulgation
placed seventh with 44,558 votes. of the Resolution by the COMELEC First Division, the
COMELEC En Banc promulgated Resolution No. 7257, as
On 28 May 2004, Santos filed with the COMELEC a Petition, follows:
docketed SPC No. 04-233, for Annulment of Proclamation on
RESOLUTION NO. 7257
(OMNIBUS RESOLUTION ON PENDING 1. All cases which were filed by private
CASES) parties without timely payment of the proper
filing fee are hereby dismissed;

WHEREAS, in connnection with the May 10, 2004 2. All cases which were filed beyond the
National and Local Elections, various petitions reglementary period or not in the form
docketed as Special Actions, Special Cases and prescribed under appropriate provisions of the
Special Proceeding Cases and other contentious Omnibus Election Code, Republic Act Nos.
cases were filed with the Office of the Clerk of the 6646 and 7166 are hereby likewise dismissed;
Commission; 3. All other pre-proclamation cases which
do not fall within the class of cases specified
WHEREAS, the second paragraph of Sec. 16, under paragraphs (1) and (2) immediately
Republic Act No. 7166, provides: preceding shall be deemed terminated
pursuant to Section 16, R.A. 7166 except
All pre-proclamation cases pending before the those mentioned in paragraph (4). Hence, all
Commission shall be deemed terminated at the rulings of boards of canvassers concerned
the beginning of the term of office involved are deemed affirmed. Such boards of
and the rulings of the boards of canvassers canvassers are directed to reconvene
concerned shall be deemed affirmed, without forthwith, continue their respective canvass
prejudice to the filing of a regular election and proclaim the winning candidates
protest by the aggrieved party. However, accordingly, if the proceedings were
proceedings may continue when on the basis suspended by virtue of pending pre-
of the evidence thus far presented, the proclamation cases;
Commission determines that the petition
appears meritorious and accordingly issues 4. All remaining pre-proclamation cases,
an order for the proceeding to continue or which on the basis of the evidence thus far
when appropriate order has been issued by presented, appear meritorious and/or are
the Supreme Court in a petition for certiorari. subject of orders by the Supreme Court or this
Commission in petitions for certiorari brought
WHEREAS, the Commission has disposed of the pre- respectively to them shall likewise remain
proclamation and other cases brought before it for active cases, thereby requiring the
adjudication, except those whose disposition requires proceedings therein to continue beyond 30
proceedings extending beyond 30 June 2001; June 2004, until they are finally resolved; and
NOW, THEREFORE, by virtue of its powers under
the Constitution, the Omnibus Election Code, Batas 5. All petitions for disqualification, failure
Pambansa Blg. 881, Republic Act Nos. 6646 and of elections or analogous cases, not being
7166, and other election laws, the pre-proclamation controversies and, therefore,
Commission RESOLVED, as it hereby RESOLVES: not governed by Sections 17, 18, 19, 20, 21,
and particularly, by the second paragraph of
Sec. 6, Republic Act No. 7166, shall remain
active cases, the proceedings to continue 7257, the COMELEC En Banc effectively terminated the case
beyond June 30, 2004, until the issues therein to its finality. Santos claims that he only learned on 22 July
are finally resolved by the Commission; 2004 of the exclusion of SPC No. 04-233 from the list of
ACCORDINGLY, it is hereby ordered that the cases, after the petition before this Court had been filed.
proceedings in the cases appearing on the list However, he admits that Resolution No. 7257 was published
annexed and made an integral part hereof, be in the Philippine Daily Inquirer on 30 June 2004.
continued to be heard and disposed of by the
Commission.
The Issues
This resolution shall take effect immediately.[5]
The issues for resolution of this Court are:
Annexed to Resolution No. 7257 is a list of cases [6] that shall
remain active before the COMELEC until their final 1. Whether Santos is guilty forum shopping;
resolution. SPC No. 04-233 is not included in the list.
2. Whether the COMELEC First Division committed
On 9 July 2004, Santos filed with the COMELEC En Banc a grave abuse of discretion in dismissing SPC No. 04-
motion for the reconsideration assailing the COMELEC First 233;
Divisions Resolution.
3. Whether the COMELEC En Banc committed grave
On 30 August 2004, Santos filed before this Court a petition abuse of discretion in excluding SPC No. 04-233 from
for certiorari assailing the 29 June 2004 Resolution of the the list of cases annexed to Resolution No. 7257.
COMELEC First Division and Resolution No. 7257 of the
COMELEC En Banc. The Ruling of This Court

In his Comment on the petition, Asistio accused Santos of The petition has no merit.
forum shopping. Asistio informed the Court that the
COMELEC En Banc only disposed of Santos motion for Santos is Guilty of Forum-Shopping
reconsideration in its Order of 15 September 2004 when it
affirmed the 29 June 2004 Resolution of the COMELEC First Forum shopping is an act of a party, against whom
Division. Hence, at the time of the filing of the petition an adverse judgment or order has been rendered in one
for certiorari before this Court, Santos motion for forum, of seeking and possibly securing a favorable opinion
reconsideration was still pending before the COMELEC En in another forum, other than by appeal or special civil action
Banc. for certiorari.[7] It may also be the institution of two or more
actions or proceedings grounded on the same cause on the
Santos, in his Reply to Asistios Comment, maintains that he supposition that one or the other court would make a
is not guilty of forum shopping because the petition before favorable disposition.[8]
the Supreme Court only challenges Resolution No. 7257 In this case, Santos filed the petition for certiorari before this
and not the 29 June 2004 Resolution of the COMELEC First Court during the pendency of his motion for reconsideration
Division. Santos further argues that by excluding SPC No. with the COMELEC En Banc. The petition clearly states that
04-233 from the list of cases annexed to Resolution No. he is questioning the two Resolutions issued by the
COMELEC: the 29 June 2004 Resolution of the COMELEC First Contrary to Santos claim, the COMELEC En Banc did not
Division in SPC No. 04-233 and the COMELEC En Banc dismiss outright SPC No. 04-233 even though the case was
Resolution No. 7257.[9] It was only when Asistio, in his excluded in the list annexed to Resolution No. 7257. The
Comment, called the Courts attention that Santos now COMELEC First Division in fact resolved SPC No. 04-233.
belatedly asserts that he only seeks to challenge COMELEC When Santos filed a motion for reconsideration, the
Resolution No. 7257 and not the Resolution of the COMELEC COMELEC En Banc accepted, considered and disposed of the
First Division.[10] motion. Hence, the issue of whether the COMELEC En Banc
committed grave abuse of discretion in excluding SPC No.
Santos stated in his petition before this Court that on 04-233 in the list of cases annexed to Resolution No. 7257 is
9 July 2004, he filed a motion for reconsideration of the now moot since the COMELEC in fact accepted, considered
COMELEC First Divisions Resolution. However, he did not and disposed of SPC No. 04-233.
disclose that at the time of the filing of his petition, his WHEREFORE, we DISMISS the petition.
motion for reconsideration was still pending before the SO ORDERED.
COMELEC En Banc. Santos did not also bother to inform the
Court of the denial of his motion for reconsideration by the
COMELEC En Banc. Had Asistio not called this Courts
attention, we would have ruled on whether the COMELEC
SECOND DIVISION
First Division committed grave abuse of discretion in
dismissing SPC No. 04-233, which is one of the issues raised
by Santos in this petition. This act of Santos alone [G.R. No. 152878. May 5, 2003]
constitutes a ground for this Courts summary dismissal of
his petition. RIZAL COMMERCIAL
BANKING CORPORATION, petitioner, vs. MAGWIN
The Resolution of the COMELEC First Division has
MARKETING CORPORATION, NELSON TIU, BENITO SY
attained Finality
and ANDERSON UY, respondents.
Had this Court been apprised at the outset of the pendency
of Santos motion for reconsideration before the COMELEC En DECISION
Banc, it would have dismissed the petition outright for
premature filing. When the COMELEC En Banc finally BELLOSILLO, J.:
resolved the motion for reconsideration, Santos no longer
elevated the denial of his motion before this Court. He could
no longer do that without exposing his act of forum WE ARE PERTURBED that this case should drag this
shopping. Thus, by Santos inaction, the Order of the Court in the banal attempts to decipher the hazy and
COMELEC En Banc is now final and executory. confused intent of the trial court in proceeding with what
would have been a simple, straightforward and hardly
arguable collection case. Whether the dismissal without
The Exclusion of SPC No. 04-233 in the List of Cases
prejudice for failure to prosecute was unconditionally
Annexed To Resolution No. 7257 has become Moot
reconsidered, reversed and set aside to reinstate the civil
case and have it ready for pre-trial are matters which should Marketing Corporation and respondent Benito Sy as Director
have been clarified and resolved in the first instance by the thereof.[8] Only respondent Nelson Tiu affixed his signature
court a quo. Unfortunately, this feckless imprecision of the on the letter to signify his agreement to the terms and
trial court became the soup stock of the parties and their conditions of the restructuring.[9]
lawyers to further delay the case below when they could
have otherwise put things in proper order efficiently and On 20 July 2000 the RTC of Makati City, on its own
effectively. initiative, issued an Order dismissing without prejudice Civil
Case No. 99-518 for failure of petitioner as plaintiff therein
On 4 March 1999 petitioner Rizal Commercial Banking to prosecute its action for an unreasonable length of time x
Corporation (RCBC) filed a complaint for recovery of a sum x x.[10] On 31 July 2000 petitioner moved for reconsideration
of money with prayer for a writ of preliminary attachment of the Order by informing the trial court of
against respondents Magwin Marketing Corporation, Nelson respondents unremitting desire to settle the case amicably
Tiu, Benito Sy and Anderson Uy.[1] On 26 April 1999, the trial through a loan restructuring program. [11] On 22 August 2000
court issued a writ of attachment. [2] On 4 June 1999 the writ petitioner notified the trial court of the acquiescence thereto
was returned partially satisfied since only a parcel of land of respondent Nelson Tiu as an officer of Magwin Marketing
purportedly owned by defendant Benito Sy was attached. Corporation and defendant in the civil case.[12]
[3]
In the meantime, summons was served on each of the
defendants, respondents herein, who filed their respective On 8 September 2000 the court a quo issued
answers, except for defendant Gabriel Cheng who was an Order reconsidering the dismissal without prejudice of
dropped without prejudice as party-defendant as his Civil Case No. 99-518
whereabouts could not be located.[4] On 21 September 1999
petitioner moved for an alias writ of attachment which on 18 Acting on plaintiffs Motion for Reconsideration of the Order
January 2000 the court a quo denied.[5] dated 20 July 2000 dismissing this case for failure to
prosecute, it appearing that there was already conformity to
Petitioner did not cause the case to be set for pre-trial. the restructuring of defendants indebtedness with plaintiff
[6]
For about six (6) months thereafter, discussions between by defendant Nelson Tiu, President of defendant corporation
petitioner and respondents Magwin Marketing Corporation, per Manifestation and Motion filed by plaintiff on 22 August
Nelson Tiu, Benito Sy and Anderson Uy, as parties in Civil 2000, there being probability of settlement among the
Case No. 99-518, were undertaken to restructure the parties, as prayed for, the Order dated 20 July 2000 is
indebtedness of respondent Magwin Marketing Corporation. hereby set aside.
[7]
On 9 May 2000 petitioner approved a debt payment
scheme for the corporation which on 15 May 2000 was Plaintiff is directed to submit the compromise agreement
communicated to the latter by means of a letter dated 10 within 15 days from receipt hereof. Failure on the part of
May 2000 for the conformity of its officers, i.e., respondent plaintiff to submit the said agreement shall cause the
Nelson Tiu as President/General Manager of Magwin
imposition of payment of the required docket fees for re- On 15 November 2000 petitioner filed its Notice of
filing of this case.[13] Appeal from the 8 September 2000 Order of the trial court
as well as its undated Order in Civil Case No. 99-518. On 16
On 27 July 2000 petitioner filed in Civil Case No. 99-518 November 2000 the trial court issued two (2) Orders, one of
a Manifestation and Motion to Set Case for Pre-Trial which inserted the date 6 November 2000 in the
Conference alleging that [t]o date, only defendant Nelson undated Order rejecting petitioners motion for pre-trial in
Tiu had affixed his signature on the May 10, 2000 letter the civil case, and the other denying due course to
which informed the defendants that plaintiff [herein the Notice of Appeal on the ground that the Orders dated 8
petitioner] already approved defendant Magwin Marketing September 2000 and 6 November 2000 are interlocutory
Corporations request for restructuring of its loan obligations orders and therefore, no appeal may be taken x x x.[18]
to plaintiff but subject to the terms and conditions specified
in said letter.[14] This motion was followed on 5 October 2000 On 7 December 2000 petitioner elevated
by petitioners Supplemental Motion to Plaintiffs the Orders dated 8 September 2000, 6 November 2000 and
Manifestation and Motion to Set Case for Pre-Trial 16 November 2000 of the trial court to the Court of Appeals
Conference affirming that petitioner could not submit a in a petition for certiorari under Rule 65 of the Rules of Civil
compromise agreement because only defendant Nelson Tiu Procedure.[19] In the main, petitioner argued that the court a
had affixed his signature on the May 10, 2000 letter x x x. quo had no authority to compel the parties in Civil Case No.
[15]
Respondent Anderson Uy opposed the foregoing 99-518 to enter into an amicable settlement nor to deny the
submissions of petitioner while respondents Magwin holding of a pre-trial conference on the ground that no
Marketing Corporation, Nelson Tiu and Benito Sy neither compromise agreement was turned over to the court a quo.
contested nor supported them.[16] [20]

The trial court, in an undated Order (although a date On 28 September 2001 the appellate court promulgated
was later inserted in the Order), denied petitioners motion its Decision dismissing the petition for lack of merit and
to calendar Civil Case No. 99-518 for pre-trial stating that - affirming the assailed Orders of the trial court[21] holding that
-
Acting on plaintiffs [herein petitioner] Manifestation and
Motion to Set Case for Pre-Trial Conference, the Opposition x x x although the language of the September 8, 2000 Order
filed by defendant Uy and the subsequent Supplemental may not be clear, yet, a careful reading of the same would
Motion filed by plaintiff; defendant Uys Opposition, and clearly show that the setting aside of the Order dated July
plaintiffs Reply; for failure of the plaintiff to submit a 20, 2000 which dismissed petitioners complaint x x x for
compromise agreement pursuant to the Order dated 8 failure to prosecute its action for an unreasonable length of
September 2000 plaintiffs motion to set case for pre-trial time is dependent on the following conditions, to wit: a) The
conference is hereby denied.[17] submission of the compromise agreement by petitioner
within fifteen (15) days from notice; and b) Failure of
petitioner to submit the said compromise agreement shall Inc. v. Court of Appeals. Respondent Uy claims that
cause the imposition of the payment of the required docket the Order reconsidering the dismissal of Civil Case No. 99-
fees for the re-filing of the case; so much so that the non- 518 without prejudice is on its face contingent upon the
compliance by petitioner of condition no. 1 would make submission of the compromise agreement which in the first
condition no. 2 effective, especially that petitioners place was the principal reason of petitioner to justify the
manifestation and motion to set case for pre-trial conference withdrawal of the Order declaring his failure to prosecute
and supplemental motion x x x [were] denied by the the civil case.He further contends that the trial court did not
respondent judge in his Order dated November 6, 2000, force the parties in the civil case to execute a compromise
which in effect means that the Order dated July 20, 2000 agreement, the truth being that it dismissed the complaint
was ultimately not set aside considering that a party need therein for petitioners dereliction.
not pay docket fees for the re-filing of a case if the original
case has been revived and reinstated.[22] Finally, respondent Uy contests the relevance
of Goldloop Properties, Inc. v. Court of Appeals, and refers to
On 2 April 2002 reconsideration of the Decision was its incongruence with the instant case, i.e., that the
denied; hence, this petition. complaint of petitioner was dismissed for failure to
prosecute and not for its reckless disregard to present an
In the instant case, petitioner maintains that the trial amicable settlement as was the situation in Goldloop
court cannot coerce the parties in Civil Case No. 99-518 to Properties, Inc., and that the dismissal was without
execute a compromise agreement and penalize their failure prejudice, in contrast with the dismissal with prejudice
to do so by refusing to go forward with the pre-trial ordered in the cited case. For their part, respondents
conference. To hold otherwise, so petitioner avers, would Magwin Marketing Corporation, Nelson Tiu and Benito Sy
violate Art. 2029 of the Civil Code which provides that [t]he waived their right to file a comment on the instant petition
court shall endeavor to persuade the litigants in a civil case and submitted the same for resolution of this Court. [24]
to agree upon some fair compromise, and this Courts ruling
in Goldloop Properties, Inc. v. Court of Appeals [23] where it The petition of Rizal Commercial Banking Corporation is
was held that the trial court cannot dismiss a complaint for meritorious. It directs our attention to questions of
failure of the parties to submit a compromise agreement. substance decided by the courts a quo plainly in a way not
in accord with applicable precedents as well as the accepted
On the other hand, respondent Anderson Uy filed his and usual course of judicial proceedings; it offers special
comment after several extensions asserting that there are and important reasons that demand the exercise of our
no special and important reasons for undertaking this power of supervision and review. Furthermore, petitioners
review. He also alleges that petitioners attack is limited to objections to the proceedings below encompass not only
the Order dated 8 September 2000 as to whether it is the Order of 8 September 2000 but include the
conditional as the Court of Appeals so found and the cognate Orders of the trial court of 6 and 16 November
applicability to this case of the ruling in Goldloop Properties, 2000. This is evident from the prayer of the instant petition
which seeks to reverse and set aside the Decision of the quo invaluable time and other resources far outweighing the
appellate court and to direct the trial court to proceed with docket fees that petitioner would be forfeiting should we
the pre-trial conference in Civil Case No. 99-518. Evidently, rule otherwise.
the substantive issue involved herein is whether the
proceedings in the civil case should progress, a question Going over the specifics of this petition and the
which at bottom embroils all the Orders affirmed by the arguments of respondent Anderson Uy, we rule that
Court of Appeals. the Order of 8 September 2000 did not reserve conditions
on the reconsideration and reversal of the Order dismissing
On the task at hand, we see no reason why RTC-Br. 135 without prejudice Civil Case No. 99-518. This is quite evident
of Makati City should stop short of hearing the civil case on from its text which does not use words to signal an intent to
the merits. There is no substantial policy worth pursuing by impose riders on the dispositive portion -
requiring petitioner to pay again the docket fees when it has
already discharged this obligation simultaneously with the Acting on plaintiffs Motion for Reconsideration of the Order
filing of the complaint for collection of a sum of money. The dated 20 July 2000 dismissing this case for failure to
procedure for dismissed cases when re-filed is the same as prosecute, it appearing that there was already conformity to
though it was initially lodged, i.e., the filing of answer, reply, the restructuring of defendants indebtedness with plaintiff
answer to counter-claim, including other foot-dragging by defendant Nelson Tiu, President of defendant corporation
maneuvers, except for the rigmarole of raffling cases which per Manifestation and Motion filed by plaintiff on 22 August
is dispensed with since the re-filed complaint is 2000, there being probability of settlement among the
automatically assigned to the branch to which the original parties, as prayed for, the Order dated 20 July 2000 is
case pertained.[25] A complaint that is re-filed leads to the re- hereby set aside.
enactment of past proceedings with the concomitant full
attention of the same trial court exercising an immaculate Plaintiff is directed to submit the compromise agreement
slew of jurisdiction and control over the case that was within 15 days from receipt hereof. Failure on the part of
previously dismissed,[26] which in the context of the instant plaintiff to submit the said agreement shall cause the
case is a waste of judicial time, capital and energy. imposition of payment of the required docket fees for re-
filing of this case.[27]
What judicial benefit do we derive from starting the civil
case all over again, especially where three (3) of the four (4) Contrary to respondent Uys asseverations, the impact of
defendants, i.e., Magwin Marketing Corporation, Nelson Tiu the second paragraph upon the first is simply to illustrate
and Benito Sy, have not contested petitioners plea before what the trial court would do after setting aside the
this Court and the courts a quo to advance to pre-trial dismissal without prejudice: submission of the compromise
conference? Indeed, to continue hereafter with the agreement for the consideration of the trial court. Nothing in
resolution of petitioners complaint without the usual the second paragraph do we read that the reconsideration is
procedure for the re-filing thereof, we will save the court a
subject to two (2) qualifications. Certainly far from it, for issue the assailed Orders, a continuation of the hearing
in Goldloop Properties, Inc. v. Court of Appeals [28] a similar thereon would not trigger a disbursement for docket fees on
directive, i.e., [t]he parties are given a period of fifteen (15) the part of petitioner as this would obviously imply the
days from today within which to submit a Compromise setting aside of the order of dismissal and the reinstatement
Agreement, was held to mean that should the parties fail in of the complaint.
their negotiations the proceedings would continue from
where they left off. Goldloop Properties, Inc.further said that Indubitably, it is speculative to reckon the effectivity of
its order, or a specie of it, did not constitute an agreement the Order of dismissal without prejudice to the presentation
or even an expectation of the parties that should they fail of the compromise agreement. If we are to admit that the
to settle their differences within the stipulated number of efficacy of the invalidation of the Order of dismissal is
days their case would be dismissed. dependent upon this condition, then we must inquire: from
what date do we count the fifteen (15)-day reglementary
The addition of the second sentence in the second period within which the alleged revival of the order of
paragraph does not change the absolute nullification of the dismissal began to run? Did it commence from the lapse of
dismissal without prejudice decreed in the first the fifteen (15) days provided for in the Order of 8
paragraph. The sentence [f]ailure on the part of plaintiff to September 2000? Or do we count it from the 6 November
submit the said agreement shall cause the imposition of 2000 Order when the trial court denied the holding of a pre-
payment of the required docket fees for re-filing of this case trial conference? Or must it be upon petitioners receipt of
is not a directive to pay docket fees but only a statement of the 16 November 2000 Order denying due course to
the event that may result in its imposition. The reason for its Notice of Appeal? The court a quo could not have
this is that the trial court could not have possibly made such instituted an Order that marked the proceedings before it
payment obligatory in the same civil case, i.e., Civil Case with a shadow of instability and chaos rather than a
No. 99-518, since docket fees are defrayed only after the semblance of constancy and firmness.
dismissal becomes final and executory and when the civil
case is re-filed. The subsequent actions of the trial court also belie an
intention to revive the Order of dismissal without prejudice
It must be emphasized however that once the dismissal in the event that petitioner fails to submit a compromise
attains the attribute of finality, the trial court cannot impose agreement.The Orders of 6 and 16 November 2000 plainly
legal fees anew because a final and executory dismissal manifest that it was retaining jurisdiction over the civil case,
although without prejudice divests the trial court of a fact which would not have been possible had the dismissal
jurisdiction over the civil case as well as any residual power without prejudice been resuscitated. Surely, the court a
to order anything relative to the dismissed case; it would quo could not have denied on 6 November 2000 petitioners
have to wait until the complaint is docketed once again. motion to calendar Civil Case No. 99-518 for pre-trial if the
[29]
On the other hand, if we are to concede that the trial dismissal had been restored to life in the meantime. By then
court retains jurisdiction over Civil Case No. 99-518 for it to the dismissal without prejudice would have already become
final and executory so as to effectively remove the civil case then it is obvious that the dismissal of the complaint on the
from the docket of the trial court. basis thereof amounts no less to a gross procedural infirmity
assailable by certiorari. For such submission could at most
The same is true with the Order of 16 November 2000 be directory and could not result in throwing out the case for
denying due course to petitioners Notice of Appeal. There failure to effect a compromise. While a compromise is
would have been no basis for such exercise of discretion encouraged, very strongly in fact, failure to consummate
because the jurisdiction of the court a quo over the civil one does not warrant any procedural sanction, much less an
case would have been discharged and terminated by the authority to jettison a civil complaint worth P4,000,000.00 x
presumed dismissal thereof. Moreover, we note the ground x x Plainly, submission of a compromise agreement is never
for denying due course to the appeal: the Orders dated 8 mandatory, nor is it required by any rule.[32]
September 2000 and 6 November 2000 are interlocutory
orders and therefore, no appeal may be taken from x x x. As also explained therein, the proper course of action
[30]
This declaration strongly suggests that something more that should have been taken by the court a quo, upon
was to be accomplished in the civil case, thus negating the manifestation of the parties of their willingness to discuss a
claim that the Order of dismissal without prejudice was settlement, was to suspend the proceedings and allow them
resurrected upon the parties failure to yield a compromise reasonable time to come to terms (a) If willingness to
agreement. A final order issued by a court has been defined discuss a possible compromise is expressed by one or both
as one which disposes of the subject matter in its entirety or parties; or (b) If it appears that one of the parties, before the
terminates a particular proceeding or action, leaving nothing commencement of the action or proceeding, offered to
else to be done but to enforce by execution what has been discuss a possible compromise but the other party refused
determined by the court, while an interlocutory order is one the offer, pursuant to Art. 2030 of the Civil Code. If despite
which does not dispose of a case completely but leaves efforts exerted by the trial court and the parties the
something more to be decided upon.[31] negotiations still fail, only then should the action continue as
if no suspension had taken place.[33]
Besides the semantic and consequential improbabilities
of respondent Uys argument, our ruling in Goldloop Ostensibly, while the rules allow the trial court to
Properties, Inc., is decisive of the instant case. In Goldloop suspend its proceedings consistent with the policy to
Properties, Inc., we reversed the action of the trial court in encourage the use of alternative mechanisms of dispute
dismissing the complaint for failure of the plaintiff to resolution, in the instant case, the trial court only gave the
prosecute its case, which was in turn based on its inability to parties fifteen (15) days to conclude a deal. This was, to say
forge a compromise with the other parties within fifteen (15) the least, a passive and paltry attempt of the court a quo in
days from notice of the order to do so and held - its task of persuading litigants to agree upon a reasonable
concession.[34] Hence, if only to inspire confidence in the
Since there is nothing in the Rules that imposes the sanction pursuit of a middle ground between petitioner and
of dismissal for failing to submit a compromise agreement, respondents, we must not interpret the trial courts Orders as
dismissing the action on its own motion because the parties, parties to a pre-trial conference, the reason or basis therefor
specifically petitioner, were anxious to litigate their case as was the absence of a negotiated settlement - a
exhibited in their several manifestations and motions. circumstance that takes the case at bar within the plain
ambit of Goldloop Properties, Inc. In any event, given that
We reject respondent Uys contention that Goldloop the instant case merely revolves around the search for a
Properties, Inc. v. Court of Appeals is irrelevant to the case reasonable interpretation of the several Orders of the trial
at bar on the dubious reasoning that the complaint of court, i.e., as to whether the dismissal without prejudice was
petitioner was dismissed for failure to prosecute and not for revived upon petitioners helplessness to perfect an out-of-
the non-submission of a compromise agreement which was court arrangement, with more reason must we employ the
the bone of contention in that case, and that the dismissal ruling in Goldloop Properties, Inc. to resolve the parties
imposed in the instant case was without prejudice, in differences of opinion.
contrast to the dismissal with prejudice decreed in the cited
case. To begin with, whether the dismissal is with or without We also find nothing in the record to support respondent
prejudice if grievously erroneous is detrimental to the cause Uys conclusion that petitioner has been mercilessly delaying
of the affected party; Goldloop Properties, Inc. does not the prosecution of Civil Case No. 99-518 to warrant its
tolerate a wrongful dismissal just because it was without dismissal.A complaint may be dismissed due to plaintiffs
prejudice. More importantly, the facts in Goldloop fault: (a) if he fails to appear during a scheduled trial,
Properties, Inc. involve, as in the instant case, a dismissal especially on the date for the presentation of his evidence in
for failure to prosecute on the ground of the parties inability chief, or when so required at the pre-trial; (b) if he neglects
to come up with a compromise agreement within fifteen (15) to prosecute his action for an unreasonable length of time;
days from notice of the courts order therein. All told, the or (c) if he does not comply with the rules or any order of
parallelism between them is unmistakable. the court. None of these was obtaining in the civil case.

Even if we are to accept on face value respondents While there was a lull of about six (6) months in the
understanding of Goldloop Properties, Inc. as solely about prosecution of Civil Case No. 99-518, it must be
the failure to submit a compromise agreement, it is remembered that respondents themselves contributed
apparent that the present case confronts a similar largely to this delay. They repeatedly asked petitioner to
problem. Perhaps initially the issue was one of failure to consider re-structuring the debt of respondent Magwin
prosecute, as can be observed from the Order dated 20 July Marketing Corporation to which petitioner graciously
2000, although later reversed and set aside. But thereafter, acceded. Petitioner approved a new debt payment scheme
in the Order of 6 November 2000, the trial court refused to that was sought by respondents, which it then
proceed to pre-trial owing to the failure of the plaintiff to communicated to respondent Corporation through a letter
submit a compromise agreement pursuant to the for the conformity of the latters officers, i.e., respondent
Order dated 8 September 2000. When the civil case was Nelson Tiu as President/General Manager and respondent
stalled on account of the trial courts refusal to call the Benito Sy as Director thereof. Regrettably, only respondent
Nelson Tiu affixed his signature on the letter to signify his In fine, petitioner cannot be said to have lost interest in
concurrence with the terms and conditions of the fighting the civil case to the end. A court may dismiss a case
arrangement. The momentary lag in the civil case was on the ground of non prosequitur but the real test of the
aggravated when respondent Benito Sy for unknown and judicious exercise of such power is whether under the
unexplained reasons paid no heed to the adjustments in the circumstances plaintiff is chargeable with want of fitting
indebtedness although curiously he has not opposed before assiduousness in not acting on his complaint with
this Court or the courts a quo petitioners desire to go ahead reasonable promptitude. Unless a partys conduct is so
with the pre-trial conference. indifferent, irresponsible, contumacious or slothful as to
provide substantial grounds for dismissal, i.e., equivalent to
Admittedly, delay took place in this case but it was not default or non-appearance in the case, the courts should
an interruption that should have entailed the dismissal of consider lesser sanctions which would still amount to
the complaint even if such was designated as without achieving the desired end.[38] In the absence of a pattern or
prejudice. To constitute a sufficient ground for dismissal, the scheme to delay the disposition of the case or of a wanton
inattention of plaintiff to pursue his cause must not only be failure to observe the mandatory requirement of the rules
prolonged but also be unnecessary and dilatory resulting in on the part of the plaintiff, as in the case at bar, courts
the trifling of judicial processes. In the instant case, the should decide to dispense rather than wield their authority
adjournment was not only fleeting as it lasted less than six to dismiss.[39]
(6) months but was also done in good faith to accommodate
respondents incessant pleas to negotiate. Although the Clearly, another creative remedy was available to the
dismissal of a case for failure to prosecute is a matter court a quo to attain a speedy disposition of Civil Case No.
addressed to the sound discretion of the court, that 99-518 without sacrificing the course of justice. Since the
judgment however must not be abused. The availability of failure of petitioner to submit a compromise agreement was
this recourse must be determined according to the the refusal of just one of herein respondents, i.e., Benito Sy,
procedural history of each case, the situation at the time of to sign his name on the conforme of the loan restructure
the dismissal, and the diligence of plaintiff to proceed documents, and the common concern of the courts a
therein.[35] Stress must also be laid upon the official directive quo was dispatch in the proceedings, the holding of a pre-
that courts must endeavor to convince parties in a civil case trial conference was the best-suited solution to the problem
to consummate a fair settlement,[36] and to mitigate as this stage in a civil action is where issues are simplified
damages to be paid by the losing party who has shown a and the dispute quickly and genuinely reconciled. By means
sincere desire for such give-and-take.[37] All things of pre-trial, the trial court is fully empowered to sway the
considered, we see no compelling circumstances to uphold litigants to agree upon some fair compromise.
the dismissal of petitioners complaint regardless of its
characterization as being without prejudice. Dismissing the civil case and compelling petitioner to
re-file its complaint is a dangerous, costly and circuitous
route that may end up aggravating, not resolving, the
disagreement. This case management strategy is Civil Case No. 99-518 is deemed REINSTATED in, as it
frighteningly deceptive because it does so at the expense of was never taken out from, the dockets of the Regional Trial
petitioner whose cause of action, perhaps, may have Court, Branch 135, of Makati City. The trial court is
already been admitted by its adverse parties as shown by ORDERED to exercise its jurisdiction over Civil Case No. 99-
three (3) of four (4) defendants not willing to contest 518, to CONDUCT the pre-trial conference therein with
petitioners allegations, and more critically, since this dispatch, and to UNDERTAKE thereafter such other
approach promotes the useless and thankless duplication of proceedings as may be relevant, without petitioner being
hard work already undertaken by the trial court. As we have charged anew docket or other legal fees in connection with
aptly observed, [i]nconsiderate dismissals, even if without its reinstatement. Costs against respondents.
prejudice, do not constitute a panacea nor a solution to the
congestion of court dockets. While they lend a deceptive SO ORDERED.
aura of efficiency to records of individual judges, they
merely postpone the ultimate reckoning between the Quisumbing, Austria-Martinez, and Callejo, Sr.,
parties. In the absence of clear lack of merit or intention to JJ., concur.
delay, justice is better served by a brief continuance, trial on
the merits, and final disposition of the cases before the
court.[40]
FIRST DIVISION
WHEREFORE, the Petition for
Review is GRANTED. The Decision dated 28 September 2001 [G.R. No. 136726. September 24, 2003]
and Resolution dated 2 April 2002 of the Court of Appeals in
CA-G.R. SP No. 62102 are REVERSED and SET ASIDE. PANFILO V. VILLARUEL, JR., petitioner, vs. REYNALDO
D. FERNANDO, MODESTO ABARCA, JR. and
The Orders dated 8 September 2000, 6 November 2000 MARILOU M. CLEOFAS, respondents.
and 16 November 2000 of the Regional Trial Court, Branch
135, of Makati City, docketed as Civil Case No. 99-518, are DECISION
also REVERSED and SET ASIDE insofar as these Orders are
interpreted to impose upon and collect anew from petitioner CARPIO, J.:
RIZAL COMMERCIAL BANKING CORPORATION docket or legal
fees for its complaint, or to dismiss without prejudice Civil The Case
Case No. 99-518, or to preclude the trial court from calling
the parties therein to pre-trial conference, or from
This petition for review on certiorari[1] seeks to reverse
proceeding thereafter with dispatch to resolve the civil case.
the Decision[2] of the Court of Appeals in CA-G.R. SP No.
48233[3] dated 30 September 1998 denying due course to
the petition for certiorari[4] filed by Panfilo V. Villaruel, Jr. and 1995 addressed to Abarca placing him under preventive
the Resolution dated 3 December 1998 denying the motion suspension for 90 days without pay pending investigation
for reconsideration. for alleged grave misconduct.

The Facts On 10 August 1995, respondents requested Secretary


Garcia to lift the detail order and to order their return to
Petitioner Panfilo V. Villaruel, Jr. (petitioner) is the former their mother unit since more than 90 days had already
Assistant Secretary of the Air Transportation Office (ATO), lapsed. Respondents also sought the intervention of the
Department of Transportation and Communication Ombudsman in their case. As a result, the Ombudsman
(DOTC).Respondents Reynaldo D. Fernando, Modesto E. inquired from Secretary Garcia the action taken on
Abarca, Jr. (Abarca), and Marilou M. Cleofas are the Chief, respondents request for reconsideration of the detail order.
Chief Administrative Assistant, and Administrative Assistant,
respectively, of the Civil Aviation Training Center (CATC). The On 22 November 1995, Secretary Garcia replied to the
CATC is an adjunct agency of the ATO tasked to train air Ombudsman that he had issued a memorandum dated 9
traffic controllers, airway communicators and related civil November 1995 directing petitioner to recall respondents to
aviation personnel for the local aviation industry as well as their mother unit. Secretary Garcia declared that the law
for the Southeast Asian and Pacific region. does not sanction the continuous detail of respondents.

Petitioner issued a memorandum dated 27 April 1995 Despite repeated demands by respondents, petitioner
addressed to the respondents, detailing them to the Office failed and refused to reinstate respondents to their mother
of DOTC Undersecretary Primitivo C. Cal effective 2 May unit.
1995.
On 24 January 1996, respondents filed a Petition for
On 29 April 1995, respondents wrote to DOTC Secretary Mandamus and Damages with Prayer for a Preliminary
Jesus B. Garcia and Undersecretary Josefina T. Lichauco Mandatory Injunction against petitioner with the Regional
through petitioner requesting for reconsideration of the Trial Court of Pasay City docketed as Civil Case No. 96-
detail order. 0139. Respondents prayed for the following:

On 7 May 1995, in compliance with the detail order, PRAYER


respondents reported to the Office of Undersecretary Cal at
DOTC. WHEREFORE, premises considered, petitioners herein
respectfully pray of this Honorable Court that:
Without acting on respondents request for
reconsideration, petitioner issued a memorandum on 19 July
1. Pending the determination of the merits of this petition, a On 23 February 1996, the trial court granted
writ of preliminary mandatory injunction be issued ex- respondents prayer for a preliminary mandatory injunction.
parte directing respondent Panfilo V. Villaruel, Jr., to recall
the petitioners herein within twenty four (24) hours from Meanwhile, Judge Aurora Navarette-Recia of the trial
receipt hereof to their mother unit, the Civil Aviation Training court was appointed Chairman of the Commission on Human
Center, Air Transportation Office, DOTC, and to forthwith Rights. Consequently, the case was re-raffled and assigned
allow them to assume, perform and discharge the functions, to Branch 231 of the Regional Trial Court, Pasay City.[6]
duties and responsibilities inherent, appurtenant and
incident to their respective offices. On 12 April 1996, the trial court issued an order
modifying the 23 February 1996 order of Judge Recia. The
2. After hearing on the merits, judgment be rendered trial court issued a writ of preliminary mandatory injunction
confirming the writ of preliminary mandatory injunction ordering petitioner to comply with the 9 November 1995
earlier issued by this Honorable Court and declaring the order of Secretary Garcia directing petitioner to recall
same permanent, and ordering the respondent Panfilo respondents to their mother unit until further orders by the
Villaruel, Jr., to pay petitioners herein the following damages, trial court.
to wit:
For petitioners continued failure to comply with the writ
a) to pay petitioner Reynaldo D. Fernando the amount of preliminary injunction, respondents moved to cite
of P50,000 as actual and compensatory damages; petitioner in contempt. Respondents also moved to declare
petitioner in default for not filing an answer within the
b) to pay petitioners herein moral, exemplary and temperate period prescribed in the trial courts order of 26 January
damages, in such amounts as may hereafter be proven in 1996.
the course of trial, which petitioners herein are leaving to
the sound discretion of this Honorable Court to determine On 28 May 1996, the trial court granted the motion and
and adjudge; declared petitioner guilty of indirect contempt. The trial
court issued a bench warrant against petitioner.
c) to pay petitioners herein attorneys fees in the amount
of P100,000; Petitioner, through the Office of the Solicitor General
(OSG), filed a special civil action for certiorari with the Court
d) to pay petitioners herein the costs of suit. of Appeals[7] assailing the trial courts order finding petitioner
guilty of indirect contempt. The case was docketed as CA-
Petitioners herein pray for such other and further relief as G.R. SP No. 41263.
may be just and equitable in the premises.[5]
Meanwhile, the trial court declared petitioner in default The Court of Appeals granted the OSG a non-extendible
for his failure to file an answer to the petition for mandamus extension until 13 December 1996 within which to file
and damages. Accordingly, respondents adduced their petitioners memorandum. However, the OSG failed to file
evidence ex-parte before the Clerk of Court. the memorandum. Subsequently, Solicitor Restituto Tuando,
Jr. who was handling the case was appointed Regional Trial
On 11 July 1996, the trial court rendered a Decision the Court judge of Dumaguete City. The case was re-assigned to
dispositive portion of which reads: Assistant Solicitor Luciano Joson, Jr. On 13 March 1997, the
Court of Appeals issued a Resolution dismissing petitioners
Wherefore, considering the foregoing premises, judgment is appeal for failure to file the required memorandum. The
hereby rendered in favor of the petitioners and against the OSG, through Assistant Solicitor Luciano Joson, Jr., filed a
respondent declaring mandamus permanent and thereby Motion for Reconsideration, but the Court of Appeals denied
ordering respondent Panfilo V. Villaruel, Jr., to pay the the same. The Resolution became final and executory on 14
following: June 1997.

(1) One hundred thousand pesos (P100,000.00) each as Consequently, the respondents filed a Motion for
moral damages; Execution with the trial court. Although served a copy of the
motion for execution, the OSG did not file any opposition.
(2) Twenty five thousand pesos (P25,000.00) each as
exemplary damages; Acting on the motion for execution, the trial court issued
a Writ of Execution on 22 September 1997. On 3 February
(3) Twenty five thousand pesos (P25,000.00) each as 1998, the Sheriff issued a Notice of Sheriffs Sale setting on
temperate damages, and; 23 February 1998 the sale of petitioners real property
covered by Transfer Certificate of Title No. 83030.
(4) Fifty thousand pesos (P50,000.00) as attorneys fees.
On 17 February 1998, petitioner, through his new
SO ORDERED. [8] counsel,[10] filed a Motion to Quash the Writ of Execution and
to Suspend Sheriffs Sale. In his motion, petitioner alleged
Aggrieved, petitioner, represented by the OSG, that the trial courts decision never became final and
appealed to the Court of Appeals. The appeal was docketed executory as the trial court deprived him of his right to due
as CA-G.R. SP No. 42447.[9] With the filing of the appeal, the process. Petitioner claimed that the OSG failed to file
Court of Appeals granted respondents motion for the petitioners memorandum in CA-G.R. SP No. 42447 resulting
dismissal of the petition for certiorari in CA-G.R. SP No. in the dismissal of his appeal. Furthermore, petitioner
41263 for being moot and academic. alleged that the OSG failed to inform him of the dismissal of
his appeal and of the trial courts order granting respondents
motion for execution. Petitioner further asserted that the
Resolution of the Ombudsman in OMB-ADM 0-96- The Ruling of the Court of Appeals
0090[11] superseded the decision of the trial court. The
Ombudsmans Resolution approved the following Petitioner raised before the Court of Appeals the
recommendation of the reviewing Assistant Ombudsman: following issues:

PREMISES CONSIDERED, respondent MODESTO ABARCA, JR., 1. THE TRIAL COURTS DECISION DATED JULY 11, 1996 IS
is hereby found GUILTY of violation of Section 7(d) of VOID FOR LACK OF DUE PROCESS AND COULD NOT
Republic Act 6713, for which the penalty of Suspension HAVE BECOME FINAL AND EXECUTORY.
Without Pay for Six (6) Months is hereby recommended
pursuant to Section 10(b), Rule III of Administrative Order 2. SUPERVENING FACTS AND CIRCUMSTANCES HAVE
No. 07, in relation to Section 25(2) of Republic Act No. 6770. TRANSPIRED WHICH RENDERED EXECUTION OF THE
JUDGMENT UNJUST AND INEQUITABLE.[13]
It is also respectfully recommended that the charge against
respondents REYNALDO FERNANDO and MARY LOU CLEOFAS On the first issue, the Court of Appeals ruled that the
be DISMISSED.[12] negligence of the OSG could not relieve petitioner of the
effects of such negligence and prevent the decision of the
On 23 February 1998, the trial court issued an Order trial court from becoming final and executory. In short, the
quashing the Writ of Execution because the Sheriff failed to OSGs negligence binds petitioner.
follow Section 9, Rule 39 of the Rules of Court. The trial
court, however, issued an Alias Writ of Execution. Petitioner The Court of Appeals admonished petitioner for his
filed a Motion for Reconsideration but the trial court denied failure to ascertain periodically from the OSG or from the
the same on 28 April 1998. Court of Appeals the status of his appeal. The appellate
court cited Reyes v. Court of Appeals,[14] which held that
Dissatisfied with the trial courts orders, petitioner filed a it is the duty of a party litigant to make inquiries to his
special civil action for certiorari with the Court of Appeals counsel on matters concerning his case. A party litigant
docketed as CA-G.R. SP No. 48233 assailing the execution of bears the responsibility of contacting his lawyer periodically
the trial courts decision of 11 July 1996. The Court of to apprise himself of the progress of the case. A lawyers
Appeals denied due course to the petition for certiorari and negligence binds a party litigant who must suffer the
dismissed the same in the Decision dated 30 September consequences of such negligence. The Court of Appeals
1998. Petitioner moved for reconsideration but the appellate further held that there was no proof that the OSG failed to
court denied the motion in a Resolution of 3 December inform petitioner of the dismissal of his appeal.
1998.
On the second issue, the Court of Appeals concurred
Hence, the instant petition. with the trial courts ruling that the nature of the case before
the Ombudsman is different from the case before the trial 4. Whether the resolution of the Ombudsman finding
court. The former deals with a violation of Republic Act No. Modesto Abarca, Jr. guilty of violating Section 7 of RA
6713 (RA 6713)[15] punished with suspension from office 6713 rendered the execution of the trial courts
while the latter deals with an ultra vires act punished with decision unjust and inequitable.
damages. The appellate court ruled that the findings of the
Ombudsman had nothing to do with the findings of the trial The main issue to resolve is whether the Court of
court, as the two forums are separate and distinct from each Appeals erred in dismissing the petition
other. for certiorari assailing the trial courts orders dated 23
February 1998 and 28 April 1998.Resolving this issue
Moreover, the Court of Appeals opined that petitioner necessarily determines the validity of the questioned
failed to prove that the trial court committed grave abuse of orders. This in turn resolves the questions of whether the
discretion to warrant the writ of certiorari. The appellate trial court denied petitioner of his right to due process and
court ruled that the trial court acted in accord with law and whether the Ombudsmans resolution rendered the execution
prevailing jurisprudence in issuing the questioned orders. of the trial courts decision unjust and inequitable.

The Issues We can no longer resolve the issue regarding the


validity and reasonableness of the award of damages for
Petitioner presents the following issues for resolution of three reasons. First, the decision of the trial court dated 11
this Court:[16] July 1996 is already final and executory. Second, the petition
for certiorari filed by petitioner was simply a direct
1. Whether the award of moral, exemplary and consequence of the trial courts issuance of the writ of
temperate damages to respondents has legal basis. execution and notice of sheriffs sale. In other words,
petitioner merely questioned the execution of the trial
2. Whether the trial court correctly ruled that the courts decision in his petition for certiorari. Third, petitioner
negligence of the OSG could not relieve petitioner of did not raise the issue of the validity and reasonableness of
the effects of such negligence and prevent the the award of damages before the Court of Appeals.[17]
decision of the trial court from becoming final and
executory. The Courts Ruling

3. Whether petitioner was denied of his right to due The petition has no merit.
process when the appellate court dismissed his
appeal for failure of the OSG to file the We begin by pointing out that petitioner failed to allege
memorandum. the essential requisites under Section 1, Rule 65 of the Rules
of Court for a petition for certiorari to prosper. Specifically,
petitioner never alleged that the trial court acted without or Due process, in essence, is simply an opportunity to be
in excess of its jurisdiction in issuing the questioned heard[19] and this opportunity was not denied
orders. Neither did petitioner allege that the trial court petitioner. Throughout the proceedings in the trial court as
gravely abused its discretion amounting to lack or excess of well as in the Court of Appeals, petitioner had the
jurisdiction, and there is no appeal, or any plain, speedy, opportunity to present his side but he failed to do
and adequate remedy in the ordinary course of law. In other so. Clearly, petitioners former counsel, the OSG, was
words, there is no issue that the trial court committed grave negligent. This negligence, however, binds petitioner. The
abuse of discretion amounting to lack or excess of trial and appellate courts correctly ruled that the negligence
jurisdiction in handing down the questioned orders. On this of the OSG could not relieve petitioner of the effects such
score alone, the dismissal of the petition for certiorari before negligence[20] and prevent the decision of the trial court from
the Court of Appeals is in order. However, in disposing of the becoming final and executory.
instant case, we shall still resolve the principal issues raised
by petitioner. In Villa Rhecar Bus v. De la Cruz,[21] which petitioner
himself cited, the Court ruled:
No Denial of Petitioners Right to Due Process
It is unfortunate that the lawyer of the petitioner neglected
Petitioner essentially contends that the judgment of the his responsibilities to his client. This negligence ultimately
trial court in Civil Case No. 96-0139 is void for lack of due resulted in a judgment adverse to the client. Be that as it
process. Petitioner alleges that the trial court never gave may, such mistake binds the client, the herein petitioner. As
him the chance to be heard and to submit his evidence. a general rule, a client is bound by the mistakes of
Petitioner, formerly represented by the OSG, failed to file an his counsel. Only when the application of the general
answer to respondents petition for mandamus and rule would result in serious injustice should an
damages. Consequently, the trial court declared petitioner exception thereto be called for. Under the
in default. While the OSG filed a notice of appeal of the circumstances obtaining in this case, no undue prejudice
judgment by default, it failed to file with the Court of against the petitioner has been satisfactorily
Appeals the required memorandum resulting in the demonstrated. At most, there is only an unsupported claim
dismissal of the appeal. In petitioners words, the OSG that the petitioner had been prejudiced by the negligence of
virtually abandoned[18] his case. Petitioner argues that the its counsel, without an explanation to that effect. (Emphasis
inexcusable negligence of the OSG did not bind him and supplied)
prevented the decision of the trial court from becoming final
and executory. In the present case, there was no proof that petitioner
suffered serious injustice to exempt him from the general
We do not agree. rule that the negligence of the counsel binds the
client. Petitioner did not even attempt to refute the
respondents allegations in the petition for mandamus and counsel did not diligently exhaust all legal remedies
damages. to advance respondents cause, yet respondent did
not terminate his services. She was aware of the
Moreover, petitioner is not entirely blameless for the repeated negligence of her counsel and cannot now
dismissal of his appeal. After the OSGs failure to file the complain of counsels errors. Hence, there is no
answer to the petition for mandamus and damages and to justifiable reason to exempt her from the general
have the order declaring petitioner in default lifted, rule that clients should suffer the consequences of
petitioner should have already replaced the OSG with the negligence, mistake or lack of competence of the
another lawyer. However, petitioner still retained the counsel whom they themselves hired and had the full
services of the OSG, despite its apparent lack of interest in authority to fire at any time and replace with another
petitioners case, until the trial courts decision became even without justifiable reason. (Emphasis supplied)
final. In Salva v. Court of Appeals,[22] the Court declared:
Furthermore, petitioner cannot now complain of the
Respondents reliance on Legarda is inapropos. Notably, the OSGs errors. Petitioner should have taken the initiative of
decision in said case was not yet final in 1991. The private making periodic inquiries from the OSG and the appellate
respondent therein then filed a timely motion for court about the status of his case. [23] Litigants represented
reconsideration. In granting the motion for reconsideration, by counsel should not expect that all they need to do is sit
the Court en banc held: back, relax and await the outcome of their case. [24] To agree
with petitioners stance would enable every party to render
Neither Cathay nor Cabrera should be made to suffer for the inutile any adverse order or decision through the simple
gross negligence of Legardas counsel. If she may be said to expedient of alleging negligence on the part of his counsel.
[25]
be innocent because she was ignorant of the acts of The Court will not countenance such ill-founded
negligence of her counsel, with more reason are argument which contradicts long-settled doctrines of trial
respondents truly innocent. xxx In this case, it was not and procedure.[26]
respondents, but Legarda, who misjudged and hired the
services of the lawyer who practically abandoned her case The Ombudsmans Resolution Does Not Render the
and who continued to retain him even after his proven Execution of the Trial Courts Decision Unjust and
apathy and negligence. Inequitable

At any rate, we find that respondent Governor Sato, as well Petitioner contends that the Ombudsmans Resolution
as the Province of Occidental Mindoro which she represents, finding Abarca guilty of violating Section 7(d) of RA 6713
were not denied their day in court. Responsive pleadings superseded the trial courts decision finding petitioner liable
were filed before the lower courts, and respondent was for damages.Petitioner insists that the Ombudsmans
given all the opportunities to prove her case. Her chosen resolution rendered the execution of the trial courts decision
unjust and inequitable.
We are not persuaded. The findings of the Ombudsman did not render the
execution of the trial courts decision unjust and
Settled is the rule that a judgment that has acquired inequitable. The resolution of the Ombudsman finding
finality becomes immutable and unalterable and may no Abarca guilty of violating Section 7(d) of RA 6713 did not
longer be modified in any respect except only to correct state that petitioner had a valid reason to detail respondents
clerical errors or mistakes.[27] True, this rule admits of certain to the Office of Undersecretary Cal. In fact, the Ombudsman
exceptions. One of these exceptions is whenever dismissed the charges against Reynaldo Fernando and Mary
circumstances transpire after the finality of the decision Lou Cleofas. Thus, the trial court correctly awarded damages
rendering its execution unjust and inequitable. [28] This, to respondents. Contrary to petitioners contention, awarding
however, is not the case here. In the present case, the damages to respondents does not amount to rewarding
Ombudsman issued his Resolution prior to the finality of the respondents for their alleged wrongdoing. The award merely
trial courts decision. The Ombudsman issued his Resolution compensates respondents for petitioners own unlawful
on 22 January 1997 while the trial courts decision became acts. Clearly illegal were petitioners acts of unjustifiably
final and executory on 14 June 1997. Therefore, the detailing respondents to the office of DOTC Undersecretary
resolution of the Ombudsman is not a supervening event to Cal and refusing to comply with the 9 November 1995
warrant the stay of the execution of the decision of the trial directive of Secretary Garcia to recall immediately
court. respondents to their mother unit.

Furthermore, the resolution of the Ombudsman finding WHEREFORE, we DENY the instant petition. The
Abarca guilty of violating Section 7(d) of RA 6713 did not Decision of the Court of Appeals in CA G.R. SP No. 48233
and could not supersede the decision of the trial court dated 30 September 1998 and the Resolution dated 3
holding petitioner liable for damages. The action filed by the December 1998 are AFFIRMED. No costs.
petitioner before the Ombudsman is completely different
from the action instituted by respondents before the trial SO ORDERED.
court. The two actions, which are clearly separate and
distinct from each other, presented two different causes of Davide, Jr., C.J., (Chairman), Vitug, and Ynares-Santiago,
action. Petitioners cause of action arose from respondents JJ., concur.
alleged violation of certain provisions of RA 6713 whereas
respondents cause of action resulted from petitioners refusal Azcuna, J., on leave.
to recall respondents to their mother unit at CATC. In the
administrative case before the Ombudsman, the issue was
whether respondents were guilty of violating RA 6713. In
contrast, the issue in the civil action before the trial court THIRD DIVISION
was whether respondents were entitled to the issuance of
the writ of mandamus and damages.
[G.R. No. 145260. July 31, 2003] The facts of the case are summarized by the CA in this
wise:
CITY OF ILIGAN, Represented by Hon. FRANKLIN M.
QUIJANO in His Capacity as City On October 19, 1998, Mayor Franklin M. Quijano, acting for
Mayor, petitioner, vs. PRINCIPAL MANAGEMENT and in behalf of [petitioner] City of Iligan, requested from
GROUP, INC. (PMGI), Represented by Its the Sangguniang Panlungsod for: (a) Resolution authorizing
President & Chief Executive Officer, FERNANDO him to open a domestic Standby Letter of Credit (SLC) in the
M. SOPOT, respondent. amount of P14,000,000.00 in favor of the Land Bank Realty
Development Corporation and/or PNCC with the Principal
DECISION Management Group, Inc. (herein private respondent) as the
funder/financial managers in connection with the
PANGANIBAN, J.: development of a project on a turn-key basis; and (b)
Resolution authorizing him to open a high yielding
The ascertainment of good reasons for execution depository account with the Land Bank of the Philippines in
pending appeal lies within the sound discretion of the trial the amount of P14,000,000.00 as a hold-out collateral for
court. Normally, its finding will not be disturbed by a the domestic SLC.
reviewing court, in the absence of grave abuse of discretion.
The City Council approved Mayor Quijanos requests and
The Case passed Resolutions Nos. 1050 and 1051 series of 1998 on
October 20, 1998.
Before this Court is a Petition[1] for Review under Rule 45
of the Rules of Court, assailing the May 4, 2000 On December 29, 1998, a Memorandum of Agreement
Decision[2] and the July 14, 2000 Resolution[3] of the Court of (MOA) on a turn-key arrangement was drawn by Mayor
Appeals (CA) in CA-GR CV No. 56952. The decretal portion of Quijano, representing the City of Iligan, with Land Bank
the Decision reads as follows: Realty Development Corporation (LBRDC) as General
Contractor and Principal Management Group, Inc. (PMGI) as
WHEREFORE, the Petition for Certiorari is hereby Developer - Financing Manager. The project to be
DISMISSED.[4] undertaken was the construction of a Sports Complex which
upon completion shall be turned over to Iligan City for
The assailed Resolution denied petitioners Motion for acceptance and the issuance of Certificate of Acceptance
Reconsideration. and Authority to Pay to enable Land Bank Realty-PMGI to call
on the SLC.
The Facts
The project started on November 26, 1998 despite the fact which favorably acted on it through Resolution No. 99-765
that some drawings had not yet been completed, since the dated June 8, 1999 authorizing the payment of the affected
MOA provides for a construction period of one hundred occupants in the project site.
twenty days from the date of the signing.
On November 8, 1999, PMGI filed a complaint against the
The construction site of the Sports Complex was donated by City of Iligan for rescission of the MOA and damages. After
San Miguel (Iligan) Enterprises, Inc. wherein the City of the filing of City of Iligans Answer, a Motion for Partial
Iligan as donee was bound to provide for all expenses for Summary Judgment was filed by PMGI which claimed that
the transfer of the occupants therein. there was no genuine issue as to the fact of the obligation of
the City of Iligan since it admitted the accomplishment of
On or about January 1999, the work on the project stopped 52.89% or equivalent to P6,958,861.59 of PMGI and that the
due to the refusal of some of the occupants to vacate the City of Iligan had not specifically denied under oath the
premises claiming that they have not been paid x x x their genuineness of the Letter of Credit and Memorandum of
disturbance compensation. By then, PMGI had already Agreement.
accomplished 78.27% of the contracted project equivalent
to P10,957,800.00 of the total project cost An Opposition to the Motion for Partial Summary Judgment
of P14,000,000.00. was filed by the City of Iligan on December 7, 1999 which
stated that: it never admitted that PMGI made any
On February 24, 1999, PMGI requested from the City of accomplishment at all but merely stated that with respect to
Iligan for a deductive change order to enable it to collect the the work accomplishment, it was only 52.89% based on the
above-stated amount based on the 78.27% accomplishment report of Engr. Maatas team; the MOA or the contract for the
of the project. The City of Iligan, however, claimed that construction of the sports complex is between the City of
PMGIs accomplishment was only 52.89% or equivalent only Iligan, as owner, and the Land Bank Realty Development
to P6,958,861.59 based on the Accomplishment Report as of Corporation as General Contractor, PMGI only entered into
February 9, 1999. the picture to support LBRDC in accordance with their own
separate agreement; the grounds of lack of cause of action
The City of Iligan refused to pay for the reason that the and jurisdiction raised in the Answer should be set for
mutually agreed price of P14 Million shall only be paid after hearing; LBRDC as an indispensable party should be
the completion of the project and acceptance by it and since impleaded; and the court does not have jurisdiction over the
the project is not yet complete, no payment can be paid. case in view of Sec. 4 of Executive Order No. 1008 which
vests exclusive jurisdiction over construction disputes to
The problem on the payment of the affected occupant, Construction Industry Arbitration Commission (CIAC).
which was the cause of the work stoppage, was accordingly
brought to the attention of the Sangguniang Panlungsod In private respondents Rejoinder to Opposition, it was
alleged that PMGI and LBRDC are solidary creditors, hence,
there was no need to implead the latter since the suit SO ORDERED.
redounds to the benefit of LBRDC, there was no
disagreement or dispute as to the accomplishment of The Motion for Reconsideration filed by the City of Iligan to
52.89% or equivalent to P6,958,861.59, hence, there was no the December 20, 1999 Order was denied in the Resolution
need to resort to arbitration; and the turn-key provision in dated January 17, 2000.
the MOA is not applicable since the 120-day construction
period lapsed due to the failure of the City of Iligan to A Notice of Appeal was filed by the City of Iligan on January
perform its obligation. 26, 2000.

In the Order dated December 20, 1999, the trial court A Motion for Execution Pending Appeal x x x filed on January
granted the Motion for Partial Summary Judgment and 18, 2000 by PMGI which alleged that when the appeal is
rendered the following judgment/order: clearly dilatory, order for execution upon good reasons may
be issued with the discretion of the court, was granted on
WHEREFORE, foregoing premises considered, [respondents] January 24, 2000 over the opposition of the City of Iligan, to
motion is GRANTED. justify the same, the dispositive portion of which was earlier
quoted. The trial court further stated that:
Partial summary judgment is hereby issued in favor of
[respondent] in the amount of Six Million Nine Hundred Fifty- The Court is convinced that there are good reasons to allow
eight Thousand Eight Hundred Sixty one & 59/100 the immediate execution pending appeal. Its adjudication is
(P6,958,861.59) Pesos Only. based on [petitioners] own admission hence, any appeal
would be unmeritorious and would only serve to delay
The Manager of the LAND BANK OF THE PHILIPPINES (Iligan execution of the final order subject of the instant
City Branch), or his authorized representative, or any motion. The fact that an appeal in this case if taken by
competent officer of said bank is hereby ORDERED to pay [petitioner] will be a merely dilatory tactic has been
the amount of P6,958,861.59 out of LC NO. 98003/D to Mr. declared by the Supreme Court as a good and sufficient
Fernando M. Sopot, President and CEO of [respondent]. reason upon which to issue execution of the order under
Section 2, Rule 39 of the Revised Rules of Court.
In the event said LC NO. 98003/D is insufficient or has
expired, the Manager and/or any competent officer of said A Demand Letter and Notice of Garnishment, both dated
LAND BANK OF THE PHILIPPINES (Iligan City Branch) is January 26, 2000, were served on even date by Sheriff
hereby ORDERED to pay to said Mr. Fernando M. Sopot the Montoy B. Lomondot to herein petitioner. [5] (Citations
amount of P6,958,861.59 out of any accounts or moneys of omitted)
[petitioner].
Ruling of the Court of Appeals
The CA held that the trial court did not commit grave reasons to allow the immediate execution pending appeal;
abuse of discretion in granting the execution pending appeal and
since the appeal filed by petitioner was a dilatory tactic and
is not allowed in the first place. [6] Ruling that the trial court C
could grant executions pending appeal, provided that a
good reason therefor was stated in a special order, the Whether or not the Honorable Court of Appeals erred in
appellate court upheld dilatory tactic as one such good affirming the Order of the trial court in spite of the latters
reason. failure to take into consideration the provision in paragraph
8 of the Memorandum of Agreement entered into by the
The appellate court also ruled that certiorari would not herein parties.[8] (Citations omitted)
be allowed in this case, because there were other remedies
still available to petitioner, like the filing of a supersedeas Simply put, the main issue is whether the Order
bond to stay the execution or the filing of a motion for granting execution pending appeal was proper.
reconsideration.
The Courts Ruling
Hence, this Petition.[7]
The Petition has no merit.
The Issues
Main Issue:
Petitioner raises the following issues for our
consideration: Propriety of Execution Pending Appeal

A Executions pending appeal are governed by Section 2 of


Rule 39 of the Rules of Court, which reads:
Whether or not the Honorable Court of Appeals erred in
affirming the Order of the trial court granting a Writ of SEC. 2. Discretionary execution.--
Execution Pending Appeal to implement its previous Order
dated December 20, 1999 approving respondents Motion for (a) Execution of a judgment or a final order pending appeal.
Partial Summary Judgment; On motion of the prevailing party with notice to the adverse
party filed in the trial court while it has jurisdiction over the
B 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
Whether or not the Honorable Court of Appeals erred in filing of such motion, said court may, in its discretion, order
affirming the Order of the trial court that there were good
execution of a judgment or final order even before the because unless these are divulged, it will be difficult to
expiration of the period to appeal. determine on appeal whether judicial discretion has been
properly exercised by the lower court.[13]
After the trial court has lost jurisdiction, the motion for
execution pending appeal may be filed in the appellate Good reasons consist of compelling circumstances that
court. justify the immediate execution of a judgment, lest it
become illusory; or the prevailing party be unable to enjoy it
Discretionary execution may only issue upon good reasons after the lapse of time, considering the tactics of the
to be stated in a special order after due hearing. adverse party who may have no recourse but to delay.[14]

There are three requisites for the execution of a In the present case, the good reason relied upon by
judgment pending appeal: a) a motion must be filed by the both the trial and the appellate courts was that the partial
prevailing party with notice to the adverse party; b) there adjudication of the case was based on petitioners own
must be good reasons for execution pending appeal; and c) admission; hence, any appeal based on that point would be
the good reasons must be stated in a special order.[9] unmeritorious and merely dilatory. Indeed, both courts ruled
that an appeal by petitioner would only serve as a good and
Execution pending appeal is, of course, the exception to sufficient reason upon which to issue execution.[15]
the general rule.[10] Normally, execution cannot be obtained
until and unless (a) the judgment has become final and The ascertainment of good reasons for execution
executory; (b) the right of appeal has been renounced or pending appeal lies within the sound discretion of the trial
waived; (c) the period for appeal has lapsed without an court, and the appellate court will not normally disturb such
appeal having been filed; or (d) having been filed, the finding.Intervention by the latter may be proper, if it is
appeal has been resolved and the records of the case have shown that there has been an abuse of discretion.[16]
been returned to the court of origin -- in which case,
execution shall issue as a matter of right.[11] Like the CA, we find no abuse of discretion in the trial
courts grant of execution pending appeal. Indeed, this Court
On the other hand, when the period of appeal has not has held that a good and sufficient reason upon which to
yet expired, the execution of a judgment should not be authorize immediate execution is when an appeal is clearly
allowed except if, in the courts discretion, there are good dilatory.[17]
reasons therefor.[12]
Normally, the trial court is not allowed to assess its own
Since the execution of a judgment pending appeal is an judgment and to hold that an appeal may not prosper, or
exception to the general rule, the existence of good reasons that it would merely be dilatory. In the present case,
is essential. These reasons must be stated in a special order,
however, there are circumstances that undisputedly serve upheld by the CA, which found that the appeal filed by the
as cogent bases for arriving at such a conclusion. petitioner was a dilatory tactic and was not allowed in the
first place. Consequently, the appellate court did not err in
First, it is not seriously disputed that the judgment is refusing to attribute grave abuse of discretion to the trial
anchored upon material facts as follows: (1) there is a courts Order granting execution pending appeal.
Memorandum of Agreement (MOA) for the site development
of Sports Complex Project No. 1 signed by the parties; (2) WHEREFORE, the Petition is DENIED and the assailed
petitioner failed to pay the occupants of the project site on Decision and Resolution AFFIRMED. Costs against petitioner.
time, thereby preventing respondent from fully complying
with its obligation under the MOA; (3) respondent admitted SO ORDERED.
that the work accomplished was 52.89 percent, which was
equivalent to P6,958,861.59. Obviously, there is no genuine Puno, (Chairman), Corona, and Carpio-Morales,
issue as to any material fact on this point. JJ., concur.

Second, Article 1191 of the Civil Code states: Sandoval-Gutierrez, J., on official leave.

The power to rescind obligations is implied in reciprocal


ones, in case one of the obligors should not comply with
what is incumbent upon him. THIRD DIVISION

The injured party may choose between the fulfillment and [A.M. No. MTJ-03-1513. November 12, 2003]
the rescission of the obligation, with the payment of
damages in either case. x x x. Spouses JAIME and PURIFICACION
MORTA, complainants vs. Judge ANTONIO C.
By failing to pay the occupants of the project site within BAGAGAN, Municipal Trial
the time required for the completion of the project, Court, Guinobatan, Albay; and Sherif DANILO
petitioner did not comply with what was incumbent upon O. MATIAS, Regional Trial Court, Branch
it. Applying the law to the undisputed facts, the trial court 14, Ligao, Albay, respondents.
had prima facie bases for rendering its partial summary
judgment holding that respondent was entitled to rescission DECISION
and to the payment of P6,958,861.59.
PANGANIBAN, J.:
Verily, the trial court committed no abuse of discretion
in granting execution pending appeal. Its conclusion was
Unreasonable delay in resolving motions opens a judge Complainants, who are the plaintiffs in the aforementioned
to administrative sanctions. Likewise, a sheriff is civil cases, allege[d] that on March 29, 1994[,] the Municipal
administratively liable for delayed implementation of a writ Trial Court [of] Guinobatan, Albay rendered a decision in
of execution and failure to render the required reports their favor. The decretal portion of the decision reads:
thereon. These are necessary lessons from the time-honored
principle that justice delayed is justice denied. WHEREFORE, in view of the foregoing considerations,
judgment is rendered in favor of the plaintiffs and against
The Case and the Facts the defendants in both cases as follows:

In their Administrative Complaint[1] dated July 26, 2001, 1) Ordering the defendants not to molest and disturb the
Spouses Jaime and Purificacion Morta Sr. charged Judge peaceful possession of the plaintiffs in the lands in question
Antonio C. Bagagan of the Municipal Trial Court (MTC) situated at San Rafael, Guinobatan;
of Guinobatan, Albay with gross ignorance of the law,
incompetence, bias and delay. They also indicted 2) Condemning the defendants in Civil Case No. 481 to
Sheriff Danilo O. Matias of the Regional Trial Court (RTC) jointly and severally pay the plaintiffs the total amount
of Ligao, Albay (Branch 14) with gross ignorance of the law, of P8,130.00 representing the value of the
negligence and connivance with the defendants in Civil Case coconuts, pili nuts and anahaw leaves and for the destroyed
Nos. 481 and 482 (MTC, Guinobatan, Albay). The Office of plants;
the Court Administrator (OCA) summarized the factual
antecedents as follows: 3) Ordering the defendants in Civil Case No. 481 jointly and
severally to reimburse the plaintiffs the amount of P202.00
x x x [In] a Complaint-Affidavit dated July 26, 2001 (with as legal expenses incurred in filing their suit;
enclosures), x x x [Spouses] Jaime and Purificacion Morta[,]
through their counsel[,] Atty. Rodolfo R. Paulino[,] charg[ed] 4) Condemning the defendants in Civil Case No. 482 jointly
[Respondent] Judge Antonio C. Bagagan and and severally to pay the plaintiffs the total amount
Sheriff Danilo O. Matias with gross ignorance of the law and of P9,950.00 representing the value of the coconuts
procedure, incompetence, bias and delay in the disposition and anahaw leaves;
of Civil Case No. 481, entitled Jaime Morta, Sr.
and Purficacion Padilla vs. Jamie Occidental and Atty. 5) Ordering the said defendants in Civil Case No. 482 to
Mariano Baranda, Jr., for Damages with Prayer for a Writ of jointly and severally reimburse the plaintiffs the sum
Preliminary Injunction, and Civil Case No. 482 entitled of P202.00 as legal expenses in filing this suit.
Jaime Morta, Sr. and PurficacionPadilla vs. Jamie Occidental,
Atty. Mariano Baranda, Jr. and Daniel Corral, for Damages The defendants appealed to the Regional Trial Court
with Prayer for a Writ of Preliminary Injunction. [of] Ligao, Albay. In its decision dated August 10, 1994, the
Regional Trial Court [RTC] dismissed the aforesaid cases on respondent Sheriff a long time before he finally submitted
the ground that the claims for damages are tenancy-related his Sheriff's Return of Service on the Writ of Execution. [2]
problems which fall under the original and exclusive
jurisdiction of the Department of Agrarian Reform In his Answer/Comment[3] dated April 2, 2002,
Adjudicatory Board (DARAB). On September 9, 1994, the respondent judge explained that he had denied
plaintiffs filed a petition for review with the Court of Appeals complainants Motion for the issuance of a writ of possession
assailing the decision of the RTC. However, in its decision because, by the time Civil Case Nos. 481 and 482 were
dated May 31, 1995, the Court of Appeals affirmed the lower finally decided by this Court on June 10, 1999, they had
courts ruling that the cases fall within the original and already been ousted from the lots in question pursuant to
exclusive jurisdiction of DARAB. Thereafter, the First Division the Decisions in DARAB Case No. 2413 and Civil Case No.
of this Court, acting on the petition for review on certiorari 1920. In Civil Case No. 1920, respondent judge ordered
filed by the plaintiffs, rendered its decision dated June 10, complainants to vacate the disputed lots. A Writ of
1999 in G.R. No. 123417 affirming the decision of the Execution/Demolition was thereafter issued on January 29,
Municipal Trial Court, Guinobatan, Albay in Civil Case Nos. 1998. On the other hand, the DARAB Decision, which
481 and 482 and thereby setting aside the decision of the became final and executory on October 27, 1998, directed
Court of Appeals in CA-GR SP No. 35300 and that of the them to cease and desist from disturbing the peaceful
Regional Trial Court in Civil Cases Nos. 1751 and 1752. possession of therein Petitioner Jaime Occidental.

They now complain that despite the fact that the decision of Regarding the alleged delay in the resolution of the
the Supreme Court in the aforesaid case had already Motion for Contempt filed by complainants, respondent
become final and executory, the respondent Judge still judge contended that an ocular inspection and a hearing
refused to issue a writ of possession in their favor. had been conducted by his court as early as June 16, 2000,
to determine if their Motion had any basis. With the consent
Complainants further allege that on June 6, 2000 they filed a of their counsel, the hearing had to be deferred, however,
motion to cite Jaime Occidental for contempt of pending receipt of the Sheriffs Report in Civil Case No. 1920.
court. Although more than one (1) year had already elapsed
since the motion was filed in the respondent Judges sala, the For his part, Respondent Sheriff Matias admitted in his
same had remained unresolved up to the filing of the instant Comment[4] dated April 18, 2002, that there was delay in the
complaint. full implementation of the Writ of Execution in Civil Case
Nos. 481 and 482. Explaining that the delay was due to his
As against the respondent Sheriff, the complainants heavy workload and thus unintentional, he begged for
aver[red] that through his ignorance, negligence and compassion from this Court.
connivance with the defendants, he failed to execute in full
the writ of execution that had been previously issued by the Evaluation and Recommendation of the OCA
court in Civil Case Nos. 481 and 482. Moreover, it took
The OCA found that the explanation of respondent judge We agree with the OCA that respondent judge acted
for not granting the Motion for Execution, filed by correctly in not issuing a writ of execution/possession. His
complainants, was sufficient. According to the court action was consistent with the Decision of this Court in GR
administrator, the records showed that they had indeed No. 123417 affirming that of the MTC as to
been evicted from the lots they were claiming when Civil damages. Besides, the latters Order directing defendants
Case Nos. 481 and 482 were finally decided by the Supreme not to molest complainants in their peaceful possession was
Court on June 10, 1999.[5] Moreover, it emphasized that this rendered moot when they were ousted from the disputed
Court had merely affirmed the Decision of the MTC insofar lots by virtue of the final and executory judgments in Civil
as the award of damages was concerned. Case No. 1920 and DARAB Case No. 2413. Indeed, the
execution of a final judgment may be refused, as in this
As to complainants Motion to cite Occidental in case, when there has been a change in the situation of the
contempt, the OCA held that the delay was due primarily to parties that would make its execution inequitable.[6]
the need of the court to clarify some important matters, not
to the negligence or partiality of respondent. Accordingly, it The delay in the resolution of complainants Motion,
recommended that the charges against him be dismissed for however, is an altogether different matter. The Code of
lack of merit. Judicial Conduct enjoins trial court judges, as paragons of
justice in the first instance, to dispose of the courts business
On the other hand, the OCA found that promptly[7] and to decide cases and motions within the
Sheriff Matias had failed to implement the Writ of Execution required periods.[8] Section 15(1) of Article VIII of the
promptly and efficiently. It recommended that he be ordered Constitution mandates them to do so within three months
to pay a fine of P1,000, with a warning that a repetition of from the date of submission for decision or final
the same or a similar act in the future would be dealt with resolution. This Court, through Administrative Circular No. 1,
[9]
more severely. also specifically requires all of them to act promptly on all
motions and interlocutory matters pending before their
The Courts Ruling courts.[10]

We modify the OCAs findings and recommended Hence, it is well-settled that the unexplained failure of
penalties, consistent with Rule 140 of the Revised Rules of judges to decide cases and resolve motions and incidents
Court and the Revised Uniform Rules on Administrative within the reglementary period of 90 days, which is fixed by
Cases in the Civil Service. the Constitution and the law, renders them administratively
liable.[11] We have stressed often enough that delay in the
Administrative Liability administration of justice undermines the faith of the people
in the judiciary, which is expected to hear their supplications
promptly. Delay reinforces in the mind of litigants the
impression that the wheels of justice grind ever so slowly.
[12]
As the time-honored principle goes, justice delayed is inefficiency or negligence remains an empty victory on the
justice denied. part of the prevailing party.[15] For this reason, any inordinate
delay in the execution of judgment is truly deplorable and
In this case, respondent judge never resolved the cannot be countenanced by the Court.
Motion, filed on June 6, 2000, to cite Defendant Occidental
for contempt. While it is true that the former immediately There is no mistaking the mandatory character of the
conducted an ocular inspection of the area to determine if period prescribed under Section 14 of Rule 39 of the Revised
the Motion had any basis, this act served only to mitigate Rules of Court on the Return of a Writ of Execution, which
his infraction, but not absolve him from it. The Sheriffs reads:
Return of Service of the Writ of Demolition issued in Civil
Case No. 1920 would have clarified whether or not SEC. 14. Return of writ of execution. The writ of execution
Occidental had already been fully restored in possession. shall be returnable to the court issuing it immediately after
But while its absence was a valid reason to defer action on the judgment has been satisfied in part or in full. If the
the contempt Motion at the outset, it was certainly not an judgment cannot be satisfied in full within thirty (30) days
excuse for the prolonged inaction. after his receipt of the writ, the officer shall report to the
court and state the reason therefor. Such writ shall continue
Had respondent judge been so minded, he would have in effect during the period within which the judgment may
requested a copy of the Sheriffs Report, so that he could be enforced by motion. The officer shall make a report to the
rule on the Motion with dispatch. He has not satisfactorily court every thirty (30) days on the proceedings taken
explained his failure to do so, considering that the Writ of thereon until the judgment is satisfied in full, or
Demolition issued in Civil Case No. 1920 had been fully its effectivity expires. The returns or periodic reports shall
executed as early as February 25, 1998, and the return set forth the whole of the proceedings taken, and shall be
thereon made on March 17, 1998.[13] filed with the court and copies thereof promptly furnished
the parties.
With respect to the charges against respondent sheriff,
we agree with the OCA that he was remiss in his duty to A similar rule is stated in Administrative Circular No. 12
implement the Writ fully in Civil Case Nos. 481 and 482. dated October 1, 1985, and incorporated in the Manual for
Time and time again, we have impressed upon those tasked Clerks of Court.[16] According to this Circular, all sheriffs and
to implement court orders and processes to see to it that deputy sheriffs shall submit to the judge concerned a report
the final stage in the litigation process -- the execution of on actions taken on all writs and processes assigned to them
judgment -- be carried out promptly. They should exert within 10 days from receipt.
every effort and indeed consider it their bounden duty to do
so, in order to ensure the speedy and efficient Per the records of this case, a Writ of Execution was
administration of justice.[14] A decision that is left issued on November 22, 1999 in Civil Case Nos. 481 and
unexecuted or delayed indefinitely because of the sheriffs
482.[17] Respondent Sheriffs Return of Service [18] of that Writ absence. Instead, we adopt our previous ruling
was filed only on May 25, 2000, however, or six months in Aquino v. Lavadia [26] imposing a fine equivalent to his
thereafter. There is nothing in the records showing that he one-month salary, so that he can finally implement the
submitted before then a periodic report on the actions he subject Writ and perform his other duties.
had taken on the Writ every 30 days from the date of receipt
as required. On the contrary, the Report indicates that the WHEREFORE, Judge Antonio C. Bagagan of the
Writ was partially executed on December 15-28, Municipal Trial Court of Guinobatan, Albay, is found guilty of
1999 and January 11, 2000; and that the damages adjudged unreasonable delay and is FINED P11,000 with a stern
were partly paid in the amount of P3,500 plus one unit of warning that a repetition of the same or a similar act in the
Karaoke machine. But it was only on May 25, 2000, that this future shall be dealt with more severely. On the other hand,
matter was reported to the trial court. Sheriff Danilo O. Matias of the Regional Trial Court
of Ligao, Albay (Branch 14), is ordered to pay a fine
The excuse proffered by respondent sheriff -- heavy equivalent to his one-month salary, with a similar warning of
workload -- cannot absolve him from administrative stiffer sanctions for the same or a similar act.
sanctions.[19] As an officer of the court, he should at all times
show a high degree of professionalism in the performance of SO ORDERED.
his duties.[20] He has failed to observe that degree of
dedication required of him as a sheriff. The charge of Puno, (Chairman), Sandoval-
connivance is, however, dismissed for lack of basis. Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Although the OCA recommended that Respondent


Judge Bagagan be absolved of all charges, we find him
guilty of undue delay[21] in resolving a pending motion, an
infraction that also constitutes a violation of a Court circular.
[22]
Under Section 11(B) of Rule 140 of the Revised Rules of SECOND DIVISION
Court, this less serious charge [23] may be sanctioned by a
fine of more than P10,000, but not exceeding P20,000. [G.R. No. 133883. December 10, 2003]

As to Sheriff Matias, we find him guilty of simple neglect SPOUSES ARTURO AND NICETA SERRANO, petitioners,
of duty,[24] a less grave offense under the Revised Uniform vs. COURT OF APPEALS AND HEIRS OF EMILIO
Rules on Administrative Cases in the Civil Service. This S. GELI, respondents.
infraction is punishable by a suspension of one month and
one day to six months.[25] But under the circumstances, we DECISION
find it inadvisable to suspend respondent sheriff,
considering that his work would be left unattended in his
CALLEJO, SR., J.: However, Emilio Geli and his children failed to settle the
amount of P32,000 to the GSIS. The latter forthwith filed a
Before us is a petition for review on certiorari under complaint against Emilio Geli and his children with the
Rule 45 of the Rules of Court of the Decision[1] of the Court of Regional Trial Court of Quezon City for the rescission of the
Appeals (CA) in CA-G.R. SP No. 45573 setting aside the deed of absolute sale with partial assumption of
Order of the Regional Trial Court of Quezon City in Civil Case mortgage. The defendants therein alleged, by way of special
No. Q-24790 with motion of herein petitioners, Spouses defense, that the plaintiffs Spouses Serrano failed to furnish
Arturo and Niceta Serrano, for the issuance of an alias writ them with a detailed statement of the account due from the
of execution.[2] GSIS, thus accounting for their failure to remit the balance of
the loan to the GSIS. On September 6, 1984, the trial court
The Antecedents rendered judgment ordering the rescission of the said deed,
the decretal portion of which reads:
The Spouses Serrano were the owners of a parcel of
land as well as the house constructed thereon located at WHEREFORE, judgment is hereby rendered: a) ordering the
Road 4, Project 6, Diliman, Quezon City, covered by Transfer rescission of the Deed of Absolute Sale with Assumption of
Certificate of Title No. 80384, and a parcel of land located Mortgage, dated June 23, 1969; b) ordering defendant Emilio
in Caloocan City, covered by Transfer Certificate of Title No. S. Geli and all persons claiming under him, including the
15191. The couple mortgaged the said properties in favor of other defendants Oswaldo, Eugenia, Marilyn, Cristopher and
the Government Service Insurance System (GSIS) as Ray, all surnamed Geli, to vacate the house and lot located
security for a loan of P50,000. By June 1969, the couple was at No. 110 A-1, Road 4, Project 6, Quezon City, and to turn
able to pay only the amount of P18,000. over the peaceful possession of the premises to plaintiffs
Arturo Serrano and Niceta M. Serrano; c) ordering defendant
On June 23, 1969, the Spouses Serrano, as vendors, and Emilio S. Geli to pay plaintiffs the amount of P1,000.00 a
Spouses Emilio and Evelyn Geli, as vendees, executed a month representing reasonable compensation for the use
deed of absolute sale with partial assumption of mortgage and occupancy of the premises starting June 23, 1969 up to
over the parcel of land covered by TCT No. 80384 and the the time the defendant Geli and all other persons claiming
house thereon for the price of P70,000. The Spouses Geli under them including the other defendants, shall have
paid the amount of P38,000 in partial payment of the completely vacated the property, deducting therefrom the
property, the balance of P32,000 to be paid by them to the sum of P38,000.00 paid by defendant Geli to plaintiffs as
GSIS for the account of the Spouses Serrano. The Spouses part of the aforesaid compensation; and, d) ordering
Geli thereafter took possession of the property. In the defendant Emilio S. Geli to pay plaintiffs the sum
meantime, Evelyn Geli died intestate and was survived by of P10,000.00 representing exemplary damages. Costs
her husband Emilio Geli and their children. against defendant Emilio S. Geli.[3]
Emilio Geli and his children appealed the decision to the motion of the plaintiffs. This, too, was not implemented,
CA on October 19, 1984. During the pendency of the appeal, because of the defendants change of address.On May 9,
the GSIS foreclosed the real estate mortgage over the 1996, the trial court issued an order granting the motion of
property for non-payment of the P50,000 loan secured by the plaintiffs for a second alias writ of execution. On
the said property. At the sale on public auction, the GSIS was September 6, 1996, the defendants filed a motion to quash
the highest bidder. A certificate of sale over the property the same claiming, for the first time, that defendant Emilio
was thereby issued by the sheriff in its favor on August 30, Geli had already redeemed the subject property in 1988
1986. On October 30, 1987 and November 3, 1987, Emilio from the GSIS. According to the defendants, this constituted
Geli paid the redemption price of P67,701.84[4] to the a supervening event that would make the execution of the
GSIS. Official Receipts Nos. 905401 and 901685 for the said trial courts decision unjust and inequitable.
amount with the notation for the account of Arturo Serrano
were issued. Accordingly, on February 22, 1988, the GSIS On May 19, 1997, the trial court issued an order
executed a certificate of redemption[5] and turned over to denying the aforesaid motion of the defendants. It noted
Emilio Geli the owners copy of TCT No. 80384 in the names that the payment by defendant Emilio Geli of the
of the Spouses Serrano. Emilio Geli did not inform the redemption price to the GSIS took place before the CA
Spouses Serrano and the CA that he had paid the dismissed the appeal and before the decision of the RTC
redemption price to the GSIS. became final and executory; hence, it did not constitute a
supervening event warranting a quashal of the writ of
On January 8, 1991, the CA dismissed the appeal of execution. The trial court cited the ruling of this Court in Lim
Emilio Geli and his children on the ground that the v. Jabalde.[6]
appellants failed to pay the requisite docket fees despite
notices from the appellate court. No motion for the On September 18, 1997, the trial court issued an order
reconsideration of the resolution was filed. Thus, the said granting the motion for the issuance of another alias writ of
dismissal of the appeal became final and executory. The execution filed by the Spouses Serrano, to wit:
Court of Appeals forthwith issued an Entry of Judgment
on February 27, 1991. The Motion to Quash Writ of Execution, filed by defendants
having been earlier denied and, it being explicit under the
After the remand of the records, the Spouses Serrano New Rules of Civil Procedure (1997) that no appeals may be
filed with the RTC on January 14, 1994 a motion for the taken from orders of execution, instead of giving due course
execution of the trial courts September 6, 1984 to the appeal interposed by defendant, the court resolves to
Decision. On February 15, 1994, the trial court issued an grant the motion for the issuance of an Alias Writ of
order granting the motion and forthwith issued a writ of Execution.[7]
execution. The writ, however, was not implemented as the
Spouses Serrano were then in the United States. On August
1, 1995, the trial court issued an alias writ of execution on
On September 26, 1997, the trial court issued an Alias writ of PRELIMINARY INJUNCTION be granted after due
Writ of Execution.[8] Conformably with said writ, the sheriff hearing, ORDERING public respondent Judge and public
served a Sheriffs Notice to Vacate [9] on the defendants. In respondent Sheriff to desist or refrain from implementing
the meantime, Emilio Geli died intestate and was survived the September 18, 1997 order.
by his children.
Other remedies available in law and equity are likewise
On October 10, 1997, the heirs of Emilio Geli filed with prayed for.[10]
the Court of Appeals a petition for certiorari and/or
prohibition praying for the nullification of the May 19, On January 5, 1998, the appellate court issued an order
1997 and September 18, 1997 Orders of the trial court. They restraining the implementation of the alias writ of execution
alleged inter alia that when their father Emilio Geli paid the and the notice to vacate issued by the trial court. [11] On May
redemption price to the GSIS on October 30, 12, 1998, the CA rendered the assailed decision in favor of
1987 and November 3, 1987, their appeal of the September the heirs of Emilio Geli, the decretal portion of which reads:
6, 1984 Decision of the RTC in Civil Case No. Q-24790 before
the CA was still pending resolution. Consequently, under the WHEREFORE, the foregoing considered, the petition is
terms of the deed of absolute sale with assumption of hereby GRANTED, and the writ of certiorari issued. The
mortgage which was still subsisting at that time, they respondent court is hereby PERPETUALLY ENJOINED from
were ipso facto subrogated to the rights of the Spouses issuing any order or writ which would disturb the petitioners
Serrano as mortgagors of the property; hence, they became in their lawful ownership and possession of the property
the owners of the property and were entitled to the subject matter of the instant case.[12]
possession thereof. The petitioners therein further posited
that since they acquired ownership of the property before The appellate court ruled that since Emilio Geli paid the
the CA dismissed their appeal and before the September 6, redemption price for the property to the GSIS in 1987 while
1984 Decision of the RTC became final and executory, the his appeal was pending in the CA, the said redemption was
execution of the decision against them was unjust and a supervening event which rendered the enforcement of the
unfair. They then prayed for the following relief: writ of execution issued by the trial court against them
unjust and inequitable.
WHEREFORE, premises considered, it is respectfully prayed
that the order of public respondent Judge, dated 18 The Spouses Serrano filed the instant petition and
September 1997 and the Notice to Vacate issued by public assigned to the CA the following errors:
respondent Sheriff, dated 26 September 1997 be set
aside. Likewise, to declare execution of judgment in Civil I
Case No. Q-24790 to have been rendered impossible, as
execution hereof would result to injustice. In the meantime
to obviate irreversible damage on the part of petitioners, a
THE COURT A QUO COMMITTED GRAVE ABUSE OF partial assumption of mortgage had been rescinded by final
DISCRETION AMOUNTING TO LACK OR EXCESS OF judgment of the RTC, Emilio Geli was no longer a mortgagor
JURISDICTION WHEN IT PERMANENTLY ENJOINED THE TRIAL or the successor-in-interest of the mortgagors; hence, he
COURT FROM DISTURBING THE RESPONDENTS IN THEIR could not redeem the property on behalf of the mortgagors
LAWFUL OWNERSHIP AND POSSESSION OF THE SAID without the latters knowledge and consent.
PROPERTY, IT BEING CLEAR THAT THEIR REDEMPTION WAS
EFFECTED FOR AND ON BEHALF OF PETITIONER ARTURO V. For their part, the respondents echo the ruling of the CA
SERRANO. that although the issuance by the trial court of a writ of
execution is ministerial upon the finality of its decision, the
II same is subject to the onset of a supervening event which
may, as in this case, render the same unwarranted, unjust
THE COURT A QUO COMMITTED GRAVE ABUSE OF and inequitable.
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT HELD THAT THE REDEMPTION The respondents contend that the petitioners lost their
CONSTITUTED A SUPERVENING EVENT WHICH CHANGE THE ownership over the property when they failed to redeem the
RELATIONS OF THE PARTIES, THUS RENDERING EXECUTION property within one year from the sale thereof at public
INEQUITABLE UNDER THE PREMISES.[13] auction to the GSIS. Although the GSIS executed a
Certificate of Redemption in favor of Emilio Geli on February
The petitioners contend that the payment of the 22, 1988, the deed was, in fact, a deed of conveyance
redemption price made by Emilio Geli in 1987 during the because, by then, the one-year period to redeem the
pendency of the appeal in the CA was ineffective because, property had already lapsed and the GSIS in the meantime
subsequently, when the respondents appeal was dismissed had become the owner of the property. Thus, the Spouses
by the CA, the summary decision of the RTC declaring the Geli acquired ownership thereof when they purchased the
deed of absolute sale with partial assumption of mortgage same from the GSIS in 1988 for P67,701.84. The GSIS in
rescinded had become final and executory. The deed of effect sold the property to Emilio Geli and did not merely
absolute sale with partial assumption of mortgage executed allow him to redeem it. Departing from their submission
by the petitioners and the Spouses Geli had ceased to exist before the CA, the respondents now posit that their claim of
with its rescission as decreed by the RTC. According to the ownership over the subject property was after all not
petitioners, the payment of the redemption price was anchored on the deed of sale with assumption of mortgage,
conditioned upon the perfection and outcome of the as it had been admittedly rescinded by virtue of the finality
appeal. Since the appeal of the respondents was dismissed of the trial courts September 6, 1984 Decision. Their claim
by their failure to pay the requisite docket fees, they must of ownership rests on the fact that they had acquired the
suffer the consequences thereof. The petitioners assert that property from the GSIS, the purchaser at public auction. As
the redemption of a property is a right belonging to the owners of the property, they cannot now be evicted
mortgagor-debtor, and since the deed of absolute sale with therefrom.
We find the petition to be meritorious. facts.[17] Evidence may be adduced by the parties on such
supervening facts or circumstances.[18]
Generally, the execution upon a final judgment is a
matter of right on the part of the prevailing party. It is the In this case, the payment by Emilio Geli of the amount
ministerial and mandatory duty of the trial court to enforce of P67,701.84 on October 30 and November 3, 1987 to the
its own judgment once it becomes final and executory. It GSIS for the account of the petitioners was made while the
may happen, however, that new facts and circumstances appeal of the private respondents from the summary
may develop or occur after a judgment had been rendered judgment of the RTC was pending. The summary judgment
and while an appeal therefrom is pending; or new matters of the RTC had not yet become final and executory. It
had developed after the appeal has been dismissed and the behooved the said respondents to prosecute their appeal
appealed judgment had become final and executory, which and file their brief, where they should have invoked the
the parties were not aware of and could not have been payment of the redemption price as a ground for the
aware of prior to or during the trial or during the appeal, as reversal of the trial courts summary judgment in their
they were not yet in existence at that time. In the first favor. The respondents failed to do so, and even concealed
situation, any attempt to frustrate or put off the the payment of the loan for the account of the
enforcement of an executory decision must fail. Once a petitioners. Worse, the respondents did not pay the requisite
judgment has become final and executory, the only remedy docket fees for their appeal, which resulted in its
left for material attention thereof is that provided for in Rule dismissal. The respondents even opted not to file any
38 of the Rules of Court, as amended. There is no other motion for the reconsideration of the resolution of the CA
prerequisite mode of thwarting the execution of the dismissing their appeal. In sum, the respondents allowed the
judgment on equitable grounds predicated on facts decision of the trial court to become final and
occurring before the finality of judgment.[14] In the second executory. Consequently, the enforcement of the summary
situation, the execution may be stayed, notwithstanding the judgment of the trial court can no longer be frustrated by
affirmance of the appealed judgment by this Court. [15] It is the respondents payment, through Emilio Geli, of the
required, however, that the supervening facts and amount of P67,701.84 to the GSIS in 1987.
circumstances must either have a direct effect upon the
matter already litigated and settled or create a substantial Irrefragably, the Spouses Geli, as vendees-mortgagors
change in the rights or relations of the parties therein which under the deed of absolute sale with partial assumption of
would render execution of a final judgment unjust, mortgage, would have been subrogated to the rights and
impossible or inequitable or when it becomes imperative in obligations of the petitioners under the said deed, including
the interest of justice.[16] The interested party may file a the right to redeem the property from the GSIS.[19] However,
motion to quash a writ of execution issued by the trial court, the CA dismissed their appeal for failure to pay the requisite
or ask the court to modify or alter the judgment to docket fees, and such dismissal became final and
harmonize the same with justice and further supervening executory. Hence, the summary judgment of the trial court
declaring the deed of absolute sale with partial assumption HUNDRED ONE & 84/100 (P67,701.84) PESOS, Philippine
of mortgage rescinded had also become final and executory. Currency, herein paid by EMILIO S. GELI, of legal age,
married, Filipino, with residence and postal address at 110
Generally, the rule is that to rescind a contract is not A-1, Road 4, Project 6, Quezon City, do hereby resell,
merely to terminate it, but to abrogate and undo it from the retransfer and reconvey by way of Certificate of Redemption
beginning; that is, not merely to release the parties from in favor of ARTURO V. SERRANO, the above-described
further obligations to each other in respect to the subject of parcel/s of land, together with the building/s and
the contract, but to annul the contract and restore the improvements existing thereon.
parties to the relative positions which they would have
occupied if no such contract had ever been IN WITNESS WHEREOF, the GOVERNMENT SERVICE
made. Rescission necessarily involves a repudiation of the INSURANCE SYSTEM has caused this instrument to be
contract and a refusal of the moving party to be further executed by its Director, Atty. Roque M. Fernando, Jr., at the
bound by it.[20] With the rescission of the deed of sale, etc., City of Manila, Philippines, this _______ day of ______, 19__.
the rights of Emilio Geli under the said deed to redeem the
property had been extinguished. The petitioners cannot GOVERNMENT SERVICE INSURANCE SYSTEM
even be compelled to subrogate the respondents to their
rights under the real estate mortgage over the property Mortgagee-Purchaser
which the petitioners executed in favor of the GSIS since the
payment of the P67,701.84 redemption price was made By: Sgd.
without the knowledge of the petitioners. [21] The
respondents, however, are entitled to be reimbursed by the ROQUE M. FERNANDO, JR.
petitioners to the extent that the latter were benefited.[22]
in his capacity as Director[23]
Neither did the respondents acquire title to the property
under the certificate of redemption executed by the GSIS Second. Case law has it that the one-year period within
on February 10, 1998. which the mortgagor-debtor or his successor-in-interest may
redeem the property should be counted from the time the
First. In the certificate of redemption, the mortgagor- certificate of sale was registered with the Register of Deeds.
debtor in whose favor the certificate was executed was the [24]
Upon the lapse of the one-year period, the right to
petitioner Arturo Serrano and not Emilio Geli and/or the redeem becomes functus officio on the date of its expiry.
respondents: [25]
The rule on redemption is actually liberally construed in
favor of the original owner of the property. The purpose of
NOW, THEREFORE, for and in consideration of the foregoing the law is to aid rather than to defeat him in the exercise of
premises and the sum of SIXTY-SEVEN THOUSAND SEVEN his right of redemption.[26] Before the lapse of the one-year
period, the mortgagor-debtor remains the owner of the name of the petitioner Arturo Serrano. As the Latin maxim
property. The right acquired by the purchaser at public goes: NEMO DAT QUOD NON HABET.
auction is merely inchoate until the period of redemption
has expired without the right being exercised by the We are not convinced by the ratiocination of the
redemptioner.[27] Such right becomes absolute only after the respondents that the enforcement of the summary decision
expiration of the redemption period without the right of of the trial court and the alias writ of execution against them
redemption having been exercised. [28] The purchaser is is unjust and unreasonable.
entitled as a matter of right to consolidation of title and to
the possession of the property.[29] Where redemption is The Spouses Geli and the respondents, as heirs and
seasonably exercised by the mortgagor-debtor, what is successors-in-interest of the said spouses, were obliged
actually effected is not the recovery of ownership of his under the deed of absolute sale with partial assumption of
land, which ownership he never lost, but the elimination mortgage to pay to the GSIS the balance of the petitioners
from his title thereto of the lien created by the registration account. The Spouses Geli reneged on their
of a mortgage thereon.[30] undertaking. The petitioners were impelled to secure the
services of counsel and sue the Spouses Geli with the RTC
Upon the expiry of the redemption period without the for the rescission of the said deed with damages. The
mortgagor-debtor being able to redeem the property, the respondent spouses nevertheless remained adamant and
purchaser can no longer be compelled to allow the former to refused to pay the petitioners account with the GSIS which
redeem the property or to resell the property; and if he impelled the latter to foreclose the real estate mortgage and
agrees to sell the property, it may be for a price higher than sell the property at public auction. Emilio Geli and the
that for which he purchased the property at public auction. respondents did not inform the CA and the petitioners that
[31]
Emilio Geli had paid the amount of P67,701.84 for the
account of the petitioners. The respondents even allowed
In this case, there is no showing in the records that the their appeal to be dismissed by the CA, and the dismissal to
sheriffs certificate of sale in favor of the GSIS had been become final and executory. The petitioners were impelled
registered in the Office of the Register of Deeds of Quezon to spend money for their counsel and for sheriffs fees for the
City and if so, when it was in fact registered in the said implementation of the writ of execution and the alias writ of
office. It cannot thus be argued that when Emilio Geli execution issued by the trial court. In the meantime, the
remitted the amount of P67,701.84 to the GSIS in full respondents remained in possession of the property from
payment of the account of the petitioners, the one-year 1969, when the said deed of absolute sale with partial
period to redeem the property had by then lapsed. Hence, assumption of mortgage was executed, up to the present, or
the petitioners remained the owners of the property. The for a period of 34 years without paying a single centavo. For
GSIS never acquired title over the property and could not the Court to allow the respondents to benefit from their own
have conveyed and transferred ownership over the same wrong would run counter to the maxim: Ex Dolo Malo Non
when it executed the certificate of redemption to and in the Oritur Actio (No man can be allowed to found a claim upon
his own wrongdoing).[32] Equity is applied only in the petitioners are obliged to refund the said amount to the
absence of and never against statutory law or judicial rules respondents.
of procedure.[33] We reiterate our ruling that:
IN LIGHT OF ALL THE FOREGOING, the petition is
Justice is done according to law. As a rule, equity follows the GRANTED. The assailed decision of the Court of Appeals
law. There may be a moral obligation, often regarded as an dated May 12, 1998 in CA-G.R. SP No. 45573 is SET ASIDE
equitable consideration (meaning compassion), but if there AND REVERSED. The petitioners Spouses Serrano are
is no enforceable legal duty, the action must fail although obliged to refund to the respondents, as heirs of Emilio S.
the disadvantaged party deserves commiseration or Geli, the amount of P67,701.84 to be deducted from the
sympathy. amount due to the petitioners under the September 6, 1984
Decision of the Regional Trial Court, Quezon City, in Civil
The choice between what is legally just and what is morally Case No. Q-24790.
just, when these two options do not coincide, is explained by
Justice Moreland in Vales v. Villa, 35 Phil. 769, 788 where he SO ORDERED.
said:
Puno, (Chairman), Quisumbing, Austria-
Courts operate not because one person has been defeated Martinez, and Tinga, JJ., concur.
or overcome by another, but because he has been defeated
or overcome illegally. Men may do foolish things, make
ridiculous contracts, use miserable judgment, and lose
money by themindeed, all they have in the world; but not THIRD DIVISION
for that alone can the law intervene and restore. There must
be in addition, a violation of law, the commission of what the [G.R. No. 151325. June 27, 2005]
law knows as an actionable wrong before the courts are
authorized to lay hold of the situation and remedy it. (Rural D ARMOURED SECURITY AND INVESTIGATION AGENCY,
Bank of Paraaque, Inc. v. Remolado, 62051, March 18, 1985) INC., petitioner, vs. ARNULFO ORPIA,
(135 SCRA 409, 412).[34] respondents.

In sum then, the respondents, as heirs of Emilio Geli, DECISION


are obliged to vacate the subject property. However, since
the petitioners were benefited to the extent of P67,701.84 SANDOVAL-GUTIERREZ, J.:
which was the total amount paid by Emilio Geli to the GSIS
as redemption price for the foreclosed property, the For resolution is a petition for review on certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, as amended,
assailing the Decision[1] dated December 18, 2001 rendered underpayment, overtime pay, legal holiday pay, service
by the Court of Appeals in CA-G.R. SP No. 61799, incentive leave pay, 13th month pay, illegal deduction and
entitled DArmoured Security and Investigation Agency, Inc. refund of firearms bond, as indicated in Annex A.
vs. National Labor Relations Commission, Arbiter Ariel C.
Santos, NLRC Sheriff Ricardo Perona, Arnulfo Orpia, Finally, ten (10%) percent of all sums owing to complainants
Ludovico Abucejo, Rowel Aguro, Efren Almoete, Romeo is hereby awarded as attorneys fees.
Amista, Warlito Balgosa, Romeo Balingbing, Ramon Barroa,
Monteclaro Batawil, Arnel Bon, Ricardo Capentes, Danilo SO ORDERED.
Dada, Joel dela Cruz, Hernando delos Reyes, Florentino
delos Trino, Rogelio Duerme, Nonito Estrellado, Joseph From the said Decision, Fortune Tobacco interposed an
Falceso, Isidro Flores, Victor Gungon, Sonny Julba, Patricio appeal to the National Labor Relations Commission (NLRC).
Lacana, Jr., Felix Lascona, Juanito Luna, Raul Lozadas, Petitioner did not appeal. On March 26, 1999, the NLRC
Rommel Magbanua, Rogelio Maribung, Nicolas Mendoza, rendered its Decision affirming with modification the
Ezvener Ogana, Ricky Orano, Reynaldo Ozaraga, Samuel assailed Arbiters Decision in the sense that the complaint
Padilla, Edwin Parreno, Ireneo Partolan, Juan Pigtuan, against Fortune Tobacco was dismissed. This Decision
Guillermo Pusing, Rodel Sibal, Silvestre Soledad, Jovener became final and executory. Thus, the award specified in the
Tever, Virgilio Timajo, Emilio Tomarong, Jr., Virgilio Verdeflor Decision of the Arbiter became the sole liability of petitioner.
and Joerex Victorino.
The records were then remanded to the Arbiter for
On February 9, 1995, the above-named respondents, execution.
who were employed as security guards by DArmoured
Security and Investigation Agency, Inc., petitioner, and Upon respondents motion, the Arbiter issued a writ of
assigned to Fortune Tobacco, Inc. (Fortune Tobacco), filed execution. Eventually, the sheriff served a writ of
with the Labor Arbiter a complaint for illegal dismissal and garnishment upon the Chief Accountant of Foremost Farms,
various monetary claims against petitioner and Fortune Inc., a corporation with whom petitioner has an existing
Tobacco, docketed as NLRC-NCR Case No. 00-02-01148-95. services agreement. Thus, petitioners receivables with
Foremost were garnished.
On June 11, 1998, the Labor Arbiter rendered a
Decision, the dispositive portion of which reads: Petitioner filed with the NLRC a Motion to Quash/Recall
Writ of Execution and Garnishment which was opposed by
WHEREFORE, premises considered, all the respondents respondents.
except Antonio Cabangon Chua are jointly and severally
liable to pay complainants the total sum of ONE MILLION
SEVENTY SEVEN THOUSAND ONE HUNDRED TWENTY FOUR
AND TWENTY NINE CENTAVOS (P1,077,124.29) for
On March 10, 2000, the Arbiter issued an Order denying Assuming that an appeal is proper, still we have to deny
the motion and directing the sheriff to release the garnished the instant petition. Section 1, Rule IV of the NLRC Manual
sum of money to respondents pro rata. on Execution of Judgment provides:

Petitioners motion for reconsideration was denied, Rule IV


hence, it interposed an appeal to the NLRC.
EXECUTION
In a Resolution dated July 27, 2000, the NLRC dismissed
the appeal for petitioners failure to post a bond within the SECTION 1. Properties exempt from execution. Only the
reglementary period. Its motion for reconsideration was properties of the losing party shall be the subject of
denied in a Resolution dated September 25, 2000. execution, except:

Forthwith, petitioner filed with the Court of Appeals a (a) The losing partys family home constituted in accordance
petition for certiorari and prohibition with prayer for with the Civil Code or Family Code or as may be provided for
issuance of a writ of preliminary injunction. by law or in the absence thereof, the homestead in which he
resides, and land necessarily used in connection therewith,
In a Decision dated December 18, 2001, the Court of subject to the limits fixed by law;
Appeals dismissed the petition.
(b) His necessary clothing, and that of his family;
Hence, this petition for review on certiorari.
(c) Household furniture and utensils necessary for
In this petition, the issue posed is whether the Court of housekeeping, and used for that purpose by the losing party
Appeals erred in holding that petitioners monthly such as he may select, of a value not exceeding the amount
receivables from the Foremost Farms, Inc. (garnishee) are fixed by law;
not exempt from execution.
(d) Provisions for individual or family use sufficient for three
The petition lacks merit. We have ruled that an order (3) months;
of execution of a final and executory judgment, as in
this case, is not appealable, otherwise, there would (e) The professional libraries of attorneys, judges,
be no end to litigation. [2] On this ground alone, the physicians, pharmacists, dentists, engineers, surveyors,
instant petition is dismissible. clergymen, teachers, and other professionals, not exceeding
the amount fixed by law;
(f) So much of the earnings of the losing party for his months preceding the levy as are necessary for the support
personal services within the month preceding the levy as of his family.
are necessary for the support of his family;
The exemption under this procedural rule should be read in
(g) All monies, benefits, privileges, or annuities accruing or conjunction with the Civil Code, the substantive law which
in any manner growing out of any life insurance; proscribes the execution of employees wages, thus:

(h) Tools and instruments necessarily used by him in his ART. 1708. The laborers wage shall not be subject to
trade or employment of a value not exceeding three execution or attachment, except for debts incurred for food,
thousand (P3,000.00) pesos; shelter, clothing and medical attendance.

(i) Other properties especially exempted by law. Obviously, the exemption under Rule 39 of the Rules of
Court and Article 1708 of the New Civil Code is meant to
The above Rule clearly enumerates what properties are favor only laboring men or women whose works are manual.
exempt from execution. It is apparent that the exemption Persons belonging to this class usually look to the reward of
pertains only to natural persons and not to juridical entities. a days labor for immediate or present support, and such
On this point, the Court of Appeals correctly ruled that persons are more in need of the exemption than any other
petitioner, being a corporate entity, does not fall within the [Gaa vs. Court of Appeals, 140 SCRA 304 (1985)].
exemption, thus:
In this context, exemptions under this rule are confined only
We cannot accede to petitioners position that the garnished to natural persons and not to juridical entities such as
amount is exempt from execution. petitioner. Thus, the rule speaks of salaries, wages and
earning from the personal services rendered by the
Section 13 of Rule 39 of the Rules of Court is plain and clear judgment obligor. The rule further requires that such
on what properties are exempt from execution. Section 13 earnings be intended for the support of the judgment
(i) of the Rules pertinently reads: debtors family.

SECTION 13. Property exempt from execution. Except as Necessarily, petitioner which is a corporate entity, does not
otherwise expressly provided by law, the following property, fall under the exemption. If at all, the exemption refers to
and no other, shall be exempt from execution: petitioners individual employees and not to petitioner as a
corporation.
(i) So much of the salaries, wages or earnings of the
judgment obligor for his personal services within the four x x x. Parenthetically, in a parallel case where a security
agency claimed that the guns it gives to its guards are tools
and implements exempt from execution, the Supreme Court
had the occasion to rule that the exemption pertains only to
natural and not to juridical persons, thus: SECOND DIVISION

However, it would appear that the exemption contemplated [G.R. No. 157616. July 22, 2005]
by the provision involved is personal, available only to a
natural person, such as a dentists dental chair and electric ISIDRO PEREZ and NARCISO A. RAGUA, petitioners,
fan (Belen v. de Leon, G.R. No. L-15612, 30 Nov. 1962). As vs. HON. COURT OF APPEALS, , respondents.
pointed out by the Solicitor General, if properties used in
business are exempt from execution, there can hardly be an DECISION
instance when a judgment claim can be enforced against
the business entity [Pentagon Security and Investigation CALLEJO, SR., J.:
Agency vs. Jimenez, 192 SCRA 492 (1990)].
The spouses Gaudencio Digos, Jr. and Rhodora Digos
It stands to reason that only natural persons whose salaries, secured a loan of P5,800,000.00 from the International
wages and earnings are indispensable for his own and that Exchange Bank in December 1996, to finance their project
of his familys support are exempted under Section 13 (i) of for the construction of townhouses on their property covered
Rule 39 of the Rules of Court. Undeniably, a corporate entity by Transfer Certificate of Title (TCT) No. 168790 located in
such as petitioner security agency is not covered by the Tandang Sora, Quezon City. To secure the payment of the
exemption. loan, the spouses Digos executed a Real Estate Mortgage
over the said property. However, the completion of their
WHEREFORE, the petition is hereby DISMISSED. project was delayed, partly because some homeowners in
the Pillarville Subdivision (which abutted the subject
SO ORDERED. property) refused to allow them to build an access road
through the subdivision to the property. Thus, the equipment
WHEREFORE, the petition is DENIED. The assailed to be used for the project could not pass through the
Decision dated December 18, 2001 of the Court of Appeals Pillarville Subdivision.
in CA-G.R. SP No. 61799 is AFFIRMED IN TOTO. Costs against
petitioner. Because of the spouses Digos failure to pay the
amortizations on their loan, the bank caused the
SO ORDERED. extrajudicial foreclosure of their real estate mortgage.
Consequently, the property was sold at public auction, with
Panganiban, (Chairman), Corona, Carpio- the bank as the highest bidder at P4,500,000.00, which
Morales, and Garcia, JJ., concur. appeared to be the account of the spouses Digos at the
time. The Certificate of Sale executed by the sheriff was, In their complaint, the spouses Digos alleged, inter alia,
thereafter, registered at the Office of the Register of Deeds that they were denied their right to due process because the
on September 7, 1998.[1] foreclosure of the real estate mortgage was extrajudicial;
the sale of their property at public auction was without prior
In the meantime, the spouses Digos referred the matter notice to them; the property was sold for
of the right of way to the barangay captain for settlement. only P4,500,000.00, the balance of their account with the
Due to the vehement objections of some Pillarville bank, but about 400% lower than the prevailing price of the
Subdivision homeowners, the barangay captain failed to property; the bank rejected their plea for a five-month
resolve the matter.[2] extension to redeem, and their offer of P1,000,000.00 in
partial payment of their loan account to reduce the same
On July 2, 1999, the spouses Digos wrote the bank, to P3,500,000.00, but the bank granted them an extension
requesting for a period of six (6) months from September 7, of only one month to redeem the property, designed to
1999 within which to redeem the property. [3] However, the divest them of the same and enrich some characters at their
bank denied the request. On August 3, 1999, the spouses expense; because of the foregoing acts of the bank, they
again wrote to the bank, pleading for an extension of at suffered sleepless nights, nervous tension and the rise in
least three (3) months to redeem the property. [4] In a their blood pressure for which they were entitled to moral
Letter[5] to the spouses dated August 30, 1999, the bank damages in the amount of P500,000.00, aside from the
granted the spouses Digos a period of one month from exemplary damages they were entitled to in the amount
September 8, 1999 (or until October 8, 1999) within which of P100,000.00.
to redeem the property. However, the bank consolidated its
title over the property, and on September 19, 1999, the The spouses Digos prayed for a temporary restraining
Register of Deeds issued TCT No. 206979 in the name of the order to enjoin the bank from consolidating its title over the
bank. property, and that judgment be rendered in their favor, thus:

Instead of repurchasing the property on or before 2. Ordering the defendant Bank to allow plaintiffs to
October 8, 1999, the spouses Digos filed a redeem their property;
Complaint[6] against the bank on October 7, 1999 with the
Regional Trial Court (RTC) of Quezon City, for the nullification 3. Making the writ of injunction permanent;
of the extrajudicial foreclosure of the real estate mortgage
and sale at public auction and/or redemption of the 4. Ordering the defendant Bank to pay moral
property, with a prayer for a temporary restraining order damages of P500,000.00;
and a writ of preliminary injunction to enjoin the bank from
consolidating its title over the property. The spouses Digos 5. Ordering defendant Bank to pay exemplary
also sought judgment for damages. damages of P200,000.00;
6. Ordering defendant Bank to pay attorneys fee period for the redemption of the property was about to
of P30,000.00 plus P2,000.00 for every expire, and that they were given up to October 8, 1999
appearance in Court; within which to do so. The court held that it had no authority
to extend the period for redemption, and since it had
Plaintiffs further pray for such other reliefs and remedies already expired, the spouses had no more right to redeem
available within the premises.[7] the property; as such, the defendant had the right to
consolidate its title over the property, and had, in fact, been
The case (first complaint, for brevity) was docketed as issued TCT No. 206979. The court also declared that the
Civil Case No. Q-99-38941. The spouses Digos caused the spouses Digos had no right to demand that they be allowed
annotation of a notice of lis pendens at the dorsal portion of to redeem the property.
TCT No. 206979. The trial court, however, did not issue a
temporary restraining order or writ of preliminary injunction. Finally, since the act sought to be enjoined the
consolidation of the banks title was already fait accompli,
Meanwhile, the bank filed a motion to dismiss the the spouses Digos had no cause of action for injunction.
[9]
complaint and for the cancellation of the notice of lis The trial court ruled that a writ of injunction cannot issue
pendens on the following grounds: to enjoin a consummated act.[10] It, thus, ordered the
cancellation of the notice of lis pendens annotated at the
1. The action for injunction has already been dorsal portion of TCT No. 206979.
rendered moot and academic, title to the
foreclosed property having been consolidated in The spouses Digos failed to appeal the order; instead,
iBanks name; they filed a petition for certiorari with the Court of Appeals
(CA), assailing the Order of the RTC. The CA dismissed the
2. Assuming arguendo that title to the foreclosed petition because it was filed out of time. The petitioners
property has not yet been consolidated, still then filed a motion for reconsideration thereof, which they
plaintiffs have no cause of action for injunction later withdrew via a motion. The CA then resolved to grant
against iBank.[8] the motion; hence, the CA resolution dismissing the petition
became final and executory on May 7, 2001. Entry of
The spouses Digos opposed the motion. The bank filed a judgment was made of record.[11]
reply, appending thereto a copy of TCT No. 206979 in its
name. Meanwhile, the bank sold the property to Isidro Perez
and Narciso Ragua to whom the Register of Deeds issued
In an Order dated December 9, 1999, the trial court TCT No. 211888. The vendees caused the subdivision of the
granted the motion and dismissed the complaint. It found property into eighteen (18) lots. The Register of Deeds
that the spouses Digos admitted in their complaint that the issued titles for each subdivision lot in favor of Perez and
Ragua.[12]
On June 4, 2001, the spouses Digos filed a 2. to pay plaintiffs the amount of ONE MILLION AND FIVE
Complaint[13] with the RTC of Quezon City, this time, against HUNDRED THOUSAND PESOS (P1,500,000.00), as and by
the bank, Perez and Ragua, for the cancellation and way of moral damages;
annulment of the extrajudicial foreclosure of the real estate
mortgage executed by them in favor of the bank, the sale at 3. to pay plaintiffs the amount of ONE HUNDRED THOUSAND
public auction as well as the certificate of sale executed by PESOS (P100,000.00), as and by way of exemplary
the sheriff, and the Torrens title issued to them. The spouses damages;
Digos prayed for a writ of preliminary injunction and a
temporary restraining order. The petitory portion of the 4. to pay plaintiffs the amount of FIVE HUNDRED THOUSAND
complaint reads: PESOS (P500,000.00), as and by way of attorneys fees; and,

WHEREFORE, premises considered, it is most respectfully 5. to pay the expenses of litigation and costs of suit.
prayed of this Honorable Court that immediately upon the
filing of the instant complaint, a temporary restraining order Plaintiffs further pray for other reliefs, just and equitable,
be issued, and after hearing, a writ of preliminary injunction under the circumstances.[14]
issue, enjoining defendants PEREZ and RAGUA from further
disposing of the subject property. The spouses Digos reiterated the allegations in their
complaint in Civil Case No. Q-99-38941 that they were not
Likewise, it is most respectfully prayed of this Honorable notified of the sale at public auction, and that the
Court that, after due hearing, judgment be rendered banks P4,500,000.00 bid for the property was
ordering the CANCELLATION and ANNULMENT of the unconscionably low compared to the prevailing market price
extrajudicial foreclosure of sale, the Sheriffs Certificate of of P25,000,000.00. They also admitted their failure to pay
Sale and the consolidated title under the name of defendant their amortization on their loans. However, they alleged this
bank, as well as the transfer certificate/s of title issued or time that the extrajudicial foreclosure of the real estate
under the name of defendants iBANK, PEREZ and RAGUA; mortgage and the sale at public auction
were illegal because the bank charged much more than the
Further, it is most respectfully prayed also that judgment be amount due on their loan account, to wit: interest of 26%
rendered ordering the defendants: per annum on the loan account covering January 2, 1998,
whereas under the promissory note executed in favor of the
1. to pay plaintiffs the amount of FIVE HUNDRED THOUSAND bank, the new interest rate should commence only on March
[PESOS] (P500,000.00), as and by way of actual expenses: 4, 1993; penalty charges of 26% of the account, and 5%
penalty charges on top of the 26% interest per annum, as
shown by the banks statement of account. The spouses
Digos also averred that although they pleaded for a
restructuring of their loan account and a moratorium on the The bank alleged that the spouses Digos admitted in
payment of their account, they were unaware of the their complaint that, after the extrajudicial foreclosure of the
erroneous computation of the balance of their loan account. real estate mortgage and the sale of the property at public
They maintained that the banks consolidation of its title auction, they pleaded to redeem the property but failed to
over the property on September 19, 1999 was premature do so and were granted a one-month extension. The bank
because they were given until October 8, 1999 to redeem averred that, based on the said allegations, the spouses
the property. were estopped from assailing the extrajudicial foreclosure of
the real estate mortgage, the sale at public auction and the
The spouses Digos also alleged that as a consequence Torrens title issued to it; hence, they had no cause of action.
of the banks acts, they incurred actual damages It further alleged that the spouses Digos already assailed
of P500,000.00, sustained moral damages of P1,500,000.00, the extrajudicial foreclosure of the real estate mortgage and
and were entitled to exemplary damages for P100,000.00.[15] the sale of the property at public auction on account of lack
of due process and arbitrary abuse in their first complaint;
The case was docketed as Civil Case No. Q-01-44227. they again sought to do so in this case, this time grounded
The defendant bank filed a motion to dismiss the complaint on the invalid foreclosure of the real estate mortgage, and
on the following grounds: the sale at public auction of the property for an amount in
excess of the balance of the loan account. The bank argued
A. THE PLAINTIFFS HAVE NO CAUSE OF ACTION that, in so doing, the spouses Digos were guilty of splitting a
AGAINST DEFENDANTS, THEY BEING ESTOPPED single cause of action which is proscribed by Rule 2, Section
FROM QUESTIONING THE REGULARITY OF THE 4 of the Rules of Court; they were, likewise, barred by res
EXTRAJUDICIAL FORECLOSURE SALE. judicata from filing the second complaint for the same
causes of action, even if additional defendants were
B. PLAINTIFFS HAVE VIOLATED THE RULE AGAINST impleaded. Consequently, the spouses Digos were also
SPLITTING A SINGLE CAUSE OF ACTION UNDER guilty of forum shopping.[17]
SECTION 4, RULE 2 OF THE RULES OF COURT IN
INSTITUTING THE INSTANT CASE. Perez and Ragua filed a motion to dismiss on similar
grounds of res judicata, splitting of a single cause of action
C. PLAINTIFFS ARE GUILTY OF FORUM SHOPPING. and forum shopping.[18]

D. PLAINTIFFS ARE GUILTY OF FALSE CERTIFICATION On June 29, 2001, the trial court issued an
AGAINST FORUM SHOPPING, IN VIOLATION OF Order[19] denying the motion, ruling that there was no
SECTION 5, RULE 7 OF THE RULES OF COURT. identity of issue in the two actions because, in the second
[16] complaint (docketed as Civil Case No. Q-01-44227), the
spouses Digos assailed the legality of the extrajudicial
foreclosure, on the sole ground that the bank had unlawfully
increased their obligation, contrary to the terms and Petitioners Isidro Perez and Narciso Ragua forthwith filed
conditions of the loan contract. The court held that the the instant petition for review on certiorari, raising the
causes of action in the two complaints were not identical: in following issues:
the first case, it was for the redemption of the mortgaged
property, distinct and separate from their cause of action in WHETHER OR NOT THE JUDGMENT IN CIVIL CASE NO. Q-99-
the second case which is rooted on the erroneous [38941] (REDEMPTION OF MORTGAGE) IS RES JUDICATA TO
computation of the balance of their loan account with the CIVIL CASE NO. Q-01-44227 (CANCELLATION AND
bank. The court also declared that in the first complaint, the ANNULMENT OF FORECLOSURE SALE)?
spouses Digos assailed the validity or regularity of the
extrajudicial foreclosure of the real estate mortgage and the WHETHER OR NOT THE PRIVATE RESPONDENTS ARE
sale at public auction. Consequently, the court concluded, ALREADY ESTOPPED FROM ATTACKING THE VALIDITY OF THE
the complaint was not barred by res judicata; nor are they FORECLOSURE SALE?[24]
guilty of forum shopping.
It is the contention of the petitioners that the private
The trial court denied the defendants motion for respondents (the plaintiffs in both actions in the RTC) are
reconsideration in its Order[20] dated December 6, 2001; guilty of splitting their cause of action. The petitioners point
hence, they filed a petition[21] for certiorari, prohibition and out that the private respondents failed to pray for the
mandamus with the CA, alleging therein that the respondent nullification of the extrajudicial foreclosure and sale at public
judge committed a grave abuse of his discretion amounting auction in their first action, and did so only in their second
to excess or lack of jurisdiction in denying their motion to complaint. For such failure, the second action was barred
dismiss the complaint. by res judicata, conformably with Section 4, Rule 2 of the
Rules of Court. The petitioners point out that the issue of the
On November 25, 2002, the CA rendered judgment computation of the respondents balance on their loan
dismissing the petition and affirming the assailed orders. account had already been passed upon and resolved by the
The appellate court declared that there was no identity of court in the first case, and, as such, can no longer be
causes of action in the two cases because the first action assailed in the second case. The petitioners likewise
was one for injunction and redemption of the property, maintain that the validity of the foreclosure of the real
whereas the second action was for the nullification of the estate mortgage and sale at public auction was raised and
extrajudicial foreclosure of the real estate mortgage and the resolved in the first case. The petitioners insist that the
sale at public auction due to the erroneous computation of private respondents were barred from assailing the
the balance on the respondents account with the bank; extrajudicial foreclosure of the real estate mortgage and the
hence, the spouses Digos were not estopped from filing their sale at public auction of the property in favor of the bank.
second action.[22] The petitioners filed a motion for a They further point out that the private respondents
reconsideration of the said decision, which the appellate repeatedly requested the bank for extensions to redeem the
court denied.[23]
property; such requests were eventually granted but the Otherwise stated, if two separate and distinct primary rights
private respondents still failed to redeem the property. are violated by one and the same wrong; or if the single
primary right should be violated by two distinct and
For their part, the private respondents aver that their separate legal wrongs; or when the two primary rights are
action in the first case was for the grant of an extension to each broken by a separate and distinct wrongs; in either
redeem the property and avert the banks act of case, two causes of action would result. [28] Causes of action
consolidating its title over the property, while their action in which are distinct and independent, although arising out of
the second case was for the nullification of the extrajudicial the same contract, transaction or state of fact may be sued
foreclosure of the real estate mortgage and the sale of the separately, recovery on one being no bar to subsequent
property at public auction on account of the arbitrary, actions on the others.
unlawful and baseless imposition of unconscionable re-
priced interest rates on their loan account. They aver that The mere fact that the same relief is sought in the
there can be no conclusiveness of judgment in the first subsequent action will not render the judgment in the prior
action because the issues in the two cases are not identical. action as res judicata.[29] Causes of action are not
They insist that the issues in the first case are not being distinguishable for purposes of res judicata by difference in
relitigated in the second case; hence, their second action is the claims for relief.[30]
not barred by res judicata, nor did they split their cause of
action. Comparing the material averments of the two
complaints, it would appear that separate primary rights of
The Ruling of the Court the respondents were violated by the banks institution of a
petition for extrajudicial foreclosure of the real estate
Splitting a single cause of action consists in dividing a mortgage and the sale at public auction; hence, the
single or indivisible cause of action into several parts or respondents had separate and independent causes of action
claims and instituting two or more actions therein. [25] A against the bank, to wit: (a) the first complaint relates to the
single cause of action or entire claim or demand cannot be violation by the bank of the right to a judicial, not
split up or divided so as to be made the subject of two or extrajudicial, foreclosure of the real estate mortgage and for
more different actions.[26] an extension of the period for the respondents to redeem
the property with damages; (b) the second complaint relates
A single act or omission may be violative of various to the breach by the bank of its loan contract with the
rights at the same time, such as when the act constitutes a respondents by causing the extrajudicial foreclosure of the
violation of separate and distinct legal obligations. [27] The real estate mortgage for P4,500,000.00 which was in excess
violation of each of these rights is a cause of action in itself. of their unpaid account with the bank.
However, if only one right may be violated by several acts or
omissions, there would only be one cause of action. However, we are convinced that the institution by the
respondents of their second complaint anchored on their
claim that the bank breached its loan contracts with them Section 49(b) enunciates the first concept of res
by erroneously computing the actual and correct balance of judicata, known as bar by prior judgment or estoppel by
their account when the petition for extrajudicial foreclosure judgment, which refers to a theory or matter that has been
of the real estate mortgage was filed by it designed to avert definitely and finally settled on its merits by a court of
the dismissal of their complaint due to splitting causes of competent jurisdiction without fraud or collusion.
action and res judicata, following the dismissal of their first
complaint and the dismissal of their appeal through their There are four (4) essential requisites which must
negligence. The Court is constrained to conclude that this concur for the application of this doctrine:
was a last-ditch attempt to resuscitate their lost cause, a
brazen violation of the principle of res judicata. (a) finality of the former judgment;

Section 49(b)(c), Rule 39 of the Rules of Court provides (b) the court which rendered it had jurisdiction over the
in part: subject matter and the parties;

SEC. 49. Effect of judgments. The effect of a judgment or (c) it must be a judgment on the merits; and
final order rendered by a court or judge of the Philippines,
having jurisdiction to pronounce the judgment or order, may (d) there must be, between the first and second actions,
be as follows: identity of parties, subject matter and causes of
action.[31]
(b) In other cases the judgment or order is, with respect to
the matter directly adjudged or as to any other matter that A judgment or order is on the merits of the case when it
could have been raised in relation thereto, conclusive determines the rights and liabilities of the parties based on
between the parties and their successors in interest by title the ultimate facts as disclosed by the pleadings or issues
subsequent to the commencement of the action or special presented for trial. It is not necessary that a trial, actual
proceeding, litigating for the same thing and under the hearing or argument on the facts of the case ensued. For as
same title and in the same capacity. long as the parties had the full legal opportunity to be heard
on their respective claims and contentions, the judgment or
(c) In any other litigation between the same parties or their order is on the merits. [32] An order of the trial court on the
successors in interest, that only is deemed to have been ground that the complaint does not state a cause of action
adjudged in a former judgment which appears upon its face is a determination of the case on its merits. [33] Such order
to have been so adjudged, or which was actually and whether right or wrong bars another action based upon the
necessarily included therein or necessary thereto. same cause of action.[34] The operation of the order as res
judicata is not affected by a mere right of appeal where the
appeal has not been taken or by an appeal which never has conclusive in the second if that same point or question was
been perfected.[35] in issue and adjudicated in the first suit; but the adjudication
of an issue in the first case is not conclusive of an entirely
Indeed, absolute identity of parties is not a different and distinct issue arising in the second. In order
condition sine qua non for the application of res judicata. It that this rule may be applied, it must clearly and positively
is sufficient that there is a shared identity of interest. [36] The appear, either from the record itself or by the aid of
rule is that, even if new parties are found in the second competent extrinsic evidence that the precise point or
action, res judicata still applies if the party against whom question in issue in the second suit was involved and
the judgment is offered in evidence was a party in the first decided in the first. And in determining whether a given
action; otherwise, a case can always be renewed by the question was an issue in the prior action, it is proper to look
mere expedience of joining new parties in the new suit. [37] behind the judgment to ascertain whether the evidence
necessary to sustain a judgment in the second action would
The ultimate test to ascertain identity of causes of have authorized a judgment for the same party in the first
action is whether or not the same evidence fully supports action.[39]
and establishes both the first and second cases. The
application of the doctrine of res judicata cannot be excused In the present case, before the private respondents filed
by merely varying the form of the action or engaging a their first complaint, they already knew that the balance of
different method of presenting the issue.[38] their account with the bank was P4,500,000.00. They even
offered to make a P1,000,000.00 partial payment of their
Section 49(c) of Rule 39 enumerates the concept of loan to reduce their account to P3,500,000.00. These are
conclusiveness of judgment. This is the second branch, gleaned from the averments in the first complaint:
otherwise known as collateral estoppel or estoppel by
verdict. This applies where, between the first case wherein 7. That the long process of negotiation for the right-of-way
judgment is rendered and the second case wherein such has unnecessarily delayed the project of the plaintiffs and
judgment is involved, there is no identity of causes of has nearly caused the foreclosure of the mortgage property
action. As explained by this Court: by the private defendant Bank, however, the said
foreclosure was held in abeyance when plaintiffs offered to
It has been held that in order that a judgment in one action pay the additional amount of P1,000,000.00 which should
can be conclusive as to a particular matter in another action leave a balance of the loan in the amount of P3,500,000.00;
[40]
between the same parties or their privies, it is essential that
the issues be identical. If a particular point or question is in
issue in the second action, and the judgment will depend on 10. That as the auction sale was highly irregular, obviously,
the determination of that particular point or question, a the only bidder is the defendant Bank for the price limited to
former judgment between the same parties will be final and the remaining balance of the loan in the amount
of P4,500,000.00, no more, no less;[41]
More telling is the private respondents failure to object private respondents pleas for extensions of time to redeem
to the extrajudicial foreclosure of the real estate mortgage the subject property are of the same genre.
and the sale at public auction; they even pleaded to be
allowed to redeem the property after it had already been The private respondents admitted in their complaint in
sold at public auction. Patently then, the respondents were the first case that the bank only gave a one-month
proscribed from claiming that the foreclosure of the real extension to redeem the property. Indeed, they made this
estate mortgage was for an amount in excess of the balance declaration in their letter to the bank, dated July 2, 1999,
of their account and that the sale at public auction was copy of which was appended to their complaint (and thus
irregular/illegal. As the Court held in Aclon v. Court of made an integral part thereof), to wit:
Appeals:[42]
Mr. Sonny Justiniano
In the absence of evidence proving that a judgment debtor
was merely trying to protect himself or save his property, Acquired Assets
and that no reliance could or should have been placed upon
his action in so doing, an attempt to redeem from an International Exchange Bank
execution sale has been construed as a waiver of defects or
irregularities therein, precluding him from relying upon them Salcedo Tower
for the purpose of challenging its validity. When Aclon
sought to redeem his property from PNB he never made any 169 H.V. De la Costa St.,
reservation with respect to his right to question the validity
of the auction sale and to seek alternative relief before the Salcedo Village, Makati City
courts. In other words, there was no indication whatsoever
that he does not recognize the validity of the sale. If Dear Sir:
petitioner indeed felt that the assailed foreclosure
proceedings were attended with any irregularity he should
Your deadline of September 7, 1999 is already fast
have filed the appropriate action with the court. Instead, he
approaching. Our action program to redeem the property
offered to repurchase the subject properties without any
has been stalled due to the infighting of the homeowners
condition or reservation. Nevertheless, Aclon failed to
association members. We were not permitted to build
comply with his undertaking and instead defaulted in his
access road to the property. They wont allow our equipment
subsequent payments.
to pass and start work unless we get the approval of all the
members. At present, there are two factions and they are at
Redemption is inconsistent with the claim of invalidity of odds with each. Either side does not recognize the existence
the sale. Redemption is an implied admission of the of the other. Our only option at the moment is to go to court
regularity of the sale and would estop the respondents from and you know very well that this takes time.
later impugning its validity on that ground. [43] Thus, the
Our interested buyers wont budge unless they see recourse to enable them to redeem the property despite the
improvements in the property like in place drainage system lapse of the one-year period therefor.
and access road. We are ready to start work, however, the
association has prevented us based on [the] above-stated Relying on these admissions on the part of the private
reasons. respondents, and the fact that the bank has already
consolidated its title over the property, the Court thus
We have no other alternative but to once again appeal to dismissed their first complaint. The Order of the Court
you. We respectfully request for an extension of six months dismissing the first complaint is a judgment of the case on
from September 7, 1999 to enable us to sort the association the merits.
problem by court proceedings and place in motion our
action program to redeem the property. The attempt of the respondents in their second
complaint to avoid the application of the principle of res
We pray that your kind heart will once again grant our judicata by claiming the nature of their account on the
request. ground therefor and their legal theory cannot prosper. Case
law has it that where a right, question or fact is distinctly put
Thank you very much. in issue and directly determined by a court of competent
jurisdiction in a first case, between the same parties or their
Very truly yours, privies, the former adjudication of that fact, right or question
is binding on the parties or their privies in a second suit
(Sgd.) irrespective of whether the causes of action are the same.
[45]
The ruling of the CA that the action of the private
GAUDENCIO DIGOS[44] respondents and their legal theory in their second complaint
were different from their causes of action and legal theory in
If indeed the bank made an erroneous computation of the first complaint is not correct. A different cause of action
the balance of their account as claimed by the private is one that proceeds not only on a sufficiently different legal
respondents in their second complaint, this should have theory, but also on a different factual footing as not to
been alleged in the first complaint as one of their causes of require the trial of facts material to the former suit; that is,
action. They failed to do so. The private respondents an action that can be maintained even if all disputed factual
unequivocably admitted in their first complaint that the issues raised in the plaintiffs original complaint are
balance of their account with the bank was P4,500,000.00 concluded in defendants favor.[46]
which was the precise amount for which the bank sought
the foreclosure of the real estate mortgage and the sale of In this case, the private respondents second complaint
the property at public auction; they even sought judicial cannot be maintained without trying the facts material to
the first case, and the second case cannot be maintained if
all the disputed factual issues raised in the first complaint A party seeking to enforce a claim, legal or equitable,
are considered in favor of the bank. must present to the court, either by the pleadings or proofs,
or both, on the grounds upon which to expect a judgment in
The principle of res judicata applies when the his favor. He is not at liberty to split up his demands, and
opportunity to raise an issue in the first complaint exists but prosecute it by piecemeal or present only a portion of the
the plaintiff failed to do so. Indeed, if the pleading of a grounds upon which a special relief is sought and leave the
different legal theory would have convinced the trial court to rest to the presentment in a second suit if the first fails.
decide a particular issue in the first action which, with the There would be no end to litigation if such piecemeal
use of diligence the plaintiffs could have raised therein but presentation is allowed.[54]
failed to do so, they are barred by res judicata.[47] Nor do
legal theories operate to constitute a cause of action. New IN LIGHT OF ALL THE FOREGOING, the petition is
legal theories do not amount to a new cause of action so as GRANTED. The Decision and Resolution of the Court of
to defeat the application of the principle of res judicata.[48] Appeals and the assailed Order of the RTC are SET ASIDE.
The Regional Trial Court is ORDERED to dismiss the
Indeed, in Siegel v. Knott,[49] it was held that the complaint in Civil Case No. Q-01-44227.
statement of a different form of liability is not a different
cause of action, provided it grows out of the same SO ORDERED.
transaction or act and seeks redress for the wrong. Two
actions are not necessarily for different causes of action Puno, (Chairman), Austria-Martinez, Tinga, and Chico-
simply because the theory of the second would not have Nazario, JJ., concur.
been open under the pleadings in the first. A party cannot
preserve the right to bring a second action after the loss of
the first, merely by having circumscribed and limited
theories of recovery opened by the pleadings in the first.[50] FIRST DIVISION

It bears stressing that a party cannot divide the grounds FAR EAST BANK AND TRUST GR No. 129130
for recovery.[51] A plaintiff is mandated to place in issue in his COMPANY,
pleading, all the issues existing when the suit began. A Petitioner,
lawsuit cannot be tried piecemeal.[52] The plaintiff is bound - versus
to set forth in his first action every ground for relief which he COURT OF APPEALS, COURT OF
claims to exist and upon which he relied, and cannot be TAX APPEALS and COMMISSIONER OF INTERNAL REVENUE,
Respondents.
permitted to rely upon them by piecemeal in successive
x
action to recover for the same wrong or injury. [53] ------------------------------------------------------------------------------------
---- x
DECISION Thus, petitioner, being the surviving entity of the
merger, filed this Petition for Review after its
AZCUNA, J.: administrative claim for refund was not acted upon.[1]

This is a Petition for Review on Certiorari assailing the In denying petitioners claim, the CA held that the
decision of the Court of Appeals (CA) dated May 7, 1997 in evidence presented by petitioner consisting of (1)
CA-G.R. SP No. 41666. confirmation receipts, payment orders, and official receipts
issued by the Central Bank and the BIR with CDB as the
The CA affirmed in toto the decision of the Court of payor; [2] (2) Income Tax Returns for 1990 and 1991 with
Tax Appeals (CTA) dated January 24, 1996 and its resolution attached financial statements filed by petitioner with the
of July 31, 1996, dismissing petitioner Far East Bank and BIR;[3] and, (3) a list prepared by the Accounting Department
Trust Companys claim for refund of excess creditable of petitioner purportedly showing the CDB schedule of
withholding taxes in the aggregate amount of Seven creditable withholding tax applied for refund for 1990 and
Hundred Fifty-Five Thousand Seven Hundred and Fifteen 1991,[4] all failed to clearly establish that the taxes arising
Pesos (P755,715) allegedly paid and remitted to the Bureau from the sale of its acquired assets sometime in 1990 and
of Internal Revenue (BIR) sometime in 1990 and 1991. 1991 were properly withheld and remitted to the BIR. The
CA likewise ruled that it was incumbent upon petitioner to
The antecedent facts are as follows: present BIR Form No. 1743.1 as required under Revenue
Regulation 6-85 to conclusively prove its right to the refund.
Petitioner is a domestic banking corporation duly It held that petitioners failure to do so was fatal to its cause.
organized and existing under and by virtue of
Philippine laws. In the early part of 1992, the Cavite Hence, this Petition.
Development Bank [CDB], also a domestic banking
corporation, was merged with Petitioner with the Petitioner anchors its arguments on the following
latter as its surviving entity [under] the merger. grounds:
Petitioner being the surviving entity[, it] acquired all
[the] assets of CDB. 1. THE DECISION OF MAY 7,1997 WHEREBY
RESPONDENT CA DISMISSED PETITIONERS APPEAL,
During the period from 1990 to 1991, CDB sold some AND RESPONDENT CTAS DECISION DATED JANUARY
acquired assets in the course of which it allegedly 24, 1996 AND RESOLUTION OF JULY 31,1996, ARE
withheld the creditable tax from the sales proceeds NOT BASED ON THE FACTS AND THE LAW.
which amounted to P755,715.00.
2. PETITIONER HAS ADDUCED EVIDENCE A
In said years, CDB filed income tax returns which QUO WHICH SUFFICIENTLY AND SUBSTANTIALLY
reflected that CDB incurred negative taxable income ESTABLISH[ES] THE FACT THAT THE CREDITABLE
or losses for both years. Since there was no tax WITHHOLDING TAX ON THE SALE OF ACQUIRED
against which to credit or offset the taxes withheld ASSETS WAS WITHHELD AND THEN REMITTED TO
by CDB, the result was that CDB, according to THE BUREAU OF INTERNAL REVENUE; AND,
petitioner, had excess creditable withholding tax.
3. THE DISMISSAL OF THE CLAIM FOR REFUND findings of the CA which is normally the final arbiter of
BEFORE RESPONDENT CTA ARISES FROM AN UNDULY questions of fact.[9] The findings shall not be reviewed nor
STRICT APPLICATION OF THE REGULATIONS WHICH IS disturbed on appeal[10] unless a party can show that these
NOT WARRANTED IN VIEW OF THE CLEAR PROOFS are not supported by evidence, [11] or when the judgment is
ADDUCED BY PETITIONER WHICH ESTABLISH THE premised on a misapprehension of facts, or when the lower
BASIS FOR THE RELIEFS SOUGHT.[5] courts failed to notice certain relevant facts which if
considered would justify a different conclusion.[12]

Petitioner contends that the confirmation receipts Petitioner has not sufficiently presented a case for
presented by it constitute competent and irrefutable proof of the application of an exception from the rule.
the fact that taxes were withheld and remitted to the BIR.
[6]
It is admitted that the taxes reflected on the confirmation Firstly, the CA cannot be faulted for not lending
receipts as well as on the payment orders and official credence to petitioners contention that it withheld, for its
receipts issued by the BIR were withheld by CDB. Petitioner own account, the creditable withholding taxes on the sale
maintains that these pertained to the proceeds of the sale of of its acquired assets. In our withholding tax system,
its acquired assets in 1990 and 1991. According to possession of the amount that is used to settle the tax
petitioner, CDB took the initiative of paying the withholding liability is acquired by the payor as the withholding agent of
tax accruing thereon notwithstanding the fact that it was the the government.[13] For this reason, the Tax Code imposes,
recipient of the income, to ensure that the correct taxes among others, certain obligations upon the withholding
were remitted to the BIR. Petitioner further argues that the agent to monitor its compliance with this duty. These include
list prepared by its Accounting Department identifying the the filing of the quarterly withholding tax returns,[14] the
persons to whom the various sales were made and submission to the payee, in respect of his or its receipts
indicating the amount of taxes withheld for each transaction during the calendar quarter or year, of a written statement
should have been given more weight by the court a quo as showing the income or other payments made by the
this document, when taken with the tax withholding forms, withholding agent during such quarter or year and the
indubitably establishes the fact of withholding and the basis amount of the tax deducted and withheld therefrom, [15] and
for the claims for refund. [7] Considering, therefore, that the filing with the BIR of a reconciliation statement of
petitioner had adequately established by other evidence the quarterly payments and a list of payees and income
basis for the grant of the claim for tax refund, petitioner payments.[16] Codal provisions on withholding tax are
asserts that its failure to submit BIR Form No. 1743.1 is not mandatory and must be complied with by the withholding
fatal to its cause. agent. This is significant in that a taxpayer cannot be
compelled to answer for the non-performance by the
The crucial issue in this case turns on a question of withholding agent of its legal duty to withhold unless there
fact, that is, whether petitioner adduced sufficient evidence is collusion or bad faith. In addition, the former could not be
to prove its entitlement to a refund. deemed to have evaded the tax had the withholding agent
performed its duty. [17]
The findings of fact of the CTA, a special court
exercising particular expertise on the subject of tax, are On the other hand, it is incumbent upon the payee to
generally regarded as final, binding and conclusive [8] upon reflect in his or its own return the income upon which any
this Court, especially if these are substantially similar to the creditable tax is required to be withheld at the source. Only
when there is an excess of the amount of tax so withheld acquired assets. This is because a cursory
over the tax due on the payees return can a refund become examination of the said Confirmation Receipts,
possible. Payment Orders and Official Receipts will show that
what are reflected therein are merely the names of
A taxpayer must thus do two things to be able to the payors and the amount of tax. The nature of
successfully make a claim for the tax refund: (a) declare the the tax paid, or at the very least, the income
income payments it received as part of its gross income and payments from which the taxes paid were withheld
(b) establish the fact of withholding. [18] On this score, the are not reflected therein. If these are the only
relevant revenue regulation provides as follows: entries that are found on these proferred
documents, We cannot begrudge the Respondent
Court from nurturing veritable doubts on the nature
Section 10. Claims for tax credit or refund. -- Claims and identity of the taxes withheld, when it
for tax credit or refund of income tax deducted and declared, in part, in its Decision (Annex A of the
withheld on income payments shall be given due Petition) that, It can not well be said that the
course only when it is shown on the return that the amounts paid and remitted to the BIR were for
income payment received was declared as part of CDBs account and not for the other possible payees
the gross income and the fact of withholding is of withholding taxes which CDB may also be liable
established by a copy of the statement duly issued to remit as a withholding agent x x x . [20]
by the payor to the payee (BIR Form No. 1743.1)
showing the amount paid and the amount of tax
withheld therefrom.[19] Petitioner, apparently aware of the foregoing
deficiency, offered into evidence a CDB Schedule of
As mentioned, petitioner relies heavily on the Creditable Withholding Tax for the period 1990 to
confirmation receipts with the corresponding official receipts 1991[21] prepared by petitioners representative to show that
and payment orders to support its case. Standing alone, the taxes CDB withheld did, indeed, pertain to the taxes
however, these documents only establish that CDB withheld accruing on the sale of the acquired assets. The CA,
certain amounts in 1990 and 1991. It does not follow that however, found the same to be self-serving and unverifiable
the payments reflected in the confirmation receipts relate to and therefore barren of evidentiary weight. [22] We accord this
the creditable withholding taxes arising from the sale of the finding on an issue of fact the highest respect and we will
acquired properties. The claim that CDB had excess not set it aside lightly.
creditable withholding taxes can only be upheld if it were
clearly and positively shown that the amounts on the It bears emphasis that questions on whether certain
various confirmation receipts were the amounts withheld by items of evidence should be accorded probative value or
virtue of the sale of the acquired assets. On this point, the weight, or rejected as feeble or spurious, or whether the
CA correctly pronounced: proofs on one side or the other are clear and convincing and
adequate to establish a proposition in issue, are without
The confirmation receipts alone, by themselves, will doubt questions of fact. This is true regardless of whether
not suffice to prove that the taxes reflected in the the body of proofs presented by a party, weighed and
income tax returns are the same taxes withheld analyzed in relation to contrary evidence submitted by the
from CDBs income payments from the sale of its adverse party, may be said to be strong, clear and
convincing. Whether certain documents presented by one 90[27] was the reason why CDB took upon itself the task of
side should be accorded full faith and credit in the face of withholding the taxes arising from the sale, to ensure
protests as to their spurious character by the other side; accuracy. Assuming this were true, CDB should have,
whether inconsistencies in the body of proofs of a party are nevertheless, accomplished the necessary returns to clearly
of such gravity as to justify refusing to give said proofs identify the nature of the payments made and file the same
weightall these are issues of fact. Questions like these are with the BIR. Section 2 of the circular clearly provides that
not reviewable by us. As a rule, we confine our review of the amount of withholding tax paid by a corporation to the
cases decided by the CA only to questions of law raised in BIR during the quarter on sales or exchanges of property
the petition and therein distinctly set forth. [23] We note that and which are creditable against the corporations tax
without the CDB Schedule, no evidence links the liability are evidenced by Confirmation/Official Receipts and
Confirmation Receipts, Payment Orders and Official Receipts covered by BIR Form Nos. 1743W and 1743-B. On the other
to the taxes allegedly withheld by CDB on the sale of the hand, Revenue Regulation 6-85 states that BIR Form No.
acquired assets. 1743.1 establishes the fact of withholding. Since no
competent evidence was adduced by petitioner, the failure
As to the annual income tax returns for 1990 and to offer these returns as evidence of the amount of
1991 [24] presented by petitioner, we must stress that the petitioners entitlement during the trial phase of this case is
mere admission into the records of these returns does not fatal to its cause. For its negligence, petitioner cannot be
automatically make their contents or entries undisputed and allowed to seek refuge in a liberal application of the [r]ules.
binding facts. Mere allegations by petitioner of the figures in [28]
The liberal interpretation and application of rules apply
its returns are not a sufficient proof of the amount of its only in proper cases of demonstrable merit and under
refund entitlement. They do not even constitute justifiable causes and circumstances.[29]
evidence adverse to respondent, against whom these are
being presented.[25] We must emphasize that tax refunds, like tax
exemptions, are construed strictly against the taxpayer and
Furthermore, we note that in the proceedings below, liberally in favor of the taxing authority. [30] In the event,
respondent Commissioner of Internal Revenue (CIR) raised petitioner has not met its burden of proof in establishing the
the fact that there was a discrepancy in the excess factual basis for its claim for refund and we find no reason to
creditable withholding tax reflected in the returns with the disturb the ruling of the lower courts.
amounts sought to be refunded by petitioner. Whereas the
1990 and 1991 Income Tax Returns indicated that CDB had WHEREFORE, the petition is DENIED and the
excess creditable withholding tax in the amounts Decision of the Court of Appeals dated May 7, 1997 in CA-
of P535,310 and P357,511, respectively, the amounts G.R. SP No. 41666 is AFFIRMED. No pronouncement as to
claimed by petitioner as indicated in the CDB Schedule costs.
were P512,940.50 for 1990 and P242,774.50 for 1991.
[26]
The records are bereft of any explanation for such
discrepancy. This further undermines petitioners
contentions, and its reliance on the CDB Schedule. SO ORDERED.

Petitioner also asserts that the confusion or difficulty FIRST DIVISION


in the implementation of Revenue Memorandum Circular 7-
ROGELIO (ROGER) PANOTES (thru G.R. No. 154739
ARACELI BUMATAY, as successor-in- In a letter of the same date, then NHA Acting General
interest),Petitioner, Manager Antonio A. Fernando ordered PROSECOR to provide
- versus - Block 40 of the subdivision as open space.
CITY TOWNHOUSE DEVELOPMENT
CORPORATION, PROSECOR was served copies of the NHA Resolution and the
Respondent. letter on August 22, 1980.

x --------------------------------------------------------------------------------------x Considering that PROSECOR did not appeal from the NHA
Resolution, it became final and executory.
DECISION
When Panotes filed a motion for execution of the NHA
SANDOVAL-GUTIERREZ, J.: Resolution, it was found that the records of the case were
mysteriously missing. Hence, his motion was provisionally
dismissed without prejudice.
For our resolution is the instant Petition for Review on
Certiorari assailing the Decision[1] of the Court of Appeals Meanwhile, PROSECOR sold to City Townhouse Development
dated January 29, 2002 in CA-G.R. SP No. 52621 and its Corporation (CTDC), respondent, several lots in the
Resolution[2] dated August 5, 2002 denying the motion for subdivision. Among the lots sold were those comprising
reconsideration. Block 40. CTDC was unaware of the NHA Resolution ordering
PROSECOR to have Block 40 utilized as open space
This case stemmed from a complaint filed with the National of Provident Village.
Housing Authority (NHA) in April 1979 by Rogelio
(Roger) Panotes, petitioner, then president of the Provident Eventually, Panotes was succeeded by Araceli Bumatay as
Village Homeowners Association, Inc., against Provident president of the Provident Village Homeowners Association,
Securities Corporation (PROSECOR), owner-developer of Inc. On July 17, 1990, she filed with the Housing and Land
the Provident Village in Marikina City. The complaint, Use Regulatory Board (HLURB) a complaint for revival of the
docketed as NHA Case No. 4175, alleges that PROSECOR NHA Resolution dated August 14, 1980. Impleaded therein
violated Sections 19, 20, 21, 38, and 39 of Presidential as defendant was CTDC, whom she alleged as successor-in-
Decree (P.D.) No. 957.[3] One of the violations complained of interest of PROSECOR.
was its failure to provide an open space in the said
subdivision. In its answer, CTDC averred, among others, that
(1) Araceli Bumatay has no legal personality to file the
During the proceedings before the NHA, an ocular inspection action for revival of judgment; (2) there is a pending
showed that the subdivision has no open space. The NHA litigation between CTDC and PROSECOR involving Block 40;
found, however, that Block 40, with an area of 22,916 and (3) other entities like the Bangko Sentral Ng Pilipinas
square meters, could be utilized as open space. Thus, in its and Provident Savings Bank have existing liens over Block
Resolution dated August 14, 1980, the NHA directed 40.
PROSECOR to provide the Provident Village an open space
which is Block 40.
On October 15, 1991, the HLURB, through Housing and Land
Use Arbiter Charito M. Bunagan, rendered its Decision in After its motion for reconsideration was denied, CTDC then
favor of Bumatay, reviving the NHA Resolution and declaring interposed an appeal to the Office of the President (OP).
Block 40 of the Provident Village as open space for the said On February 10, 1999, the OP rendered its Decision
subdivision, thus: affirming in toto the judgment of the HLURB Board of
Commissioners. CTDC filed a motion for reconsideration, but
WHEREFORE, premises considered, judgment it was denied in a Resolution dated April 14, 1999.
is hereby rendered declaring Block 40 (with
an area of 22,916 square meters) of the CTDC then filed with the Court of Appeals a petition for
Subdivision Plan Pcs-5683 of the Provident review under Rule 43 of the 1997 Rules of Procedure, as
Villages located at Marikina, Metro Manila as amended, docketed therein as CA-G.R. SP No. 52621.
the legally mandated open space for said
subdivision project; and the Register of In a Resolution[5] dated May 10, 1999, the Court of Appeals
Deeds for Marikina is hereby directed to dismissed CTDCs petition for its failure to attach thereto a
cause the annotation of this fact on the certification against forum shopping. The Court of Appeals
corresponding Torrens Title which describes also found that the petition was not supported by certified
and covers said open space; said area to be true copies of such material portions of the records and
reserved and utilized exclusively in the other pertinent papers referred to in the petition.
manner and for the purposes provided for
under P.D. N0. 957 and P.D. No. 1216.[4] CTDC filed a motion for reconsideration which was opposed
by Bumatay.
Furthermore, let a Cease and Desist Order
be, as it is hereby, issued against respondent On June 10, 1999, CTDC submitted to the Court of Appeals a
Provident Securities Corp. and City certification of non-forum shopping as well as the pleadings
Townhouse Development Corporation, mentioned in its Resolution.
restraining said respondents, and all persons,
agents, or other associations or corporate On July 27, 1999, the Court of Appeals issued a Resolution
entities acting on their behalf, from asserting granting CTDCs motion for reconsideration and reinstated its
or perpetrating any or further acts of petition.
dominion or claim over said Block 40, Pcs-
5683, the open space allocated and reserved On January 29, 2002, the appellate court rendered its
for the Provident Villages in Marikina, Metro Decision reversing the Decision of the OP and dismissing the
Manila. complaint for revival of judgment, thus:

IT IS SO ORDERED. IN VIEW OF ALL THE FOREGOING, finding


merit in this petition for review, the assailed
On appeal to the HLURB Board of Commissioners, Decision of the Office of the President dated
Arbiter Bunagans Decision was affirmed with modification in February 10, 1999, together with its
the sense that CTDC has the right to recover from Resolution dated February 14, 1999 are
PROSECORwhat it has lost. REVERSED and SET ASIDE, and a new one
entered dismissing HLRB Case No. REM-
071790-4052 (NHA Case No. 4175; HLRB It bears stressing that when CTDC bought Block 40, there
Case No. REM-A-1089). Costs against the was no annotation on PROSECORs title showing that the
respondent. property is encumbered. In fact, the NHA Resolution was not
annotated thereon. CTDC is thus a buyer in good faith and
SO ORDERED. for value, and as such, may not be deprived of the
ownership of Block 40. Verily, the NHA Resolution may not
The basic issue for our resolution is whether the NHA be enforced against CTDC.
Resolution dated August 14, 1980 may be enforced against
CTDC. Section 2 of P.D. No. 1216 provides:

An action for revival of judgment is no more than a Section 2. Section 31 of Presidential Decree
procedural means of securing the execution of a previous No. 957 is hereby amended to read as follows:
judgment which has become dormant after the passage of Section 31. Roads, Alleys, Sidewalks and
five years without it being executed upon motion of the Open Spaces. The owner or developer of a
prevailing party. It is not intended to re-open any issue subdivision shall provide adequate roads,
affecting the merits of the judgment debtors case nor the alleys and sidewalks. For subdivision projects
propriety or correctness of the first judgment.[6] of one (1) hectare or more, the owner shall
reserve thirty percent (30%) of the gross area
Here, the original judgment or the NHA Resolution sought to for open space.
be revived was between Rogelio Panotes and PROSECOR, Clearly, providing an open space within the
not between petitioner Araceli Bumatay and respondent subdivision remains to be the obligation of PROSECOR, the
CTDC. owner-developer and the real party-in-interest in the case
for revival of judgment. As aptly held by the Court of
In maintaining that CTDC is bound by the NHA Resolution, Appeals:
petitioner claims that CTDC is the successor-in-interest of Quintessentially, the real party-in-interest in the
PROSECOR and, therefore, assumed the obligations of the revival of NHA Case No. 4175 is PROSECOR and not
latter to provide an open space for Provident Village. CTDC. PROSECOR was the lone defendant or
respondent in that case against whom judgment was
CTDC purchased from PROSECOR Block 40 in the said rendered. To insist that CTDC is a successor-in-
village, not as an owner-developer like PROSECOR, but as an interest of PROSECOR may have some truth if we
ordinary buyer of lots. Even after the sale, CTDC did not are talking about the ownership of the lots sold by
become an owner-developer. The Deed of Sale executed by PROSECOR in favor of CTDC as a result of a civil
CTDC, as buyer, and PROSECOR, as seller, shows that the action between the two. But then, to hold CTDC as
subject matter of the sale is the unsold lots comprising the successor-in-interest of PROSECOR as the
Block 40 within the subdivision to CTDC. The contract does developer of the subdivision, is far from realty. CTDC
not include the transfer of rights of PROSECOR as owner- is simply on the same footing as any lot buyer-
developer of the said subdivision. Clearly, there is no basis member of PVHIA. x x x.
to conclude that CTDC is the successor-in-interest of
PROSECOR.
Furthermore, strangers to a case, like CTDC, are not bound
by the judgment rendered by a court. It will not divest the Emerita Garon (Garon) filed an action for sum of money
rights of a party who has not and never been a party to a docketed as Civil Case No. 99-1051 against Project Movers
litigation. Execution of a judgment can be issued only Realty and Development Corporation (Project Movers) and
against a party to the action and not against one who did Stronghold Insurance Company, Inc. (Stronghold
not have his day in court.[7] Insurance). In an Order[3] dated 19 September 2000, the
Regional Trial Court of Makati City, Branch 56[4] (trial court)
WHEREFORE, we DENY the petition and AFFIRM the granted Garons motion for summary judgment. The trial
assailed Decision and Resolution of the Court of Appeals in court rendered judgment in favor of Garon, as follows:
CA-G.R. SP No. 52621. Costs against petitioner.
1. Defendant Project Movers Realty and
SO ORDERED. Development Corporation is hereby
directed to pay plaintiff as follows:

THIRD DIVISION On Promissory Note No. PMRDC 97-12-332:

(A) The sum of PESOS: Six Million Eighty Eight


STRONGHOLD INSURANCE G.R. No. 148090 Thousand Seven Hundred Eighty Three and 68/100
COMPANY, INC., (P6,088,783.68) under PMRDC-97-12-332;
Petitioner,
VS. (B) Interest thereon at 36% per annum computed
HONORABLE NEMESIO S. FELIX and from 19 December 1997 until fully paid;
EMERITA GARON,
Respondents. November 28, 2006 (C) A penalty of 3% per month computed from 03
November 1998 until full payment on all unpaid
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - amounts consisting of the principal and interest.
-----------
DECISION On Promissory Note No. PMRDC No. 97-12-
333:

CARPIO, J.: (A) The peso equivalent of the sum of DOLLARS: One
Hundred Eighty Nine Thousand Four Hundred
Eighteen and 75/100 (US$189,418.75) under PMRDC-
The Case 97-12-333;
Before the Court is a petition for review [1] assailing the 4
May 2001 Decision[2] of the Court of Appeals in CA-G.R. SP (B) Interest thereon at the stipulated rate of 17% per
No. 63334. annum computed from 31 December 1997;

The Antecedent Facts


(C) A penalty of 3% per month computed from 03 On 16 February 2001, Stronghold Insurance filed a notice of
November 1998 until full payment on all unpaid appeal.
amounts consisting of the principal and interest.
2. Defendant Stronghold Insurance Company, Inc. Stronghold Insurance also filed a petition for certiorari
is hereby held jointly and solidarily liable to plaintiff before the Court of Appeals to assail the trial courts 8
Mrs. Garon in the amount of PESOS: TWELVE MILLION February 2001 Order and the writ of execution pending
SEVEN HUNDRED appeal. In its Resolution[8] of 23 February 2001, the Court of
FIFTY FIVE THOUSAND ONE HUNDRED THIRTY Appeals enjoined the trial court, Jamora and Garon from
NINE AND EIGHTY FIVE CENTAVOS (P12,755,139.85). enforcing the 8 February 2001 Order. However, it turned out
that notices of garnishment had been served before the
3. Defendants Project Movers Realty Court of Appeals issued the temporary restraining order
and Development Corporation and Stronghold (TRO). In its Order[9] dated 7 March 2001, the trial court
Insurance Company, Inc. denied Stronghold Insurances Urgent Motion for the recall of
are also ordered to pay plaintiff Mrs. Garon jointly the notices of garnishment.
and severally the sum of PESOS: TWO HUNDRED
THOUSAND as attorneys fees plus costs of suit. The Ruling of the Court of Appeals

All other claims and counter-claims of the parties are In its 4 May 2001 Decision, the Court of Appeals dismissed
hereby ordered dismissed. the petition of Stronghold Insurance and lifted the TRO it
issued.
SO ORDERED.[5]
The Court of Appeals sustained the trial court in issuing the
On 6 October 2000, Garon filed a motion for execution writ of execution pending appeal on the ground of illness
pending appeal. On 10 October 2000, Stronghold Insurance of Garons husband. Citing Articles 68[10] and 195[11] of the
moved for the reconsideration of the 19 September Family Code, the Court of Appeals held that while it was
2000 Order of the trial court. not Garon who was ill, Garon needed the money to support
her husbands medical expenses and to support her family.
In an Order[6] dated 23 January 2001, the trial court denied
Stronghold Insurances motion for reconsideration for lack of Stronghold Insurance alleged that its liability is limited only
merit. to P12,755,139.85 in accordance with its surety bond
with Project Movers, plus attorneys fees of P200,000 as
In an Order[7] dated 8 February 2001, the trial court awarded by the trial court. However, the amount in the writ
granted Garons motion for execution pending appeal. The of execution pending appeal and notices of garnishment
trial court ordered Garon to post a bond of P20 million to is P56 million. Nevertheless, the Court of Appeals ruled that
answer for any damage that Project Movers and Stronghold Stronghold Insurance failed to show that more
Insurance may sustain by reason of the execution pending than P12,755,139.85 had been garnished.
appeal. On 14 February 2001, Branch Clerk of Court Richard Hence, the petition before this Court.
C. Jamora (Jamora) issued a writ of execution pending
appeal. In its Resolution[12] dated 8 August 2001, this Court issued a
TRO to restrain and enjoin the enforcement of the 8
February 2001 Order and the writ of execution pending Execution pending appeal is an exception to the general
appeal until further orders from this Court. rule. The Court explained the nature of execution pending
appeal as follows:

The Issue Execution pending appeal is an extraordinary


remedy, being more of the exception rather
The sole issue is whether there are good reasons to than the rule. This rule is strictly construed
justify execution pending appeal. against the movant because courts look with
disfavor upon any attempt to execute a
judgment which has not acquired finality. Such
The Ruling of This Court execution affects the rights of the parties
which are yet to be ascertained on appeal.[13]
The petition has merit.
The requisites for the grant of an execution of a judgment
Requisites of Execution Pending Appeal pending appeal are the following:

Execution pending appeal is governed by paragraph (a), (a) there must be a motion by the prevailing party with
Section 2, Rule 39 of the 1997 Rules of Civil Procedure notice to the adverse party;
(Rules) which provides:
(b) there must be good reasons for execution pending
SEC. 2. Discretionary execution. - appeal;

(a) Execution of a judgment or final order pending (c) the good reasons must be stated in the special order.[14]
appeal. - On motion of the prevailing party with
notice to the adverse party filed in the trial court As a discretionary execution, execution pending appeal is
while it has jurisdiction over the case and is in permissible only when good reasons exist for immediately
possession of either the original record or the record executing the judgment before finality or pending appeal or
on appeal, as the case may be, at the time of the even before the expiration of the period to appeal. [15] Good
filing of such motion, said court may, in its discretion, reasons, special, important, pressing reasons must exist to
order execution of a judgment or final order even justify execution pending appeal; otherwise, instead of an
before the expiration of the period to appeal. instrument of solicitude and justice, it may well become a
tool of oppression and inequality. [16] Good reasons consist of
After the trial court has lost jurisdiction, the motion exceptional circumstances of such urgency as to outweigh
for execution pending appeal may be filed in the the injury or damage that the losing party may suffer should
appellate court. the appealed judgment be reversed later.[17]

Discretionary execution may only issue upon good Existence of Good Grounds to Justify Execution
reasons to be stated in a special order after due Pending Appeal
hearing.
In this case, Garon anchors the motion for execution Home Insurance Company vs. Court of Appeals, 184
pending appeal on the following grounds: SCRA 318).

(a) any appeal which Project Movers and Stronghold The second ground relied upon by plaintiff is also
Insurance may take from the summary judgment would be impressed with merit. In Ma-ao Sugar Central
patently dilatory; vs. Canete, 19 SCRA 646, the Supreme Court held
(b) the ill health of Garons spouse and the spouses urgent that the movant was entitled to execution pending
need for the funds owed to them by Project Movers and appeal of an award of compensation, ruling that his ill
Stronghold Insurance constitute good reasons for execution health and urgent need for the funds so awarded
pending appeal; and were considered good reasons to justify execution
pending appeal (See also De Leon vs. Soriano, 95
(c) Garon is ready and willing to post a bond to answer for Phil. 806).
any damage Project Movers and Stronghold Insurance may
suffer should the trial courts decision be reversed on appeal. It is established that plaintiffs spouse, Mr.
[18]
Robert Garon, suffers from coronary artery disease,
benign Prostatic Hyperplasia and hyperlipidemia. He
In granting the motion for execution pending appeal, the is undergoing continuous treatment for the foregoing
trial court ruled: ailments and has been constrained to make serious
lifestyle changes, that he can no longer actively earn
A perusal of [t]he records of the instant case will a living. As shown in plaintiffs verified motion, she
sustain plaintiffs claim that defendants raised no has urgent need of the funds owed to her by
valid or meritorious defenses against the claims of defendants in order to answer for her husbands
plaintiff. The Court notes with interest the fact that medical expenses and for the day-to-day support of
defendants admitted the genuineness and due the family considering her husbands ill health. The
execution of the Promissory Notes and Surety Court therefore finds and holds that there exists good
Agreement sued upon in this case. reasons warranting an execution pending appeal.[19]

The instant case simply turns on the issues of (i) The trial court ruled that an appeal from its 19 September
whether or not there was a valid, due and 2000 Order is only a ploy to delay the proceedings of the
demandable obligation and (ii) whether or not the case. However, the authority to determine whether an
obligation had been extinguished in the manner appeal is dilatory lies with the appellate court. [20] The trial
provided for under our laws. The Answers of courts assumption that the appeal is dilatory prematurely
defendants contained admissions that the obligation judges the merits of the main case on appeal.[21] Thus:
was valid and subsisting and that the same was due
and unpaid. Founded as it is on Promissory Notes and Well-settled is the rule that it is not for the trial court
Surety Agreements, the authenticity and due to determine the merit of a decision it rendered as
execution of which had been admitted, the Court is this is the role of the appellate Court. Hence, it is not
convinced that plaintiff is entitled to a judgment in within the competence of the trial court, in resolving
her favor and that any appeal therefrom will the motion for execution pending appeal, to rule that
obviously be a ploy to delay the proceedings (See the appeal is patently dilatory and to rely on the
same as the basis for finding good reason to grant agreement was valid only during Asuncions lifetime.The
the motion.[22] Court considered that Sorianos health was delicate and she
was 75 years old at that time. Hence, execution pending
In a Decision[23] promulgated on 7 May 2004 in CA-G.R. CV appeal was justified. In this case, it was not Garon, but her
No. 69962 entitled Emerita Garon v. Project Movers Realty husband, who was ill.
and Development Corporation, et al., the Court of Appeals
sustained the trial court in rendering the summary judgment The posting of a bond, standing alone and absent the good
in Civil Case No. 99-1051. However, the Court of Appeals reasons required under Section 2, Rule 39 of the Rules, is
ruled that Stronghold Insurance could not be not enough to allow execution pending appeal. The mere
held solidarily liable with Project Movers. The Court of filing of a bond by a successful party is not a good reason to
Appeals ruled that the surety bond between Project Movers justify execution pending appeal as a combination of
and Stronghold Insurance expired on 7 November 1998 circumstances is the dominant consideration which impels
before the maturity of Project Movers loans on 17 December the grant of immediate execution.[26] The bond is only an
1998 and 31 December 1998, respectively. Hence, when the additional factor for the protection of the defendants
loans matured, the liability of Stronghold Insurance had long creditor.[27]
ceased. The Court of Appeals affirmed the trial courts 19
September 2000 Order with modification by ruling that The exercise of the power to grant or deny a motion for
Stronghold Insurance is not liable to Garon. execution pending appeal is addressed to the sound
discretion of the trial court.[28] However, the existence of
The 7 May 2004 Decision of the Court of Appeals is not yet good reasons is indispensable to the grant of execution
final. It is the subject of a petition for review filed pending appeal.[29] Here, Garon failed to advance good
by Garon before this Court. The case, docketed as G.R. No. reasons that would justify the execution pending appeal.
166058, is still pending with this Court. While this Court may Execution Pending Appeal against Stronghold
either affirm or reverse the 7 May 2004 Decision of the Insurance Exceeds its Liability under the Trial Courts
Court of Appeals, the fact that the Court of Appeals absolved Order
Stronghold Insurance from liability to Garon shows that the
appeal from the 19 September 2000 Order is not dilatory on The dispositive portion of the trial courts 19 September
the part of Stronghold Insurance. 2000 Order states:

We agree with Stronghold Insurance that Garon failed to WHEREFORE, premises considered[,] this Court
present good reasons to justify execution pending hereby renders judgment in favor of the plaintiff
appeal. The situations in the cases cited by the trial court Mrs. Emerita I. Garon as follows:
are not similar to this case. In Ma-Ao Sugar Central Co., Inc.
v. Caete,[24] Caete filed an action for compensation for his 2. Defendant Stronghold Insurance Company, Inc. is
illness. The Workmens Compensation Commission found the hereby held jointly and solidarily liable to plaintiff
illness compensable. Considering Caetes physical condition Mrs. Garon in the amount of PESOS: TWELVE MILLION
and the Courts finding that he was in constant danger of SEVEN HUNDRED FIFTY FIVE THOUSAND ONE
death, the Court allowed execution pending appeal. In De HUNDRED THIRTY NINE AND EIGHTY FIVE CENTAVOS
Leon, et al. v. Soriano, et al.,[25] De Leon, et al. defaulted on (P12,755,139.85).
an agreement that was peculiarly personal to Asuncion. The
3. Defendants Project Movers Realty and SO ORDERED.
Development Corporation and Stronghold Insurance
Company, Inc. are also ordered to pay plaintiff
Mrs. Garon jointly and severally the sum of Republic of the Philippines
PESOS: TWO HUNDRED THOUSAND as attorneys fees SUPREME COURT
plus costs of suit. Manila

The writ of execution pending appeal issued against Project


SECOND DIVISION
Movers and Stronghold Insurance is for P56 million.
[31]
However, the Court of Appeals ruled that Stronghold
Insurance failed to show that more than P12,755,139.85 had G.R. No. 196049 June 26, 2013
been garnished. The ruling of the Court of Appeals unduly
burdens Stronghold Insurance because the amount MINORU FUJIKI, PETITIONER,
garnished could exceed its liability. It gives the sheriff the vs.
discretion to garnish more than P12,755,139.85 from the
MARIA PAZ GALELA MARINAY, RESPONDENTS.
accounts of Stronghold Insurance. The amount for
garnishment is no longer ministerial on the part of the
sheriff. This is not allowed. Thus: DECISION

Leaving to the Sheriff, as held by the Court of CARPIO, J.:


Appeals, the determination of the exact amount due
under the Writ would be tantamount to vesting such
The Case
officer with judicial powers. He would have to receive
evidence to determine the exact amount owing. In
his hands would be placed a broad discretion that This is a direct recourse to this Court from the Regional Trial
can only lead to delay and open the door to possible Court (RTC), Branch 107, Quezon City, through a petition for
abuse. The orderly administration of justice requires review on certiorari under Rule 45 of the Rules of Court on a
that the amount on execution be determined pure question of law. The petition assails the Order1 dated
judicially and the duties of the Sheriff confined to
31 January 2011 of the RTC in Civil Case No. Q-11-68582 and
purely ministerial ones.[32]
its Resolution dated 2 March 2011 denying petitioners
Motion for Reconsideration. The RTC dismissed the petition
WHEREFORE, we SET ASIDE the 4 May 2001 Decision of for "Judicial Recognition of Foreign Judgment (or Decree of
the Court of Appeals in CA-G.R. SP No. 63334. We also SET Absolute Nullity of Marriage)" based on improper venue and
ASIDE the 8 February 2001 Order of the Regional Trial Court the lack of personality of petitioner, Minoru Fujiki, to file the
of Makati City, Branch 56 and the writ of execution pending petition.
appeal issued on 14 February 2001. We make permanent
the temporary restraining order we issued on 8 August
2001. The Facts
Petitioner Minoru Fujiki (Fujiki) is a Japanese national who A few days after the filing of the petition, the RTC
married respondent Maria Paz Galela Marinay (Marinay) in immediately issued an Order dismissing the petition and
the Philippines2 on 23 January 2004. The marriage did not sit withdrawing the case from its active civil docket.7 The RTC
well with petitioners parents. Thus, Fujiki could not bring his cited the following provisions of the Rule on Declaration of
wife to Japan where he resides. Eventually, they lost contact Absolute Nullity of Void Marriages and Annulment of
with each other. Voidable Marriages (A.M. No. 02-11-10-SC):

In 2008, Marinay met another Japanese, Shinichi Maekara Sec. 2. Petition for declaration of absolute nullity of void
(Maekara). Without the first marriage being dissolved, marriages.
Marinay and Maekara were married on 15 May 2008 in
Quezon City, Philippines. Maekara brought Marinay to Japan. (a) Who may file. A petition for declaration of absolute
However, Marinay allegedly suffered physical abuse from nullity of void marriage may be filed solely by the husband
Maekara. She left Maekara and started to contact Fujiki.3 or the wife.

Fujiki and Marinay met in Japan and they were able to Sec. 4. Venue. The petition shall be filed in the Family
reestablish their relationship. In 2010, Fujiki helped Marinay Court of the province or city where the petitioner or the
obtain a judgment from a family court in Japan which respondent has been residing for at least six months prior to
declared the marriage between Marinay and Maekara void the date of filing, or in the case of a non-resident
on the ground of bigamy.4 On 14 January 2011, Fujiki filed a respondent, where he may be found in the Philippines, at
petition in the RTC entitled: "Judicial Recognition of Foreign the election of the petitioner. x x x
Judgment (or Decree of Absolute Nullity of Marriage)." Fujiki
prayed that (1) the Japanese Family Court judgment be The RTC ruled, without further explanation, that the petition
recognized; (2) that the bigamous marriage between was in "gross violation" of the above provisions. The trial
Marinay and Maekara be declared void ab initio under court based its dismissal on Section 5(4) of A.M. No. 02-11-
Articles 35(4) and 41 of the Family Code of the 10-SC which provides that "[f]ailure to comply with any of
Philippines;5 and (3) for the RTC to direct the Local Civil the preceding requirements may be a ground for immediate
Registrar of Quezon City to annotate the Japanese Family dismissal of the petition."8 Apparently, the RTC took the view
Court judgment on the Certificate of Marriage between that only "the husband or the wife," in this case either
Marinay and Maekara and to endorse such annotation to the Maekara or Marinay, can file the petition to declare their
Office of the Administrator and Civil Registrar General in the marriage void, and not Fujiki.
National Statistics Office (NSO).6
Fujiki moved that the Order be reconsidered. He argued that
The Ruling of the Regional Trial Court A.M. No. 02-11-10-SC contemplated ordinary civil actions for
declaration of nullity and annulment of marriage. Thus, A.M.
No. 02-11-10-SC does not apply. A petition for recognition of of marriage to send a copy of the final decree of the court to
foreign judgment is a special proceeding, which "seeks to the local registrar of the municipality where the dissolved or
establish a status, a right or a particular fact," 9 and not a annulled marriage was solemnized."17 Section 2 of Rule 108
civil action which is "for the enforcement or protection of a provides that entries in the civil registry relating to
right, or the prevention or redress of a wrong." 10 In other "marriages," "judgments of annulments of marriage" and
words, the petition in the RTC sought to establish (1) the "judgments declaring marriages void from the beginning"
status and concomitant rights of Fujiki and Marinay as are subject to cancellation or correction.18 The petition in the
husband and wife and (2) the fact of the rendition of the RTC sought (among others) to annotate the judgment of the
Japanese Family Court judgment declaring the marriage Japanese Family Court on the certificate of marriage
between Marinay and Maekara as void on the ground of between Marinay and Maekara.
bigamy. The petitioner contended that the Japanese
judgment was consistent with Article 35(4) of the Family Fujikis motion for reconsideration in the RTC also asserted
Code of the Philippines11on bigamy and was therefore that the trial court "gravely erred" when, on its own, it
entitled to recognition by Philippine courts.12 dismissed the petition based on improper venue. Fujiki
stated that the RTC may be confusing the concept of venue
In any case, it was also Fujikis view that A.M. No. 02-11-10- with the concept of jurisdiction, because it is lack of
SC applied only to void marriages under Article 36 of the jurisdiction which allows a court to dismiss a case on its
Family Code on the ground of psychological own. Fujiki cited Dacoycoy v. Intermediate Appellate
incapacity.13 Thus, Section 2(a) of A.M. No. 02-11-10-SC Court19 which held that the "trial court cannot pre-empt the
provides that "a petition for declaration of absolute nullity of defendants prerogative to object to the improper laying of
void marriages may be filed solely by the husband or the the venue by motu proprio dismissing the case."20Moreover,
wife." To apply Section 2(a) in bigamy would be absurd petitioner alleged that the trial court should not have
because only the guilty parties would be permitted to sue. In "immediately dismissed" the petition under Section 5 of A.M.
the words of Fujiki, "[i]t is not, of course, difficult to realize No. 02-11-10-SC because he substantially complied with the
that the party interested in having a bigamous marriage provision.
declared a nullity would be the husband in the prior, pre-
existing marriage."14 Fujiki had material interest and On 2 March 2011, the RTC resolved to deny petitioners
therefore the personality to nullify a bigamous marriage. motion for reconsideration. In its Resolution, the RTC stated
that A.M. No. 02-11-10-SC applies because the petitioner, in
Fujiki argued that Rule 108 (Cancellation or Correction of effect, prays for a decree of absolute nullity of
Entries in the Civil Registry) of the Rules of Court is marriage.21 The trial court reiterated its two grounds for
applicable. Rule 108 is the "procedural implementation" of dismissal, i.e. lack of personality to sue and improper venue
the Civil Register Law (Act No. 3753)15 in relation to Article under Sections 2(a) and 4 of A.M. No. 02-11-10-SC. The RTC
413 of the Civil Code.16 The Civil Register Law imposes a considered Fujiki as a "third person"22 in the proceeding
duty on the "successful petitioner for divorce or annulment because he "is not the husband in the decree of divorce
issued by the Japanese Family Court, which he now seeks to On 30 May 2011, the Court required respondents to file their
be judicially recognized, x x x."23 On the other hand, the RTC comment on the petition for review.30 The public
did not explain its ground of impropriety of venue. It only respondents, the Local Civil Registrar of Quezon City and the
said that "[a]lthough the Court cited Sec. 4 (Venue) x x x as Administrator and Civil Registrar General of the NSO,
a ground for dismissal of this case[,] it should be taken participated through the Office of the Solicitor General.
together with the other ground cited by the Court x x x Instead of a comment, the Solicitor General filed a
which is Sec. 2(a) x x x."24 Manifestation and Motion.31

The RTC further justified its motu proprio dismissal of the The Solicitor General agreed with the petition. He prayed
petition based on Braza v. The City Civil Registrar of that the RTCs "pronouncement that the petitioner failed to
Himamaylan City, Negros Occidental.25 The Court in Braza comply with x x x A.M. No. 02-11-10-SC x x x be set aside"
ruled that "[i]n a special proceeding for correction of entry and that the case be reinstated in the trial court for further
under Rule 108 (Cancellation or Correction of Entries in the proceedings.32 The Solicitor General argued that Fujiki, as
Original Registry), the trial court has no jurisdiction to nullify the spouse of the first marriage, is an injured party who can
marriages x x x."26 Braza emphasized that the "validity of sue to declare the bigamous marriage between Marinay and
marriages as well as legitimacy and filiation can be Maekara void. The Solicitor General cited Juliano-Llave v.
questioned only in a direct action seasonably filed by the Republic33 which held that Section 2(a) of A.M. No. 02-11-10-
proper party, and not through a collateral attack such as [a] SC does not apply in cases of bigamy. In Juliano-Llave, this
petition [for correction of entry] x x x."27 Court explained:

The RTC considered the petition as a collateral attack on the [t]he subsequent spouse may only be expected to take
validity of marriage between Marinay and Maekara. The trial action if he or she had only discovered during the connubial
court held that this is a "jurisdictional ground" to dismiss the period that the marriage was bigamous, and especially if the
petition.28 Moreover, the verification and certification against conjugal bliss had already vanished. Should parties in a
forum shopping of the petition was not authenticated as subsequent marriage benefit from the bigamous marriage, it
required under Section 529 of A.M. No. 02-11-10-SC. Hence, would not be expected that they would file an action to
this also warranted the "immediate dismissal" of the petition declare the marriage void and thus, in such circumstance,
under the same provision. the "injured spouse" who should be given a legal remedy is
the one in a subsisting previous marriage. The latter is
The Manifestation and Motion of the Office of the clearly the aggrieved party as the bigamous marriage not
Solicitor General and the Letters of Marinay and only threatens the financial and the property ownership
Maekara aspect of the prior marriage but most of all, it causes an
emotional burden to the prior spouse. The subsequent
marriage will always be a reminder of the infidelity of the
spouse and the disregard of the prior marriage which Marinay and Maekara individually sent letters to the Court to
sanctity is protected by the Constitution.34 comply with the directive for them to comment on the
petition.42 Maekara wrote that Marinay concealed from him
The Solicitor General contended that the petition to the fact that she was previously married to Fujiki.43Maekara
recognize the Japanese Family Court judgment may be made also denied that he inflicted any form of violence on
in a Rule 108 proceeding.35 In Corpuz v. Santo Tomas,36 this Marinay.44 On the other hand, Marinay wrote that she had no
Court held that "[t]he recognition of the foreign divorce reason to oppose the petition.45 She would like to maintain
decree may be made in a Rule 108 proceeding itself, as the her silence for fear that anything she say might cause
object of special proceedings (such as that in Rule 108 of misunderstanding between her and Fujiki.46
the Rules of Court) is precisely to establish the status or
right of a party or a particular The Issues
fact."37 While Corpuz concerned a foreign divorce decree, in
the present case the Japanese Family Court judgment also Petitioner raises the following legal issues:
affected the civil status of the parties, especially Marinay,
who is a Filipino citizen. (1) Whether the Rule on Declaration of Absolute Nullity of
Void Marriages and Annulment of Voidable Marriages (A.M.
The Solicitor General asserted that Rule 108 of the Rules of No. 02-11-10-SC) is applicable.
Court is the procedure to record "[a]cts, events and judicial
decrees concerning the civil status of persons" in the civil (2) Whether a husband or wife of a prior marriage can file a
registry as required by Article 407 of the Civil Code. In other petition to recognize a foreign judgment nullifying the
words, "[t]he law requires the entry in the civil registry of subsequent marriage between his or her spouse and a
judicial decrees that produce legal consequences upon a foreign citizen on the ground of bigamy.
persons legal capacity and status x x x."38 The Japanese
Family Court judgment directly bears on the civil status of a (3) Whether the Regional Trial Court can recognize the
Filipino citizen and should therefore be proven as a fact in a foreign judgment in a proceeding for cancellation or
Rule 108 proceeding. correction of entries in the Civil Registry under Rule 108 of
the Rules of Court.
Moreover, the Solicitor General argued that there is no
jurisdictional infirmity in assailing a void marriage under The Ruling of the Court
Rule 108, citing De Castro v. De Castro39 and Nial v.
Bayadog40 which declared that "[t]he validity of a void We grant the petition.
marriage may be collaterally attacked."41
The Rule on Declaration of Absolute Nullity of Void Marriages
and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC)
does not apply in a petition to recognize a foreign judgment issues."57 The interpretation of the RTC is tantamount to
relating to the status of a marriage where one of the parties relitigating the case on the merits. In Mijares v.
is a citizen of a foreign country. Moreover, in Juliano-Llave v. Raada,58 this Court explained that "[i]f every judgment of a
Republic,47 this Court held that the rule in A.M. No. 02-11-10- foreign court were reviewable on the merits, the plaintiff
SC that only the husband or wife can file a declaration of would be forced back on his/her original cause of action,
nullity or annulment of marriage "does not apply if the rendering immaterial the previously concluded litigation."59
reason behind the petition is bigamy."48
A foreign judgment relating to the status of a marriage
I. affects the civil status, condition and legal capacity of its
parties. However, the effect of a foreign judgment is not
For Philippine courts to recognize a foreign judgment automatic. To extend the effect of a foreign judgment in the
relating to the status of a marriage where one of the parties Philippines, Philippine courts must determine if the foreign
is a citizen of a foreign country, the petitioner only needs to judgment is consistent with domestic public policy and other
prove the foreign judgment as a fact under the Rules of mandatory laws.60 Article 15 of the Civil Code provides that
Court. To be more specific, a copy of the foreign judgment "[l]aws relating to family rights and duties, or to the status,
may be admitted in evidence and proven as a fact under condition and legal capacity of persons are binding upon
Rule 132, Sections 24 and 25, in relation to Rule 39, Section citizens of the Philippines, even though living abroad." This
48(b) of the Rules of Court.49 Petitioner may prove the is the rule of lex nationalii in private international law. Thus,
Japanese Family Court judgment through (1) an official the Philippine State may require, for effectivity in the
publication or (2) a certification or copy attested by the Philippines, recognition by Philippine courts of a foreign
officer who has custody of the judgment. If the office which judgment affecting its citizen, over whom it exercises
has custody is in a foreign country such as Japan, the personal jurisdiction relating to the status, condition and
certification may be made by the proper diplomatic or legal capacity of such citizen.
consular officer of the Philippine foreign service in Japan and
authenticated by the seal of office.50 A petition to recognize a foreign judgment declaring a
marriage void does not require relitigation under a Philippine
To hold that A.M. No. 02-11-10-SC applies to a petition for court of the case as if it were a new petition for declaration
recognition of foreign judgment would mean that the trial of nullity of marriage. Philippine courts cannot presume to
court and the parties should follow its provisions, including know the foreign laws under which the foreign judgment
the form and contents of the petition,51 the service of was rendered. They cannot substitute their judgment on the
summons,52 the investigation of the public prosecutor, 53 the status, condition and legal capacity of the foreign citizen
setting of pre-trial,54 the trial55 and the judgment of the trial who is under the jurisdiction of another state. Thus,
court.56 This is absurd because it will litigate the case anew. Philippine courts can only recognize the foreign judgment as
It will defeat the purpose of recognizing foreign judgments, a fact according to the rules of evidence.
which is "to limit repetitive litigation on claims and
Section 48(b), Rule 39 of the Rules of Court provides that a law, the Japanese Family Court judgment is fully consistent
foreign judgment or final order against a person creates a with Philippine public policy, as bigamous marriages are
"presumptive evidence of a right as between the parties and declared void from the beginning under Article 35(4) of the
their successors in interest by a subsequent title." Moreover, Family Code. Bigamy is a crime under Article 349 of the
Section 48 of the Rules of Court states that "the judgment or Revised Penal Code. Thus, Fujiki can prove the existence of
final order may be repelled by evidence of a want of the Japanese Family Court judgment in accordance with Rule
jurisdiction, want of notice to the party, collusion, fraud, or 132, Sections 24 and 25, in relation to Rule 39, Section 48(b)
clear mistake of law or fact." Thus, Philippine courts exercise of the Rules of Court.
limited review on foreign judgments. Courts are not allowed
to delve into the merits of a foreign judgment. Once a II.
foreign judgment is admitted and proven in a Philippine
court, it can only be repelled on grounds external to its Since the recognition of a foreign judgment only requires
merits, i.e. , "want of jurisdiction, want of notice to the proof of fact of the judgment, it may be made in a special
party, collusion, fraud, or clear mistake of law or fact." The proceeding for cancellation or correction of entries in the
rule on limited review embodies the policy of efficiency and civil registry under Rule 108 of the Rules of Court. Rule 1,
the protection of party expectations,61 as well as respecting Section 3 of the Rules of Court provides that "[a] special
the jurisdiction of other states.62 proceeding is a remedy by which a party seeks to establish
a status, a right, or a particular fact." Rule 108 creates a
Since 1922 in Adong v. Cheong Seng Gee,63 Philippine courts remedy to rectify facts of a persons life which are recorded
have recognized foreign divorce decrees between a Filipino by the State pursuant to the Civil Register Law or Act No.
and a foreign citizen if they are successfully proven under 3753. These are facts of public consequence such as birth,
the rules of evidence.64 Divorce involves the dissolution of a death or marriage,66 which the State has an interest in
marriage, but the recognition of a foreign divorce decree recording. As noted by the Solicitor General, in Corpuz v.
does not involve the extended procedure under A.M. No. 02- Sto. Tomas this Court declared that "[t]he recognition of the
11-10-SC or the rules of ordinary trial. While the Philippines foreign divorce decree may be made in a Rule 108
does not have a divorce law, Philippine courts may, proceeding itself, as the object of special proceedings (such
however, recognize a foreign divorce decree under the as that in Rule 108 of the Rules of Court) is precisely to
second paragraph of Article 26 of the Family Code, to establish the status or right of a party or a particular fact."67
capacitate a Filipino citizen to remarry when his or her
foreign spouse obtained a divorce decree abroad.65 Rule 108, Section 1 of the Rules of Court states:

There is therefore no reason to disallow Fujiki to simply Sec. 1. Who may file petition. Any person interested in
prove as a fact the Japanese Family Court judgment any act, event, order or decree concerning the civil
nullifying the marriage between Marinay and Maekara on status of persons which has been recorded in the civil
the ground of bigamy. While the Philippines has no divorce
register, may file a verified petition for the cancellation or maintain the integrity of his marriage.74 In any case, Section
correction of any entry relating thereto, with the Regional 2(a) of A.M. No. 02-11-10-SC preserves this substantive right
Trial Court of the province where the corresponding civil by limiting the personality to sue to the husband or the wife
registry is located. (Emphasis supplied) of the union recognized by law.

Fujiki has the personality to file a petition to recognize the Section 2(a) of A.M. No. 02-11-10-SC does not preclude a
Japanese Family Court judgment nullifying the marriage spouse of a subsisting marriage to question the validity of a
between Marinay and Maekara on the ground of bigamy subsequent marriage on the ground of bigamy. On the
because the judgment concerns his civil status as married to contrary, when Section 2(a) states that "[a] petition for
Marinay. For the same reason he has the personality to file a declaration of absolute nullity of void marriage may be
petition under Rule 108 to cancel the entry of marriage filed solely by the husband or the wife"75it refers to
between Marinay and Maekara in the civil registry on the the husband or the wife of the subsisting marriage. Under
basis of the decree of the Japanese Family Court. Article 35(4) of the Family Code, bigamous marriages are
void from the beginning. Thus, the parties in a bigamous
There is no doubt that the prior spouse has a personal and marriage are neither the husband nor the wife under the
material interest in maintaining the integrity of the marriage law. The husband or the wife of the prior subsisting marriage
he contracted and the property relations arising from it. is the one who has the personality to file a petition for
There is also no doubt that he is interested in the declaration of absolute nullity of void marriage under
cancellation of an entry of a bigamous marriage in the civil Section 2(a) of A.M. No. 02-11-10-SC.
registry, which compromises the public record of his
marriage. The interest derives from the substantive right of Article 35(4) of the Family Code, which declares bigamous
the spouse not only to preserve (or dissolve, in limited marriages void from the beginning, is the civil aspect of
instances68) his most intimate human relation, but also to Article 349 of the Revised Penal Code,76 which penalizes
protect his property interests that arise by operation of law bigamy. Bigamy is a public crime. Thus, anyone can initiate
the moment he contracts marriage.69 These property prosecution for bigamy because any citizen has an interest
interests in marriage include the right to be supported "in in the prosecution and prevention of crimes.77If anyone can
keeping with the financial capacity of the family"70 and file a criminal action which leads to the declaration of nullity
preserving the property regime of the marriage.71 of a bigamous marriage,78 there is more reason to confer
personality to sue on the husband or the wife of a subsisting
Property rights are already substantive rights protected by marriage. The prior spouse does not only share in the public
the Constitution,72 but a spouses right in a marriage interest of prosecuting and preventing crimes, he is also
extends further to relational rights recognized under Title III personally interested in the purely civil aspect of protecting
("Rights and Obligations between Husband and Wife") of the his marriage.
Family Code.73 A.M. No. 02-11-10-SC cannot "diminish,
increase, or modify" the substantive right of the spouse to
When the right of the spouse to protect his marriage is To be sure, a petition for correction or cancellation of an
violated, the spouse is clearly an injured party and is entry in the civil registry cannot substitute for an action to
therefore interested in the judgment of the suit.79 Juliano- invalidate a marriage. A direct action is necessary to
Llave ruled that the prior spouse "is clearly the aggrieved prevent circumvention of the substantive and procedural
party as the bigamous marriage not only threatens the safeguards of marriage under the Family Code, A.M. No. 02-
financial and the property ownership aspect of the prior 11-10-SC and other related laws. Among these safeguards
marriage but most of all, it causes an emotional burden to are the requirement of proving the limited grounds for the
the prior spouse."80 Being a real party in interest, the prior dissolution of marriage,83 support pendente lite of the
spouse is entitled to sue in order to declare a bigamous spouses and children,84 the liquidation, partition and
marriage void. For this purpose, he can petition a court to distribution of the properties of the spouses,85 and the
recognize a foreign judgment nullifying the bigamous investigation of the public prosecutor to determine
marriage and judicially declare as a fact that such judgment collusion.86 A direct action for declaration of nullity or
is effective in the Philippines. Once established, there should annulment of marriage is also necessary to prevent
be no more impediment to cancel the entry of the bigamous circumvention of the jurisdiction of the Family Courts under
marriage in the civil registry. the Family Courts Act of 1997 (Republic Act No. 8369), as a
petition for cancellation or correction of entries in the civil
III. registry may be filed in the Regional Trial Court "where the
corresponding civil registry is located."87 In other words, a
In Braza v. The City Civil Registrar of Himamaylan City, Filipino citizen cannot dissolve his marriage by the mere
Negros Occidental, this Court held that a "trial court has no expedient of changing his entry of marriage in the civil
jurisdiction to nullify marriages" in a special proceeding for registry.
cancellation or correction of entry under Rule 108 of the
Rules of Court.81 Thus, the "validity of marriage[] x x x can However, this does not apply in a petition for correction or
be questioned only in a direct action" to nullify the cancellation of a civil registry entry based on the recognition
marriage.82 The RTC relied on Braza in dismissing the of a foreign judgment annulling a marriage where one of the
petition for recognition of foreign judgment as a collateral parties is a citizen of the foreign country. There is neither
attack on the marriage between Marinay and Maekara. circumvention of the substantive and procedural safeguards
of marriage under Philippine law, nor of the jurisdiction of
Braza is not applicable because Braza does not involve a Family Courts under R.A. No. 8369. A recognition of a foreign
recognition of a foreign judgment nullifying a bigamous judgment is not an action to nullify a marriage. It is an
marriage where one of the parties is a citizen of the foreign action for Philippine courts to recognize the effectivity of a
country. foreign judgment, which presupposes a case which was
already tried and decided under foreign law. The
procedure in A.M. No. 02-11-10-SC does not apply in a
petition to recognize a foreign judgment annulling a
bigamous marriage where one of the parties is a citizen of was rendered. The second paragraph of Article 26 of the
the foreign country. Neither can R.A. No. 8369 define the Family Code is based on this Courts decision in Van Dorn v.
jurisdiction of the foreign court. Romillo90 which declared that the Filipino spouse "should not
be discriminated against in her own country if the ends of
Article 26 of the Family Code confers jurisdiction on justice are to be served."91
Philippine courts to extend the effect of a foreign divorce
decree to a Filipino spouse without undergoing trial to The principle in Article 26 of the Family Code applies in a
determine the validity of the dissolution of the marriage. marriage between a Filipino and a foreign citizen who
The second paragraph of Article 26 of the Family Code obtains a foreign judgment nullifying the marriage on the
provides that "[w]here a marriage between a Filipino citizen ground of bigamy. The Filipino spouse may file a petition
and a foreigner is validly celebrated and a divorce is abroad to declare the marriage void on the ground of
thereafter validly obtained abroad by the alien spouse bigamy. The principle in the second paragraph of Article 26
capacitating him or her to remarry, the Filipino spouse shall of the Family Code applies because the foreign spouse, after
have capacity to remarry under Philippine law." In Republic the foreign judgment nullifying the marriage, is capacitated
v. Orbecido,88 this Court recognized the legislative intent of to remarry under the laws of his or her country. If the foreign
the second paragraph of Article 26 which is "to avoid the judgment is not recognized in the Philippines, the Filipino
absurd situation where the Filipino spouse remains married spouse will be discriminatedthe foreign spouse can
to the alien spouse who, after obtaining a divorce, is no remarry while the Filipino spouse cannot remarry.
longer married to the Filipino spouse"89 under the laws of his
or her country. The second paragraph of Article 26 of the Under the second paragraph of Article 26 of the Family
Family Code only authorizes Philippine courts to adopt the Code, Philippine courts are empowered to correct a situation
effects of a foreign divorce decree precisely because the where the Filipino spouse is still tied to the marriage while
Philippines does not allow divorce. Philippine courts cannot the foreign spouse is free to marry. Moreover,
try the case on the merits because it is tantamount to trying notwithstanding Article 26 of the Family Code, Philippine
a case for divorce. courts already have jurisdiction to extend the effect of a
foreign judgment in the Philippines to the extent that the
The second paragraph of Article 26 is only a corrective foreign judgment does not contravene domestic public
measure to address the anomaly that results from a policy. A critical difference between the case of a foreign
marriage between a Filipino, whose laws do not allow divorce decree and a foreign judgment nullifying a bigamous
divorce, and a foreign citizen, whose laws allow divorce. The marriage is that bigamy, as a ground for the nullity of
anomaly consists in the Filipino spouse being tied to the marriage, is fully consistent with Philippine public policy as
marriage while the foreign spouse is free to marry under the expressed in Article 35(4) of the Family Code and Article 349
laws of his or her country. The correction is made by of the Revised Penal Code. The Filipino spouse has the
extending in the Philippines the effect of the foreign divorce option to undergo full trial by filing a petition for declaration
decree, which is already effective in the country where it of nullity of marriage under A.M. No. 02-11-10-SC, but this is
not the only remedy available to him or her. Philippine status, right and fact92 that needs to be reflected in the civil
courts have jurisdiction to recognize a foreign judgment registry. Otherwise, there will be an inconsistency between
nullifying a bigamous marriage, without prejudice to a the recognition of the effectivity of the foreign judgment and
criminal prosecution for bigamy. the public records in the Philippines.1wphi1

In the recognition of foreign judgments, Philippine courts are However, the recognition of a foreign judgment nullifying a
incompetent to substitute their judgment on how a case was bigamous marriage is without prejudice to prosecution for
decided under foreign law. They cannot decide on the bigamy under Article 349 of the Revised Penal Code.93 The
"family rights and duties, or on the status, condition and recognition of a foreign judgment nullifying a bigamous
legal capacity" of the foreign citizen who is a party to the marriage is not a ground for extinction of criminal liability
foreign judgment. Thus, Philippine courts are limited to the under Articles 89 and 94 of the Revised Penal Code.
question of whether to extend the effect of a foreign Moreover, under Article 91 of the Revised Penal Code, "[t]he
judgment in the Philippines. In a foreign judgment relating term of prescription [of the crime of bigamy] shall not run
to the status of a marriage involving a citizen of a foreign when the offender is absent from the Philippine
country, Philippine courts only decide whether to extend its archipelago."
effect to the Filipino party, under the rule of lex
nationalii expressed in Article 15 of the Civil Code. Since A.M. No. 02-11-10-SC is inapplicable, the Court no
longer sees the need to address the questions on venue and
For this purpose, Philippine courts will only determine (1) the contents and form of the petition under Sections 4 and
whether the foreign judgment is inconsistent with an 5, respectively, of A.M. No. 02-11-10-SC.
overriding public policy in the Philippines; and (2) whether
any alleging party is able to prove an extrinsic ground to WHEREFORE, we GRANT the petition. The Order dated 31
repel the foreign judgment, i.e. want of jurisdiction, want of January 2011 and the Resolution dated 2 March 2011 of the
notice to the party, collusion, fraud, or clear mistake of law Regional Trial Court, Branch 107, Quezon City, in Civil Case
or fact. If there is neither inconsistency with public policy No. Q-11-68582 are REVERSED and SET ASIDE. The
nor adequate proof to repel the judgment, Philippine courts Regional Trial Court is ORDERED to REINSTATE the petition
should, by default, recognize the foreign judgment as part of for further proceedings in accordance with this Decision.
the comity of nations. Section 48(b), Rule 39 of the Rules of
Court states that the foreign judgment is already SO ORDERED.
"presumptive evidence of a right between the parties." Upon
recognition of the foreign judgment, this right becomes Brion, Del Castillo, Perez, and Perlas-Bernabe, JJ.,
conclusive and the judgment serves as the basis for the concur.
correction or cancellation of entry in the civil registry. The
recognition of the foreign judgment nullifying a bigamous
marriage is a subsequent event that establishes a new
Republic of the Philippines (property) within 10 years from the signing of the Contract
SUPREME COURT of Lease with Option to Buy.
Manila
On 4 September 1984, RCBC informed Serra of its decision
SECOND DIVISION to exercise its option to buy the property. However, Serra
replied that he was no longer interested in selling the
G.R. No. 203241 July 10, 2013 property. On 14 March 1985, RCBC filed a Complaint for
Specific Performance and Damages against Serra (Specific
RIZAL COMMERCIAL BANKING Performance case) in the RTC Makati. The RTC Makati
CORPORATION, PETITIONER, initially dismissed the complaint. However, in an Order
vs. dated 5 January 1989, the RTC Makati reversed itself and
FEDERICO A. SERRA, RESPONDENT. ordered Serra to execute and deliver the proper deed of sale
in favor of RCBC.4
DECISION
Serra appealed to the Court of Appeals (CA). On 18 May
CARPIO, J.: 1989, Serra donated the property to his mother, Leonida
Ablao (Ablao). On 20 April 1992, Ablao sold the property to
The Case Hermanito Liok (Liok). A new land title was issued in favor of
Liok. Thus, RCBC filed a Complaint for Nullification of Deed
This Petition for Review on Certiorari1 with prayer for the of Donation and Deed of Sale with Reconveyance and
issuance of a Writ of Preliminary Injunction and/or Temporary Damages against Liok, Ablao and Serra (Annulment case)
Restraining Order assails the 16 February 20122 and 26 July before the RTC of Masbate City (RTC Masbate).
20123 Orders of the Regional Trial Court of Makati City,
Branch 134 (RTC Makati). Meanwhile, the CA, and later the Supreme Court, affirmed
the order of the RTC Makati in the Specific Performance
The Facts case. In a Decision dated 4 January 1994, this Court
declared that the Contract of Lease with Option to Buy was
Respondent Federico A. Serra (Serra) is the owner of a 374 valid, effective, and enforceable. On 15 April 1994, the
square meter parcel of land located along Quezon Street, decision in the Specific Performance case became final and
Masbate, Masbate. On 20 May 1975, Serra and petitioner executory upon entry of judgment.5
Rizal Commercial Banking Corporation (RCBC) entered into a
Contract of Lease with Option to Buy, wherein Serra agreed On 22 October 2001, the RTC Masbate ruled in favor of
to lease his land to RCBC for 25 years. Serra further granted RCBC, declaring the donation in favor of Ablao and the
RCBC the option to buy the land and improvement subsequent sale to Liok null and void.6 In a Decision dated
28 September 2007, the CA affirmed the RTC Masbate In an Order dated 26 July 2012, the RTC Makati denied
decision. The CA held that the donation to Ablao was RCBCs motion for reconsideration. Thus, RCBC filed this
simulated and was done solely to evade Serras obligation to petition.
RCBC. Since Ablao had no right to transfer the property and
Liok was not a buyer in good faith, the subsequent sale to In a Resolution dated 3 December 2012, this Court granted
Liok was likewise null and void. RCBCs Temporary Restraining Order against the
implementation of the questioned Orders upon RCBCs filing
Thus, Liok filed a Petition for Review on Certiorari, docketed of a bond.
as G.R. No. 182478, while Serra and Ablao filed a Petition for
Certiorari, docketed as G.R. No. 182664, before this Court. In The Issue
separate Resolutions dated 30 June 2008 and 22 October
2008, which became final and executory on 27 August RCBC raises this sole issue for resolution:
20087 and 3 March 2009,8respectively, this Court found
neither reversible error nor grave abuse of discretion on the WHETHER OR NOT THE COURT A QUO ERRED IN HOLDING
CAs part. THAT PETITIONER RCBC IS BARRED FROM HAVING ITS 05
JANUARY 1989 DECISION EXECUTED THROUGH MOTION,
On 25 August 2011, RCBC moved for the execution of the CONSIDERING THAT UNDER THE CIRCUMSTANCES
decision in the Specific Performance case. RCBC alleged that OBTAINING IN THIS CASE, RCBC WAS UNLAWFULLY
it was legally impossible to ask for the execution of the PREVENTED BY THE RESPONDENT FROM ENFORCING THE
decision prior to the annulment of the fraudulent transfers SAID DECISION.10
made by Serra. Thus, the period to execute by motion was
suspended during the pendency of the Annulment case. On The Ruling of the Court
22 September 2011, Serra filed his comment and opposition
to the motion. Serra insisted that the motion for execution The petition has merit.
was already barred by prescription and laches, and that
RCBC was at fault for failing to register as lien in the original The Rules of Court provide that a final and executory
title the Contract of Lease with Option to Buy. judgment may be executed by motion within five years from
the date of its entry or by an action after the lapse of five
In an Order dated 16 February 2012, the RTC Makati denied years and before prescription sets in.11 This Court, however,
RCBCs motion for execution. The RTC Makati opined that allows exceptions when execution may be made by motion
"[RCBC] should have asked for the execution of the deed of even after the lapse of five years. These exceptions have
sale and have the same registered with the Registry of one common denominator: the delay is caused or
Deeds, so that even if [Serra] sold or transferred the subject occasioned by actions of the judgment obligor and/or is
property to any person the principle of caveat emptor would incurred for his benefit or advantage.12
set in."9
In Camacho v. Court of Appeals,13 we held that where the WHEREFORE, we GRANT the petition. We SET ASIDE the
delays were occasioned by the judgment debtors own assailed Orders of the Regional Trial Court of Makati City
initiatives and for her advantage as well as beyond the dated 16 February 2012 and 26 July 2012. The Temporary
judgment creditors control, the five-year period allowed for Restraining Order issued by this Court on 3 December 2012
enforcement of the judgment by motion is deemed to have is made permanent. The Regional Trial Court of Makati City
been effectively interrupted or suspended. is DIRECTED to issue the writ of execution in Civil Case No.
10054 for the enforcement of the decision therein. Costs
In the present case, there is no dispute that RCBC seeks to against petitioner.
enforce the decision which became final and executory on
15 April 1994. This decision orders Serra to execute and SO ORDERED.
deliver the proper deed of sale in favor of RCBC. However, to
evade his obligation to RCBC, Serra transferred the property Perez, Mendoza,* and Perlas-Bernabe, JJ., concur.
to his mother Ablao, who then transferred it to Liok. Serras
action prompted RCBC to file the Annulment case. Clearly, Republic of the Philippines
the delay in the execution of the decision was caused by SUPREME COURT
Serra for his own advantage. Thus, the pendency of the Manila
Annulment case effectively suspended the five-year period
to enforce through a motion the decision in the Specific SECOND DIVISION
Performance case. Since the decision in the Annulment case
attained finality on 3 March 2009 and RCBCs motion for G.R. No. 198680 July 8, 2013
execution was filed on 25 August 2011, RCBCs motion is
deemed filed within the five-year period for enforcement of HEIRS OF MAGDALENO YPON, NAMELY, ALVARO YPON,
a decision through a motion. ERUDITA Y. BARON, CICERO YPON, WILSON YPON,
VICTOR YPON, AND HINIDINO Y.
This Court has reiterated that the purpose of prescribing PEALOSA, PETITIONERS,
time limitations for enforcing judgments is to prevent parties vs.
from sleeping on their rights.14 Far from sleeping on its GAUDIOSO PONTERAS RICAFORTE A.K.A. "GAUDIOSO
rights, RCBC has pursued persistently its action against E. YPON," AND THE REGISTER OF DEEDS OF TOLEDO
Serra in accordance with law. On the other hand, Serra has CITY, RESPONDENTS.
continued to evade his obligation by raising issues of
technicality. While strict compliance with the rules of RESOLUTION
procedure is desired, liberal interpretation is warranted in
cases where a strict enforcement of the rules will not serve PERLAS-BERNABE, J.:
the ends of justice.15
This is a direct recourse to the Court from the Regional Trial petitioners have been judicially declared as Magdalenos
Court of Toledo City, Branch 59 (RTC), through a petition for lawful heirs.10
review on certiorari1 under Rule 45 of the Rules of Court,
raising a pure question of law. In particular, petitioners assail The RTC Ruling
the July 27, 20112 and August 31, 20113 Orders of the RTC,
dismissing Civil Case No. T-2246 for lack of cause of action. On July 27, 2011, the RTC issued the assailed July 27, 2011
Order,11 finding that the subject complaint failed to state a
The Facts cause of action against Gaudioso. It observed that while the
plaintiffs therein had established their relationship with
On July 29, 2010, petitioners, together with some of their Magdaleno in a previous special proceeding for the issuance
cousins,4 filed a complaint for Cancellation of Title and of letters of administration,12 this did not mean that they
Reconveyance with Damages (subject complaint) against could already be considered as the decedents compulsory
respondent Gaudioso Ponteras Ricaforte a.k.a. "Gaudioso E. heirs. Quite the contrary, Gaudioso satisfactorily established
Ypon" (Gaudioso), docketed as Civil Case No. T-2246.5 In the fact that he is Magdalenos son and hence, his
their complaint, they alleged that Magdaleno Ypon compulsory heir through the documentary evidence he
(Magdaleno) died intestate and childless on June 28, 1968, submitted which consisted of: (a) a marriage contract
leaving behind Lot Nos. 2-AA, 2-C, 2-F, and 2-J which were between Magdaleno and Epegenia Evangelista; (b) a
then covered by Transfer Certificates of Title (TCT) Nos. T-44 Certificate of Live Birth; (c) a Letter dated February 19,
and T-77-A.6 Claiming to be the sole heir of Magdaleno, 1960; and (d) a passport.13
Gaudioso executed an Affidavit of Self-Adjudication and
caused the cancellation of the aforementioned certificates of The plaintiffs therein filed a motion for reconsideration
title, leading to their subsequent transfer in his name under which was, however, denied on August 31, 2011 due to the
TCT Nos. T-2637 and T-2638,7 to the prejudice of petitioners counsels failure to state the date on which his Mandatory
who are Magdalenos collateral relatives and successors-in- Continuing Legal Education Certificate of Compliance was
interest.8 issued.14

In his Answer, Gaudioso alleged that he is the lawful son of Aggrieved, petitioners, who were among the plaintiffs in
Magdaleno as evidenced by: (a) his certificate of Live Birth; Civil Case No. T-2246,15 sought direct recourse to the Court
(b) two (2) letters from Polytechnic School; and (c) a through the instant petition.
certified true copy of his passport.9 Further, by way of
affirmative defense, he claimed that: (a) petitioners have no The Issue Before the Court
cause of action against him; (b) the complaint fails to state a
cause of action; and (c) the case is not prosecuted by the The core of the present controversy revolves around the
real parties-in-interest, as there is no showing that the issue of whether or not the RTCs dismissal of the case on
the ground that the subject complaint failed to state a cause be made in the proper special proceeding for such purpose,
of action was proper. and not in an ordinary suit for recovery of ownership and/or
possession, as in this case:
The Courts Ruling
Jurisprudence dictates that the determination of who are the
The petition has no merit. legal heirs of the deceased must be made in the proper
special proceedings in court, and not in an ordinary suit for
Cause of action is defined as the act or omission by which a recovery of ownership and possession of
party violates a right of another.16 It is well-settled that the property.1wphi1 This must take precedence over the action
existence of a cause of action is determined by the for recovery of possession and ownership. The Court has
allegations in the complaint.17 In this relation, a complaint is consistently ruled that the trial court cannot make a
said to assert a sufficient cause of action if, admitting what declaration of heirship in the civil action for the reason that
appears solely on its face to be correct, the plaintiff would such a declaration can only be made in a special
be entitled to the relief prayed for.18Accordingly, if the proceeding. Under Section 3, Rule 1 of the 1997 Revised
allegations furnish sufficient basis by which the complaint Rules of Court, a civil action is defined as one by which a
can be maintained, the same should not be dismissed, party sues another for the enforcement or protection of a
regardless of the defenses that may be averred by the right, or the prevention or redress of a wrong while a special
defendants.19 proceeding is a remedy by which a party seeks to establish
a status, a right, or a particular fact. It is then decisively
As stated in the subject complaint, petitioners, who were clear that the declaration of heirship can be made only in a
among the plaintiffs therein, alleged that they are the lawful special proceeding inasmuch as the petitioners here are
heirs of Magdaleno and based on the same, prayed that the seeking the establishment of a status or right.
Affidavit of Self-Adjudication executed by Gaudioso be
declared null and void and that the transfer certificates of In the early case of Litam, et al. v. Rivera, this Court ruled
title issued in the latters favor be cancelled. While the that the declaration of heirship must be made in a special
foregoing allegations, if admitted to be true, would proceeding, and not in an independent civil action. This
consequently warrant the reliefs sought for in the said doctrine was reiterated in Solivio v. Court of Appeals x x x:
complaint, the rule that the determination of a decedents
lawful heirs should be made in the corresponding special In the more recent case of Milagros Joaquino v. Lourdes
proceeding20 precludes the RTC, in an ordinary action for Reyes, the Court reiterated its ruling that matters relating to
cancellation of title and reconveyance, from granting the the rights of filiation and heirship must be ventilated in the
same. In the case of Heirs of Teofilo Gabatan v. CA,21 the proper probate court in a special proceeding instituted
Court, citing several other precedents, held that the precisely for the purpose of determining such rights. Citing
determination of who are the decedents lawful heirs must the case of Agapay v. Palang, this Court held that the status
of an illegitimate child who claimed to be an heir to a
decedent's estate could not be adjudicated in an ordinary WHEREFORE, the petition is DENIED. The dismissal of Civil
civil action which, as in this case, was for the recovery of Case No. T-2246 is hereby AFFIRMED, without prejudice to
property.22 (Emphasis and underscoring supplied; citations any subsequent proceeding to determine the lawful heirs of
omitted) the late Magdaleno Ypon and the rights concomitant
therewith.
By way of exception, the need to institute a separate special
proceeding for the determination of heirship may be SO ORDERED.
dispensed with for the sake of practicality, as when the
parties in the civil case had voluntarily submitted the issue Carpio, (Chairperson), Del Castillo, Perez, and
to the trial court and already presented their evidence Mendoza,* JJ., concur.
regarding the issue of heirship, and the RTC had
consequently rendered judgment thereon,23 or when a FIRST DIVISION
special proceeding had been instituted but had been finally
closed and terminated, and hence, cannot be re-opened.24 G.R. No. 167052, March 11, 2015

In this case, none of the foregoing exceptions, or those of BANK OF THE PHILIPPINE ISLANDS SECURITIES
similar nature, appear to exist. Hence, there lies the need to CORPORATION, Petitioner, v. EDGARDO V.
institute the proper special proceeding in order to determine GUEVARA, Respondent.
the heirship of the parties involved, ultimately resulting to
DECISION
the dismissal of Civil Case No. T-2246.
LEONARDO-DE CASTRO, J.:
Verily, while a court usually focuses on the complaint in
determining whether the same fails to state a cause of Before the Court is a Petition for Review under Rule 45 of the
action, a court cannot disregard decisions material to the Rules of Court seeking the reversal and setting aside of the
proper appreciation of the questions before it.25 Thus, Decision1 dated December 19, 2003 and Resolution2 dated
concordant with applicable jurisprudence, since a February 9, 2005 of the Court Appeals in CA-G.R. CV No.
determination of heirship cannot be made in an ordinary 69348, affirming the Decision3 dated September 11, 2000 of
action for recovery of ownership and/or possession, the the Regional Trial Court (RTC) of Makati City, Branch 57 in
Civil Case No. 92-1445. The RTC acted favorably on the
dismissal of Civil Case No. T-2246 was altogether proper. In
action instituted by respondent Edgardo V. Guevara for the
this light, it must be pointed out that the RTC erred in ruling enforcement of a foreign judgment, particularly, the
on Gaudiosos heirship which should, as herein discussed, Order4 dated March 13, 1990 of the United States (U.S.)
be threshed out and determined in the proper special District Court for the Southern District of Texas, Houston
proceeding. As such, the foregoing pronouncement should Division (U.S. District Court), in Civil Action No. H-86-440,
therefore be devoid of any legal effect. and ordered petitioner Bank of the Philippine Islands (BPI)
Securities Corporation to pay respondent (a) the sum of
US$49,500.00 with legal interest; (b) P250,000.00 attorneys the Makati Stock Exchange, the trading privileges of
fees and litigation expenses; and (c) costs of suit. PHILSEC was in peril of being suspended.

The facts are culled from the records of the case. Ducat proposed to settle his debts by an exchange of
assets. Ducat owned several pieces of real estate in
Ayala Corporation, a holding company, and its subsidiaries Houston, Texas, in partnership with Drago Daic (Daic),
are engaged in a wide array of businesses including real President of 1488, Inc., a U.S.-based corporation.
estate, financial services, telecommunications, water and Respondent relayed Ducats proposal to Enrique Zobel
used water, electronics manufacturing services, automotive (Zobel), the Chief Executive Officer of Ayala Corporation.
dealership and distributorship, business process Zobel was amenable to Ducats proposal but advised
outsourcing, power, renewable energy, and transport respondent to send Thomas Gomez (Gomez), an AIFL
infrastructure.5 employee who traveled often to the U.S., to evaluate
Ducats properties.
In the 1980s, Ayala Corporation was the majority
stockholder of Ayala Investment and Development In December of 1982, Gomez examined several parcels of
Corporation (AIDC). AIDC, in turn, wholly owned Philsec real estate that were being offered by Ducat and 1488, Inc.
Investment Corporation (PHILSEC), a domestic stock for the exchange. Gomez, in a telex to respondent,
brokerage firm, which was subsequently bought by recommended the acceptance of a parcel of land in Harris
petitioner; and Ayala International Finance Limited (AIFL), a County, Texas (Harris County property), which was believed
Hong Kong deposit-taking corporation, which eventually to be worth around US$2.9 million. Gomez further opined
became BPI International Finance Limited (BPI-IFL). PHILSEC that the swap would be fair and reasonable and that it
was a member of the Makati Stock Exchange and the rules would be better to take this opportunity rather than pursue
of the said organization required that a stockbroker maintain a prolonged legal battle with Ducat. Gomezs
an amount of security equal to at least 50% of a clients recommendation was brought to Zobels attention. The
outstanding debt. property-for-debt exchange was subsequently approved by
the AIFL Board of Directors even without a prior appraisal of
Respondent was hired by Ayala Corporation in 1958. the Harris County property. However, before the exchange
Respondent later became the Head of the Legal Department actually closed, an AIFL director asked respondent to obtain
of Ayala Corporation and then the President of PHILSEC from such an appraisal.
September 1, 1980 to December 31, 1983. Thereafter,
respondent served as Vice-President of Ayala Corporation William Craig (Craig), a former owner of the Harris County
until his retirement on August 31, 1997. property, conducted the appraisal of the market value of the
said property. In his January 1983 appraisal, Craig
While PHILSEC President, one of respondents obligations estimated the fair market value of the Harris County
was to resolve the outstanding loans of Ventura O. Ducat property at US$3,365,000.
(Ducat), which the latter obtained separately from PHILSEC
and AIFL. Although Ducat constituted a pledge of his stock Negotiations finally culminated in an Agreement,6 executed
portfolio valued at approximately US$1.4 million, Ducats on January 27, 1983 in Makati City, Philippines, among 1488,
loans already amounted to US$3.1 million. Because the Inc., represented by Daic; Ducat, represented by Precioso
security for Ducats debts fell below the 50% requirement of Perlas (Perlas); AIFL, represented by Joselito Gallardo
(Gallardo); and PHILSEC and Athona Holdings, N. V. and (d) acting in concert as a common enterprise or in the
(ATHONA), both represented by respondent. Under the alternative, that ATHONA was the alter ego of PHILSEC and
Agreement, the total amount of Ducats debts was reduced AIFL. The suit was docketed as Civil Action No. H-86-440
from US$3.1 million to US$2.5 million; ATHONA, a company before the U.S. District Court.
wholly owned by PHILSEC and AIFL, would buy the Harris
County property from 1488, Inc. for the price of PHILSEC, AIFL, and ATHONA filed counterclaims against
US$2,807,209.02; PHILSEC and AIFL would grant ATHONA a 1488, Inc., Daic, Craig, Ducat, and respondent, for the
loan of US$2.5 million, which ATHONA would entirely use as recovery of damages and excess payment or, in the
initial payment for the purchase price of the Harris County alternative, the rescission of the sale of the Harris County
property; ATHONA would execute a promissory note in favor property, alleging fraud, negligence, and conspiracy on the
of 1488, Inc. in the sum of US$307,209.02 to cover the part of counter-defendants who knew or should have known
balance of the purchase price for the Harris County that the value of said property was less than the appraisal
property; upon its receipt of the initial payment of US$2.5 value assigned to it by Craig.
million from ATHONA, 1488, Inc. would then fully pay
Ducats debts to PHILSEC and AIFL in the same amount; for Before the referral of the case to the jury for verdict, the
their part, PHILSEC and AIFL would release and transfer U.S. District Court dropped respondent as counter-defendant
possession of Ducats pledged stock portfolio to 1488, Inc.; for lack of evidence to support the allegations against him.
and 1488, Inc. would become the new creditor of Ducat, Respondent then moved in open court to sanction petitioner
subject to such other terms as they might agree upon. (formerly PHILSEC), AIFL, and ATHONA based on Rule 11 of
the U.S. Federal Rules of Civil Procedure.7
The series of transactions per the Agreement was eventually
executed. However, after acquiring the Harris County In its Order dated March 13, 1990, the U.S. District Court
property, ATHONA had difficulty selling the same. Despite stated that on February 14, 1990, after trial, the jury
repeated demands by 1488, Inc., ATHONA failed to pay its returned a verdict for 1488, Inc. In the same Order, the U.S.
promissory note for the balance of the purchase price for District Court ruled favorably on respondents pending
the Harris County property, and PHILSEC and AIFL refused to motion for sanction, thus:
release the remainder of Ducats stock portfolio, claiming
that they were defrauded into believing that the said During the course of the trial, the Court was required to
property had a fair market value higher than it actually had. review plaintiffs Exhibit No. 91 to determine whether the
exhibit should be admitted. After reviewing the exhibit and
Civil Action No. H-86-440 before the U.S. District hearing the evidence, the Court concluded that the
Court of Southern District of Texas, Houston Division defendants counterclaims against Edgardo V. Guevara are
frivolous and brought against him simply to humiliate and
On October 17, 1985, 1488, Inc. instituted a suit against embarrass him. It is the opinion of the Court that the
PHILSEC, AIFL, and ATHONA for (a) misrepresenting that an defendants, Philsec Investment Corporation, A/K/A BPI
active market existed for two shares of stock included in Securities, Inc., and Ayala International Finance Limited,
Ducats portfolio when, in fact, said shares were to be should be sanctioned appropriately based on Fed. R. Civ. P.
withdrawn from the trading list; (b) conversion of the stock 11 and the Courts inherent powers to punish
portfolio; (c) fraud, as ATHONA had never intended to abide unconscionable conduct. Based upon the motion and
by the provisions of its promissory note when they signed it; affidavit of Edgardo V. Guevara, the Court finds that $49,450
is reasonable punishment. defendants have failed to allege any facts that would tend
to show that the plaintiff or any of the third party
ORDERED that defendants, Philsec Investment Corporation defendants made a false representation or a representation
A/K/A BPI Securities, Inc., and Ayala International Finance with reckless disregard as to its truth.
Limited, jointly and severally, shall pay to Edgardo V.
Guevara $49,450 within 30 days of the entry of this order.8 The Houston real estate market was extremely volatile
during the late 1970s and the early 1980s. Like a stream
of hot air, property values rose rapidly as the heat and fury
Petitioner, AIFL, and ATHONA appealed the jury verdict, as
generated by speculation and construction plans mounted,
well as the aforementioned order of the U.S. District Court
but, just as rapidly, the climate cooled and the high-flying
for them to pay respondent US$49,450.00; while 1488, Inc.
market came crashing to an all time low. The real estate
appealed a post-judgment decision of the U.S. District Court
transaction involved in this case was certainly affected by
to amend the amount of attorneys fees awarded. The
this environment of capriciousness. Moreover, a number of
appeals were docketed as Case No. 90-2370 before the U.S.
additional variables may have contributed to the uncertainty
Court of Appeals, Fifth Circuit.
of its value. For instance, the land abutted a two-lane
asphalt road that had been targeted by the state for
The U.S. Court of Appeals rendered its Decision on
conversion into a major multi-lane divided highway. Water
September 3, 1991 affirming the verdict in favor of 1488,
and sewage treatment facilities were located near the
Inc. The U.S. Court of Appeals found no basis for the
boundary lines of the property. In addition, Houstons lack
allegations of fraud made by petitioner, AIFL, and ATHONA
of conventional zoning ordinances meant that the value of
against 1488, Inc., Daic, Craig, and Ducat:
the property could fluctuate depending upon the use
(commercial or residential) for which the property would
[2] To state a cause of action for fraud under Texas law, a
ultimately be used.
plaintiff must allege sufficient facts to show:
[3] The fact that the defendants were unable to sell the
(1) that a material representation was made;
property at the price for which it had been appraised does
(2) that it was false;
not demonstrate that the plaintiff or the third party
(3) that when the speaker made it he knew that it was
defendants knew that the value of the property was less
false or made it recklessly without any knowledge of
than the appraised value, nor does it establish that the
the truth and as a positive assertion;
opposing parties were guilty of negligent misrepresentation
(4) that he made it with the intention that it should be
or negligence.
acted on by the party;
(5) that the party acted in reliance upon it;
[4] In support of their allegation of fraud, the defendants
(6) that he thereby suffered injury.
rely heavily on a loan application completed by 1488 shortly
before the subject property was transferred to Athona. See
Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183, 185
Defendants Exhibit 29. At the time, 1488 still owed
(Tex.1977). We agree with the district courts decision to
approximately $300,000 to Republic of Texas Savings
grant a directed verdict against the defendants. The
Association on its original loan for the subject property. The
defendants failed to allege sufficient facts to establish the
debt had matured and 1488 was planning to move the loan
elements necessary to demonstrate fraud. In particular, the
to Home Savings Association of Houston, that is, take out a
loan from Home Savings to pay off the debt to Republic. the transaction, 1488, for tax purposes, wanted the
1488 had planned to borrow $350,000 for that purpose. A purchase price on the closing statement to reflect only that
line item on the Home Savings loan application form asked amount of cash actually exchanged at the closing as well as
for the amount of the loan as a percentage of the appraised the promissory note given at the closing. See Record on
value of the land. A figure of thirty-nine percent was typed Appeal, Vol. 17 at 5-127. Although the closing documents
into that space, and the defendants suggest that this proves recite a purchase price well under the actual sales price,
that the plaintiff knew Craigs appraisal was erroneous. The nothing indicates that any of the parties actually believed
defendants reason that if the $350,000 loan amount was the property to be worth less than the sales amount.
only thirty-nine percent of the lands appraised value, then
the real estate must have been worth approximately The defendants also assert that it was error for the district
$897,436. court to deny them permission to designate O. Frank
McPherson, a Houston appraiser, as an expert witness after
Although their analysis is sound, the conclusion reached by the cutoff date established by a pretrial order for such
the defendants cannot withstand additional scrutiny. At the designations. The defendants contend that the error
time that the loan application was completed, 1488 did not prevented them from presenting facts that would support
request to have a new appraisal done for the property. their fraud allegations. Although the defendants were
Instead, 1488 planned to use the numbers that had been allowed to present the testimony of another expert witness
generated for a quasi-appraisal done in 1977. The 1977 on the subject of valuation, they argue that McPhersons
report purported only to supplement an earlier appraisal testimony was critical because he had performed an
that had been conducted in 1974, and the supplement appraisal of the property for the Texas Highway Department
described its function as estimating market value for close to the time period during which Craig had made his
mortgage loan purposes only. See Defendants Trial Exhibit appraisal. McPhersons appraisal was performed as part of
4. The two page supplement was based on such old the States condemnation proceedings that preceded the
information that even the Home Savings Association would planned highway expansion next to the subject property.
not accept it without additional collateral as security for the
loan. See Record on Appeal, Vol. 17 at 5-29 to 5-30. The [9] In their briefs, the defendants fail to provide an adequate
loan, however, was never made because the property was explanation for their failure to identify their expert witness
transferred to Athona, and the outstanding loan to Republic in accordance with the district courts pretrial order. This law
was paid off as part of that transaction. In addition, the loan suit was initiated in 1985, and the defendants had until
application itself was never signed by anyone affiliated with November of 1988 to designate their expert witnesses. The
1488. The district court was correct in dismissing this defendants were aware of the condemnation proceedings,
argument in support of the defendants fraud allegations. and they, therefore, had approximately three years to
determine the identity of any appraiser used by the state.
[5] The defendants also allege that the plaintiff and counter The defendants simply failed to make this inquiry.
defendants knew that Craigs appraisal was fraudulent
because the purchasers statement signed by their own Enforcement of the district courts pretrial order did not
representative, and the sellers statement, signed by the leave the defendants without an expert witness on the issue
plaintiff, as well as the title insurance policy all recited a of valuation, and the available expert had also conducted
purchase price of $643,416.12. Robert Higgs, general appraisals for the Texas Highway Department in the area
counsel for 1488, explained that because of the nature of surrounding the subject property.
to perform the appraisal after the defendants had already
Although the degree of prejudice suffered by the plaintiff given their initial approval for the transaction. Craig had
due to the late designation of an expert would not have performed real estate appraisals in the past, and Texas law
been great, a district court still has the discretion to control permits real estate brokers to conduct such appraisals, see
pretrial discovery and sanction a partys failure to follow a Tex.Rev.Civ.Stat.Ann. art. 6573a, 2(2)(E) (Vernon Supp.
scheduling order. See id. at 791. Such action is particularly 1988) (Original version at Tex.Rev.Civ.Stat.Ann. art. 6573a,
appropriate here, where the defendants have failed to 4(1)(e) (Vernon 1969). These facts do not support a claim
provide an adequate explanation for their failure to identify of negligence.
their expert within the designated timetable.
For the foregoing reasons the district court committed no
The defendants failed to produce enough evidence from error in granting a directed verdict against the
which fraud could be inferred to justify the submission of the counterclaims advanced by the defendants.10
issue to a jury. Conclusional allegations or speculation
regarding what the plaintiff knew or did not know The U.S. Court of Appeals, however, vacated the award of
concerning the value of the subject property are insufficient exemplary damages in favor of 1488, Inc. for the fraudulent
to withstand a motion for a directed verdict. The district misrepresentation regarding the marketability of the two
court committed no error in granting the motion. shares of stock in Ducats portfolio. Under Texas law, a jury
may not award damages unless it was determined that the
Since the defendants failed to present the district court with plaintiff had also sustained actual damages. The U.S. Court
any facts that would tend to show that the plaintiffs of Appeals agreed with petitioner, AIFL, and ATHONA that
committed a fraud against them, their claim of a conspiracy 1488, Inc. brought its suit alleging fraudulent
to commit fraud must also fail.9 misrepresentation after the two-year statute of limitation
had expired. The misrepresentation issue should never
The U.S. Court of Appeals likewise adjudged that petitioner, have gone to the jury. Therefore, the jurys finding of actual
AIFL, and ATHONA failed to prove negligence on the part of damages is nullified; and since the jury verdict is left without
1488, Inc., Daic, Craig, and Ducat in the appraisal of the a specific finding of actual damages, the award of
market value of the said property: exemplary damages must be vacated.

[10, 11] The defendants have likewise failed to present any The U.S. Court of Appeals also vacated the award of Rule 11
facts that would tend to support their claim of negligent sanctions in favor of respondent and against petitioner,
misrepresentation or negligence. The defendants rely on AIFL, and ATHONA for being rendered without due process,
assumptions and unsupportable conclusions of law in and remanded the issue to the U.S. District Court:
establishing their case for negligence: Assuming the
Propertys true value is less than $800,000, it is reasonable [18-20] The Rule 11 motion was first made by Guevara on
to assume that the counter defendants failed to exercise February 14, 1990, and the court immediately ruled on the
reasonable care or competence . . . Brief for Athona at 45- issue without giving the defendants an opportunity to
46 x x x. A party may not rely on assumptions of fact to prepare a written response. See Record on Appeal, Vol. 22
carry their case forward. The defendants have presented no at 10-25 to 10-37. Although, the defendants were given an
facts to suggest that the plaintiff was negligent in acquiring opportunity to speak, we conclude that the hearing failed to
its appraisal. The plaintiff hired Craig, a real estate broker, comport with the requirements of due process, which
demand that the defendants be provided with adequate In an Order15 dated December 31, 1991, the U.S. District
notice and an opportunity to prepare a response. See Court still found respondents motion for Rule 11 sanctions
Henderson v. Department of Public Safety and meritorious and reinstated its Order dated March 13, 1990:
Corrections, 901 F.2d 1288, 1293-94 (5th Cir.1990).
Providing specific notice and an opportunity to respond is The basis of the Courts prior decision as well as now is the
particularly important in cases, such as the one before us, in fact that the defendants filed suit against Guevara with
which the sanctions have been imposed on the clients and knowledge that the basis of the suit was unfounded. In the
not the attorneys. See Donaldson v. Clark, 819 F.2d 1551, defendants file was an appraisal from an international
1560 (11th Cir.1987) (If sanctions are proposed to be appraisal firm, which the defendants refused to disclose
imposed on the client, due process will demand more during discovery and was only discovered at a bench
specific notice because the client is likely unaware of the conference during a discussion about appraisers. Based on
existence of Rule 11 and should be given the opportunity to the defendants own appraisers, no basis existed for a suit
prepare a defense.). A separate hearing is not a by the defendants against their employee.
prerequisite to the imposition of Rule 11 sanctions, see
Donaldson, 819 F.2d at 1560 n. 12, but the defendants in The previous judgment entered by this Court is REINSTATED.
this case, should have been given more of an opportunity to
respond to the motion than that provided at the hearing in The above-quoted Order of the U.S. District Court attained
which the motion was first raised. Providing the defendant finality as it was no longer appealed by petitioner, AIFL, and
with an opportunity to mount a defense on the spot does ATHONA.
not comport with due process. Given that the defendants
were not provided with adequate notice or an opportunity to Through a letter dated February 18, 1992, respondent
be heard, we vacate the award of sanctions and remand so demanded that petitioner pay the amount of US$49,450.00
that the district court can provide the defendants with an awarded by the U.S. District Court in its Order dated March
adequate opportunity to be heard.11 13, 1990. Given the continuous failure and/or refusal of
petitioner to comply with the said Order of the U.S. District
Finally, the U.S. Court of Appeals similarly vacated the Court, respondent instituted an action for the enforcement
award of attorneys fees and remanded the matter to the of the same, which was docketed as Civil Case No. 92-1445
U.S. District Court for recalculation to conform with the and raffled to the RTC of Makati City, Branch 57.
requirements provided in the promissory note.
Civil Case No. 92-1445 before Branch 57 of the RTC of
In accordance with the Decision dated September 3, 1991 of Makati City
the U.S. Court of Appeals, the U.S. District Court issued an
Order12 dated October 28, 1991 giving petitioner, AIFL, and In his Complaint for the enforcement of the Order dated
ATHONA 20 days to formally respond to respondents motion March 13, 1990 of the U.S. District Court in Civil Action No.
for Rule 11 sanctions. Petitioner, AIFL, and ATHONA jointly H-86-440, respondent prayed that petitioner be ordered to
filed before the U.S. District Court their opposition to pay:
respondents motion for Rule 11 sanctions.13 Respondent
filed his reply to the opposition, to which petitioner, AIFL, 1. The sum of US$49,450.00 or its equivalent in
and ATHONA, in turn, filed a reply-brief.14 Philippine Pesos x x x with interest from date of
demand;
2. Attorneys fees and litigation expenses in the sum of WHEREFORE, judgment is hereby rendered in favor of
P250,000.00; [respondent] Edgardo V. Guevara ordering [petitioner] BPI
3. Exemplary damages of P200,000.00; and Securities Corporation to pay [respondent] the following:
4. Costs of the suit.16 1. the sum of US$49,500.00 with legal interest from the
filing of this case until fully paid;
In its Amended Answer Ad Cautelam,17 petitioner opposed 2. the sum of P250,000.00 as attorneys fees and
the enforcement of the Order dated March 13, 1990 of the litigation expenses; and
U.S. District Court on the grounds that it was rendered upon 3. the costs of suit.
a clear mistake of law or fact and/or in violation of its right An award of exemplary damages for P200,000.00 is denied
to due process. for being speculative.27

In the course of the pre-trial and scheduled trial Petitioner appealed to the Court of Appeals, assigning the
proceedings, the parties respectively manifested before the following errors on the part of the RTC:
court that they were dispensing with the presentation of
their witnesses since the subject matter of their testimonies A. The trial court erred in not passing upon the merit or
had already been stipulated upon.18 validity of [petitioners] defenses against the
enforcement of the foreign judgment in the
Thereafter, the parties formally offered their respective Philippines.
evidence which entirely consisted of documentary exhibits.
Respondent submitted authenticated and certified true Had the trial court considered [petitioners] defenses,
copies of Rule 11 of the U.S. Federal Rules of Civil it would have concluded that the foreign judgment
Procedure;19 the Orders dated March 13, 1990, October 28, was not enforceable because it was made upon a
1991, and December 31, 1991 of the U.S. District Court in clear mistake of law or fact and/or was made in
Civil Action No. H-86-440;20 the Decision dated September 3, violation of the [petitioners] right to due process.
1991 of the U.S. Court of Appeals in Case No. 90-2370; 21 and
the opposition to respondents motion for Rule 11 sanctions B. The trial court erred in not utilizing the standard for
and reply-brief filed by PHILSEC, AIFL, and ATHONA before determining the enforceability of the foreign award
the U.S. District Court.22 Petitioner presented photocopies of that was agreed upon by the parties to this case
pleadings, documents, and transcripts of stenographic notes during the pre-trial, namely, did the defendants in
in Civil Action No. H-86-440 before the U.S. District the Houston case (PHILSEC, AIFL, AND ATHONA) have
Court;23 the pleadings filed in other cases related to Civil reasonable grounds to implead [respondent] in the
Case No. 92-1440;24 and a summary of lawyers fees Houston case based upon the body of the evidence
incurred by petitioner in the U.S.25 The RTC admitted in submitted therein. Thus, whether or not PHILSEC,
evidence the documentary exhibits of the parties in its AIFL and ATHONA ultimately prevailed against
Orders dated September 21, 1998 and February 8, [respondent] was immaterial or irrelevant; the
1999,26 and then deemed the case submitted for decision. question only was whether they had reasonable
grounds to proceed against him, for if they had, then
The RTC rendered a Decision on September 11, 2000 with there was admittedly no basis for the Rule 11 award
the following dispositive portion: against them by the Houston Court.
C. In the light of its ruling, the trial court failed to pass Division of the appellate court denied the said Motion for
upon and resolve the other issues and/or defenses lack of merit.32
expressly raised by [petitioner], including the
defense that PHILSEC, AIFL, and ATHONA were Hence, petitioner seeks recourse from this Court via the
deprived of their right to defend themselves against instant Petition for Review, insisting that the Court of
the Rule 11 sanction and the main decision because Appeals erred in affirming the RTC judgment which enforced
of the prohibitive cost of legal representation in the the Order dated March 13, 1990 of the U.S. District Court in
us and also because of the gross negligence of its US Civil Action No. H-86-440.
counsel. x x x.28
Petitioner contends that it was not accorded by the Court of
Appeals the right to refute the foreign judgment pursuant to
In its Decision dated December 19, 2003, the Fifth Division Rule 39, Section 48 of the Rules of Court because the
of the Court of Appeals decreed: appellate court gave the effect of res judicata to the said
foreign judgment. The Court of Appeals copied wholesale
WHEREFORE, the Decision dated 11 September 2000 in or verbatim the respondents brief without addressing the
Civil Case No. 92-1445 of the Regional Trial Court of Makati, body of evidence adduced by petitioner showing that it had
Branch 57, is hereby AFFIRMED in all respect with costs reasonable grounds to implead respondent in Civil Action
against [petitioner].29 No. H-86-440.

In its Motion for Reconsideration,30 petitioner lamented that Petitioner asserts that the U.S. District Court committed a
the Fifth Division of the Court of Appeals failed to resolve on clear mistake of law and fact in its issuance of the Order
its own petitioners appeal as the Decision dated December dated March 13, 1990, thus, said Order is unenforceable in
19, 2003 of the said Division was copied this jurisdiction. Petitioner discusses in detail its evidence
almost verbatim from respondents brief. Thus, petitioner proving that respondent, together with 1488, Inc., Ducat,
prayed that the Fifth Division of the Court of Appeals recuse Craig, and Daic, induced petitioner to agree to a fraudulent
itself from deciding petitioners Motion for Reconsideration deal. Petitioner points out that respondent had the duty of
and that the case be re-raffled to another division. looking for an independent and competent appraiser of the
market value of the Harris County property; that instead of
The Fifth Division of the Court of Appeals maintained in its choosing an unbiased and skilled appraiser, respondent
Resolution dated May 25, 2004 that the issues and connived with 1488, Inc., Ducat, and Daic in selecting Craig,
contentions of the parties were all duly passed upon and who turned out to be the former owner of the Harris County
that the case was decided according to its merits. The said property and a close associate of 1488, Inc. and Daic; and
Division, nonetheless, abstained from resolving petitioners that respondent endorsed to petitioner Craigs appraisal of
Motion for Reconsideration and directed the re-raffle of the the market value of the Harris County property, which was
case.31 overvalued by more than 400%.

Petitioners Motion for Reconsideration was re-raffled to and According to petitioner, it had reasonable grounds to
subsequently resolved by the Tenth Division of the Court of implead respondent in Civil Action No. H-86-440 so the
Appeals. In its Resolution dated February 9, 2005, the Tenth sanction imposed upon it under Rule 11 of the U.S. Federal
Rules of Civil Procedure was unjustified. Petitioner
additionally argues that there is no basis for the U.S. District legal fees charged by their U.S. counsel effectively
Court to impose upon it the Rule 11 sanction as there is prevented them from making further appeal.
nothing in the said provision which allows the imposition of
sanctions for simply bringing a meritless lawsuit. If the The Court finds the Petition bereft of merit.
Rule 11 sanction was imposed upon petitioner as
punishment for impleading a party (when it had reasonable In Mijares v. Raada,33 the Court extensively discussed the
basis for doing so) and not prevailing against said party, underlying principles for the recognition and enforcement of
then, petitioner claims that such a sanction is against foreign judgments in Philippine jurisdiction:
Philippine public policy and should not be enforced in this
jurisdiction. Settled in this jurisdiction that there should be There is no obligatory rule derived from treaties or
no premium attached to the right to litigate, otherwise conventions that requires the Philippines to recognize
parties would be very hesitant to assert a claim in court. foreign judgments, or allow a procedure for the enforcement
thereof. However, generally accepted principles of
Petitioner further alleges that it was denied due process in international law, by virtue of the incorporation clause of the
Civil Action No H-86-440 because: (1) the U.S. District Court Constitution, form part of the laws of the land even if they
imposed the Rule 11 sanction on the basis of a single do not derive from treaty obligations. The classical
document, i.e., the letter dated September 26, 1983 of formulation in international law sees those customary rules
Bruce C. Bossom, a partner at Jones Lang Wooton, a firm of accepted as binding result from the combination two
chartered surveyors and international real estate elements: the established, widespread, and consistent
consultants, addressed to a Mr. Senen L. Matoto of AIFL practice on the part of States; and a psychological element
(marked as Exhibit 91 before the U.S. District Court), which known as the opinion juris sive necessitates (opinion as to
was never admitted into evidence; (2) in said letter, Jones law or necessity). Implicit in the latter element is a belief
Lang Wooton was soliciting a listing agreement and in that the practice in question is rendered obligatory by the
which the said firm unilaterally, without being asked as to existence of a rule of law requiring it.
the value of the [Harris County] property, indicated a value
for the [same] which approximate[d] with the value given in While the definite conceptual parameters of the recognition
the Craig appraisal, hence, it cannot be used as basis to and enforcement of foreign judgments have not been
conclude that petitioner, AIFL, and ATHONA assented to authoritatively established, the Court can assert with
Craigs appraisal of the Harris County property; (3) the certainty that such an undertaking is among those generally
counsel who represented petitioner, AIFL, and ATHONA in accepted principles of international law. As earlier
Civil Action No. H-86-440 before the U.S. District Court was demonstrated, there is a widespread practice among states
grossly ignorant and/or negligent in the prosecution of their accepting in principle the need for such recognition and
counterclaims and/or in proving their defenses, such as enforcement, albeit subject to limitations of varying
when said counsel failed to present an expert witness who degrees. The fact that there is no binding universal treaty
could have testified as to the actual market value of the governing the practice is not indicative of a widespread
Harris County property or when said counsel failed to rejection of the principle, but only a disagreement as to the
discredit respondents credibility despite the availability of imposable specific rules governing the procedure for
evidence that respondent had been previously fined by the recognition and enforcement.
Philippine Securities and Exchange Commission for stock
manipulation; and (4) the excessive and unconscionable Aside from the widespread practice, it is indubitable that the
procedure for recognition and enforcement is embodied in jurisdiction is governed by Rule 39, Section 48 of the Rules
the rules of law, whether statutory or jurisprudential, of Court, which provides:
adopted in various foreign jurisdictions. In the Philippines,
this is evidenced primarily by Section 48, Rule 39 of the SEC. 48. Effect of foreign judgments or final orders. The
Rules of Court which has existed in its current form since the effect of a judgment or final order of a tribunal of a foreign
early 1900s. Certainly, the Philippine legal system has long country, having jurisdiction to render the judgment or final
ago accepted into its jurisprudence and procedural rules the order is as follows:
viability of an action for enforcement of foreign judgment, as
well as the requisites for such valid enforcement, as derived (a) In case of a judgment or final order upon a specific
from internationally accepted doctrines. Again, there may thing, the judgment or final order is conclusive upon the title
be distinctions as to the rules adopted by each particular to the thing; and
state, but they all prescind from the premise that there is a
rule of law obliging states to allow for, however generally, (b) In case of a judgment or final order against a person,
the recognition and enforcement of a foreign judgment. The the judgment or final order is presumptive evidence of a
bare principle, to our mind, has attained the status of opinio right as between the parties and their successors in interest
juris in international practice. by a subsequent title.

This is a significant proposition, as it acknowledges that the In either case, the judgment or final order may be repelled
procedure and requisites outlined in Section 48, Rule 39 by evidence of a want of jurisdiction, want of notice to the
derive their efficacy not merely from the procedural rule, but party, collusion, fraud, or clear mistake of law or fact.
by virtue of the incorporation clause of the Constitution.
Rules of procedure are promulgated by the Supreme Court, The Court expounded in Mijares on the application of the
and could very well be abrogated or revised by the high aforequoted provision:
court itself. Yet the Supreme Court is obliged, as are all
State components, to obey the laws of the land, including There is an evident distinction between a foreign judgment
generally accepted principles of international law which in an action in rem and one in personam. For an action in
form part thereof, such as those ensuring the qualified rem, the foreign judgment is deemed conclusive upon the
recognition and enforcement of foreign judgments. title to the thing, while in an action in personam, the foreign
(Citations omitted.) judgment is presumptive, and not conclusive, of a right as
between the parties and their successors in interest by a
It is an established international legal principle that final subsequent title. However, in both cases, the foreign
judgments of foreign courts of competent jurisdiction are judgment is susceptible to impeachment in our local courts
reciprocally respected and rendered efficacious subject to on the grounds of want of jurisdiction or notice to the party,
certain conditions that vary in different countries.34 In the collusion, fraud, or clear mistake of law or fact. Thus, the
Philippines, a judgment or final order of a foreign tribunal party aggrieved by the foreign judgment is entitled to
cannot be enforced simply by execution. Such judgment or defend against the enforcement of such decision in the local
order merely creates a right of action, and its non- forum. It is essential that there should be an opportunity to
satisfaction is the cause of action by which a suit can be challenge the foreign judgment, in order for the court in this
brought upon for its enforcement.35 An action for the jurisdiction to properly determine its efficacy.
enforcement of a foreign judgment or final order in this
It is clear then that it is usually necessary for an action the above example, the complainant will have to establish
to be filed in order to enforce a foreign judgment, before the court the tortious act or omission committed by
even if such judgment has conclusive efect as in the the tortfeasor, who in turn is allowed to rebut these factual
case of in rem actions, if only for the purpose of allegations or prove extenuating circumstances. Extensive
allowing the losing party an opportunity to challenge litigation is thus conducted on the facts, and from there the
the foreign judgment, and in order for the court to right to and amount of damages are assessed. On the other
properly determine its efficacy. Consequently, the hand, in an action to enforce a foreign judgment, the
party attacking a foreign judgment has the burden of matter left for proof is the foreign judgment itself,
overcoming the presumption of its validity. and not the facts from which it prescinds.

The rules are silent as to what initiatory procedure must be As stated in Section 48, Rule 39, the actionable issues are
undertaken in order to enforce a foreign judgment in the generally restricted to a review of jurisdiction of the
Philippines. But there is no question that the filing of a civil foreign court, the service of personal notice,
complaint is an appropriate measure for such purpose. A collusion, fraud, or mistake of fact or law. The
civil action is one by which a party sues another for the limitations on review [are] in consonance with a
enforcement or protection of a right, and clearly an action to strong and pervasive policy in all legal systems to
enforce a foreign judgment is in essence a vindication of a limit repetitive litigation on claims and issues.
right prescinding either from a conclusive judgment upon Otherwise known as the policy of preclusion, it seeks
title or the presumptive evidence of a right. Absent to protect party expectations resulting from previous
perhaps a statutory grant of jurisdiction to a quasi-judicial litigation, to safeguard against the harassment of
body, the claim for enforcement of judgment must be defendants, to insure that the task of courts not be
brought before the regular courts. increased by never-ending litigation of the same
disputes, and in a larger sense to promote what
There are distinctions, nuanced but discernible, between the Lord Coke in the Ferrers Case of 1599 stated to be
cause of action arising from the enforcement of a foreign the goal of all law: rest and quietness. If every
judgment, and that arising from the facts or allegations that judgment of a foreign court were reviewable on the
occasioned the foreign judgment. They may pertain to the merits, the plaintif would be forced back on his/her
same set of facts, but there is an essential difference in the original cause of action, rendering immaterial the
right-duty correlatives that are sought to be vindicated. For previously concluded litigation.36 (Emphases supplied,
example, in a complaint for damages against a tortfeasor, citations omitted.)
the cause of action emanates from the violation of the right
of the complainant through the act or omission of the Also relevant herein are the following pronouncements of
respondent. On the other hand, in a complaint for the the Court in Minoru Fujiki v. Marinay37:
enforcement of a foreign judgment awarding
damages from the same tortfeasor, for the violation A petition to recognize a foreign judgment declaring a
of the same right through the same manner of action, marriage void does not require relitigation under a Philippine
the cause of action derives not from the tortious act court of the case as if it were a new petition for declaration
but from the foreign judgment itself. of nullity of marriage. Philippine courts cannot presume
to know the foreign laws under which the foreign
More importantly, the matters for proof are different. Using judgment was rendered. They cannot substitute their
judgment on the status, condition and legal capacity that the U.S. District Court issued an Order on March 13,
of the foreign citizen who is under the jurisdiction of 1990 in Civil Action No. H-86-440 ordering petitioner, AIFL,
another state. Thus, Philippine courts can only and ATHONA, to pay respondent the sum of US$49,450.00
recognize the foreign judgment as a fact according to as sanction for filing a frivolous suit against respondent, in
the rules of evidence. violation of Rule 11 of the U.S. Federal Rules of Civil
Procedure. The said Order became final when its
Section 48(b), Rule 39 of the Rules of Court provides that a reinstatement in the Order dated December 31, 1991 of the
foreign judgment or final order against a person creates a U.S. District Court was no longer appealed by petitioner,
presumptive evidence of a right as between the parties and AIFL, and/or ATHONA.
their successors in interest by a subsequent title.
Moreover, Section 48 of the Rules of Court states that the The Order dated March 13, 1990 of the U.S. District Court in
judgment or final order may be repelled by evidence of a Civil Action No. H-86-440 is presumptive evidence of the
want of jurisdiction, want of notice to the party, collusion, right of respondent to demand from petitioner the payment
fraud, or clear mistake of law or fact. Thus, Philippine of US$49,450.00 even in this jurisdiction. The next question
courts exercise limited review on foreign judgments. then is whether petitioner was able to discharge the burden
Courts are not allowed to delve into the merits of a of overcoming the presumptive validity of said Order.
foreign judgment. Once a foreign judgment is
admitted and proven in a Philippine court, it can only The Court rules in the negative.
be repelled on grounds external to its merits, i.e.,
want of jurisdiction, want of notice to the party, In complete disregard of the limited review by Philippine
collusion, fraud, or clear mistake of law or fact. The courts of foreign judgments or final orders, petitioner
rule on limited review embodies the policy of opposes the enforcement of the Order dated March 13, 1990
efficiency and the protection of party expectations, of the U.S. District Court on the very same allegations,
as well as respecting the jurisdiction of other arguments, and evidence presented before and considered
states. (Emphases supplied, citations omitted.) by the U.S. District Court when it rendered its verdict
imposing the Rule 11 sanction against petitioner. Petitioner
As the foregoing jurisprudence had established, recognition attempts to convince the Court that it is necessary to look
and enforcement of a foreign judgment or final order into the merits of the Order dated March 13, 1990 because
requires only proof of fact of the said judgment or final the U.S. District Court committed clear mistake of law and
order. In an action in personam, as in the case at bar, the fact in issuing the same. The Court, however, is not
foreign judgment or final order enjoys the disputable convinced. A Philippine court will not substitute its own
presumption of validity. It is the party attacking the foreign interpretation of any provision of the law or rules of
judgment or final order that is tasked with the burden of procedure of another country, nor review and pronounce its
overcoming its presumptive validity.38 A foreign judgment or own judgment on the sufficiency of evidence presented
final order may only be repelled on grounds external to its before a competent court of another jurisdiction. Any
merits, particularly, want of jurisdiction, want of notice to purported mistake petitioner attributes to the U.S. District
the party, collusion, fraud, or clear mistake of law or fact. Court in the latters issuance of the Order dated March 13,
1990 would merely constitute an error of judgment in the
The fact of a foreign final order in this case is not disputed. exercise of its legitimate jurisdiction, which could have been
It was duly established by evidence submitted to the RTC corrected by a timely appeal before the U.S. Court of
Appeals. pass upon the admissibility or weight of Exh. 91 is
violative of our public policy not to substitute our
Petitioner cannot insist that the RTC and the Court of judgment for that of a competent court of another
Appeals resolve the issue of whether or not petitioner, AIFL, jurisdiction.
and ATHONA had reasonable grounds to implead respondent
as a counter-defendant in Civil Action No. H-86-440. [Petitioner] does not deny the fact that the judgment
Although petitioner submitted such an issue for resolution awarding sanctions based on [Rule 11 of the U.S.] Federal
by the RTC in its Pre-Trial Brief, the RTC did not issue any Rules of Civil Procedure was elevated to the United States
pre-trial order actually adopting the same. In addition, Court of Appeals for the Fifth Circuit which remanded the
petitioner was also unable to lay the basis, whether in U.S. case to the District Court precisely to give [petitioner] a
or Philippine jurisdiction, for the use of the reasonable reasonable opportunity to be heard. After remand, the
grounds standard for determining a partys liability for or District Court ordered [petitioner] to file its response to the
exemption from the sanctions imposed for violations of Rule motion of [respondent] for sanctions and after the filing of
11 of the U.S. Federal Rules of Civil Procedure. Equally their respective briefs, the District Court reinstated the
baseless is petitioners assertion that the Rule 11 sanction is former judgment.
contrary to public policy and in effect, puts a premium on
the right to litigate. It bears to stress that the U.S. District Certainly, under these circumstances, the claim of violation
Court imposed the Rule 11 sanction upon petitioner, AIFL, of due process cannot be sustained since [petitioner] was
and ATHONA for their frivolous counterclaims against given reasonable opportunity to present its side before the
respondent intended to simply humiliate and embarrass imposition of sanctions.
respondent; and not because petitioner, AIFL, and ATHONA
impleaded but lost to respondent.
[Petitioner] likewise argued that the US District Court
Contrary to the claims of petitioner, both the RTC and the committed a clear mistake of law or fact and in support
Court of Appeals carefully considered the allegations, thereof presented Exhibits 10 to 18 to establish that the
arguments, and evidence presented by petitioner to repel fair market value of the Houston property in January 1983
the Order dated March 13, 1990 of the U.S. District Court in was no longer US$800,000.00 by the admissions against
Civil Action No. H-86-440. Worthy of reproducing herein are interest of 1488 itself, of Craig who submitted the fraudulent
the following portions of the RTC judgment: appraisal, and by the previous owners of the said property
and to show that [respondent] Guevara was either directly
[Petitioners] contention that the judgment sought to be involved in the conspiracy against the Houston defendants
enforced herein is violative of its right to due process and in submitting to the latter a fraudulent appraisal of W. Craig
contrary to public policy because the Houston Court relied (or was at least responsible to the Houston defendants for
upon Exhibit 91 (which is [petitioner BPI Securities] Exh. 1 the injury that they suffered) and that the Houston
in this case) and the US Court disregarded the evidence on defendants had reasonable basis to implead him as a
record in the Houston Action is unavailing. Whether or not defendant in the Houston Case on account of his
said Exhibit 91 (petitioners Exh. 1) is inadmissible participation in the conspiracy or his fault of responsibility
or is not entitled to any weight is a question which for the injury suffered by them.
should have been addressed to the US of Court of
Appeals by [petitioner]. To ask a Philippine court to However, none of these documents show that [respondent]
had any participation nor knowledge in the execution, It is noted that the petition for review merely generally
custody or other intervention with respect to the alleges that starting from its page 5, the decision of the RTC
said. Thus, said Exhibits 10 to 18 are irrelevant copied verbatim the allegations of herein Respondents in
and immaterial to the issue of the enforceability of a its Memorandum before the said court, as if the
foreign judgment. It must be emphasized that the Memorandum was the draft of the Decision of the Regional
imposition of the sanctions under [Rule 11 of the Trial Court of Pasig, but fails to specify either the portions
U.S.] Federal Rules of Civil Procedure did not flow allegedly lifted verbatim from the memorandum, or why she
from the merits of the civil case in the US District regards the decision as copied. The omission renders the
Court but from the lack of even an iota of evidence petition for review insufficient to support her contention,
against [respondent] Guevara. To quote the US District considering that the mere similarity in language or thought
Court: between Printwells memorandum and the trial courts
decision did not necessarily justify the conclusion that the
THE COURT RTC simply lifted verbatim or copied from the memorandum.

I am disturbed about that. I dont see any evidence at all in It is to be observed in this connection that a trial or
this case, after listening to all of this evidence, that there appellate judge may occasionally view a partys
ever was a lawsuit that could have been brought against memorandum or brief as worthy of due consideration either
Guevara, and even after all of the discovery was done, there entirely or partly. When he does so, the judge may adopt
was still no evidence of a conspiracy. There is no evidence and incorporate in his adjudication the memorandum or the
of any conspiracy to this good day that he could have been, parts of it he deems suitable, and yet not be guilty of the
but there is no proof of it, and thats what we base these accusation of lifting or copying from the memorandum. This
lawsuits on. Thats what the Rule 11 is designed to do, to is because of the avowed objective of the memorandum to
deal with the circumstance. contribute in the proper illumination and correct
determination of the controversy. Nor is there anything
So, I brought it up to Mr. Guevara because I know the untoward in the congruence of ideas and views about the
frustration, and irrespective as to whether or not he brought legal issues between himself and the party drafting the
it up, it would have been my position, my own position as an memorandum. The frequency of similarities in
officer of this Court to sanction the defendants in this case. argumentation, phraseology, expression, and citation of
That is my opinion, that they are to be sanctioned because authorities between the decisions of the courts and the
they have brought all of the power that they have in the memoranda of the parties, which may be great or small, can
Philippines to bear and put pressure on this man so that he be fairly attributable to the adherence by our courts of law
would have to come over 10,000 miles to defend himself or and the legal profession to widely know nor universally
to hire lawyers to defend himself against a totally frivolous accepted precedents set in earlier judicial actions with
claim.39 (Emphases supplied.) identical factual milieus or posing related judicial dilemmas.
(Citations omitted.)
As for petitioners contention that the Fifth Division of the
Court of Appeals, in its Decision dated December 19, 2003, The Court is unmoved by petitioners allegations of denial of
copied verbatim or wholesale from respondents brief, the due process because of its U.S. counsels exorbitant fees
Court refers to its ruling in Halley v. Printwell, Inc.,40 thus: and negligence. As aptly pointed out by respondent in his
Memorandum:
On the specific claim that petitioner has been denied legal The general rule is that a client is bound by the acts, even
representation in the United States in view of the exorbitant mistakes, of his counsel in the realm of procedural
legal fees of US counsel, petitioner is now estopped from technique. The basis is the tenet that an act performed by
asserting that the costs of litigation resulted in a denial of counsel within the scope of a general or implied authority
due process because it was petitioner which impleaded is regarded as an act of the client. While the application of
Guevara. If petitioner cannot prosecute a case to its final this general rule certainly depends upon the surrounding
stages, then it should not have filed a counterclaim against circumstances of a given case, there are exceptions
Guevara in the first place. Moreover, there is no showing recognized by this Court: (1) where reckless or gross
that petitioner could not find a less expensive counsel. negligence of counsel deprives the client of due process of
Surely, petitioner could have secured the services of another law; (2) when its application will result in outright
counsel whose fees were more affordable.41 deprivation of the clients liberty or property; or (3) where
the interests of justice so require.
Moreover, petitioner is bound by the negligence of its
counsel. The declarations of the Court in Gotesco The present case does not fall under the said exceptions.
Properties, Inc. v. Moral42 is applicable to petitioner: In Amil v. Court of Appeals, the Court held that to fall within
the exceptional circumstance relied upon x x x, it must be
shown that the negligence of counsel must be so gross that
the client is deprived of his day in court. Thus, where a
party was given the opportunity to defend [its] interests in
due course, [it] cannot be said to have been denied due
process of law, for this opportunity to be heard is the very
essence of due process. To properly claim gross negligence
on the part of the counsel, the petitioner must show that the
counsel was guilty of nothing short of a clear abandonment
of the clients cause. (Citations omitted.)

Finally, it is without question that the U.S. District Court, in


its Order dated March 13, 1990 in Civil Action No. H-86-440,
ordered petitioner, AIFL, and ATHONA to pay respondent
US$49,450.00 as sanction for violating Rule 11 of the U.S.
Federal Rules of Civil Procedure. The Court noticed that
throughout its Decision dated September 11, 2000 in Civil
Case No. 92-1445, the RTC variably mentioned the amount
of Rule 11 sanction imposed by the U.S. District Court as
US$49,450.00 and US$49,500.00, the latter obviously being
a typographical error. In the dispositive portion, though, the
RTC ordered petitioner to pay respondent US$49,500.00,
which the Court hereby corrects motu proprio to
US$49,450.00 in conformity with the U.S. District Court
Order being enforced.
DECISION
The Court notes that during the pendency of the instant
Petition before this Court, respondent passed away on NACHURA, J.:
August 17, 2007, and is survived and substituted by his
heirs, namely: Ofelia B. Guevara, Ma. Leticia G. Allado, Jose Assailed before the Court via a petition for certiorari under
Edgardo B. Guevara, Jose Emmanuel B. Guevara, and Ma. Rule 65 are the following issuances of the Court of Appeals
Joselina G. Gepuela. (CA): (1) the April 30, 2001 Decision1 in CA-G.R. CR No.
18387 affirming the November 9, 1994 Decision 2 of the
WHEREFORE, the instant Petition is hereby DENIED for Regional Trial Court, Branch 24 of Maasin, Southern Leyte in
lack of merit. The Decision dated December 19, 2003 and Criminal Case Nos. 1261, 1262, 1263, 1264, 1265, 1267 and
Resolution dated February 9, 2005 of the Court Appeals in 1269; (2) the June 28, 2001 Resolution3 denying petitioners
CA-G.R. CV No. 69348, affirming the Decision dated Motion for Extension of Time to File a Motion for
September 11, 2000 of the Regional Trial Court of Makati Reconsideration;4 and (3) the August 17, 2001
City, Branch 57 in Civil Case No. 92-1445, is Resolution5 denying petitioners Motion for
hereby AFFIRMED with MODIFICATION that petitioner BPI Reconsideration6 of the June 28, 2001 Resolution.
Securities Corporation is ordered to pay respondent Edgardo
V. Guevara the sum of US$49,450.00 or its equivalent in
Philippine Peso, with interest at six percent (6%) per annum Records reveal the following antecedent facts:
from the filing of the case before the trial court on May 28,
1992 until fully paid.43 Sometime in February and March 1986, petitioner, while in
Sogod, Southern Leyte, represented to private complainants
SO ORDERED. Gaudencio Ang, Rogelio Ceniza, Nilo Cabardo, Salvacion
Nueve, Virgilio Maunes, Apolinaria Olayvar, and Mariza
Sereno, C.J., (Chairperson), Bersamin, Perez, and Perlas- Florendo that she was one of the owners of Golden Overseas
Bernabe, JJ., concur. Employment7 and that she was recruiting workers to be sent
abroad.8 She then asked from the said complainants the
payment of placement and processing fees
totaling P15,000.00.9 Viewing this as a golden opportunity
Republic of the Philippines
for the amelioration of their lives, the private complainants
SUPREME COURT
paid the fees, went with petitioner to Manila, relying on her
Manila
promise that they would be deployed by July 1986.10 On the
promised date of their departure, however, private
THIRD DIVISION complainants never left the country. They were then
informed by petitioner that there were no available plane
G.R. No. 150276 February 12, 2008 tickets and that they would leave by September of that year.

CECILIA B. ESTINOZO, petitioner, Came November 1986 and still they were not deployed. This
vs. prompted private complainants to suspect that something
COURT OF APPEALS, FORMER SIXTEENTH DIVISION, was amiss, and they demanded the return of their money.
and PEOPLE OF THE PHILIPPINES, respondents. Petitioner assured them refund of the fees and even
executed promissory notes11 to several of the complainants; MONTHS and TWENTY (20) DAYS of prision mayor, as
but, as before, her assurances were mere pretenses.12 maximum, and to pay the costs.

In the early months of 1987, complainants then initiated The accused is also ordered to reimburse to the private
formal charges for estafa against petitioner. After complainants the following amounts proved during the trial:
preliminary investigation, the Provincial Prosecutor filed with
the Regional Trial Court (RTC) of Maasin, Southern Leyte 1. Gaudencio Ang -----------------
seven (7) separate Informations13 for Estafa, defined and
penalized under Article 315, par. 2(a) of the Revised Penal P15,000.00
Code (RPC). On request of petitioner, the cases were
consolidated and jointly heard by the trial court.14 2. Virgilio Maunes -----------------
P15,000.00
During the trial, in her defense, petitioner testified, among
others, that she was an employee of the Commission on
Audit who worked as a part-time secretary at FCR 3. Rogelio Ceniza -----------------
Recruitment Agency owned by Fe Corazon Ramirez; that she P11,500.00
received the amounts claimed by the complainants and
remitted the same to Ramirez;15 that complainants actually
4. Nilo Cabardo -------------------
transacted with Ramirez and not with her;16 and that she
was only forced to execute the promissory notes.17 P15,000.00

On November 9, 1994, the RTC rendered its 5. Mariza Florendo -----------------


Decision18 finding petitioner guilty beyond reasonable doubt P15,000.00
of the charges of estafa. The dispositive portion of the trial
courts decision reads:
6. Salvacion Nueve -----------------
WHEREFORE, FOREGOING CONSIDERED, the Court hereby P15,000.00
renders judgment finding the accused Cecilia Dejarme
Estinozo GUILTY beyond reasonable doubt of seven (7)
7. Salvador Olayvar ----------------
counts of the crime of Estafa through false pretenses as
defined and penalized under Article 315(2)(a) of the Revised P13,500.00
Penal Code under Criminal Cases Nos. 1261, 1262, 1263,
1264, 1265, 1267 and 1269, and applying the Indeterminate
Sentence Law, with no modifying circumstances to consider with interest at the legal rate from the date of the filing of
for or against her, hereby sentences the said accused, for the respective informations in each case of every private
EACH of the seven (7) counts of Estafa in the criminal cases complainant until the amount shall have been fully paid.
aforementioned, to an indeterminate penalty of TWO (2)
YEARS, ELEVEN (11) MONTHS and TEN (10) DAYS of prision
SO ORDERED.19
correccional, as minimum, to SIX (6) YEARS, EIGHT (8)
Aggrieved, petitioner appealed the case to the CA (docketed reconsideration of the CAs decision, and consequently an
as CA-G.R. CR No. 18387). As aforesaid, the appellate court, appeal therefrom;30 (2) she should not be bound by the
in the assailed April 30, 2001 Decision,20 affirmed the ruling mistake of her previous counsel especially when the latters
of the trial court. The CA ruled that the complainants negligence and mistake would prejudice her substantial
positively identified petitioner, their townmate, as the one rights and would affect her life and liberty;31 (3) the
who falsely presented herself as possessing a license to appellate court gravely abused its discretion when it
recruit persons for overseas employment. The seven (7) affirmed petitioners conviction for the other four (4)
complainants relied on that representation when they paid criminal casesCriminal Cases Nos. 1264, 1265, 1267 and
the amount she required as a condition for their being 1269absent any direct testimony from the complainants in
employed abroad. Petitioner even admitted receiving the those cases;32 (4) she was deprived of her constitutional
said fees.21 The prosecution had then satisfactorily proved right to cross-examine the complainants in the
that she committed the offense of Estafa under Article 315, aforementioned 4 cases;33 and (5) she presented sufficient
par. 2 (a) of the RPC.22 Her defense that she was merely an evidence to cast reasonable doubt as to her guilt in all the
agent of the real recruiter was deemed as merely a last- seven (7) criminal cases.34
ditch effort to absolve herself of authorship of the crime.
The CA noted that Ramirez was never mentioned when The Court rules to dismiss the petition.
petitioner conducted her recruitment activities, and no
evidence was further introduced to show that petitioner Immediately apparent is that the petition is the wrong
remitted the said fees to Ramirez.23 remedy to question the appellate courts issuances. Section
1 of Rule 45 of the Rules of Court expressly provides that a
On May 30, 2001, within the 15-day reglementary period to party desiring to appeal by certiorari from a judgment or
file a motion for reconsideration or a petition for final order or resolution of the CA may file a verified petition
review,24 petitioner filed with the appellate court a Motion for review on certiorari.35 Considering that, in this case,
for Extension of Time to File a Motion for appeal by certiorari was available to petitioner, she
Reconsideration.25 On June 28, 2001, the CA, in the effectively foreclosed her right to resort to a special civil
challenged Resolution,26 denied the said motion pursuant to action for certiorari, a limited form of review and a remedy
Rule 52, Section 1 of the Rules of Court and Rule 9, Section of last recourse, which lies only where there is no appeal or
2 of the Revised Internal Rules of the Court of Appeals plain, speedy and adequate remedy in the ordinary course
(RIRCA). of law.36

Petitioner then filed a Motion for Reconsideration27 of the A petition for review on certiorari under Rule 45 and a
June 28, 2001 Resolution of the CA. The appellate court petition for certiorari under Rule 65 are mutually exclusive
denied the same, on August 17, 2001, in the other assailed remedies. Certiorari cannot co-exist with an appeal or any
Resolution.28 other adequate remedy.37 The nature of the questions of law
intended to be raised on appeal is of no consequence. It
Displeased with this series of denials, petitioner instituted may well be that those questions of law will treat exclusively
the instant Petition for Certiorari29 under Rule 65, arguing, of whether or not the judgment or final order was rendered
among others, that: (1) her previous counsel, by filing a without or in excess of jurisdiction, or with grave abuse of
prohibited pleading, foreclosed her right to file a motion for
discretion. This is immaterial. The remedy is appeal, As a final note, we remind party-litigants and their lawyers
not certiorari as a special civil action.38 to refrain from filing frivolous petitions for certiorari. The
2nd and 3rd paragraphs of Section 8 of Rule 65, as amended
Even granting arguendo that the instant certiorari petition is by A.M. No. 07-7-12-SC, now provide that:
an appropriate remedy, still this Court cannot grant the writ
prayed for because we find no grave abuse of discretion xxx
committed by the CA in the challenged issuances. The rule,
as it stands now without exception, is that the 15-day However, the court may dismiss the petition if it finds
reglementary period for appealing or filing a motion for the same patently without merit or prosecuted
reconsideration or new trial cannot be extended, except in manifestly for delay, or if the questions raised therein
cases before this Court, as one of last resort, which may, in are too unsubstantial to require consideration. In
its sound discretion grant the extension requested. 39 This such event, the court may award in favor of the
rule also applies even if the motion is filed before the respondent treble costs solidarily against the
expiration of the period sought to be extended.40 Thus, the petitioner and counsel, in addition to subjecting
appellate court correctly denied petitioners Motion for counsel to administrative sanctions under Rules 139
Extension of Time to File a Motion for Reconsideration. and 139-B of the Rules of Court.

It is well to point out that with petitioners erroneous filing of The Court may impose motu propio, based on res
a motion for extension of time and with her non-filing of a ipsa loquitor, other disciplinary sanctions or
motion for reconsideration or a petition for review from the measures on erring lawyers for patently dilatory and
CAs decision, the challenged decision has already attained unmeritorious petitions for certiorari.
finality and may no longer be reviewed by this Court. The
instant Rule 65 petition cannot even substitute for the lost WHEREFORE, premises considered, the petition
appeal41certiorari is not a procedural device to deprive the for certiorari is DISMISSED.
winning party of the fruits of the judgment in his or her
favor.42 When a decision becomes final and executory, the
court loses jurisdiction over the case and not even an SO ORDERED.
appellate court will have the power to review the said
judgment. Otherwise, there will be no end to litigation and Republic of the Philippines
this will set to naught the main role of courts of justice to
assist in the enforcement of the rule of law and the Supreme Court
maintenance of peace and order by settling justiciable
controversies with finality.43 Manila

We reiterate what we stated in Amatorio v. People44 that FIRST DIVISION


relief will not be granted to a party who seeks to be relieved
from the effects of the judgment when the loss of the
remedy at law was due to his own negligence, or to a HEIRS OF SPOUSES TEOFILO M. G.R. No. 159941
mistaken mode of procedure. RETERTA and ELISA RETERTA, namely:
EDUARDO M. RETERTA, CONSUELO M. land) situated in Trez Cruzes, Tanza, Cavite, containing an
RETERTA, and AVELINA M. RETERTA, area of 47,708 square meters, having inherited the land
- versus - from their father who had died on July 11, 1983; that their
SPOUSES LORENZO MORES and late father had been the grantee of the land by virtue of his
VIRGINIA LOPEZ, occupation and cultivation; that their late father and his
Respondents. predecessors in interest had been in open, exclusive,
notorious, and continuous possession of the land for more
x----------------------------------------------------------------------------------
than 30 years; that they had discovered in 1999 an affidavit
-------x
dated March 1, 1966 that their father had purportedly
executed whereby he had waived his rights, interests, and
DECISION
participation in the land; that by virtue of the affidavit, Sales
BERSAMIN, J.: Certificate No. V-769 had been issued in favor of respondent
Lorenzo Mores by the then Department of Agriculture and
The original and exclusive jurisdiction over a Natural Resources; and that Transfer Certificate of Title No.
complaint for quieting of title and reconveyance involving T-64071 had later issued to the respondents.
friar land belongs to either the Regional Trial Court (RTC) or
the Municipal Trial Court (MTC). Hence, the dismissal of such
a complaint on the ground of lack of jurisdiction due to the
land in litis being friar land under the exclusive jurisdiction On August 1, 2000, the respondents, as defendants,
of the Land Management Bureau (LMB) amounts to manifest filed a motion to dismiss, insisting that the RTC had no
grave abuse of discretion that can be corrected jurisdiction to take cognizance of Civil Case No. TM-983 due
through certiorari. to the land being friar land, and that the petitioners had no
legal personality to commence Civil Case No. TM-983.

The petitioners, whose complaint for quieting of title


and reconveyance the RTC had dismissed, had challenged On October 29, 2001, the RTC granted the motion to
the dismissal by petition for certiorari, but the Court of dismiss, holding:[3]
Appeals (CA) dismissed their petition on the ground
that certiorari was not a substitute for an appeal, the proper Considering that plaintiffs in this case sought the review of
recourse against the dismissal. They now appeal that ruling the propriety of the grant of lot 2938 of the Sta. Cruz de
of the CA promulgated on April 25, 2003.[1] Malabon Friar Lands Estate by the Lands Management
Bureau of the defendant Lorenzo Mores through the use of
the forged Affidavit and Sales Certificate No. V-769 which
eventually led to the issuance of T.C.T. No. T-64071 to
Antecedents defendant Lorenzo Mores and wife Virginia Mores, and
considering further that the land subject of this case is a
On May 2, 2000, the petitioners commenced an friar land and not land of the public domain, consequently
action for quieting of title and reconveyance in the RTC in Act No. 1120 is the law prevailing on the matter which
Trece Martires City (Civil Case No. TM-983),[2] averring that gives to the Director of Lands the exclusive administration
they were the true and real owners of the parcel of land (the
and disposition of Friar Lands. More so, the determination
whether or not fraud had been committed in the
procurement of the sales certificate rests to the exclusive Petitioners filed this petition for certiorari on May 15,
power of the Director of Lands. Hence this Court is of the 2002. Certiorari, however cannot be used as a
opinion that it has no jurisdiction over the nature of this substitute for the lost remedy of appeal.
action. On the second ground relied upon by the defendants
in their Motion To Dismiss, suffice it to state that the Court In Bernardo vs. Court of Appeals, 275 SCRA 423, the
deemed not to discuss the same. Supreme Court had the following to say:

IN VIEW OF THE FOREGOING, let this instant case be We have time and again reminded members of
dismissed as it is hereby dismissed. SO ORDERED the bench and bar that a special civil action
for certiorari under Rule 65 lies only when there is
The petitioners then timely filed a motion for no appeal nor plain, speedy and adequate
reconsideration, but the RTC denied their motion for remedy in the ordinary course of
reconsideration on February 21, 2002.[4] law. Certiorari cannot be allowed when a party to
a case fails to appeal a judgment despite the
On May 15, 2002, therefore, the petitioners assailed the availability of that remedy, certiorari not being a
dismissal via petition for certiorari, but the CA dismissed the substitute for lost appeal. The remedies of appeal
petition on April 25, 2003, holding: [5] and certiorari are mutually exclusive and not
alternative or successive.
Thus, the basic requisite for the special civil action
of certiorari to lie is that there is no appeal, nor any WHEREFORE, in view of the foregoing, the instant
plain, speedy and adequate remedy in the ordinary petition is hereby DISMISSED.\
course of law.
SO ORDERED.
In the case at bench, when the court rendered the
assailed decision, the remedy of the petitioners was On September 9, 2003, the CA denied the
to have appealed the same to this Court. But petitioners motion for reconsideration.[6]
petitioners did not. Instead they filed the present
special civil action for certiorari on May 15, 2002 Hence, this appeal.
after the decision of the court a quo has become
final. Issues

The petitioners submit that:


The Order dismissing the case was issued by the
court a quo on 29 October 2001, which Order was
received by the petitioners on November 16, 2001. I.
Petitioners filed a motion for reconsideration dated
November 26, 2001 but the same was denied by the IT IS REVERSIBLE ERROR OF THE HONORABLE COURT
court a quo on 21 February 2002. The Order denying OF APPEALS TO DISREGARD THE PROVISIONS OF
the motion for reconsideration was received by the SECTION 1, RULE 41, SECOND PARAGRAPH,
petitioners on 20 March 2002.
SUBPARAGRAPH (a), AND SECTION 9, RULE 37, 1997 Propriety of certiorari as remedy against dismissal of
RULES OF COURT; the action

The CA seems to be correct in dismissing the petition


for certiorari, considering that the order granting the
respondents motion to dismiss was a final, as distinguished
II. from an interlocutory, order against which the proper
remedy was an appeal in due course. Certiorari, as an
IT IS REVERSIBLE ERROR FOR THE HONORABLE extraordinary remedy, is not substitute for appeal due to its
being availed of only when there is no appeal, or plain,
COURT OF APPEALS TO APPLY THE RULING IN THE
speedy and adequate remedy in the ordinary course of law.
CASE OF ROSETE vs. COURT OF APPEALS, 339 SCRA [8]

193, 199,NOTWITHSTANDING THE FACT THAT THE


1997 RULES OF CIVIL PROCEDURE ALREADY TOOK Nonetheless, the petitioners posit that a special civil
EFFECT ON JULY 1, 1997. action for certiorari was their proper remedy to assail the
order of dismissal in light of certain rules of
procedure,specifically pointing out that the second
paragraph of Section 1 of Rule 37 of the Rules of Court (An
III. order denying a motion for new trial or reconsideration is
not appealable, the remedy being an appeal from the
IT IS REVERSIBLE ERROR FOR THE HONORABLE judgment or final order) prohibited an appeal of a denial of
COURT OF APPEALS IN NOT FINDING THAT THE TRIAL the motion for reconsideration, and that the second
JUDGE GRAVELY ABUSED ITS DISCRETION WHEN IT paragraph of Section 1 of Rule 41 of the Rules of Court
DISMISSED THE COMPLAINT RULING THAT IT HAS NO ( No appeal may be taken from: xxx An order denying a
JURISDICTION OVER THE NATURE OF THE ACTION, motion for new trial or reconsideration) expressly declared
AND IN NOT FINDING THAT THE TRIAL JUDGE HAS that an order denying a motion for reconsideration was not
JURISDICTION OVER THE SAME.[7] appealable. They remind that the third paragraph of Section
1 of Rule 41 expressly provided that in the instances where
the judgment or final order is not appealable, the aggrieved
Briefly stated, the issue is whether or not the CA
party may file an appropriate special civil action under Rule
erred in dismissing the petition for certiorari.
65.
Ruling
The petitioners position has no basis.
The appeal is meritorious.

1.
For one, the order that the petitioners really wanted indicates that other things remain to be done
to obtain relief from was the order granting the by the Court, is interlocutory, e.g., an order
respondents motion to dismiss, not the denial of the motion denying a motion to dismiss under Rule 16 of the
for reconsideration. The fact that the order granting Rules, or granting a motion for extension of time to
the motion to dismiss was a final order for thereby file a pleading, or authorizing amendment thereof, or
completely disposing of the case, leaving nothing more for granting or denying applications for postponement,
the trial court to do in the action, truly called for an appeal, or production or inspection of documents or
instead of certiorari, as the correct remedy. things, etc. Unlike a final judgment or order,
which is appealable, as above pointed out, an
The fundamental distinction between a final interlocutory order may not be questioned on
judgment or order, on one hand, and an interlocutory order, appeal except only as part of an appeal that
on the other hand, has been outlined in Investments, Inc. v. may eventually be taken from the final
Court of Appeals,[9] viz: judgment rendered in the case.

The concept of final judgment, as distinguished from one Moreover, even Section 9 of Rule 37 of the Rules of
which has become final (or executory as of right [final and Court, cited by the petitioners, indicates that the proper
executory]), is definite and settled. A final judgment or remedy against the denial of the petitioners motion for
order is one that finally disposes of a case, leaving reconsideration was an appeal from the final order
nothing more to be done by the Court in respect dismissing the action upon the respondents motion to
thereto, e.g., an adjudication on the merits which, on dismiss. The said rule explicitly states thusly:
the basis of the evidence presented at the trial
declares categorically what the rights and obligations Section 9. Remedy against order denying a motion for new
of the parties are and which party is in the right; or a trial or reconsideration. An order denying a motion for new
judgment or order that dismisses an action on the trial or reconsideration is not appealable, the remedy
ground, for instance, of res judicata or prescription. being an appeal from the judgment or final order.
Once rendered, the task of the Court is ended, as far
as deciding the controversy or determining the rights The restriction against an appeal of a denial of
and liabilities of the litigants is concerned. Nothing a motion for reconsideration independently of a judgment or
more remains to be done by the Court except to await final order is logical and reasonable. A motion for
the parties next move (which among others, may consist of reconsideration is not putting forward a new issue, or
the filing of a motion for new trial or reconsideration, or the presenting new evidence, or changing the theory of the
taking of an appeal) and ultimately, of course, to cause the case, but is only seeking a reconsideration of the judgment
execution of the judgment once it becomes final or, to use or final order based on the same issues, contentions, and
the established and more distinctive term, final and evidence either because: (a) the damages awarded are
executory. excessive; or (b) the evidence is insufficient to justify the
Conversely, an order that does not finally decision or final order; or (c) the decision or final order is
dispose of the case, and does not end the contrary to law.[10] By denying a motion for reconsideration,
Courts task of adjudicating the parties or by granting it only partially, therefore, a trial court finds
contentions and determining their rights and no reason either to reverse or to modify its judgment or final
liabilities as regards each other, but obviously order, and leaves the judgment or final order to stand. The
remedy from the denial is to assail the denial in the course In all the above instances where the judgment or
of an appeal of the judgment or final order itself. final order is not appealable, the aggrieved party
may file an appropriate special civil action under Rule
The enumeration of the orders that were not 65. (n)
appealable made in the 1997 version of Section 1, Rule 41
of the Rules of Court the version in force at the time when It is true that Administrative Matter No. 07-7-12-SC,
the CA rendered its assailed decision on May 15, 2002 effective December 27, 2007, has since amended
included an order denying a motion for new trial or motion Section 1, Rule 41, supra, by deleting an order
for reconsideration, to wit: denying a motion for new trial or motion for
reconsideration from the enumeration of non-
Section 1. Subject of appeal. An appeal may be taken from a appealable orders, and that such a revision of a
judgment or final order that completely disposes of the procedural rule may be retroactively applied.
case, or of a particular matter therein when declared by However, to reverse the CA on that basis would not
these Rules to be appealable. be right and proper, simply because the CA correctly
applied the rule of procedure in force at the time
No appeal may be taken from: when it issued its assailed final order.
(a) An order denying a motion for new trial or 2.
reconsideration;
RTC or MTC has jurisdiction over the action
(b) An order denying a petition for relief or any
similar motion seeking relief from judgment; The settled rule precluding certiorari as a remedy against
the final order when appeal is available notwithstanding, the
(c) An interlocutory order; Court rules that the CA should have given due course to and
granted the petition for certiorari for two exceptional
(d) An order disallowing or dismissing an appeal; reasons, namely: (a) the broader interest of justice
demanded that certiorari be given due course to avoid the
(e) An order denying a motion to set aside a
undeserved grossly unjust result that would befall the
judgment by consent, confession or compromise on
petitioners otherwise; and (b) the order of the RTC granting
the ground of fraud, mistake or duress, or any other
the motion to dismiss on ground of lack of jurisdiction over
ground vitiating consent;
the subject matter evidently constituted grave abuse of
(f) An order of execution discretion amounting to excess of jurisdiction.

(g) A judgment or final order for or against one or


more of several parties or in separate claims,
On occasion, the Court has considered certiorari as
counterclaims, cross-claims and third-party
the proper remedy despite the availability of appeal, or
complaints, while the main case is pending, unless
other remedy in the ordinary course of law. In Francisco
the court allows an appeal therefrom; and
Motors Corporation v. Court of Appeals,[11] the
(h) An order dismissing an action without prejudice. Court has declared that the requirement that there must be
no appeal, or any plain speedy and adequate remedy in the
ordinary course of law admits of exceptions, such as: (a) by all the circumstances of each particular case as the ends
when it is necessary to prevent irreparable damages and of justice may require. Thus, the writ will be
injury to a party; (b) where the trial judge capriciously and granted whenever necessary to prevent a substantial wrong
whimsically exercised his judgment; (c) where there may be or to do substantial justice.[16]
danger of a failure of justice; (d) where an appeal would be
slow, inadequate, and insufficient; (e) where the issue raised The petitioners complaint self-styled as being for
is one purely of law; (f) where public interest is involved; and the quieting of title and reconveyance, declaration of nullity
(g) in case of urgency. of affidavit & Sales Certificate, reconveyance and
damageswould challenge the efficacy of the respondents
Specifically, the Court has held that the availability of certificate of title under the theory that there had been no
appeal as a remedy does not constitute sufficient ground to valid transfer or assignment from the petitioners
prevent or preclude a party from making use of certiorariif predecessor in interest to the respondents of the rights or
appeal is not an adequate remedy, or an equally beneficial, interests in the land due to the affidavit assigning such
or speedy remedy. It is inadequacy, not the mere absence of rights and interests being a forgery and procured by fraud.
all other legal remedies and the danger of failure of justice
without the writ, that must usually determine the propriety The petitioners cause of action for reconveyance has
of certiorari.[12] A remedy is plain, speedy and adequate if it support in jurisprudence bearing upon the manner by which
will promptly relieve the petitioner from the injurious effects to establish a right in a piece of friar land. According
of the judgment, order, or resolution of the lower court or to Arayata v. Joya,[17] in order that a transfer of the rights of
agency.[13] It is understood, then, that a litigant need not a holder of a certificate of sale of friar lands may be legally
mark time by resorting to the less speedy remedy of appeal effective, it is necessary that a formal certificate of transfer
in order to have an order annulled and set aside for being be drawn up and submitted to the Chief of the Bureau of
patently void for failure of the trial court to comply with Public Lands for his approval and registration. The law
the Rules of Court.[14] authorizes no other way of transferring the rights of a holder
of a certificate of sale of friar lands. In other words, where a
Nor should the petitioner be denied the person considered as a grantee of a piece of friar land
recourse despite certiorari not being available as a proper transfers his rights thereon, such transfer must conform to
remedy against an assailed order, because it is better on certain requirements of the law. Under Director of Lands v.
balance to look beyond procedural requirements and to Rizal,[18] the purchaser in the sale of friar lands under Act No.
overcome the ordinary disinclination to exercise supervisory 1120 is already treated by law as the actual owner of the lot
powers in order that a void order of a lower court may be purchased even before the payment of the full payment
controlled to make it conformable to law and justice. price and before the execution of the final deed
[15]
Verily, the instances in which certiorari will issue cannot of conveyance, subject to the obligation to pay in full the
be defined, because to do so is to destroy the purchase price, the role or position of the Government
comprehensiveness and usefulness of the extraordinary becoming that of a mere lien holder or mortgagee.[19]
writ. The wide breadth and range of the discretion of the
court are such that authority is not wanting to show Thus, pursuant to Section 16 of Act No. 1120, [20] had
that certiorari is more discretionary than either prohibition grantee Teofilo Reterta perfected his title, the petitioners as
or mandamus, and that in the exercise of superintending his heirs would have succeeded him and taken title from him
control over inferior courts, a superior court is to be guided upon his death. By law, therefore, should the execution of
the deed in favor of the respondents be held invalid, the Section 19. Jurisdiction in Civil Cases. Regional Trial
interests of Teofilo Reterta should descend to the petitioners Courts shall exercise exclusive original
and the deed should issue in their favor. Adding significance jurisdiction: xxx
to the petitioners claim was their allegation in the complaint
that they were in possession of the land. Moreover, as (2) In all civil actions which involve the title to,
alleged in the petitioners opposition to the motion to or possession of, real property, or any interest
dismiss of the respondents, Teofilo Reterta had partially paid therein, where the assessed value of the property
the price of the land.[21] involved exceeds Twenty thousand pesos
(P20,000.00) or for civil actions in Metro Manila,
Given the foregoing, the petitioners complaint made where such value exceeds Fifty thousand pesos
out a good case for reconveyance or reversion, and its (P50,000.00) except actions for forcible entry into
allegations, if duly established, might well warrant the and unlawful detainer of lands or buildings, original
reconveyance of the land from the respondents to the jurisdiction over which is conferred upon the
petitioners. It did not matter that the respondents already Metropolitan Trial Courts, Municipal Trial Courts, and
held a certificate of title in their names. In essence, an Municipal Circuit Trial Courts;
action for reconveyance respects the incontrovertibility of
the decree of registration but seeks the transfer of the Conformably with the provision, because an action
property to its rightful and legal owner on the ground of its for reconveyance or to remove a cloud on ones title involves
having been fraudulently or mistakenly registered in another the title to, or possession of, real property, or any interest
persons name. There is no special ground for an action for therein, exclusive original jurisdiction over such action
reconveyance, for it is enough that the aggrieved party pertained to the RTC, unless the assessed value of the
asserts a legal claim in the property superior to the claim of property did not exceed P20,000.00 (in which instance the
the registered owner, and that the property has not yet MTC having territorial jurisdiction would have exclusive
passed to the hands of an innocent purchaser for value. original jurisdiction). Determinative of which regular court
[22]
On this score, it is also worthy to stress that the title of a had jurisdiction would be the allegations of the complaint
piece of a friar land obtained by a grantee from the (on the assessed value of the property) and the principal
Government without conforming with the requirements set relief thereby sought.[25]
by the law may be assailed and nullified
The respondents reliance on Section 12 and Section
Was the petitioners action for reconveyance within 18 of Act No. 1120 to sustain their position that the Bureau
the jurisdiction of the regular court? of Public Lands (now LMB) instead had exclusive jurisdiction
was without basis. The provisions read:
We answer the query in the affirmative.
Section 12. xxx the Chief of the Bureau of Public Lands shall
The law governing jurisdiction is Section 19 (2) give the said settler and occupant a certificate which shall
of Batas Pambansa Blg. 129,[23] as amended by Republic Act set forth in detail that the Government has agreed to sell to
No. 7691,[24] which provides: such settler and occupant the amount of land so held by
him, at the price so fixed, payable as provided in this Act at
the office of the Chief of Bureau of Public Lands xxx and that
upon the payment of the final installment together with all
accrued interest the Government will convey to such settler the task of the remedy was to do justice to the unjustly
and occupant the said land so held by him by proper aggrieved.[28]
instrument of conveyance, which shall be issued and
become effective in the manner provided in section one WHEREFORE, the Court grants the petition
hundred and twenty-two of the Land Registration Act xxx. for certiorari; sets aside the decision the Court of Appeals
promulgated on April 25, 2003; and directs Branch 23 of the
Section 18. No lease or sale made by Chief of the Regional Trial Court in Trece Martires City to resume the
Bureau of Public Lands under the provisions of this proceedings in Civil Case No. TM-983 with dispatch.
Act shall be valid until approved by the Secretary of
the Interior.

As the provisions indicate, the authority of LMB under The respondents shall pay the costs of suit.
Act No. 1120, being limited to the administration and
disposition of friar lands, did not include the
petitioners action for reconveyance. LMB ceases to
SO ORDERED.
have jurisdiction once the friar land is disposed of in
favor of a private person and title duly issues in the
latters name. By ignoring the petitioners showing of Republic of the Philippines
its plain error in dismissing Civil Case No. TM-983,
and by disregarding the allegations of the Supreme Court
complaint, the RTC acted whimsically and
capriciously.
Manila
Given all the foregoing, the RTC committed grave
abuse of discretion amounting to lack of jurisdiction. The
term grave abuse of discretion connotes whimsical and
capricious exercise of judgment as is equivalent to excess,
or lack of jurisdiction.[26] The abuse must be so patent and
gross as to amount to an evasion of a positive duty or to a
virtual refusal to perform a duty enjoined by law, or to act at FIRST DIVISION
all in contemplation of law as where the power is exercised
in an arbitrary and despotic manner by reason of passion or
hostility.[27]

The dismissal of Civil Case No. TM-983, unless


undone, would leave the petitioners bereft of any remedy to
protect their substantial rights or interests in the land. As ERMELINDA C. MANALOTO, AURORA
such, they would suffer grave injustice and J. CIFRA, FLORDELIZA J. ARCILLA, G.R. No. 171365
irreparable damage. In that situation, LOURDES J. CATALAN, ETHELINDA J.
the RTCs dismissal should be annulled through certiorari, for HOLT, BIENVENIDO R. JONGCO,
ARTEMIO R. JONGCO, JR. and JOEL This case is an off-shoot of an unlawful detainer case
JONGCO filed by [herein petitioners] Ermelinda C. Manaloto,
Aurora J. Cifra, Flordeliza J. Arcilla, Lourdes J. Catalan,
- versus Ethelinda J. Holt, Bienvenido R. Jongco, Artemio R.
Jongco, Jr. and Joel Jongco against [herein
ISMAEL VELOSO III, respondent]. In said complaint for unlawful detainer,
it was alleged that they are the lessors of a
Respondent. residential house located at No. 42 Big Horseshoe
Drive, Horseshoe Village, Quezon City [subject
property] which was leased to [respondent] at a
monthly rental of P17,000.00. The action was
instituted on the ground of [respondents] failure to
pay rentals from May 23, 1997 to December 22, 1998
despite repeated demands. [Respondent] denied the
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - non-payment of rentals and alleged that he made an
- - - - - - -x advance payment of P825,000.00 when he paid for
the repairs done on the leased property.
DECISION
LEONARDO-DE CASTRO, J.: After trial, the Metropolitan Trial Court (MeTC)
decided in favor of [petitioners] by ordering
[respondent] to (a) vacate the premises at No. 42 Big
Before Us is a Petition for Review on Certiorari of the
Horseshoe Drive, Horseshoe Village, Quezon City; (b)
Decision[1] dated January 31, 2006 of the Court Appeals in pay [petitioners] the sum of P306,000.00
CA-G.R. CV No. 82610, which affirmed with modification the corresponding to the rentals due from May 23, 1997
Resolution[2] dated September 2, 2003 of Branch 227 of the to November 22, 1998, and the sum of P17,000.00 a
Regional Trial Court (RTC-Branch 227) of Quezon City in Civil month thereafter until [respondent] vacates the
Case No. Q-02-48341. premises; and (c) pay [petitioners] the sum
of P5,000.00 as attorneys fees.

On appeal to the Regional Trial Court (RTC) [Branch


88, Quezon City], the MeTC decision was
reversed. [Respondent] was ordered to pay
arrearages from May 23, 1997 up to the date of the
We partly reproduce below the facts of the case as decision but he was also given an option to choose
between staying in the leased property or vacating
culled by the Court of Appeals from the records:
the same, subject to the reimbursement by
[petitioners] of one-half of the value of the
improvements which it found to be in the amount
of P120,000.00. [Respondent] was also given the
right to remove said improvements pursuant to
Article 1678 of the Civil Code, should [petitioners] against the [herein petitioners] and in favor of the
refuse to pay P60,000.00. [herein respondent] by

When both parties moved for the reconsideration of 1. Ordering [petitioners] to pay [respondent] the
the RTC decision, the RTC issued an Order dated
following amounts:
February 23, 2001 modifying its previous ruling by
increasing the value of the improvements
from P120,000.00 to P800,000.00. a) P1,500,000.00 as moral damages and
consequential damages;
After successive appeals to the Court of Appeals and
the Supreme Court, the decision of the RTC dated b) P500,000.00 as exemplary damages;
November 29, 2000 which reversed the decision of
the MeTC, became final and executory.[3] c) P425,000.00 representing the difference of the
expenses of the improvements of P825,000.00
Whilst respondents appeal of the Metropolitan Trial and P400,000.00 pursuant to Art. 1678 of the Civil
Court (MeTC) judgment in the unlawful detainer case Code;
was pending before the RTC-Branch 88, respondent
filed before the RTC-Branch 227 on November 26, d) P594,000.00 representing interest for three (3)
2002 a Complaint for Breach of Contract and years from 1998 to 2000 on the P825,000.00
Damages[4] against the petitioners, docketed as Civil advanced by the [respondent] at the rate of 24% per
Case No. Q-02-48341. The said complaint alleged two annum;
causes of action. The first cause of action was for
e) P250,000.00 as compensation for the
damages because the respondent supposedly
[respondents] labor and efforts in overseeing and
suffered embarrassment and humiliation when
attending the needs of contractors the
petitioners distributed copies of the above-
repair/renovation of the leased premises;
mentioned MeTC decision in the unlawful detainer
case to the homeowners of Horseshoe Village while f) P250,000.00, plus 20% of all recoveries from
respondents appeal was still pending before the [petitioners] and P2,500.00 per hearing as attorneys
Quezon City RTC-Branch 88. The second cause of fees;
action was for breach of contract since petitioners, as
lessors, failed to make continuing repairs on the g) Cost of suit
subject property to preserve and keep it
tenantable. Thus, respondent sought the following [Respondent] further prays for such other reliefs and
from the court a quo: remedies which are just and equitable under the
premises.[5]

The petitioners filed an Omnibus Motion[6] on


PRAYER February 18, 2003 praying for, among other reliefs,
WHEREFORE, premises considered, it is respectfully the dismissal of respondents complaint in Civil Case
prayed that after hearing the court render a decision No. Q-02-48341.Petitioners argued that respondent
had no cause of action against them because the March 23, 2004, dismissed respondents appeal for being
MeTC decision in the unlawful detainer case was a filed out of time.
matter of public record and its disclosure to the
public violated no law or any legal right of the
respondent. Moreover, petitioners averred that the
respondents present Complaint for Breach of
Contract and Damages was barred by prior judgment Respondent received a copy of the RTC-Branch 27
since it was a mere replication of respondents order dismissing his appeal on April 30, 2004 and he filed a
Answer with Compulsory Counterclaim in the Motion for Reconsideration[11] of the same on May 3,
unlawful detainer case before the MeTC. The said 2004. The RTC-Branch 227, in another Order [12] dated May
unlawful detainer case was already judicially decided 31, 2004, granted respondents latest motion because it was
with finality.
convinced that it is but appropriate and fair to both parties
On September 2, 2003, the RTC-Branch 227 issued a that this matter of whether or not the Appeal was filed on
Resolution dismissing respondents complaint in Civil time, be resolved by the appellate court rather than by this
Case No. Q-02-48341 for violating the rule against Court. The RTC-Branch 227 then ordered that the records of
splitting of cause of action, lack of jurisdiction, and the case be forwarded as soon as possible to the Court of
failure to disclose the pendency of a related
Appeals for further proceedings.
case. The RTC-Branch 227 adjudged that Civil Case
No. Q-02-48341 involved the same facts, parties, and
causes of action as those in the unlawful detainer
case, and the MeTC had already properly taken
cognizance of the latter case. The Court of Appeals, in a Resolution[13] dated
February 8, 2005, resolved to give due course to
respondents appeal. Said appeal was docketed as CA-G.R.
CV No. 82610.
Respondent received a copy of the RTC-Branch 227 decision
in Civil Case No. Q-02-48341 on September 26, 2003. He
filed a Motion for Reconsideration[7] of said judgment on
October 10, 2003, which RTC-Branch 227 denied in an On January 31, 2006, the Court of Appeals rendered
Order[8] dated December 30, 2003. its Decision in CA-G.R. CV No. 82610. The Court of Appeals
fully agreed with the RTC-Branch 227 in dismissing
respondents second cause of action (i.e., breach of contract)
in Civil Case No. Q-02-48341. The appellate court, however,
Respondent received a copy of the RTC-Branch 227 order held that RTC-Branch 227 should have proceeded with the
denying his Motion for Reconsideration on February 20, trial on the merits of the first cause of action (i.e., damages)
2004, and he filed his Notice of Appeal [9] on March 1, in Civil Case No. Q-02-48341, because [a]lthough [herein
2004. However, the RTC-Branch 227, in an Order[10] dated
respondent] may have stated the same factual antecedents humiliated [respondent] would scurry out of the
that transpired in the unlawful detainer case, such leased premises.Clearly, there was evident bad faith
allegations were necessary to give an overview of the facts intended to mock [respondents] right to appeal
leading to the institution of another case between the which is a statutory remedy to correct errors which
parties before the RTC acting in its original jurisdiction. [14] might have been committed by the lower court.

The Court of Appeals then went on to find that Thus, moral damages may be awarded since
petitioners were indeed liable to respondent for damages: [petitioners] acted in bad faith. Bad faith does not
simply connote bad judgment or negligence, it
imports a dishonest purpose or some moral obliquity
and conscious doing of a wrong, a breach of known
No doubt, distributing the copies was primarily duty through some motive or interest or ill will that
intended to embarrass [herein respondent] in the partakes of the nature of fraud. However, an award
community he mingled in. We are not unmindful of of moral damages would require certain conditions to
the fact that court decisions are public documents be met, to wit: (1) first, there must be an injury,
and the general public is allowed access thereto to whether physical, mental or psychological, clearly
make inquiries thereon or to secure a copy sustained by the claimant; (2) second, there must be
thereof. Nevertheless, under the circumstances of culpable act or omission factually established; (3)
this case, although court decisions are public third, the wrongful act or omission of the defendant
documents, distribution of the same during the is the proximate cause of the injury sustained by the
pendency of an appeal was clearly intended to cause claimant; and (4) fourth, the award of damages is
[respondent] some form of harassment and/or predicated on any of the cases stated in Article 2219
humiliation so that [respondent] would be ostracized of the Civil Code.
by his neighbors. The appeal may have delayed the
attainment of finality of the determination of the
rights of the parties and the execution in the unlawful
detainer case but it did not justify [herein petitioners] But it must again be stressed that moral damages
pre-emption of the outcome of the appeal. By are emphatically not intended to enrich a plaintiff at
distributing copies of the MeTC decision, [petitioners] the expense of the defendant. When awarded, moral
appeared to have assumed that the MeTC decision damages must not be palpably and scandalously
would simply be affirmed and therefore they tried to excessive as to indicate that it was the result of
cause the early ouster of [respondent] thinking that a passion, prejudice or corruption on the part of the
trial court judge. For this reason, this Court finds an dismissed the latters complaint in Civil Case No. Q-02-
award of P30,000.00 moral damages sufficient under 48341, was filed out of time. Respondent received a copy of
the circumstances. the said resolution on September 26, 2003, and he only
had 15 days from such date to file his appeal, or
until October 11, 2003. Respondent, instead, filed a
Motion for Reconsideration of the resolution on October 10,
On the other hand, to warrant the award of 2003, which left him with only one more day to file his
exemplary damages, the wrongful act must be appeal. The RTC-Branch 227 subsequently denied
accompanied by bad faith, and an award of damages respondents Motion for Reconsideration in an Order dated
would be allowed only if the guilty party acted in a December 30, 2003, which the respondent received
wanton, fraudulent, reckless or malevolent on February 20, 2004.Respondent only had until the
manner. Accordingly, exemplary damages in the following day, February 21, 2004, to file the
amount of P10,000.00 is appropriate.[15] appeal. However, respondent filed his Notice of Appeal only
on March 1, 2004. Hence, petitioners conclude that the
dismissal of respondents complaint in Civil Case No. Q-02-
48341 already attained finality.
In the end, the Court of Appeals decreed:

Petitioners argue in the alternative that the award of


WHEREFORE, the decision of the Regional Trial Court damages in respondents favor has no factual and legal
is AFFIRMED with the MODIFICATION that the case is bases. They contend that the Court of Appeals erred in
dismissed only as to the second cause of action. As awarding moral and exemplary damages to respondent
to the first cause of action, [herein petitioners] are based on the bare and unproven allegations in the latters
ordered to pay [herein respondent] moral damages complaint and without the benefit of any hearing or
of P30,000.00 and exemplary damages trial. While the appellate court declared that RTC-Branch 227
of P10,000.00. [16] should have proceeded with the trial on the merits involving
the action for damages, it surprisingly went ahead and ruled
Hence, the instant Petition for Review. on petitioners liability for said damages even without
trial. Even assuming for the sake of argument that
respondents allegations in his complaint are true, he still has
no cause of action for damages against petitioners, for the
Petitioners assert that respondents appeal of the disclosure of a court decision, which is part of public record,
RTC-Branch 227 Resolution dated September 2, 2003, which did not cause any legal and compensable injury to
respondent.
Respondent, on the other hand, maintains that his Jurisprudence has settled the fresh period rule,
appeal of the September 2, 2003 Resolution of the RTC- according to which, an ordinary appeal from the RTC to the
Branch 227 to the Court of Appeals was timely filed and that Court of Appeals, under Section 3 of Rule 41 of the Rules of
the same was aptly given due course. In addition, Court, shall be taken within fifteen (15) days either from
respondent asserts that the appellate court was correct in receipt of the original judgment of the trial court or from
holding petitioners liable for damages even without any receipt of the final order of the trial court dismissing or
hearing or trial since petitioners, in filing their omnibus denying the motion for new trial or motion for
motion praying for the dismissal of respondents complaint reconsideration. In Sumiran v. Damaso,[17] we presented a
on the ground of no cause of action, were deemed to have survey of the cases applying the fresh period rule:
hypothetically admitted as true the allegations in said
complaint.

As early as 2005, the Court categorically declared


in Neypes v. Court of Appeals that by virtue of the
The petition is partly meritorious. power of the Supreme Court to amend, repeal and
create new procedural rules in all courts, the Court is
allowing a fresh period of 15 days within which
to file a notice of appeal in the RTC, counted
from receipt of the order dismissing or denying
We note, at the outset, that the propriety of the a motion for new trial or motion for
dismissal by the RTC-Branch 227 of respondents second reconsideration. This would standardize the appeal
cause of action against petitioners (e.g., for breach of periods provided in the Rules and do away with the
contract) was no longer disputed by the parties. Thus, the confusion as to when the 15-day appeal period
should be counted. Thus, the Court stated:
present appeal pertains only to respondents first cause of
action (e.g., for damages), and in connection therewith, we To recapitulate, a party-litigant may either file
are called upon to resolve the following issues: (1) whether his notice of appeal within 15 days from receipt
respondent timely filed his appeal of the Resolution dated of the Regional Trial Court's decision or file it
September 2, 2003 of the RTC-Branch 227 before the Court within 15 days from receipt of the order (the
"final order") denying his motion for new trial
of Appeals; and (2) whether respondent is entitled to the
or motion for reconsideration. Obviously, the
award of moral and exemplary damages. new 15-day period may be availed of only if
either motion is filed; otherwise, the decision
We answer the first issue on the timeliness of becomes final and executory after the lapse of
respondents appeal affirmatively. the original appeal period provided in Rule 41,
Section 3.
The foregoing ruling of the Court was reiterated 15-day period within which to file the notice of
in Makati Insurance Co., Inc. v. Reyes, to wit: appeal was counted from notice of the denial
of the therein petitioner's motion for
Propitious to petitioner is Neypes v. Court of Appeals, reconsideration.
promulgated on 14 September 2005 while the
present Petition was already pending before us. x We followed suit in Elbia v. Ceniza, wherein we
applied the principle granting a fresh period of
With the advent of the "fresh period 15 days within which to file the notice of
rule" parties who availed themselves of appeal, counted from receipt of the order
the remedy of motion for dismissing a motion for new trial or motion for
reconsideration are now allowed to file a reconsideration or any final order or
notice of appeal within fifteen days from resolution.
the denial of that motion.
Thereafter, in First Aqua Sugar Traders, Inc. v.
The "fresh period rule" is not inconsistent Bank of the Philippine Islands, we held that a
with Rule 41, Section 3 of the Revised Rules party-litigant may now file his notice of appeal
of Court which states that the appeal shall be either within fifteen days from receipt of the
taken "within fifteen (15) days from notice of original decision or within fifteen days from
judgment or final order appealed from." The the receipt of the order denying the motion
use of the disjunctive word "or" signifies for reconsideration.
disassociation and independence of one thing
from another. It should, as a rule, be In De los Santos v. Vda. de Mangubat, we
construed in the sense which it ordinarily applied the same principle of "fresh period
implies. Hence, the use of "or" in the rule," expostulating that procedural law refers
above provision supposes that the notice to the adjective law which prescribes rules
of appeal may be filed within 15 days and forms of procedure in order that courts
from the notice of judgment or within 15 may be able to administer justice. Procedural
days from notice of the "final order," x x laws do not come within the legal conception
x. of a retroactive law, or the general rule
against the retroactive operation of
The "fresh period rule" finally eradicates the statutes. The "fresh period rule" is irrefragably
confusion as to when the 15-day appeal procedural, prescribing the manner in which
period should be counted from receipt of the appropriate period for appeal is to be
notice of judgment or from receipt of notice of computed or determined and, therefore, can
"final order" appealed from be made applicable to actions pending upon
its effectivity, such as the present case,
Taking our bearings from Neypes, in Sumaway without danger of violating anyone else's
v. Urban Bank, Inc., we set aside the denial of rights.[18] (Emphases supplied.)
a notice of appeal which was purportedly filed
five days late. With the fresh period rule, the
Also in Sumiran, we recognized the Order dated December 30, 2003, which the
retroactive application of the fresh period rule respondent received on February 20,
to cases pending and undetermined upon its 2004. On March 1, 2004, just after nine
effectivity:
daysfrom receipt of the order denying his
The retroactivity of the Neypes rule in cases Motion for Reconsideration, respondent
where the period for appeal had lapsed prior already filed his Notice of Appeal. Clearly,
to the date of promulgation of Neypes under the fresh period rule, respondent was
on September 14, 2005, was clearly able to file his appeal well-within the
explained by the Court in Fil-Estate prescriptive period of 15 days, and the Court
Properties, Inc. v. Homena-
of Appeals did not err in giving due course to
Valencia, stating thus:
said appeal in CA-G.R. CV No. 82610.
The determinative issue is whether the "fresh period"
rule announced in Neypes could retroactively apply
in cases where the period for appeal had lapsed prior
to 14 September 2005 when Neypes was
We likewise agree with the Court of Appeals that the
promulgated. That question may be answered
with the guidance of the general rule that RTC-Branch 227 should not have dismissed respondents
procedural laws may be given retroactive complaint for damages on the ground of failure to state a
efect to actions pending and undetermined at cause of action.
the time of their passage, there being no
vested rights in the rules of
procedure. Amendments to procedural rules are
procedural or remedial in character as they do not
According to Rule 2, Section 2 of the Rules of Court, a
create new or remove vested rights, but only operate
in furtherance of the remedy or confirmation of rights cause of action is the act or omission by which a party
already existing.[19] (Emphases supplied.) violates a right of another.

In the case before us, respondent received a


copy of the Resolution dated September 2,
2003 of the RTC-Branch 227 dismissing his When the ground for dismissal is that the complaint
complaint in Civil Case No. Q-02-48341 states no cause of action, such fact can be determined only
on September 26, 2003. Fourteen days from the facts alleged in the complaint and from no other,
thereafter, on October 10, 2003, respondent and the court cannot consider other matters aliunde. The
filed a Motion for Reconsideration of said test, therefore, is whether, assuming the allegations of fact
resolution. The RTC-Branch 227 denied in the complaint to be true, a valid judgment could be
respondents Motion for Reconsideration in an rendered in accordance with the prayer stated therein.[20]
[respondent]. This act is a direct assault or character
assassination on the part of the [respondent]
Respondent made the following allegations in because as stated in the said decision, [respondent]
support of his claim for damages against petitioners: has been staying in the premises but did not or
refused to pay his monthly rentals for a long period
of time when in truth and in fact was untrue.

FIRST CAUSE OF ACTION

29. That from the time the said decision was


distributed to said members homeowners, the
28. After the promulgation of the Metropolitan Trial [respondent] became the subject of conversation or
Court of its Decision dated August 3, 1999, ordering talk of the town and by virtue of which [respondents]
the [herein respondent] and all person claiming good name within the community or society where
rights under him to he belongs was greatly damaged; his reputation was
besmirched; [respondent] suffered sleepless night
and serious anxiety.[Respondent], who is the
grandson of the late Senator Jose Veloso and
(a) Vacate the leased premises; Congressman Ismael Veloso, was deprived of political
career and to start with was to run as candidate for
(b) pay the [herein petitioners] the sum Barangay Chairman within their area which was
of P306,000.00 as unpaid rentals from May 23, 1997 being offered to him by the homeowners but this
to November 22, 1998; and offer has started to fade and ultimately totally
vanished after the distribution of said
(c) pay the sum of P5,000.00 as attorneys Decision. Damages to his good names and
fees; reputations and other damages which he suffered as
a consequence thereof, may be reasonably
compensated for at least P1,500,000.00 as moral and
consequential damages.
But while said Decision was still pending appeal with
the Regional Trial Court, the [petitioners], through
[petitioner] Manaloto, already distributed copies of
said Decision to some of the homeowners of 30. In order to deter [petitioners] and others from
Horseshoe Village, who personally know the doing as abovementioned, [petitioners] should
likewise be assessed exemplary damages in the justice, give everyone his due, and observe honesty and
amount of P500,000.00.[21] good faith. A violation of such principle constitutes an abuse
of rights, a tortuous conduct. We expounded in Sea
Commercial Company, Inc. v. Court of Appeals[24] that:

A cause of action (for damages) exists if the following


elements are present: (1) a right in favor of the
plaintiff by whatever means and under whatever law The principle of abuse of rights stated in the above
it arises or is created; (2) an obligation on the part of article, departs from the classical theory that he who
the named defendant to respect or not to violate uses a right injures no one. The modern tendency is
to depart from the classical and traditional theory,
such right; and (3) an act or omission on the part of
and to grant indemnity for damages in cases where
such defendant violative of the right of the plaintiff or there is an abuse of rights, even when the act is not
constituting a breach of the obligation of defendant illicit.
to the plaintiff for which the latter may maintain an
action for recovery of damages.[22] We find that all Article 19 was intended to expand the concept of
three elements exist in the case at bar. Respondent torts by granting adequate legal remedy for the
untold number of moral wrongs which is impossible
may not have specifically identified each element,
for human foresight to provide specifically in
but it may be sufficiently determined from the statutory law. If mere fault or negligence in ones acts
allegations in his complaint. can make him liable for damages for injury caused
thereby, with more reason should abuse or bad faith
First, respondent filed the complaint to protect his make him liable. The absence of good faith is
good character, name, and reputation. Every man has a essential to abuse of right. Good faith is an honest
right to build, keep, and be favored with a good name. This intention to abstain from taking any unconscientious
advantage of another, even through the forms or
right is protected by law with the recognition of slander and
technicalities of the law, together with an absence of
libel as actionable wrongs, whether as criminal offenses or all information or belief of fact which would render
tortuous conduct.[23] the transaction unconscientious. In business
relations, it means good faith as understood by men
of affairs.
While Article 19 may have been intended as a mere
Second, petitioners are obliged to respect declaration of principle, the cardinal law on human
respondents good name even though they are opposing conduct expressed in said article has given rise to
parties in the unlawful detainer case. As Article 19 of the certain rules, e.g. that where a person exercises his
Civil Code requires, [e]very person must, in the exercise of rights but does so arbitrarily or unjustly or performs
his duties in a manner that is not in keeping with
his rights and in the performance of his duties, act with
honesty and good faith, he opens himself to liability.
The elements of an abuse of rights under Article 19 (4) Vexing or humiliating another on account
are: (1) there is a legal right or duty; (2) which is of his religious beliefs, lowly station in life, place of
exercised in bad faith; (3) for the sole intent of birth, physical defect, or other personal condition.
prejudicing or injuring another.[25]
Thus, Article 2219(10) of the Civil Code allows the
Petitioners are also expected to respect respondents
recovery of moral damages for acts and actions referred to
dignity, personality, privacy and peace of mind under Article
in Article 26, among other provisions, of the Civil Code.
26 of the Civil Code, which provides:

In Concepcion v. Court of Appeals,[26] we explained that:


ART. 26. Every person shall respect the dignity,
personality, privacy and peace of mind of his
neighbors and other persons. The following and
similar acts, though they may not constitute a
The philosophy behind Art. 26 underscores the
criminal offense, shall produce a cause of action for
necessity for its inclusion in our civil law. The Code
damages, prevention and other relief:
Commission stressed in no uncertain terms that the
human personality must be exalted. The sacredness
of human personality is a concomitant consideration
of every plan for human amelioration. The
(1) Prying into the privacy of anothers
touchstone of every system of law, of the culture and
residence;
civilization of every country, is how far it dignifies
man. If the statutes insufficiently protect a person
from being unjustly humiliated, in short, if human
personality is not exalted - then the laws are indeed
(2) Meddling with or disturbing the private
defective. Thus, under this article, the rights of
life or family relations of another;
persons are amply protected, and damages are
provided for violations of a persons dignity,
personality, privacy and peace of mind.

(3) Intriguing to cause another to be


alienated from his friends;
It is petitioners position that the act imputed to him
does not constitute any of those enumerated in Arts.
26 and 2219. In this respect, the law is clear. The It is already settled that the public has a right to see
violations mentioned in the codal provisions are not and copy judicial records and documents. [28] However, this is
exclusive but are merely examples and do not not a case of the public seeking and being denied access to
preclude other similar or analogous acts. Damages judicial records and documents. The controversy is rooted in
therefore are allowable for actions against a persons the dissemination by petitioners of the MeTC judgment
dignity, such as profane, insulting, humiliating, against respondent to Horseshoe Village homeowners, who
scandalous or abusive language. Under Art. 2217 of were not involved at all in the unlawful detainer case, thus,
the Civil Code, moral damages which include physical purportedly affecting negatively respondents good name
suffering, mental anguish, fright, serious anxiety, and reputation among said homeowners. The unlawful
besmirched reputation, wounded feelings, moral detainer case was a private dispute between petitioners and
shock, social humiliation, and similar injury, although respondent, and the MeTC decision against respondent was
incapable of pecuniary computation, may be then still pending appeal before the RTC-Branch 88,
recovered if they are the proximate result of the rendering suspect petitioners intentions for distributing
defendants wrongful act or omission.[27] copies of said MeTC decision to non-parties in the
case. While petitioners were free to copy and distribute such
And third, respondent alleged that the distribution by copies of the MeTC judgment to the public, the question is
petitioners to Horseshoe Village homeowners of whether they did so with the intent of humiliating
copies of the MeTC decision in the unlawful detainer respondent and destroying the latters good name and
case, which was adverse to respondent and still on reputation in the community.
appeal before the RTC-Branch 88, had no apparent
lawful or just purpose except to humiliate respondent Nevertheless, we further declare that the Court of
or assault his character. As a result, respondent Appeals erred in already awarding moral and exemplary
suffered damages becoming the talk of the town and damages in respondents favor when the parties have not
being deprived of his political career. yet had the chance to present any evidence before the RTC-
Branch 227. In civil cases, he who alleges a fact has the
burden of proving it by a preponderance of evidence. It is
incumbent upon the party claiming affirmative relief from
Petitioners reason that respondent has no cause of the court to convincingly prove its claim. Bare allegations,
action against them since the MeTC decision in the unlawful unsubstantiated by evidence are not equivalent to proof
detainer case was part of public records. under our Rules. In short, mere allegations are not evidence.
[29]
At this point, the finding of the Court of Appeals of WHEREFORE, in view of all the foregoing, the
bad faith and malice on the part of petitioners has no factual petition is PARTIALLY GRANTED. The Decision dated
basis. Good faith is presumed and he who alleges bad faith January 31, 2006 of the Court of Appeals in CA-G.R. CV No.
has the duty to prove the same. Good faith refers to the 82610 is AFFIRMED WITH MODIFICATIONS. The award of
state of the mind which is manifested by the acts of the moral and exemplary damages made by the Court of
individual concerned. It consists of the intention to abstain Appeals in favor of respondent Ismael Veloso III
from taking an unconscionable and unscrupulous advantage is DELETED. The complaint of respondent Ismael Veloso III
of another. Bad faith, on the other hand, does not simply in Civil Case No. Q-02-48341 is hereby REINSTATED before
connote bad judgment to simple negligence. It imports a Branch 227 of the Regional Trial Court of Quezon City only in
dishonest purpose or some moral obliquity and conscious so far as the first cause of action is concerned. The said
doing of a wrong, a breach of known duty due to some court is DIRECTED to hear and dispose of the case with
motive or interest or ill will that partakes of the nature of dispatch.
fraud. Malice connotes ill will or spite and speaks not in
response to duty. It implies an intention to do ulterior and
unjustifiable harm.[30]
SO ORDERED.

Republic of the Philippines


We cannot subscribe to respondents argument that Supreme Court
there is no more need for the presentation of evidence by Manila
the parties since petitioners, in moving for the dismissal of THIRD DIVISION
respondents complaint for damages, hypothetically GENEROSA ALMEDA LATORRE,
admitted respondents allegations. The hypothetical Petitioner, G.R. No. 183926
admission of respondents allegations in the complaint only - versus - Present:
goes so far as determining whether said complaint should LUIS ESTEBAN LATORRE,
be dismissed on the ground of failure to state a cause of Respondent.
action. A finding that the complaint sufficiently states a
x-----------------------------------------------------------------------------------x
cause of action does not necessarily mean that the RESOLUTION
complaint is meritorious; it shall only result in the NACHURA, J.:
reinstatement of the complaint and the hearing of the case Before this Court is a Petition for Review
for presentation of evidence by the parties. on Certiorari[1] under Rule 45, in relation to Rule 41, of the
Rules of Civil Procedure, assailing the decision [2] of the
Regional Trial Court (RTC) of Muntinlupa City, Branch 256,
dated April 29, 2008.
Moreover, petitioner averred that, on or about August 16,
2000, she discovered that respondent caused the
The facts of the case are as follows: annotation of an adverse claim on the TCT of the subject
In October 2000, petitioner Generosa Almeda Latorre property, claiming full ownership over the same by virtue of
(petitioner) filed before the RTC of Muntinlupa City a a Deed of Absolute Sale[6] dated March 21, 2000, allegedly
Complaint[3] for Collection and Declaration of Nullity of Deed executed by petitioner in favor of respondent. Petitioner
of Absolute Sale with application for Injunction against her claimed that the deed was a falsified document; that her
own son, herein respondent Luis Esteban Latorre signature thereon was forged by respondent; and that she
(respondent), and one Ifzal Ali (Ifzal). never received P21 Million or any other amount as
consideration for her share of the subject property. Thus,
Petitioner averred that, on September 28, 1999, respondent petitioner prayed that Ifzal be enjoined from paying the
and Ifzal entered into a Contract of Lease [4] over a 1,244- rentals to respondent, and the latter from receiving said
square meter real property, situated at No. 1366 Caballero rentals; that both Ifzal and respondent be ordered to pay
St., Dasmarias Village, Makati City (subject property). Under petitioner her share of the rentals; and that respondent be
the said contract, respondent, as lessor, declared that he enjoined from asserting full ownership over the subject
was the absolute and registered owner of the subject property and from committing any other act in derogation of
property. Petitioner alleged that respondent's declaration petitioner's interests therein. Petitioner also prayed for the
therein was erroneous because she and respondent were payment of moral and exemplary damages, litigation
co-owners of the subject property in equal shares. expenses, and costs of the suit.

Petitioner narrated that, on March 14, 1989, she and Respondent immediately filed a Motion to Dismiss[7] on the
respondent executed their respective Deeds of Donation, sole ground that the venue of the case was improperly laid.
conveying the subject property in favor of The Porfirio D. He stressed that while the complaint was denominated as
Latorre Memorial & Fr. Luis Esteban Latorre Foundation, Inc. one for Collection and Declaration of Nullity of Deed of
(the Foundation). Thus, Transfer Certificate of Title (TCT) No. Absolute Sale with application for Injunction, in truth the
161963[5] was issued in the name of the Foundation. case was a real action affecting title to and interest over the
Subsequently, on September 2, 1994, petitioner and subject property. Respondent insisted that all of petitioner's
respondent executed separate Deeds of Revocation of claims were anchored on her claim of ownership over one-
Donation and Reconveyance of the subject property, half () portion of the subject property. Since the subject
consented to by the Foundation, through the issuance of property is located in Makati City, respondent argued that
appropriate corporate resolutions. However, the Deeds of petitioner should have filed the case before the RTC of
Revocation were not registered; hence, the subject property Makati City and not of Muntinlupa City.
remained in the name of the Foundation. Petitioner insisted,
however, that respondent was fully aware that the subject Ifzal also filed his motion to dismiss on the ground of want
property was owned in common by both of them. To protect of jurisdiction, asserting that he was immune from suit
her rights as co-owner, petitioner formally demanded from because he was an officer of the Asian Development Bank,
Ifzal the payment of her share of the rentals, which the an international organization.
latter, however, refused to heed.
The RTC issued a Temporary Restraining Order dated
November 6, 2000, restraining Ifzal from paying his rentals
to respondent and enjoining the latter from receiving from the subject property to respondent; and that, on March 21,
the former the aforesaid rentals. The RTC also directed both 2000, petitioner executed a Deed of Absolute Sale in favor
Ifzal and respondent to pay petitioner her share of the of respondent.
rentals, with the corresponding order against respondent
not to commit any act in derogation of petitioner's interest Respondent further alleged that sometime in March to May
over the subject property. 2000, the relationship of the parties, as mother and son,
deteriorated. Petitioner left respondent's house because he
In its Order dated January 2, 2001, the RTC denied and his wife allegedly ignored, disrespected, and insulted
respondent's motion to dismiss. The RTC ruled that the her.[10] Respondent claimed, however, that petitioner left
nature of an action whether real or personal was because she detested his act of firing their driver. [11] It was
determined by the allegations in the complaint, irrespective then that this case was filed against him by petitioner.
of whether or not the plaintiff was entitled to recover upon
the claims asserted - a matter resolved only after, and as a In the meantime, in its Order dated May 15, 2003, the RTC
result of, a trial. Thus, trial on the merits ensued. dismissed petitioner's claim against Ifzal because the
dispute was clearly between petitioner and respondent.
Undaunted, respondent filed an Answer Ad
Cautelam[8] dated March 19, 2001, insisting, among others, On April 29, 2008, the RTC ruled in favor of respondent,
that the case was a real action and that the venue was disposing of the case in this wise:
improperly laid.[9]Respondent narrated that he was a former While the case herein filed by the plaintiff involves recovery
Opus Dei priest but he left the congregation in 1987 after he of possession of a real property situated at 1366 Caballero
was maltreated by his Spanish superiors. Respondent St., Dasmarias Village, Makati City, the same should have
alleged that petitioner lived with him and his family from been filed and tried in the Regional Trial Court of Makati City
1988 to 2000, and that he provided for petitioner's needs. who, undoubtedly, has jurisdiction to hear the matter as
Respondent also alleged that, for almost 20 years, the Opus aforementioned the same being clearly a real action.
Dei divested the Latorre family of several real properties.
Thus, in order to spare the subject property from the Opus WHEREFORE, in view of the foregoing, the above-
Dei, both petitioner and respondent agreed to donate it to entitled case is hereby DISMISSED for want of
the Foundation. In 1994, when respondent got married and jurisdiction, all in pursuance to the above-cited
sired a son, both petitioner and respondent decided to jurisprudence and Rule 4 of the Rules of Court.
revoke the said donation. The Foundation consented to the SO ORDERED.[12]
revocation. However, due to lack of funds, the title was
never transferred but remained in the name of the Aggrieved, petitioner filed her Motion for Reconsideration,
Foundation. [13]
which the RTC denied in its Order[14] dated July 24, 2008
for lack of merit.
Respondent asseverated that he and his wife took good
care of petitioner and that they provided for her needs, Hence, this Petition, claiming that the RTC erred in treating
spending a substantial amount of money for these needs; the venue as jurisdiction and in treating petitioner's
that because of this, and the fact that the rentals paid for complaint as a real action.
the use of the subject property went to petitioner, both
parties agreed that petitioner would convey her share over
While the instant case was pending resolution before this Absolute Sale on the strength of two basic claims that (1)
Court, petitioner passed away on November 14, 2009. Thus, she did not execute the deed in favor of respondent; and (2)
petitioner's counsel prayed that, pending the appointment thus, she still owned one half () of the subject property.
of a representative of petitioner's estate, notices of the Indubitably, petitioner's complaint is a real action involving
proceedings herein be sent to petitioners other son, Father the recovery of the subject property on the basis of her co-
Roberto A. Latorre.[15] ownership thereof.
Second. The RTC also committed a procedural blunder when
As early as the filing of the complaint, this case had been it denied respondent's motion to dismiss on the ground of
marred by numerous procedural infractions committed by improper venue.
petitioner, by respondent, and even by the RTC, all of which
cannot be disregarded by this Court. The RTC insisted that trial on the merits be conducted even
when it was awfully glaring that the venue was improperly
First. Petitioner filed her complaint with the RTC of laid, as pointed out by respondent in his motion to dismiss.
Muntinlupa City instead of the RTC of Makati City, the latter After trial, the RTC eventually dismissed the case on the
being the proper venue in this case. ground of lack of jurisdiction, even as it invoked, as
justification, the rules and jurisprudence on venue. Despite
Sections 1 and 2, Rule 4 of the 1997 Rules of Civil Procedure the conduct of trial, the RTC failed to adjudicate this case on
provide an answer to the issue of venue. [16] Actions affecting the merits.
title to or possession of real property or an interest therein
(real actions) shall be commenced and tried in the proper Third. Respondent also did not do very well, procedurally.
court that has territorial jurisdiction over the area where the When the RTC denied his Motion to Dismiss, respondent
real property is situated. On the other hand, all other could have filed a petition for certiorari and/or prohibition
actions (personal actions) shall be commenced and tried in inasmuch as the denial of the motion was done without
the proper courts where the plaintiff or any of the principal jurisdiction or in excess of jurisdiction or with grave abuse
plaintiffs resides or where the defendant or any of the of discretion amounting to lack of jurisdiction. [21] However,
principal defendants resides.[17] The action in the RTC, other despite this lapse, it is clear that respondent did not waive
than for Collection, was for the Declaration of Nullity of the his objections to the fact of improper venue, contrary to
Deed of Absolute Sale involving the subject property, which petitioner's assertion. Notably, after his motion to dismiss
is located at No. 1366 Caballero was denied, respondent filed a Motion for Reconsideration
St., Dasmarias Village, Makati City. The venue for such to contest such denial. Even in his Answer Ad Cautelam,
action is unquestionably the proper court of Makati City, respondent stood his ground that the case ought to be
where the real property or part thereof lies, not the RTC of dismissed on the basis of improper venue.
Muntinlupa City.[18]
Finally, petitioner came directly to this Court on a Petition
In this jurisdiction, we adhere to the principle that the for Review on Certiorari under Rule 45, in relation to Rule
nature of an action is determined by the allegations in the 41, of the Rules of Civil Procedure on alleged pure questions
Complaint itself, rather than by its title or heading. [19] It is of law. In Murillo v. Consul,[22] we laid down a doctrine that
also a settled rule that what determines the venue of a case was later adopted by the 1997 Revised Rules of Civil
is the primary objective for the filing of the case. [20] In her Procedure. In that case, this Court had the occasion to
Complaint, petitioner sought the nullification of the Deed of clarify the three (3) modes of appeal from decisions of the
RTC, namely: (1) ordinary appeal or appeal by writ of error, taking into account the fact that the RTC failed to adjudicate
where judgment was rendered in a civil or criminal action by this controversy on the merits. This, unfortunately, we
the RTC in the exercise of its original jurisdiction; (2) petition cannot do. It thus becomes exceedingly clear that the filing
for review, where judgment was rendered by the RTC in the of the case directly with this Court ran afoul of the doctrine
exercise of its appellate jurisdiction; and (3) petition for of hierarchy of courts. Pursuant to this doctrine, direct
review to the Supreme Court. resort from the lower courts to the Supreme Court will not
be entertained unless the appropriate remedy sought
The first mode of appeal, governed by Rule 41, is brought to cannot be obtained in the lower tribunals. This Court is a
the Court of Appeals (CA) on questions of fact or mixed court of last resort, and must so remain if it is to
questions of fact and law. The second mode of appeal, satisfactorily perform the functions assigned to it by the
covered by Rule 42, is brought to the CA on questions of Constitution and by immemorial tradition.[27]
fact, of law, or mixed questions of fact and law. The third
mode of appeal, provided in Rule 45, is filed with the Accordingly, we find no merit in the instant petition. Neither
Supreme Court only on questions of law. do we find any reversible error in the trial courts dismissal
of the case ostensibly for want of jurisdiction, although the
A question of law arises when there is doubt as to what the trial court obviously meant to dismiss the case on the
law is on a certain state of facts, while there is a question of ground of improper venue.
fact when the doubt arises as to the truth or falsity of the
alleged facts.[23] Our ruling in Velayo-Fong v. Velayo[24] is WHEREFORE, the instant Petition is DENIED. No costs.
instructive:
A question of law arises when there is doubt as to what the SO ORDERED.
law is on a certain state of facts, while there is a question of
fact when the doubt arises as to the truth or falsity of the
alleged facts. For a question to be one of law, the same SECOND DIVISION
must not involve an examination of the probative value of
the evidence presented by the litigants or any of them. The
resolution of the issue must rest solely on what the law [G.R. No. 158002. February 28, 2005]
provides on the given set of circumstances. Once it is clear
that the issue invites a review of the evidence presented, SPOUSES AURORA N. DE PEDRO and ELPIDIO DE
the question posed is one of fact. Thus, the test of whether PEDRO, petitioners, vs. ROMASAN
a question is one of law or of fact is not the appellation DEVELOPMENT CORPORATION and MANUEL
given to such question by the party raising the same;
KO, respondents.
rather, it is whether the appellate court can determine the
issue raised without reviewing or evaluating the evidence,
in which case, it is a question of law; otherwise it is a DECISION
question of fact.[25]
In her Reply to respondents Comment,[26] petitioner prayed CALLEJO, SR., J.:
that this Court decide the case on the merits. To do so,
however, would require the examination by this Court of the
probative value of the evidence presented,
This is a petition for review on certiorari of the Court of consequence of the illegal and wrongful acts of the
Appeals Decision[1] in CA-G.R. CV No. 68424 dated respondents, they suffered actual damages and incurred
November 29, 2002, as well as its Resolution dated April 11, expenses; as such, they were entitled to moral and
2003 denying the motion for reconsideration thereof. The exemplary damages, and expenses of litigation and
assailed decision affirmed the trial courts order dismissing attorneys fees.[3]
the petitioners complaint for damages.
On June 16, 1998, the respondents filed their Answer to
This case proceeded from the following antecedents: the complaint, alleging therein that the respondent
corporation was the owner of the land as evidenced by
On December 1, 1997, petitioner spouses Aurora and Transfer Certificate of Title (TCT) No. 236044 which was
Elpidio de Pedro filed a Complaint for Damages with Prayer issued by the Register of Deeds on March 5, 1993. By
for Preliminary Injunction against respondents Romasan fencing the property in order to determine its metes and
Development Corporation and Manuel Ko. The complaint bounds, the respondent corporation merely exercised its
stated, inter alia, that the spouses De Pedro were the rights of ownership over the property. The respondents
registered owners of a parcel of land in Barangay San Isidro, further maintained that the petitioners failed to establish
now Barangay Inarawan, Antipolo, Rizal, with an area of the metes and bounds of the property which was claimed to
50,000 square meters, covered and described in Original have been usurped by them. A counterclaim for damages
Certificate of Title (OCT) No. P-691, issued by the Register of was, likewise, interposed against the petitioners.
Deeds of Marikina City, Metro Manila on March 26, 1992;
that they had been continuously paying the real estate On September 18, 1998, the trial court issued an Order
taxes on the said property; that sometime in January 1997, granting the joint motion of the parties to have a relocation
the respondents started putting up a barbed-wire fence on survey on the property in order to verify its location. [4] The
the perimeter of the adjacent property; and that in the survey team consisted of Robert Pangyarihan, Chief of the
course of such construction, the petitioners farm house was Department of Environment and Natural Resources (DENR),
destroyed and bamboos and other trees were cut.[2] Region IV, Surveys Division as Chairman of the Survey Team;
[5]
Engr. Avelino L. San Buenaventura, representing the
The complaint further alleged that the respondents petitioners; and Engr. Patricio Cabalo, representing the
made claims that the petitioners farm house and the trees respondents.
were built and planted on a portion of the adjacent property
owned by the respondents. The respondents then prevented On January 30, 1999, the survey team issued a Report
and refused to allow the petitioners and their families to on the relocation survey with the following recommendation:
enter the property, through security guards. The
respondents, likewise, threatened to clear the trees and WHEREFORE, this Commission finds that OCT No. P-691 of
scrape the area owned by the petitioners with the use of a the plaintiff overlaps TCT No. 236044 of parcel H-162341 of
bulldozer. The petitioners also alleged that as a
the defendant but finds on the contrary that this land is not under H-164008. Both H-162341 and H-164008 are
the actual area that is being claimed and occupied by the presently registered in the name of Romasan Development
plaintiff but another parcel instead, namely H-164008. The Corporation, the defendant.
overlapping of titles was brought about by the double
issuance of title for H-162341 but the technical descriptions The granting of Free Patent to Mrs. de Pedro, et al. over a
of OCT No. P-691 describing a land different from the actual previously titled property is unwarranted or can be
occupation of the plaintiff was a result of the defective unwittingly an act resulting in double titling by the CENRO,
survey.[6] DENR in Antipolo City.[8]

The survey team made the following findings: (1) TCT Based on the report, the respondents filed a
No. 236044 originated from OCT No. 438 in the name of Manifestation/Motion to Dismiss, averring that there was no
Marcelino Santos, which was based on a Homestead Patent. legal or factual basis for the complaint as shown by the
The said OCT was, in turn, based on Plan H-162341 findings of the survey team; hence, the petitioners had no
surveyed on March 8, 1935 and approved on June 30, 1937; cause of action against them.[9] The petitioners did not file
(2) under the Cadastral Map Sheet of the Lungsod any opposition to the motion. Thus, on December 22, 1999,
Silangan Cadastre or CM 14-38 N., 121-12 E on file with the the trial court issued an Order granting the motion and
Records Division of the DENR, Region IV, H-162341, the land ordering the dismissal of the complaint on the ground that
covered by the said OCT was reflected as Lot 10455; (3) the petitioners had no cause of action.[10]
OCT No. P-691, under the name of petitioner Aurora de
Pedro, was based on Plan Cad. 04-0097-63-D which was a The petitioners filed a motion for reconsideration of the
subdivision survey of Lot 10455 of the Lungsod order, contending that (1) the findings and conclusions of
Silangan Cadastre; (4) Lot 10455 was subdivided into Lots the survey team were unreliable; (2) the chairman of the
10455-A to 10455-G; (5) Lot 10455-G was the subject of the team was facing criminal and administrative charges in
petitioners application for a Free Patent; and (6) the land connection with the performance of his duties; (3) the
occupied by petitioner Aurora de Pedro is actually a portion technical description of the property contained in OCT No. P-
of Lot 10454/H-164008 originally registered on July 2, 1965 691 was conclusive and should prevail over the findings of
under OCT No. 468 based on Homestead Patent No. 99480 the team; and (4) the petitioners had a cause of action for
under the name of Isidro Benitez.[7] The survey team further damages against the respondents. According to the
declared that: petitioners, it was premature for the court to dismiss the
complaint without affording them the right to adduce their
The nature of this case, however, is one of overlapping titles evidence on their claim for damages.[11]
even if the erroneous technical descriptions rectified
because even while it may not fall inside the titled H- The petitioners appended to their motion the counter-
162341, the lot of Mrs. de Pedro, et al. given the correct affidavit of Jesus Pampellona, Deputy Land Inspector, Office
description of the boundary, falls inside another titled parcel
of the Community Environment and Natural Resources Office diligent efforts in locating the same, and that H-164008 was
in Antipolo City. Pampellona alleged that subsequent to the not listed in the EDP listing; and Certifications from the
application for a free patent filed by petitioner Aurora de Register of Deeds of Rizal and Marikina City that OCT No.
Pedro over Lots 10455-F and 10455-G, he conducted the 468 issued on July 2, 1965 was not among the records on
required ocular inspections to determine the truth of her file with them.[13]
claim of actual possession over the properties subject of her
application. He found out that she was in actual, public, The respondents opposed the petitioners motion,
adverse and continuous possession of the lots applied for by claiming that the petitioners failed to oppose the
her, and that they were with several improvements, like appointment of the chairman of the team before the
petitioner Aurora de Pedros house and several fruit-bearing relocation survey. Moreover, since according to the report,
trees with an average age of 20 to 25 years. He averred the land claimed by the petitioners was covered by the title
that, as evidence of her ownership and possession over the under the name of respondent corporation, the petitioners
lots, petitioner Aurora de Pedro also submitted an claim for damages had no leg to stand on.[14]
Extrajudicial Partition with Waiver of Rights dated May 10,
1991, executed by the heirs of Marcelino Santos, and an On July 11, 2000, the trial court issued an Order denying
Affidavit of Waiver of Rights dated June 6, 1991, which she the petitioners motion for reconsideration, without prejudice
herself executed. Pampellona declared that there was no to the filing of an appropriate action for the correction or
overlapping of claims or rights over the subject lot based on alteration of the technical description of the property
a certification from the Lands Management Bureau of the covered by OCT No. P-691.[15]
DENR in Manila, and that there was no existing record of a
previous Homestead Application applied for by Marcelino The petitioners appealed the order to the Court of
Santos. He asserted that he secured another Certification Appeals (CA). On November 29, 2002, the CA rendered a
dated January 17, 1991 to the effect that Lot No. 10455, Decision affirming the assailed orders. The CA ruled that the
Mcad-585 located in San Isidro, Antipolo, Rizal, was not result of the relocation survey has the presumption of
covered by any public land application and there was no regularity, such that it must be respected absent any clear
record of the alleged Homestead Application 162341 under showing that it had been irregularly conducted by the
the name of Marcelino Santos. Pampellona, likewise, alleged survey team. The CA held that the petitioners had every
that respondent corporation was the ninth (9th) transferee opportunity to question and object to the composition of the
from the alleged original registered owner, Marcelino survey team before the trial court; since they failed to do so,
Santos, in whose favor OCT No. 438 Homestead Patent was they cannot now be allowed to do the same on appeal.
issued on August 30, 1937.[12] According to the CA, it could not take judicial notice of the
alleged cases filed against the chairman of the survey team
Also appended to the said motion for reconsideration since this was not one of the matters which the courts could
were Certifications from the Lands Management Bureau, take judicial notice of, whether mandatory or directory. [16]
stating that Plan H-164008 was not available on file despite
Finally, the CA ruled that the respondents could not be B. THE TITLE OF RESPONDENT ROMASAN DEVELOPMENT
adjudged liable for the damages allegedly sustained by the CORPORATION IS DEFECTIVE.
petitioners as a consequence of a valid and justified exercise
of ownership over the disputed property. The CA reiterated III. THE HONORABLE COURT OF APPEALS GRAVELY
the trial courts holding that the petitioners were not barred ERRED AND DECIDED THE ISSUES IN THE INSTANT CASE
from filing the appropriate action where they may seek to IN A MANNER CONTRARY TO ESTABLISHED LAW AND
correct whatever mistake or irregularity that their title had. JURISPRUDENCE IN NOT RULING THAT PETITIONERS HAD
[17]
BEEN DEPRIVED OF THEIR CONSTITUTIONAL RIGHT TO
COUNSEL.[18]
On April 11, 2003, the CA issued a Resolution denying
the motion for reconsideration filed by the petitioners; The petitioners maintain that petitioner Aurora de Pedro
hence, this petition for review. is the registered owner of the subject property as evidenced
by OCT No. P-961, and that this title is conclusive of their
The petitioners rely upon the following grounds in ownership over the same.[19] They aver that their title cannot
support of their petition: be the subject of a collateral attack.[20]

I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED The petitioners contend that in contrast to their title,
AND DECIDED THE ISSUES IN THE INSTANT CASE IN A the title of the respondents is defective. This can be gleaned
MANNER CONTRARY TO ESTABLISHED LAW AND from the certifications issued by the Lands Management
JURISPRUDENCE BY HOLDING THAT THE INSTANT CASE Bureau attesting to the fact that Survey Plan H-164008,
IS A SIMPLE CASE FOR DAMAGES. under the name of the respondents does not exist and that
its verification is not listed in the EDP listing, as well as the
II. THE HONORABLE COURT OF APPEALS GRAVELY certifications from the Register of Deeds of Rizal and
ERRED AND DECIDED THE ISSUES IN THE INSTANT CASE Marikina that OCT No. 468, upon which the respondents title
IN A MANNER CONTRARY TO ESTABLISHED LAW AND was allegedly based, does not exist.[21]
JURISPRUDENCE BY HOLDING THAT THE RESULTS OF
THE PRIOR RELOCATION SURVEY ENJOYS THE The petitioners further posit that the relocation survey
PRESUMPTION OF REGULARITY THEREBY report cannot prevail over the technical description of the
DISPOSSESSING PETITIONERS OF THEIR OWNERSHIP property in their title. They likewise assail the relocation
OVER THE DISPUTED PROPERTY DESPITE CLEAR AND survey report by alleging that Pangyarihan, the chairman of
CONVINCING EVIDENCE THAT: the survey team, is the respondent in a number of criminal
and administrative cases relating to the performance of his
A. THE TITLE OF PETITIONER AURORA N. DE PEDRO IS duties.[22]
VALID AND INDEFEASIBLE; AND
The petitioners also claim that the CA mischaracterized The respondents aver that since the survey report
their complaint as a complaint for damages. They submit revealed that there was error in the technical description of
that their complaint is not a simple case for damages but the petitioners property and that it was the petitioners who
one for the recovery of possession over the disputed usurped the respondents property, the claim for damages
property on the strength of their ownership over the same. can no longer be sustained.[28] The private respondents also
They blame the ambiguity of the complaint on the assert that the fact that the plan and the verification of the
inadequacies of their former counsel.[23] survey plan of H-164008 do not exist in the records of the
Register of Deeds is not sufficient proof that their title is
Finally, the petitioners assert that they were deprived of defective.[29]
their right to due process because their previous counsel did
not adequately defend them. They aver that their rights Further, the respondents submit that the dismissal of
were prejudiced by their former counsels negligence; hence, the complaint was not due to the negligence of the
such negligent acts should not be binding on them.[24] petitioners former counsel but was based on the result of
the survey, the conduct of which was agreed upon by the
On the other hand, the respondents submit that the parties. Even if the former counsel of the petitioners made a
petitioners are now in estoppel to assail the veracity and mistake on how to proceed with the case, such mistake is
validity of the relocation survey report since they actively not so gross and is still binding on the client. [30] The
participated in its preparation.[25] They assert that the survey respondents added that the failure to oppose the
report is entitled to full faith and credence as it was Manifestation/Motion to Dismiss was not solely the former
prepared and made by competent persons who were counsels fault, since at the time the new counsel entered his
appointed by the trial court, represented the parties, and appearance, such motion had not yet been resolved by the
were qualified to exact a report based on their expertise. trial court and the new counsel had still ample time to
[26]
They maintain that the petitioners objection to the oppose it.[31]
appointment of Pangyarihan as chairman of the survey team
is a mere afterthought and they should have objected to it The pivotal issue between the parties in the trial court is
from the very start.[27] whether or not, as claimed by the petitioners in their
complaint, the subject property is a portion of the property
covered by OCT No. P-691; or, as claimed by the
respondents in their answer to the complaint, whether the
subject property is a portion of the property covered by TCT
No. 236044, which appears to be a portion of that property
originally registered in 1937 as gleaned from TCT No.
236044.
In contrast to the apposite claims of the parties, the The action of the petitioners against the respondents,
Survey Team found that the subject property, which is part based on the material allegations of the complaint, is one
of the lot actually occupied by the petitioners, is a portion of for recovery of possession of the subject property and
Lot 10454/H-164008 which was originally covered by OCT damages. However, such action is not a direct, but a
No. 468 issued to Isidro Benitez, whereas the technical collateral attack of TCT No. 236044. [34] Neither did the
description of Lot 10455-G covered by OCT No. P-691 was respondents directly attack OCT No. P-691 in their answer to
erroneous for being the result of a defective survey. the complaint. Although the respondents averred in said
answer, by way of special and affirmative defenses, that the
The resolution of the issue will involve the alteration, subject property is covered by TCT No. 236044 issued in the
correction or modification either of OCT No. P-691 under the name of the respondent corporation, and as such the said
name of petitioner Aurora de Pedro, or TCT No. 236044 respondent is entitled to the possession thereof to the
under the name of respondent corporation. If the subject exclusion of the petitioners, such allegation does not
property is found to be a portion of the property covered by constitute a direct attack on OCT No. P-691, but is likewise a
OCT No. P-691 but is included in the technical description of collateral attack thereon. Indeed, in Ybanez v. Intermediate
the property covered by TCT No. 236044, the latter would Appellate Court,[35] we held that:
have to be corrected. On the other hand, if the subject
property is found to be a portion of the property covered by It was erroneous for petitioners to question the Torrens
TCT No. 236044 but is included in the property covered by Original Certificate of Title issued to private respondent over
OCT No. P-691, then the latter title must be rectified. Lot No. 986 in Civil Case No. 671, an ordinary civil action for
However, the rectification of either title may be made recovery of possession filed by the registered owner of the
only via an action filed for the said purpose, [32]conformably said lot, by invoking as affirmative defense in their answer
with Section 48 of Act No. 496, which provides: the Order of the Bureau of Lands, dated July 19, 1978,
issued pursuant to the investigatory power of the Director of
SEC. 48. Certificate not subject to collateral attack. A Lands under Section 91 of Public Land Law (C.A. 141 as
certificate of title shall not be subject to collateral attack. It amended). Such a defense partakes of the nature of a
cannot be altered, modified, or cancelled except in a direct collateral attack against a certificate of title brought under
proceeding in accordance with law. the operation of the Torrens system of registration pursuant
to Section 122 of the Land Registration Act, now Section 103
It has been held that a certificate of title, once of P.D. 1259. The case law on the matter does not allow a
registered, should not thereafter be impugned, altered, collateral attack on the Torrens certificate of title on the
changed, modified, enlarged or diminished except in a direct ground of actual fraud. The rule now finds expression in
proceeding permitted by law.[33] The resolution of the issue Section 48 of P.D. 1529 otherwise known as the Property
is, thus, not dependent on the report of the survey team Registration Decree.[36]
filed in the trial court.
Thus, the court a quo had no jurisdiction to resolve the No. 994 but dated April 19, 1917. Where two certificates (of
decisive issue raised by the parties in the trial court; hence, title) purport to include the same land, the earlier in date
it behooved the trial court to order the dismissal of the prevails. x x x. In successive registrations, where more than
complaint on that ground. one certificate is issued in respect of a particular estate or
interest in land, the person claiming under the prior
The petitioners anchor their claim of lawful possession certificate is entitled to the estate or interest; and the
of the subject property on their allegation that said property person is deemed to hold under the prior certificate who is
is a portion of the property covered by OCT No. P-691 in the the holder of, or whose claim is derived, directly or
name of petitioner Aurora de Pedro. The petitioners were indirectly, from the person who was the holder of the
burdened to prove not only their ownership over the earliest certificate issued in respect thereof. Hence, in point
property covered by OCT No. P-691 but also that the subject of priority issuance, private respondents title prevails over
property is a portion of the property covered by the said title that of petitioner MWSS.
and, if they fail to do so, the complaint must be dismissed.
Lastly, a certificate is not conclusive evidence of title if it is
We agree with the petitioners that, generally, a shown that the same land had already been registered and
certificate of title shall be conclusive as to all matters an earlier certificate for the same is in existence. Since the
contained therein and conclusive evidence of the ownership land in question has already been registered under OCT No.
of the land referred to therein. However, it bears stressing 994 dated April 19, 1917, the subsequent registration of the
that while certificates of title are indefeasible, unassailable same land on May 3, 1917 is null and void.[40]
and binding against the whole world, including the
government itself, they do not create or vest title. [37] They While it is true that the petitioners claimed damages
merely confirm or record title already existing and vested. against the respondents on account of the latters alleged
They cannot be used to protect a usurper from the true trespass on the subject property and the alleged destruction
owner, nor can they be used as a shield for the commission of the petitioners property, the resolution by the court a
of fraud; neither do they permit one to enrich himself at the quo of the claim for damages against the petitioners is
expense of others.[38] riveted to its resolution of the issue of whether the subject
property is a portion of the petitioners property covered by
As we had the occasion to state in Metropolitan OCT No. P-691 or the respondents property covered by TCT
Waterworks and Sewerage System v. Court of Appeals:[39] No. 236044.

It must be observed that the title of petitioner MWSS was a IN LIGHT OF ALL THE FOREGOING, the petition is
transfer from TCT No. 36957 which was derived from OCT DENIED for lack of merit. The Decision of the Court of
No. 994 registered on May 3, 1917. Upon the other hand, Appeals in CA-G.R. CV No. 68424 affirming the assailed
private respondents title was derived from the same OCT Orders of the Regional Trial Court is AFFIRMED. The
complaint is DISMISSED without prejudice. No costs.
SO ORDERED. for review on certiorari seeking to reverse and set aside the
June 27, 2012 Decision1 and the March 26, 2013
Puno, (Chairman), Austria-Martinez, Tinga, and Chico- Resolution2 of the Court of Appeals (CA)in CA-G.R. SP No.
Nazario, JJ., concur. 106271, which denied the petition for annulment of
judgment.

The Facts
Republic of the Philippines
SUPREME COURT Petitioner Yuk Ling Ong (petitioner), a British-Hong Kong
Manila national, and respondent Benjamin Co (respondent), a
Filipino citizen, were married on October 3, 1982 at
SECOND DIVISION Ellinwood-Malate Church.3

G.R. No. 206653 February 25, 2015 Sometime in November 2008, petitioner received a
subpoena from the Bureau of Immigration and Deportation
YUK LING ONG, Petitioner, (BID)directing her to appear before the said agency because
vs. her permanent residence visa was being subjected to
BENJAMIN T. CO, Respondent. cancellation proceedings. Reportedly, her marriage with
respondent was nullified by the court.
DECISION
When petitioner appeared before the BID, she was furnished
MENDOZA, J.: with the copies of the following documents: (1) petition for
declaration of nullity of marriage filed as Civil Case No. CV-
In court proceedings, there is no right more cherished than 01-0177; (2) petition for declaration of nullity of marriage
the right of every litigant to be given an opportunity to be docketed as Civil Case No. 02-0306; (3) Decision, 4 dated
heard. This right begins at the very moment that summons December 11, 2002, in Civil Case No. 02-0306 of the
is served on the defendant. The Rules of Court places Regional Trial Court, Branch 260 (RTC), Paraaque City,
utmost importance in ensuring that the defendant declaring the marriage between petitioner and respondent
personally grasp the weight of responsibility that will befall as void ab initio; and (4) their marriage contract 5 with the
him. Thus, it is only in exceptional circumstances that subject decision annotated thereon. Petitioner was
constructive notification, or substituted service of summons, perplexed that her marriage with respondent had been
is allowed. If the server falls short of the rigorous declared void ab initio. The above documents showed that
requirements for substituted service of summons, then the on April 26, 2001, respondent filed a petition for declaration
Court has no other option but to strike down a void of nullity6 on the ground of psychological incapacity before
judgment, regardless of the consequences. This is a petition
the RTC, which was docketed as Civil Case No. CV-01-0177. committed extrinsic fraud because, as seen in Civil Case No.
Respondent stated that petitioners address was 600 Elcano CV-01-0177, he deliberately indicated a wrong address to
St., Binondo, Manila. There was no showing of its status, prevent her from participating in the trial; second,
whether pending, withdrawn or terminated. On July 19, jurisdiction over her person was not acquired in Civil Case
2002, respondent filed another petition for declaration of No. 02-0306 because of an invalid substituted service of
Nullity7 on the ground of psychological incapacity before the summons as no sufficient explanation, showing impossibility
RTC, docketed as Civil Case No. 02-0306. Respondent of personal service, was stated before resorting to
indicated that petitioners address was 23 Sta. Rosa Street, substituted service of summons; third, the alleged
Unit B-2 Manresa Garden Homes, Quezon City. On July 29, substituted service was made on a security guard of their
2002, the RTC issued summons.8 In his Servers townhouse and not on a member of her household; and
Return,9 process server Rodolfo Torres, Jr. stated that, on fourth, she was not psychologically incapacitated to perform
August 1, 2002, substituted service of summons with the her marital obligations.12
copy of the petition was effected after several futile
attempts to serve the same personally on petitioner. The Ruling of the Court of Appeals
said documents were received by Mr. Roly Espinosa, a
security officer. On June 27, 2012, the CA rendered the assailed decision
finding the petition for annulment of judgment to be devoid
On December 11, 2002, the RTC rendered a decision10 in of merit. It held that there was no sufficient proof to
Civil Case No. 02-0306 finding respondents marriage with establish that respondent employed fraud to insure
petitioner as void ab initio on the ground of psychological petitioners non-participation in the trial of Civil Case No. CV-
incapacity under Article 36 of the Family Code. It stated that 01-0177.
summons was served on petitioner on August 1, 2002, but
she failed to file her responsive pleading within the Relying on Robinson v. Miralles,13 the CA further ruled that
reglementary period. The public prosecutor also stated that the substituted service of summons in Civil Case No. 02-
there were no indicative facts to manifest collusion. Thus, 0306 was valid. It found that there was a customary practice
the RTC concluded that petitioner was psychologically in petitioners townhouse that the security guard would first
incapacitated to perform her essential marital obligations. entertain any visitors and receive any communication in
behalf of the homeowners. With this set-up, it was obviously
Consequently, petitioner filed a petition for annulment of impossible for the process server to personally serve the
judgment11 under Rule 47 of the Rules of Court before the summons upon petitioner. It also declared that the process
CA on November 24, 2008, claiming that she was never servers return carries with it the presumption of regularity
notified of the cases filed against her. She prayed that the in the discharge of a public officers duties and functions.
RTC decision, dated December 11, 2002, in Civil Case No.
02-0306, be nullified on the grounds of extrinsic fraud and
lack of jurisdiction. Petitioner alleged that first, respondent
Petitioner moved for reconsideration, but her motion was The Court finds merit in the petition.
denied by the CA in its Resolution,14 dated March 26, 2013.
Annulment of judgment is a recourse equitable in character,
Hence, this petition, anchored on the following allowed only in exceptional cases as where there is no
available or other adequate remedy. Rule 47 of the 1997
ISSUES Rules of Civil Procedure, as amended, governs actions for
annulment of judgments or final orders and resolutions, and
1. Whether or not the Trial Court in Civil Case No. 02-0306 Section 2 thereof explicitly provides only two grounds for
validly acquired jurisdiction over the person of the annulment of judgment, that is, extrinsic fraud and lack of
petitioner. jurisdiction.19 Annulment of judgment is an equitable
principle not because it allows a party-litigant another
2. Whether or not the facts proven by the petitioner opportunity to reopen a judgment that has long lapsed into
constitute extrinsic fraud within the purview of Rule 47 of finality but because it enables him to be discharged from
the Rules of Court.15 the burden of being bound to a judgment that is an absolute
nullity to begin with.20
Petitioner argues that there was an invalid substituted
service of summons.1wphi1 The process servers return Petitioner raises two grounds to support her claim for
only contained a general statement that substituted service annulment of judgment: (1) extrinsic fraud and (2) lack of
was resorted to "after several futile attempts to serve the jurisdiction. Her contention on the existence of extrinsic
same personally,"16 without stating the dates and reasons of fraud, however, is too unsubstantial to warrant
the failed attempts. Petitioner also reiterates her argument consideration. The discussion shall then focus on the ground
that extrinsic fraud was employed. of lack of jurisdiction.

In his Comment,17 filed on July 9, 2014, respondent Lack of jurisdiction on the part of the trial court in rendering
contended that the servers return satisfactorily stated the the judgment or final order is either lack of jurisdiction over
reason for the resort to a substituted service of summons on the subject matter or nature of the action, or lack of
August 1, 2002; and it was improbable that petitioner failed jurisdiction over the person of the petitioner. The former is a
to receive the summons because it was sent to the same matter of substantive law because statutory law defines the
address which she declared in this present petition. jurisdiction of the courts over the subject matter or nature of
the action. The latter is a matter of procedural law, for it
Petitioner filed her Reply18 on October 8, 2014 reiterating involves the service of summons or other processes on the
her previous arguments. petitioner.21

The Courts Ruling


In the present case, petitioner contends that there was lack prompt service. "Several attempts" means at least three (3)
of jurisdiction over her person because there was an invalid tries, preferably on at least two different dates. In addition,
substituted service of summons. Jurisdiction over the the sheriff must cite why such efforts were unsuccessful. It
defendant is acquired either upon a valid service of is only then that impossibility of service can be confirmed or
summons or the defendant's voluntary appearance in accepted.
court.22 If the defendant does not voluntarily appear in
court, jurisdiction can be acquired by personal or substituted (2) Specific Details in the Return
service of summons as laid out under Sections 6 and 7 of
Rule 14 of the Rules of Court, which state: The sheriff must describe in the Return of Summons the
facts and circumstances surrounding the attempted
Sec. 6. Service in person on defendant. - Whenever personal service. The efforts made to find the defendant and
practicable, the summons shall be served by handing a copy the reasons behind the failure must be clearly narrated in
thereof to the defendant in person, or, if he refuses to detail in the Return. The date and time of the attempts on
receive and sign for it, by tendering it to him. personal service, the inquiries made to locate the
defendant, the name/s of the occupants of the alleged
Sec. 7. Substituted Service. - If, for justifiable causes, the residence or house of defendant and all other acts done,
defendant cannot be served within a reasonable time as though futile, to serve the summons on defendant must be
provided in the preceding section, service may be effected specified in the Return to justify substituted service.
(a) by leaving copies of the summons at the defendant's
residence with some person of suitable age and discretion (2) A Person of Suitable Age and Discretion
then residing therein, or (b) by leaving the copies at
defendant's office or regular place of business with some The sheriff must therefore determine if the person found in
competent person in charge thereof. the alleged dwelling or residence of defendant is of legal
age, what the recipient's relationship with the defendant is,
The landmark case of Manotoc v. CA (Manotoc)23 thoroughly and whether said person comprehends the significance of
discussed the rigorous requirements of a substituted service the receipt of the summons and his duty to immediately
of summons, to wit: xxx deliver it to the defendant or at least notify the defendant of
said receipt of summons. These matters must be clearly and
(1) Impossibility of Prompt Personal Service specifically described in the Return of Summons. (Emphases
and underscoring supplied)
For substituted service of summons to be available, there
must be several attempts by the sheriff to personally serve The pronouncements of the Court in Manotoc have been
the summons within a reasonable period of one month applied to several succeeding cases. In Pascual v.
which eventually resulted in failure to prove impossibility of Pascual,24 the return of summons did not show or indicate
the actual exertion or positive steps taken by the officer or THIS IS TO CERTIFY THAT on August 1, 2002, substituted
process server in serving the summons personally to the service of summons with copy of petition, were effected to
defendant. Similarly, in Spouses Afdal v. Carlos,25 the respondent, Yuk Ling H. Ong, at the Unit B-2, No. 23 Sta.
process servers indorsements therein failed to state that Rosa St., Manresa Garden Homes, Manresa Garden City,
the personal service on the defendants was rendered Quezon City, after several futile attempts to serve the same
impossible and that efforts were made to find them personally. The said documents were received by Mr. Roly
personally. In both those cases, the Court ruled that the Espinosa of sufficient age and discretion, the Security Officer
meticulous requirements for substituted service of summons thereat.
were not met.
Therefore, respectfully returning to Court, original copy of
There are cases, however, in which Manotoc was applied, summons, Duly Served, this 2nd day of August, 2002.
but, nevertheless, it was ruled that there was no lack of
jurisdiction over the person of the defendant. In Sagana v. RODOLFO P. TORRES, JR.
Francisco,26 the diligent efforts exerted by the sheriff to Process Server
locate the respondent were determined, not only based on
the sheriff's return, but also on the process server's notation (Emphasis supplied)
and case records. In the case of Wong v. Factor-Koyama,27 on
the other hand, even if the sheriff performed an invalid The servers return utterly lacks sufficient detail of the
substituted service of summons, jurisdiction over the person attempts undertaken by the process server to personally
of defendant was obtained because the latter had actively serve the summons on petitioner. The server simply made a
participated in trial, amounting to a voluntary appearance general statement that summons was effected after several
under Section 20 of Rule 14.28 futile attempts to serve the same personally. The server did
not state the specific number of attempts made to perform
In the case at bench, the summons in Civil Case No. 02- the personal service of summons; the dates and the
030629 was issued on July 29, 2002. In his servers corresponding time the attempts were made; and the
return,30 the process server resorted to substituted service underlying reason for each unsuccessful service. He did not
of summons on August 1, 2002. Surprisingly, the process explain either if there were inquiries made to locate the
server immediately opted for substituted service of petitioner, who was the defendant in the case. These
summons after only two (2) days from the issuance of the important acts to serve the summons on petitioner, though
summons. The servers return stated the following: futile, must be specified in the return to justify substituted
service.
SERVERS RETURN
The servers return did not describe in detail the person who
received the summons, on behalf of petitioner. It simply
stated that the summons was received "by Mr. Roly Espinosa the petition for annulment of judgment for lack of
of sufficient age and discretion, the Security Officer thereat." jurisdiction over the person of petitioner because there was
It did not expound on the competence of the security officer an invalid substituted service of summons. Accordingly, the
to receive the summons. decision in Civil Case No. 02-0306 must be declared null and
void.
Also, aside from the servers return, respondent failed to
indicate any portion of the records which would describe the The stricter rule in substituted service of summons was
specific attempts to personally serve the summons. meant to address "[t]he numerous claims of irregularities in
Respondent did not even claim that petitioner made any substituted service which have spawned the filing of a great
voluntary appearance and actively participated in Civil Case number of unnecessary special civil actions of certiorari and
No. 02-0306. appeals to higher courts, resulting in prolonged litigation
and wasteful legal expenses."32
The case of Robinson v. Miralles, cited by the CA, is not
applicable. In that case, the return described in thorough Although the decision in Civil Case No. 02-0306 was
detail how the security guard refused the sheriffs entry promulgated as early as December 11, 2002, the Court must
despite several attempts. The defendant in the said case strike it down for lack of jurisdiction over the person of
specifically instructed the guard to prevent anybody to petitioner. The favorable judgment enjoyed by respondent
proceed to her residence. In the present case, the attempts cannot be categorized as a genuine victory because it was
made by the process server were stated in a broad and fought against an adversary, who was ignorant of the
ambiguous statement. existing dispute. Whatever prize bestowed upon the victor in
such a void decision must also be undone. Respondent, if he
The CA likewise erred in ruling that the presumption of wishes to pursue, must start from scratch and institute his
regularity in the performance of official duty could be action for declaration of nullity again; this time with
applied in the case at bench. This p resumption of regularity, petitioner fully aware and ready for litigation.
however, was never intended to be applied even in cases
where there are no showing of substantial compliance with WHEREFORE, the petition is GRANTED. The June 27, 2012
the requirements of the rules of procedure. Such Decision and the March 26, 2013 Resolution of the Court of
presumption does not apply where it is patent that the Appeals in CAG.R. SP No. 106271 are hereby REVERSED and
sheriff's or server's return is defective.31 As earlier SET ASIDE. The December 11, 2002 Decision of the Regional
explained, the server's return did not comply with the Trial Court, Branch 260, Paraaque City is hereby declared
stringent requirements of substituted service of summons. VOID.

Given that the meticulous requirements in Manotoc were not SO ORDERED.


met, the Court is not inclined to uphold the CA's denial of
JOSE CATRAL MENDOZA (Adelia), filed a complaint for specific performance against
Associate Justice Godofredo and Carmen before the Regional Trial Court of
Bataan, Branch 4. The case was docketed as Civil Case No.
DH-256-94.
FIRST DIVISION
[G.R. No. 144225. June 17, 2003] Armando and Adelia alleged in their complaint that
SPOUSES GODOFREDO ALFREDO and CARMEN LIMON Godofredo and Carmen mortgaged the Subject Land
ALFREDO, SPOUSES ARNULFO SAVELLANO and for P7,000.00 with the Development Bank of the Philippines
EDITHA B. SAVELLANO, DANTON D. MATAWARAN, (DBP). To pay the debt, Carmen and Godofredo sold the
SPOUSES DELFIN F. ESPIRITU, JR. and ESTELA S. Subject Land to Armando and Adelia for P15,000.00, the
ESPIRITU and ELIZABETH TUAZON, petitioners, buyers to pay the DBP loan and its accumulated interest,
vs. SPOUSES ARMANDO BORRAS and ADELIA and the balance to be paid in cash to the sellers.
LOBATON BORRAS, respondents.
Armando and Adelia gave Godofredo and Carmen the
money to pay the loan to DBP which signed the release of
DECISION
mortgage and returned the owners duplicate copy of OCT
CARPIO, J.: No. 284 to Godofredo and Carmen. Armando and Adelia
subsequently paid the balance of the purchase price of the
The Case Subject Land for which Carmen issued a receipt dated 11
March 1970. Godofredo and Carmen then delivered to Adelia
the owners duplicate copy of OCT No. 284, with the
Before us is a petition for review assailing the document of cancellation of mortgage, official receipts of
Decision[1] of the Court of Appeals dated 26 November 1999 realty tax payments, and tax declaration in the name of
affirming the decision[2] of the Regional Trial Court of Bataan, Godofredo. Godofredo and Carmen introduced Armando and
Branch 4, in Civil Case No. DH-256-94. Petitioners also Adelia, as the new owners of the Subject Land, to the
question the Resolution of the Court of Appeals dated 26 Natanawans, the old tenants of the Subject Land.Armando
July 2000 denying petitioners motion for reconsideration. and Adelia then took possession of the Subject Land.
The Antecedent Facts In January 1994, Armando and Adelia learned that hired
A parcel of land measuring 81,524 square meters persons had entered the Subject Land and were cutting
(Subject Land) in Barrio Culis, Mabiga, Hermosa, Bataan is trees under instructions of allegedly new owners of the
the subject of controversy in this case. The registered Subject Land.Subsequently, Armando and Adelia discovered
owners of the Subject Land were petitioner spouses, that Godofredo and Carmen had re-sold portions of the
Godofredo Alfredo (Godofredo) and Carmen Limon Alfredo Subject Land to several persons.
(Carmen). The Subject Land is covered by Original On 8 February 1994, Armando and Adelia filed an
Certificate of Title No. 284 (OCT No. 284) issued to adverse claim with the Register of Deeds of
Godofredo and Carmen under Homestead Patent No. V- Bataan. Armando and Adelia discovered that Godofredo and
69196. Carmen had secured an owners duplicate copy of OCT No.
On 7 March 1994, the private respondents, spouses 284 after filing a petition in court for the issuance of a new
Armando Borras (Armando) and Adelia Lobaton Borras copy. Godofredo and Carmen claimed in their petition that
they lost their owners duplicate copy. Armando and Adelia WHEREFORE, premises considered, judgment is hereby
wrote Godofredo and Carmen complaining about their acts, rendered in favor of plaintiffs, the spouses Adelia Lobaton
but the latter did not reply. Thus, Armando and Adelia filed a Borras and Armando F. Borras, and against the defendant-
complaint for specific performance. spouses Godofredo Alfredo and Carmen Limon Alfredo,
spouses Arnulfo Sabellano and Editha B. Sabellano, spouses
On 28 March 1994, Armando and Adelia amended their Delfin F. Espiritu, Jr. and Estela S. Espiritu, Danton D.
complaint to include the following persons as additional Matawaran and Elizabeth Tuazon, as follows:
defendants: the spouses Arnulfo Savellano and Editha B.
Savellano, Danton D. Matawaran, the spouses Delfin F.
Espiritu, Jr. and Estela S. Espiritu, and Elizabeth Tuazon 1. Declaring the Deeds of Absolute Sale of the disputed
(Subsequent Buyers). The Subsequent Buyers, who are also parcel of land (covered by OCT No. 284) executed by the
petitioners in this case, purchased from Godofredo and spouses Godofredo Alfredo and Camen Limon Alfredo in
Carmen the subdivided portions of the Subject Land. The favor of spouses Arnulfo Sabellano and Editha B. Sabellano,
Register of Deeds of Bataan issued to the Subsequent spouses Delfin F. Espiritu, Danton D. Matawaran and
Buyers transfer certificates of title to the lots they Elizabeth Tuazon, as null and void;
purchased.
2. Declaring the Transfer Certificates of Title Nos. T-163266
In their answer, Godofredo and Carmen and the and T-163267 in the names of spouses Arnulfo Sabellano
Subsequent Buyers (collectively petitioners) argued that the and Editha B. Sabellano; Transfer Certificates of Title Nos. T-
action is unenforceable under the Statute of 163268 and 163272 in the names of spouses Delfin F.
Frauds. Petitioners pointed out that there is no written Espiritu, Jr. and Estela S. Espiritu; Transfer Certificates of
instrument evidencing the alleged contract of sale over the Title Nos. T-163269 and T-163271 in the name of Danton D.
Subject Land in favor of Armando and Adelia. Petitioners Matawaran; and Transfer Certificate of Title No. T-163270 in
objected to whatever parole evidence Armando and Adelia the name of Elizabeth Tuazon, as null and void and that the
introduced or offered on the alleged sale unless the same Register of Deeds of Bataan is hereby ordered to cancel said
was in writing and subscribed by Godofredo. Petitioners titles;
asserted that the Subsequent Buyers were buyers in good
faith and for value. As counterclaim, petitioners sought 3. Ordering the defendant-spouses Godofredo Alfredo and
payment of attorneys fees and incidental expenses. Carmen Limon Alfredo to execute and deliver a good and
Trial then followed. Armando and Adelia presented the valid Deed of Absolute Sale of the disputed parcel of land
following witnesses: Adelia, Jesus Lobaton, Roberto Lopez, (covered by OCT No. 284) in favor of the spouses Adelia
Apolinario Natanawan, Rolando Natanawan, Tomas Lobaton Borras and Armando F. Borras within a period of ten
Natanawan, and Mildred Lobaton. Petitioners presented two (10) days from the finality of this decision;
witnesses, Godofredo and Constancia Calonso.
4. Ordering defendant-spouses Godofredo Alfredo and
On 7 June 1996, the trial court rendered its decision in Carmen Limon Alfredo to surrender their owners duplicate
favor of Armando and Adelia. The dispositive portion of the copy of OCT No. 284 issued to them by virtue of the Order
decision reads: dated May 20, 1992 of the Regional Trial Court of Bataan,
Dinalupihan Branch, to the Registry of Deeds of Bataan
within ten (10) days from the finality of this decision, who, in
turn, is directed to cancel the same as there exists in the The trial court ruled that there was a perfected contract
possession of herein plaintiffs of the owners duplicate copy of sale between the spouses Godofredo and Carmen and the
of said OCT No. 284 and, to restore and/or reinstate OCT No. spouses Armando and Adelia. The trial court found that all
284 of the Register of Deeds of Bataan to its full force and the elements of a contract of sale were present in this
effect; case. The object of the sale was specifically identified as the
81,524-square meter lot in Barrio Culis, Mabigas, Hermosa,
5. Ordering the defendant-spouses Godofredo Alfredo and Bataan, covered by OCT No. 284 issued by the Registry of
Carmen Limon Alfredo to restitute and/or return the amount Deeds of Bataan. The purchase price was fixed
of the respective purchase prices and/or consideration of at P15,000.00, with the buyers assuming to pay the
sale of the disputed parcels of land they sold to their co- sellers P7,000.00 DBP mortgage loan including its
defendants within ten (10) days from the finality of this accumulated interest. The balance of the purchase price
decision with legal interest thereon from date of the sale; was to be paid in cash to the sellers. The last payment
of P2,524.00 constituted the full settlement of the purchase
6. Ordering the defendants, jointly and severally, to pay price and this was paid on 11 March 1970 as evidenced by
plaintiff-spouses the sum of P20,000.00 as and for attorneys the receipt issued by Carmen.
fees and litigation expenses; and The trial court found the following facts as proof of a
perfected contract of sale: (1) Godofredo and Carmen
7. Ordering defendants to pay the costs of suit. delivered to Armando and Adelia the Subject Land; (2)
Armando and Adelia treated as their own tenants the
Defendants counterclaims are hereby dismissed for lack of tenants of Godofredo and Carmen; (3) Godofredo and
merit. Carmen turned over to Armando and Adelia documents such
as the owners duplicate copy of the title of the Subject Land,
SO ORDERED.[3] tax declaration, and the receipts of realty tax payments in
the name of Godofredo; and (4) the DBP cancelled the
mortgage on the Subject Property upon payment of the loan
Petitioners appealed to the Court of Appeals. of Godofredo and Carmen. Moreover, the receipt of payment
On 26 November 1999, the Court of Appeals issued its issued by Carmen served as an acknowledgment, if not a
Decision affirming the decision of the trial court, thus: ratification, of the verbal sale between the sellers and the
buyers. The trial court ruled that the Statute of Frauds is not
WHEREFORE, premises considered, the appealed decision in applicable because in this case the sale was perfected.
Civil Case No. DH-256-94 is hereby AFFIRMED in its The trial court concluded that the Subsequent Buyers
entirety. Treble costs against the defendants-appellants. were not innocent purchasers. Not one of the Subsequent
Buyers testified in court on how they purchased their
SO ORDERED.[4] respective lots.The Subsequent Buyers totally depended on
the testimony of Constancia Calonso (Calonso) to explain
On 26 July 2000, the Court of Appeals denied petitioners the subsequent sale. Calonso, a broker, negotiated with
motion for reconsideration. Godofredo and Carmen the sale of the Subject Land which

The Ruling of the Trial Court


Godofredo and Carmen subdivided so they could sell anew a perfected contract of sale and the Subsequent Buyers
portions to the Subsequent Buyers. were not innocent purchasers.
Calonso admitted that the Subject Land was adjacent to The Court of Appeals ruled that the handwritten receipt
her own lot. The trial court pointed out that Calonso did not dated 11 March 1970 is sufficient proof that Godofredo and
inquire on the nature of the tenancy of the Natanawans and Carmen sold the Subject Land to Armando and Adelia upon
on who owned the Subject Land. Instead, she bought out the payment of the balance of the purchase price. The Court of
tenants for P150,000.00. The buy out was embodied in Appeals found the recitals in the receipt as sufficient to
a Kasunduan. Apolinario Natanawan (Apolinario) testified serve as the memorandum or note as a writing under the
that he and his wife accepted the money and signed Statute of Frauds.[5] The Court of Appeals then reiterated the
the Kasunduan because Calonso and the Subsequent Buyers ruling of the trial court that the Statute of Frauds does not
threatened them with forcible ejectment. Calonso brought apply in this case.
Apolinario to the Agrarian Reform Office where he was asked
to produce the documents showing that Adelia is the owner The Court of Appeals gave credence to the testimony of
of the Subject Land. Since Apolinario could not produce the a witness of Armando and Adelia, Mildred Lobaton, who
documents, the agrarian officer told him that he would lose explained why the title to the Subject Land was not in the
the case. Thus, Apolinario was constrained to sign name of Armando and Adelia. Lobaton testified that
the Kasunduan and accept the P150,000.00. Godofredo was then busy preparing to leave for
Davao. Godofredo promised that he would sign all the
Another indication of Calonsos bad faith was her own papers once they were ready. Since Armando and Adelia
admission that she saw an adverse claim on the title of the were close to the family of Carmen, they trusted Godofredo
Subject Land when she registered the deeds of sale in the and Carmen to honor their commitment. Armando and
names of the Subsequent Buyers. Calonso ignored the Adelia had no reason to believe that their contract of sale
adverse claim and proceeded with the registration of the was not perfected or validly executed considering that they
deeds of sale. had received the duplicate copy of OCT No. 284 and other
relevant documents. Moreover, they had taken physical
The trial court awarded P20,000.00 as attorneys fees to possession of the Subject Land.
Armando and Adelia. In justifying the award of attorneys
fees, the trial court invoked Article 2208 (2) of the Civil Code The Court of Appeals held that the contract of sale is
which allows a court to award attorneys fees, including not void even if only Carmen signed the receipt dated 11
litigation expenses, when it is just and equitable to award March 1970. Citing Felipe v. Heirs of Maximo Aldon,
the same. The trial court ruled that Armando and Adelia are [6]
the appellate court ruled that a contract of sale made by
entitled to attorneys fees since they were compelled to file the wife without the husbands consent is not void but
this case due to petitioners refusal to heed their just and merely voidable. The Court of Appeals further declared that
valid demand. the sale in this case binds the conjugal partnership even if
only the wife signed the receipt because the proceeds of the
The Ruling of the Court of Appeals sale were used for the benefit of the conjugal
The Court of Appeals found the factual findings of the partnership. The appellate court based this conclusion on
trial court well supported by the evidence. Based on these Article 161[7] of the Civil Code.
findings, the Court of Appeals also concluded that there was
The Subsequent Buyers of the Subject Land cannot II
claim that they are buyers in good faith because they had
constructive notice of the adverse claim of Armando and Whether the action to enforce the alleged oral contract of
Adelia. Calonso, who brokered the subsequent sale, testified sale brought after 24 years from its alleged perfection had
that when she registered the subsequent deeds of sale, the been barred by prescription and by laches.
adverse claim of Armando and Adelia was already annotated III
on the title of the Subject Land. The Court of Appeals
believed that the act of Calonso and the Subsequent Buyers Whether the deeds of absolute sale and the transfer
in forcibly ejecting the Natanawans from the Subject Land certificates of title over the portions of the Subject Land
buttresses the conclusion that the second sale was tainted issued to the Subsequent Buyers, innocent purchasers in
with bad faith from the very beginning. good faith and for value whose individual titles to their
respective lots are absolute and indefeasible, are valid.
Finally, the Court of Appeals noted that the issue of
prescription was not raised in the Answer. Nonetheless, the IV
appellate court explained that since this action is actually
based on fraud, the prescriptive period is four years, with Whether petitioners are liable to pay Armando and
the period starting to run only from the date of the Adelia P20,0000.00 as attorneys fees and litigation
discovery of the fraud. Armando and Adelia discovered the expenses and the treble costs, where the claim of Armando
fraudulent sale of the Subject Land only in January and Adelia is clearly unfounded and baseless.
1994. Armando and Adelia lost no time in writing a letter to
Godofredo and Carmen on 2 February 1994 and filed this V
case on 7 March 1994. Plainly, Armando and Adelia did not
sleep on their rights or lose their rights by prescription. Whether petitioners are entitled to the counterclaim for
attorneys fees and litigation expenses, where they have
The Court of Appeals sustained the award of attorneys sustained such expenses by reason of institution of a clearly
fees and imposed treble costs on petitioners. malicious and unfounded action by Armando and Adelia.[8]
The Issues The Courts Ruling
Petitioners raise the following issues: The petition is without merit.
I In a petition for review on certiorari under Rule 45, this
Whether the alleged sale of the Subject Land in favor of Court reviews only errors of law and not errors of facts.
[9]
Armando and Adelia is valid and enforceable, where (1) it The factual findings of the appellate court are generally
was orally entered into and not in writing; (2) Carmen did binding on this Court.[10] This applies with greater force when
not obtain the consent and authority of her husband, both the trial court and the Court of Appeals are in complete
Godofredo, who was the sole owner of the Subject Land in agreement on their factual findings. [11] In this case, there is
whose name the title thereto (OCT No. 284) was issued; and no reason to deviate from the findings of the lower
(3) it was entered into during the 25-year prohibitive period courts. The facts relied upon by the trial and appellate
for alienating the Subject Land without the approval of the courts are borne out by the record. We agree with the
Secretary of Agriculture and Natural Resources. conclusions drawn by the lower courts from these facts.
Validity and Enforceability of the Sale dated 11 March 1970 was the last installment to settle fully
the purchase price. Indeed, upon payment to DBP of
the P7,000.00 and the accumulated interests, the DBP
The contract of sale between the spouses Godofredo cancelled the mortgage on the Subject Land and returned
and Carmen and the spouses Armando and Adelia was a the owners duplicate copy of OCT No. 284 to Godofredo and
perfected contract. A contract is perfected once there is Carmen.
consent of the contracting parties on the object certain and
on the cause of the obligation. [12] In the instant case, the The trial and appellate courts correctly refused to apply
object of the sale is the Subject Land, and the price certain the Statute of Frauds to this case. The Statute of
is P15,000.00. The trial and appellate courts found that Frauds[16] provides that a contract for the sale of real
there was a meeting of the minds on the sale of the Subject property shall be unenforceable unless the contract or some
Land and on the purchase price of P15,000.00. This is a note or memorandum of the sale is in writing and
finding of fact that is binding on this Court.We find no reason subscribed by the party charged or his agent. The existence
to disturb this finding since it is supported by substantial of the receipt dated 11 March 1970, which is a
evidence. memorandum of the sale, removes the transaction from the
provisions of the Statute of Frauds.
The contract of sale of the Subject Land has also been
consummated because the sellers and buyers have The Statute of Frauds applies only to executory
performed their respective obligations under the contract. In contracts and not to contracts either partially or totally
a contract of sale, the seller obligates himself to transfer the performed.[17] Thus, where one party has performed ones
ownership of the determinate thing sold, and to deliver the obligation, oral evidence will be admitted to prove the
same, to the buyer who obligates himself to pay a price agreement.[18] In the instant case, the parties have
certain to the seller.[13] In the instant case, Godofredo and consummated the sale of the Subject Land, with both sellers
Carmen delivered the Subject Land to Armando and Adelia, and buyers performing their respective obligations under
placing the latter in actual physical possession of the the contract of sale. In addition, a contract that violates the
Subject Land. This physical delivery of the Subject Land also Statute of Frauds is ratified by the acceptance of benefits
constituted a transfer of ownership of the Subject Land to under the contract.[19] Godofredo and Carmen benefited
Armando and Adelia.[14] Ownership of the thing sold is from the contract because they paid their DBP loan and
transferred to the vendee upon its actual or constructive secured the cancellation of their mortgage using the money
delivery.[15] Godofredo and Carmen also turned over to given by Armando and Adelia. Godofredo and Carmen also
Armando and Adelia the documents of ownership to the accepted payment of the balance of the purchase price.
Subject Land, namely the owners duplicate copy of OCT No. Godofredo and Carmen cannot invoke the Statute of
284, the tax declaration and the receipts of realty tax Frauds to deny the existence of the verbal contract of sale
payments. because they have performed their obligations, and have
On the other hand, Armando and Adelia paid the full accepted benefits, under the verbal contract. [20] Armando
purchase price as evidenced by the receipt dated 11 March and Adelia have also performed their obligations under the
1970 issued by Carmen. Armando and Adelia fulfilled their verbal contract. Clearly, both the sellers and the buyers
obligation to provide the P7,000.00 to pay the DBP loan of have consummated the verbal contract of sale of the
Godofredo and Carmen, and to pay the latter the balance Subject Land. The Statute of Frauds was enacted to prevent
of P8,000.00 in cash. The P2,524.00 paid under the receipt
fraud.[21] This law cannot be used to advance the very evil In Felipe v. Aldon,[23] we applied Article 173 in a case
the law seeks to prevent. where the wife sold some parcels of land belonging to the
conjugal partnership without the consent of the
Godofredo and Carmen also claim that the sale of the husband. We ruled that the contract of sale was voidable
Subject Land to Armando and Adelia is void on two subject to annulment by the husband. Following petitioners
grounds. First, Carmen sold the Subject Land without the argument that Carmen sold the land to Armando and Adelia
marital consent of Godofredo. Second, the sale was made without the consent of Carmens husband, the sale would
during the 25-year period that the law prohibits the only be voidable and not void.
alienation of land grants without the approval of the
Secretary of Agriculture and Natural Resources. However, Godofredo can no longer question the sale.
Voidable contracts are susceptible of ratification.
These arguments are without basis. [24]
Godofredo ratified the sale when he introduced Armando
The Family Code, which took effect on 3 August 1988, and Adelia to his tenants as the new owners of the Subject
provides that any alienation or encumbrance made by the Land. The trial court noted that Godofredo failed to deny
husband of the conjugal partnership property without the categorically on the witness stand the claim of the
consent of the wife is void. However, when the sale is made complainants witnesses that Godofredo introduced Armando
before the effectivity of the Family Code, the applicable law and Adelia as the new landlords of the tenants. [25] That
is the Civil Code.[22] Godofredo and Carmen allowed Armando and Adelia to
enjoy possession of the Subject Land for 24 years is
Article 173 of the Civil Code provides that the formidable proof of Godofredos acquiescence to the sale. If
disposition of conjugal property without the wifes consent is the sale was truly unauthorized, then Godofredo should
not void but merely voidable. Article 173 reads: have filed an action to annul the sale. He did not. The
prescriptive period to annul the sale has long
The wife may, during the marriage, and within ten years lapsed. Godofredos conduct belies his claim that his wife
from the transaction questioned, ask the courts for the sold the Subject Land without his consent.
annulment of any contract of the husband entered into
Moreover, Godofredo and Carmen used most of the
without her consent, when such consent is required, or any
proceeds of the sale to pay their debt with the DBP. We
act or contract of the husband which tends to defraud her or
agree with the Court of Appeals that the sale redounded to
impair her interest in the conjugal partnership
the benefit of the conjugal partnership. Article 161 of the
property. Should the wife fail to exercise this right, she or
Civil Code provides that the conjugal partnership shall be
her heirs, after the dissolution of the marriage, may demand
liable for debts and obligations contracted by the wife for
the value of property fraudulently alienated by the husband.
the benefit of the conjugal partnership. Hence, even if
Carmen sold the land without the consent of her husband,
the sale still binds the conjugal partnership.
Petitioners contend that Godofredo and Carmen did not
deliver the title of the Subject Land to Armando and Adelia
as shown by this portion of Adelias testimony on cross-
examination:
Q -- No title was delivered to you by Godofredo [28]
However, we will address this new issue to finally put an
Alfredo? end to this case.
A -- I got the title from Julie Limon because my The sale of the Subject Land cannot be annulled on the
sister told me.[26] ground that the Secretary did not approve the sale, which
was made within 25 years from the issuance of the
Petitioners raise this factual issue for the first time. The homestead title.Section 118 of the Public Land Act
Court of Appeals could have passed upon this issue had (Commonwealth Act No. 141) reads as follows:
petitioners raised this earlier. At any rate, the cited
testimony of Adelia does not convincingly prove that
Godofredo and Carmen did not deliver the Subject Land to SEC. 118. Except in favor of the Government or any of its
Armando and Adelia. Adelias cited testimony must be branches, units, or institutions or legally constituted banking
examined in context not only with her entire testimony but corporation, lands acquired under free patent or homestead
also with the other circumstances. provisions shall not be subject to encumbrance or alienation
from the date of the approval of the application and for a
Adelia stated during cross-examination that she term of five years from and after the date of the issuance of
obtained the title of the Subject Land from Julie Limon the patent or grant.
(Julie), her classmate in college and the sister of
Carmen. Earlier, Adelias own sister had secured the title xxx
from the father of Carmen. However, Adelias sister, who was
about to leave for the United States, gave the title to Julie No alienation, transfer, or conveyance of any homestead
because of the absence of the other documents. Adelias after 5 years and before twenty-five years after the issuance
sister told Adelia to secure the title from Julie, and this was of title shall be valid without the approval of the Secretary of
how Adelia obtained the title from Julie. Agriculture and Commerce, which approval shall not be
It is not necessary that the seller himself deliver the title denied except on constitutional and legal grounds.
of the property to the buyer because the thing sold is
understood as delivered when it is placed in the control and A grantee or homesteader is prohibited from alienating
possession of the vendee.[27] To repeat, Godofredo and to a private individual a land grant within five years from the
Carmen themselves introduced the Natanawans, their time that the patent or grant is issued. [29] A violation of this
tenants, to Armando and Adelia as the new owners of the prohibition renders a sale void.[30] This prohibition, however,
Subject Land. From then on, Armando and Adelia acted as expires on the fifth year. From then on until the next 20
the landlords of the Natanawans. Obviously, Godofredo and years[31] the land grant may be alienated provided the
Carmen themselves placed control and possession of the Secretary of Agriculture and Natural Resources approves the
Subject Land in the hands of Armando and Adelia. alienation. The Secretary is required to approve the
alienation unless there are constitutional and legal grounds
Petitioners invoke the absence of approval of the sale to deny the approval. In this case, there are no apparent
by the Secretary of Agriculture and Natural Resources to constitutional or legal grounds for the Secretary to
nullify the sale. Petitioners never raised this issue before the disapprove the sale of the Subject Land.
trial court or the Court of Appeals. Litigants cannot raise an
issue for the first time on appeal, as this would contravene The failure to secure the approval of the Secretary does
the basic rules of fair play, justice and due process. not ipso facto make a sale void.[32] The absence of approval
by the Secretary does not nullify a sale made after the Article 1456 of the Civil Code provides that a person
expiration of the 5-year period, for in such event the acquiring property through fraud becomes by operation of
requirement of Section 118 of the Public Land Act becomes law a trustee of an implied trust for the benefit of the real
merely directory[33] or a formality.[34] The approval may be owner of the property. The presence of fraud in this case
secured later, producing the effect of ratifying and adopting created an implied trust in favor of Armando and Adelia. This
the transaction as if the sale had been previously gives Armando and Adelia the right to seek reconveyance of
authorized.[35] As held in Evangelista v. Montano:[36] the property from the Subsequent Buyers.[40]
To determine when the prescriptive period commenced
Section 118 of Commonwealth Act No. 141, as amended, in an action for reconveyance, plaintiffs possession of the
specifically enjoins that the approval by the Department disputed property is material. An action for reconveyance
Secretary "shall not be denied except on constitutional and based on an implied trust prescribes in ten years. [41] The ten-
legal grounds." There being no allegation that there were year prescriptive period applies only if there is an actual
constitutional or legal impediments to the sales, and no need to reconvey the property as when the plaintiff is not in
pretense that if the sales had been submitted to the possession of the property.[42] However, if the plaintiff, as the
Secretary concerned they would have been disapproved, real owner of the property also remains in possession of the
approval was a ministerial duty, to be had as a matter of property, the prescriptive period to recover title and
course and demandable if refused. For this reason, and if possession of the property does not run against him.[43] In
necessary, approval may now be applied for and its effect such a case, an action for reconveyance, if nonetheless
will be to ratify and adopt the transactions as if they had filed, would be in the nature of a suit for quieting of title, an
been previously authorized. (Emphasis supplied) action that is imprescriptible.[44]
In this case, the appellate court resolved the issue of
prescription by ruling that the action should prescribe four
Action Not Barred by Prescription and Laches
years from discovery of the fraud. We must correct this
erroneous application of the four-year prescriptive
Petitioners insist that prescription and laches have set period. In Caro v. Court of Appeals,[45] we explained why
in. We disagree. an action for reconveyance based on an implied trust should
prescribe in ten years. In that case, the appellate court also
The Amended Complaint filed by Armando and Adelia erroneously applied the four-year prescriptive period. We
with the trial court is captioned as one for Specific declared in Caro:
Performance. In reality, the ultimate relief sought by
Armando and Adelia is the reconveyance to them of the We disagree. The case of Liwalug Amerol, et al. v. Molok
Subject Land. An action for reconveyance is one that seeks Bagumbaran, G.R. No. L-33261, September 30, 1987,154
to transfer property, wrongfully registered by another, to its SCRA 396 illuminated what used to be a gray area on the
rightful and legal owner.[37] The body of the pleading or prescriptive period for an action to reconvey the title to real
complaint determines the nature of an action, not its title or property and, corollarily, its point of reference:
heading.[38] Thus, the present action should be treated as
one for reconveyance.[39]
xxx It must be remembered that before August 30, 1950,
the date of the effectivity of the new Civil Code, the old
Code of Civil Procedure (Act No. 190) governed prescription. reliance on Gerona vs. de Guzman. But in Gerona, the fraud
It provided: was discovered on June 25,1948, hence Section 43(3) of Act
No. 190, was applied, the new Civil Code not coming into
SEC. 43. Other civil actions; how limited.- Civil actions other effect until August 30, 1950 as mentioned earlier. It must be
than for the recovery of real property can only be brought stressed, at this juncture, that article 1144 and article 1456,
within the following periods after the right of action accrues: are new provisions. They have no counterparts in the old
Civil Code or in the old Code of Civil Procedure, the latter
3. Within four years: xxx An action for relief on the ground being then resorted to as legal basis of the four-year
of fraud, but the right of action in such case shall not be prescriptive period for an action for reconveyance of title of
deemed to have accrued until the discovery of the fraud; real property acquired under false pretenses.

In contrast, under the present Civil Code, we find that just An action for reconveyance has its basis in Section 53,
as an implied or constructive trust is an offspring of the law paragraph 3 of Presidential Decree No. 1529, which
(Art. 1456, Civil Code), so is the corresponding obligation to provides:
reconvey the property and the title thereto in favor of the
true owner. In this context, and vis-a-vis prescription, Article In all cases of registration procured by fraud, the owner may
1144 of the Civil Code is applicable. pursue all his legal and equitable remedies against the
parties to such fraud without prejudice, however, to the
Article 1144. The following actions must be brought within rights of any innocent holder of the decree of registration on
ten years from the time the right of action accrues: the original petition or application, xxx

(1) Upon a written contract; This provision should be read in conjunction with Article
1456 of the Civil Code, which provides:
(2) Upon an obligation created by law;
Article 1456. If property is acquired through mistake or
fraud, the person obtaining it is, by force of law, considered
(3) Upon a judgment. a trustee of an implied trust for the benefit of the person
from whom the property comes.
An action for reconveyance based on an implied or
constructive trust must perforce prescribe in ten The law thereby creates the obligation of the trustee to
years and not otherwise. A long line of decisions of this reconvey the property and the title thereto in favor of the
Court, and of very recent vintage at that, illustrates this true owner. Correlating Section 53, paragraph 3 of
rule. Undoubtedly, it is now well-settled that an action Presidential Decree No. 1529 and Article 1456 of the Civil
for reconveyance based on an implied or constructive Code with Article 1144(2) of the Civil Code, supra, the
trust prescribes in ten years from the issuance of the prescriptive period for the reconveyance of fraudulently
Torrens title over the property. The only discordant registered real property is ten (10) years reckoned from the
note, it seems, is Balbin vs. Medalla which states that the date of the issuance of the certificate of title xxx (Emphasis
prescriptive period for a reconveyance action is four years. supplied)[46]
However, this variance can be explained by the erroneous
Following Caro, we have consistently held that an should have been done earlier.[52] It is negligence or
action for reconveyance based on an implied trust omission to assert a right within a reasonable time,
prescribes in ten years.[47] We went further by specifying the warranting a presumption that the party entitled to assert it
reference point of the ten-year prescriptive period as the either has abandoned it or declined to assert it. [53] Armando
date of the registration of the deed or the issuance of the and Adelia discovered in January 1994 the subsequent sale
title.[48] of the Subject Land and they filed this case on 7 March
1994. Plainly, Armando and Adelia did not sleep on their
Had Armando and Adelia remained in possession of the rights.
Subject Land, their action for reconveyance, in effect an
action to quiet title to property, would not be subject to Validity of Subsequent Sale of Portions of the
prescription. Prescription does not run against the plaintiff in Subject Land
actual possession of the disputed land because such plaintiff
has a right to wait until his possession is disturbed or his Petitioners maintain that the subsequent sale must be
title is questioned before initiating an action to vindicate his upheld because the Subsequent Buyers, the co-petitioners
right.[49] His undisturbed possession gives him the continuing of Godofredo and Carmen, purchased and registered the
right to seek the aid of a court of equity to determine the Subject Land in good faith. Petitioners argue that the
nature of the adverse claim of a third party and its effect on testimony of Calonso, the person who brokered the second
his title.[50] sale, should not prejudice the Subsequent Buyers. There is
no evidence that Calonso was the agent of the Subsequent
Armando and Adelia lost possession of the Subject Land Buyers and that she communicated to them what she knew
when the Subsequent Buyers forcibly drove away from the about the adverse claim and the prior sale. Petitioners
Subject Land the Natanawans, the tenants of Armando and assert that the adverse claim registered by Armando and
Adelia.[51] This created an actual need for Armando and Adelia has no legal basis to render defective the transfer of
Adelia to seek reconveyance of the Subject Land. The title to the Subsequent Buyers.
statute of limitation becomes relevant in this case. The ten-
year prescriptive period started to run from the date the We are not persuaded. Godofredo and Carmen had
Subsequent Buyers registered their deeds of sale with the already sold the Subject Land to Armando and Adelia. The
Register of Deeds. settled rule is when ownership or title passes to the buyer,
the seller ceases to have any title to transfer to any third
The Subsequent Buyers bought the subdivided portions person.[54] If the seller sells the same land to another, the
of the Subject Land on 22 February 1994, the date of second buyer who has actual or constructive knowledge of
execution of their deeds of sale. The Register of Deeds the prior sale cannot be a registrant in good faith. [55] Such
issued the transfer certificates of title to the Subsequent second buyer cannot defeat the first buyers title. [56] In case a
Buyers on 24 February 1994. Armando and Adelia filed the title is issued to the second buyer, the first buyer may seek
Complaint on 7 March 1994. Clearly, prescription could not reconveyance of the property subject of the sale.[57]
have set in since the case was filed at the early stage of the
ten-year prescriptive period. Thus, to merit protection under the second paragraph of
Article 1544[58] of the Civil Code, the second buyer must act
Neither is the action barred by laches. We have defined in good faith in registering the deed. [59] In this case, the
laches as the failure or neglect, for an unreasonable time, to Subsequent Buyers good faith hinges on whether they had
do that which, by the exercise of due diligence, could or knowledge of the previous sale. Petitioners do not dispute
that Armando and Adelia registered their adverse claim with agree with the trial court that if it were not for petitioners
the Registry of Deeds of Bataan on 8 February 1994. The unjustified refusal to heed the just and valid demands of
Subsequent Buyers purchased their respective lots only on Armando and Adelia, the latter would not have been
22 February 1994 as shown by the date of their deeds of compelled to file this action.
sale.Consequently, the adverse claim registered prior to the
second sale charged the Subsequent Buyers with The Court of Appeals echoed the trial courts
constructive notice of the defect in the title of the sellers, condemnation of petitioners fraudulent maneuverings in
[60]
Godofredo and Carmen. securing the second sale of the Subject Land to the
Subsequent Buyers. We will also not turn a blind eye on
It is immaterial whether Calonso, the broker of the petitioners brazen tactics. Thus, we uphold the treble costs
second sale, communicated to the Subsequent Buyers the imposed by the Court of Appeals on petitioners.
existence of the adverse claim. The registration of the
adverse claim on 8 February 1994 constituted, by operation WHEREFORE, the petition is DENIED and the appealed
of law, notice to the whole world.[61] From that date onwards, decision is AFFIRMED. Treble costs against petitioners.
the Subsequent Buyers were deemed to have constructive SO ORDERED.
notice of the adverse claim of Armando and Adelia. When
the Subsequent Buyers purchased portions of the Subject Davide, Jr., C.J., (Chairman), Vitug, Ynares-
Land on 22 February 1994, they already had constructive Santiago, and Azcuna, JJ., concur.
notice of the adverse claim registered earlier.[62] Thus, the EN BANC
Subsequent Buyers were not buyers in good faith when they
purchased their lots on 22 February 1994. They were also [G.R. NO. 168101 : February 13, 2006]
not registrants in good faith when they registered their
deeds of sale with the Registry of Deeds on 24 February
PEOPLE OF THE PHILIPPINES, Appellee, v. GREGORIO
1994.
CORPUZ Y ESPIRITU,Appellant.
The Subsequent Buyers individual titles to their
respective lots are not absolutely indefeasible. The defense DECISION
of indefeasibility of the Torrens Title does not extend to a
transferee who takes the certificate of title with notice of a
flaw in his title.[63] The principle of indefeasibility of title does PER CURIAM:
not apply where fraud attended the issuance of the titles as
in this case.[64] We have before Us yet one more account of how a young
girl, deprived of the attentions of a mother gone to work in
foreign shores, is attacked and betrayed by the one other
Attorneys Fees and Costs person she should have been able to depend on for solace,
protection and love.
We sustain the award of attorneys fees. The decision of
the court must state the grounds for the award of attorneys This is an appeal from the decision of the Regional Trial
fees. The trial court complied with this requirement. [65] We Court (RTC) dated 19 July 1999, Branch 08, Aparri, Cagayan,
in Criminal Case No. 08-974 finding the herein appellant, At the time of the incident, Juvilie, then 13, and her two
Gregorio Corpuz y Espiritu, guilty beyond reasonable doubt sisters, Grace, aged 12, and Cheryl, aged 9, were living with
of raping his 13-year-old daughter, Juvilie Corpuz y Antonio, their father, herein appellant Gregorio Corpuz y Espiritu, in a
sentencing him to die by lethal injection, and ordering him two-bedroom bungalow in Palagao, Gattaran, Cagayan. The
to pay the victim P100,000.00 in moral damages girls' mother had been working as a domestic helper in
and P100,000.00 in exemplary damages. Hongkong since May 1995.

The records of this case were originally transmitted to us on Juvilie and her sister Grace used to sleep in one room, while
automatic review. However, conformably with our Decision the youngest sister Cheryl slept with their father Gregorio in
in People of the Philippines v. Efren Mateo y the other room. For two successive nights sometime prior to
Garcia1modifying Sections 3 and 10 of Rule 122, Section 13 the night in question, Juvilie felt somebody fondling her
of Rule 124, Section 3 of Rule 125 of the Revised Rules on breast and caressing her private parts, even inserting a
Criminal Procedure and any other rule insofar as they forefinger inside her. On the second night, she caught her
provide for direct appeals from the RTC to the Supreme father doing it. She confronted him, but he denied it,
Court in cases where the penalty imposed is explaining that his presence in the room was allegedly to
death, reclusion perpetua or life imprisonment, we referred put arsenic rat poison.
the case and its records to the Court of Appeals2 for
appropriate action and disposition. On the night of 16 November 1996, Juvilie was awakened by
a fist blow to her stomach. When she reported the matter to
On 08 April 2005, the Court of Appeals rendered a her father, he claimed he had also been hit in his stomach,
Decision,3 the dispositive portion of which reads: and advised her and Grace to sleep in the other room with
him and Cheryl, which they did the following night. Juvilie
WHEREFORE, the Judgment dated 19 July 1999 of the laid down on one side of the mat while Gregorio laid on the
Regional Trial Court, Second Judicial Region, Branch 08, other. Her sisters laid between them, with Grace beside
Aparri, Cagayan, in Criminal Case No. 08-974, finding Juvilie and Cheryl beside Gregorio.
accused-appellant Gregorio Corpuz guilty beyond
reasonable doubt of qualified rape and sentencing him to At around 11:00 in the evening of 17 November 1996, Juvilie
suffer the DEATH penalty is hereby AFFIRMED with was awakened by pain she felt in her private parts. She felt
MODIFICATION in the sense that he is ordered to pay the and saw the shape of a man on top of her with his penis
victim, Juvilie Corpuz, P75,000.00 as civil inside her. Her panties had been removed, and her skirt
indemnity, P75,000.00 as moral damages, and P25,000.00 raised. She pushed and hit the man, and shouted "Okinnam
as exemplary damages. bastos a laklakayan uleg, baboy" (Vulva of your mother,
dirty old man, snake, pig)! The man moved hurriedly to the
The antecedent facts are as follows: other side of the mat and said "Pakawanennac anakko, tag-
taginep ko lang daydiay" (Forgive me my daughter, I was On 20 March 1997, on the basis of a complaint filed by
only dreaming). Juvilie Corpuz y Antonio, an Information5 was filed before the
RTC, Branch 08, Aparri, Cagayan, docketed as Criminal Case
Her two sisters, awakened by the shout, ran out of the room No. 08-974, charging the herein appellant with the crime of
in fear. Juvilie was left inside the room crying. Her father qualified rape, thus:
prevented her from leaving the room, saying "padasen iti
rumuar ta adda mapasama kenca" (try to go outside and That on or about November 17, 1996, in the municipality of
something will happen to you). He also threatened her with Gattaran, province of Cagayan, and within the jurisdiction of
harm if she told anyone what had happened. this Honorable Court, the above-named accused, being then
the father (parent) of the offended party, with lewd design,
Juvilie's shout had also been heard by her uncles, Rogelio and by the use of force and intimidation, did then and there
and Walter Antonio, brothers of her mother, whose houses willfully, unlawfully and feloniously have carnal knowledge
were only about ten meters away from Juvilie's. They of said Juvilie Corpuz y Antonio, a woman under eighteen
immediately went to Juvilie's house, but hearing nothing (18) years of age, all against her will and consent.
further to arouse their suspicions, they went back to their
own homes. On 21 May 1997, the accused-appellant, with the assistance
of counsel de oficio, pleaded "Not Guilty" to the crime
In the afternoon of the following day, Juvilie slipped out of charged.6 Trial thereafter proceeded.
her house while Gregorio was cooking and told Rogelio what
her father had done to her. Rogelio reported the matter to The prosecution presented four witnesses: Rogelio and
their barangay captain, who advised him to inform the Walter Antonio, Dr. Rosales, and the private complainant
police. Since Gregorio was almost constantly with Juvilie, it herself.
was only on 27 November 1996 that she was able to report
the rape to the police, where she executed a sworn The defense presented the lone testimony of Gregorio. On
statement. the stand, he claimed that he loved his children very much.
He alleged that on the night of 17 November 1996, he
Juvilie was examined by Dr. Nida Rosales, the Municipal pushed Juvilie's leg hard against the wall, which was why
Health Officer of Gattaran, Cagayan. Dr. Rosales observed she woke up and shouted. Thereafter, the case was
one completely healed and two incompletely healed submitted for decision.
lacerations in Juvilie's hymen. The doctor also noted that
Juvilie's vagina admitted one finger with ease. When asked On 25 June 1999, the trial court issued an order7 stating:
for the possible cause of the lacerations, she replied that a
hard object, such as an erect penis, could have caused the
said lacerations.4
The Presiding Judge was in the process of preparing a raped. An accusation for rape is thus not made with
decision when he noticed that there is variance between the indifference, but with much deliberation, usually only after
offense charged and that proved. consultation with relatives and the family council.

In order to avoid the miscarriage of justice, the Trial "Art. 335. When and how rape is committed. - Rape is
Prosecutor is hereby directed to amend the Information to committed by having carnal knowledge of a woman under
conform with the evidence, specifically, that the rape was any of the following circumstances.
committed while the woman is unconscious instead of by
the use of force and intimidation. He is directed to do so "1. By using force or intimidation;
within ten (10) days.
"2. When the woman is deprived of reason or otherwise
Thus, on 13 July 1999, the prosecutor filed the following unconscious; andcralawlibrary
Amended Information:8
"3. When the woman is under twelve years of age or is
That on or about November 17, 1996, in the municipality of demented.
Gattaran, province of Cagayan, and within the jurisdiction of
this Honorable Court, the above-named accused, being then "The death penalty shall be imposed if the crime of rape is
the father (parent) of the offended party, with lewd design, committed with any of the following attendant
and while the offended party was asleep and unconscious, circumstances:
did then and there willfully, unlawfully and feloniously have
carnal knowledge of said Juvilie Corpuz y Antonio, a woman "1. When the victim is under eighteen (18) years of age and
under eighteen (18) years of age, all against her will and the offender is a parent, ascendant, step-parent, sanguinity
consent. or affinity within the third civil degree, or the common-law
spouse of the parent of the victim x x x.
On 05 August 1999, the trial court promulgated the decision
finding the accused-appellant guilty beyond reasonable The elements are carnal knowledge thru force or
doubt of the crime of rape.9 In giving credence to the intimidation, when the woman is deprived of reason or
evidence adduced by the prosecution, it explained thus: unconscious, or when the woman is under 12 or demented.

It has been truly said that rape is so easy to charge and so We are satisfied that there was carnal knowledge by
difficult to defend. The logic is not quite difficult to accused of private complainant while the latter was asleep
apprehend. It is usually committed when nobody is present on 17 November 1996. This is corroborated by finding of
to witness the same. However, Filipino culture attaches an prosecution witness Dr. Nida Nolasco-Rosales, Municipal
indelible stigma to the reputation of one who has been Health Officer of Gattaran Town, Gattaran, Cagayan who
conducted a physical examination of the complainant Juvilie Sleep is akin to "unconscious (ness)". It falls within its ambit.
Corpuz on 28 November 1996. Her findings viz:
Complainant is accused's daughter. She was barely 13 years
"Incomplete healed laceration at 2:00 [o'clock] position old on 17 November 1996. Accused did not deny that
complainant (his daughter) was aged 13.10
"Complete healed laceration at 6:00 [o'clock] position
In his brief, the appellant assigns the following errors:
"Incomplete healed laceration at 9:00 [o'clock] position
I.
"Genitalia admits one finger with ease"
THE COURT A QUO GRAVELY ERRED IN FINDING THAT THE
On the witness box, on questioning by the Court, she GUILT OF THE ACCUSED-APPELLANT FOR THE CRIME
testified that on 17 November 1996 witness-complainant did CHARGED HAS BEEN PROVEN BEYOND REASONABLE DOUBT
not yet have a boyfriend. The testimony of her maternal DESPITE THE PRIVATE COMPLAINANT'S HIGHLY DOUBTFUL
uncles Rogelio and Walter Antonio partly corroborates POSITIVE IDENTIFICATION OF HER ALLEGED ABUSER.
complainant's testimony. Both uncles testified hearing
complainant cry on the evening of 17 November 1996 when II.
the rape happened.
THE COURT A QUO ERRED IN ORDERING THE AMENDMENT
Accused himself when testifying admitted that on that OF THE INFORMATION TO CONFORM TO THE EVIDENCE
evening, complainant cried when he pushed her legs hard, ADDUCED BY THE PROSECUTION
which hit the wall. His reason for pushing - that
complainant's legs touched his in their sleep is incredible In assailing Juvilie's credibility, the appellant claims that
considering that the former and the latter were at extreme since the rape of Juvilie took place inside the bedroom with
ends of the mat with Cheryl and Grace between them. While the lights switched off, and Juvilie was initially asleep when
accused testified that complainant moves in her sleep, that she was violated, it was extremely unlikely that she was
is not a sufficient explanation why he had to push her legs able to identify her assailant.
hard causing her to cry. Further, accused did not deny that
complainant uttered the words "ukinam, bastos a The Court of Appeals correctly disposed of the appellant's
laklakayan, uleg, baboy" during the incident when she arguments.
discovered it was her father who was on top of her. On that
occasion he said "Pakawanennac anakko, tag-taginep ko The pernicious consequences to both accused and offended
lang daydiay" (meaning "forgive me my daughter, I was only party require that utmost care be taken in the review of a
dreaming". Accused did not explain this. decision involving conviction of rape.11 In such cases, we are
guided by three principles: (1) an accusation for rape can be Q - Now, while you were there inside the room of your father
made with facility; it is difficult to prove but more difficult for on November 17, 1996, at around 11:00 o'clock was there
the accused, though innocent, to disprove; (2) in view of the anything unusual that took place?cralawlibrary
intrinsic nature of the crime of rape where only two persons
are usually involved, the testimony of the complainant must A - There was, Your Honor.
be scrutinized with extreme caution; and (3) the evidence
for the prosecution must stand or fall on its own merits, and Q - What was the incident?cralawlibrary
cannot be allowed to draw strength from the weakness of
the evidence for the defense.12 A - My father raised my dress and removed my panty, and
went on top of me.
In rape cases, the accused may be convicted solely on the
basis of the testimony of the victim, provided that such Q - What kind of dress [were] you wearing?cralawlibrary
testimony is credible, natural, convincing and consistent
with human nature and the normal course of things.13 A - Skirt, Your Honor.

If her testimony meets the test of credibility, such is Q - What about the other?cralawlibrary
sufficient to convict the accused. The credibility of the victim
is almost always the single most important issue to hurdle. A - T-shirt, Your Honor.
In this regard, the trial judge is in the best position to assess
the credibility of the complainant, having personally heard Q - And you said your father removed your panty?
her and observed her deportment and manner of testifying cralawlibrary
during the trial. Absent any showing that the trial judge
overlooked, misunderstood, or misapplied some facts or A - Yes, Your Honor.
circumstances of weight which would affect the result of the
case, or that the judge acted arbitrarily, the trial judge's
Q - Did you already know that your panty was remove[d]
assessment of credibility deserves the appellate court's
and your shirt was raised, do you know who removed them?
highest respect.14
cralawlibrary

Here, the Court of Appeals agreed in the trial judge's


A - Not yet, Your Honor.
assessment of Juvilie's credibility, and observed that she
was direct, unequivocal, convincing and consistent in
Q - And after that, what did you do when your t-shirt was
answering the questions propounded to her. We concur.
raised and your panty was removed?cralawlibrary

Juvilie testified as follows:


A - I pushed him, and boxed him for several times and A - Yes, Your Honor.
grabbed him, Your Honor.
Q - And then what did you do after that?cralawlibrary
Q - Did you already know that was your father?cralawlibrary
A - I felt pain and I pushed him sir, for several times and I
A - Not yet, Your Honor. even shouted the words "Ukinam bastos a laklakayan uleg,
baboy."
Q - Was the light close[d]?cralawlibrary
Q - When you felt pain, you pushed the one on top of you,
A - Yes, Your Honor. you boxed him, you grabbed him, why do you know already
who it was?cralawlibrary
Q - What about your two sisters, what were they doing?
cralawlibrary A - Yes, Your Honor.

A - They were still sleeping, Your Honor. Q - That was when you shouted?cralawlibrary

xxxx A - Yes, Your Honor.

Fiscal Cortes: Q - Were you already awake when somebody raised your
skirt?cralawlibrary
Q - Aside from removing panty, what else did your fater do?
cralawlibrary A - Not yet, Your Honor.

A - I felt his penish (sic) penetrated, sir. Q - When somebody removed your panty you [were] awake?
cralawlibrary
Court:
A - Not yet, Your Honor.
Q - Were you asleep when your t-shirt was raised and your
panty was removed?cralawlibrary Fiscal Cortes:

A - Yes, Your Honor. Q - When your father inserted his penish (sic) to your vagina
were you already awake?cralawlibrary
Q - And were you still asleep when you felt something inside
your genital?cralawlibrary A - Yes, sir.
Court: A - No more, Your Honor.

Q - Can you recall what particular sensation awake you? Court: Continue.
cralawlibrary
Fiscal Cortes:
A - Yes, sir.
Q - Where was your father then when he uttered those
Q - Why?cralawlibrary words?cralawlibrary

A - When I felt pain that awakened me. A - He was beside of (sic) Cheryl, sir.

xxxx Q - When you woke up because of the pain, [were] your two
sisters also awoke or were they still sleeping?cralawlibrary
Fiscal Cortes:
A - Yes, sir.
xxx
Q - After your father went to the side of your sister Cheryl,
Q - How did you know that it was your father when what happened next?cralawlibrary
according to you the light was off?cralawlibrary
A - My two sisters went outside the room because they were
A - Because my father uttered the word[s] "pakawanen nak frightened, sir.
anakko tagtaglinep ko lang daydiay" which means forgive
me my daughter I was only dreaming. Court:

Court: Q - How about you?cralawlibrary

Q - When your father asked you for forgiveness was his A - I stayed in the bedroom, Your Honor.
pants on?cralawlibrary
Q - With your father?cralawlibrary
A - I do not know, Your Honor, because it was still dark at
that time. A - Yes, Your Honor.

Q - But he was no longer on top of you?cralawlibrary Q - And what happened after that?cralawlibrary
A - When my two sisters were already outside the room and which the crime was committed. Most often, the face and
I was also inside the room and my father threatened me if I body movements of the assailants create a lasting
will report I will also die.15 impression which cannot be easily erased from their
memory.18 The impression becomes more profound where
The testimony of child-victims are normally given full weight the malefactor is the victim's own father.19 Also, Juvilie
and credit, since when a woman, more so if she is a minor, categorically testified that it was her father who raped her. It
says that she has been raped, she says in effect all that is is unthinkable, if not completely preposterous, that a
necessary to show that rape was committed. Youth and daughter would concoct a story of rape against her father,
immaturity are generally badges of truth and sincerity. No taking to mind the reverence and respect for elders that is
woman, least of all a child, would concoct a story of too deeply ingrained in Filipino children.20 It is well-settled
defloration, allow an examination of her private parts and that a categorical and positive identification of an accused,
subject herself to public trial or ridicule if she has not, in without any showing of ill-motive on the part of the
truth, been a victim of rape and impelled to seek justice for eyewitness testifying on the matter, prevails over alibi and
the wrong done to her.16 denial, which are negative and self-serving evidence
undeserving of real weight in law unless substantiated by
Moreover, Juvilie's testimony is corroborated by the medical clear and convincing evidence.21
findings of the examining physician. Where a victim's
testimony is corroborated by the physical findings of Juvilie was also able to identify her abuser through his voice.
penetration, there is sufficient basis for concluding that As efficiently summed up by the Court of Appeals:
sexual intercourse did take place. A rape victim's account is
sufficient to support a conviction for rape if it is On the night of 17 November 1996, Juvilie was awakened by
straightforward, candid and corroborated by the medical the pain she felt when her abuser inserted his penis inside
findings of the examining physician,17 as in the present case. her vagina. Upon waking and finding a man on top of her,
she repeatedly pushed and hit her assailant. She shouted at
We come now to the accused-appellant's claim that the him, "ukinam bastos a laklakayan uleg, baboy."
prosecution failed to establish the identity of the perpetrator
with certitude since the room was dark and it was not shown The man laying on top of her hastily moved to the other side
to have been properly illuminated. of the mat from where Juvilie slept. He then uttered,
"pakawanen nak anako tagtaginep ko lang daydiay." She
It is highly inconceivable that complainant would not recognized his voice as that of her father.
recognize her own father, with whom she had been living for
a long time. We have held that it is the most natural Identification of an accused by his voice has been accepted
reaction for victims of criminal violence to strive to see the particularly in cases where, such as in this case, the witness
appearance of their assailant and observe the manner in has known the malefactor personally for so long and so
intimately. In People v. Calixto, the Supreme Court has given commission of the rape - from "by force and intimidation" to
credence to the blindfolded rape victim's identification of "while the offended party was asleep or unconscious" - is
the accused, a barriomate, by his voice. Also, in an earlier not sanctioned by the Rules on Criminal Procedure.
case, the Supreme Court has said:
However, this issue has already been directly addressed
"x x x [C]omplainant's identification of the appellant was not in People v. Abiera,22 and later in People v. Atienza,23 where
based solely on the latter's physical defect, but by his voice we upheld the conviction for rape committed under one
as well, when he warned complainant, 'Flor, keep quiet.' mode when the information alleged another.
Although complainant did not see appellant's face during
the sexual act because the house was dark, nevertheless, In Atienza, therein accused-appellant contended that the
no error could have been committed by the complainant in trial court erred in finding him guilty of rape under par. (2),
identifying the voice of the accused, inasmuch as Art, 335, i.e., rape of a woman who was deprived of reason,
complainant were neighbors." including those with the mental capacity of a child below
twelve (12) years old, when the Information charged him
Pitted against the positive, straightforward and unequivocal with rape committed through force and intimidation as
testimony of the victim - Juvilie - the mere denial by the defined in par. (1), Art. 335. Atienza cited the earlier case of
accused-appellant that he raped his daughter cannot Abiera, wherein we held thus:
prevail.
The appellant maintains that he cannot be convicted of rape
Denial is inherently a weak defense. It cannot prevail over committed under one mode when the information alleged
positive identifications, unless buttressed by strong another mode. He cites the case of People v. Pailano, where
evidence of non-culpability. Denials are self-serving negative this Court held that to convict the appellant on the finding
by strong evidence which cannot prevail over the positive, that he had committed rape while the victim was
straightforward and unequivocal testimony of the victim. unconscious or otherwise deprived of reason - and not
When the offended parties are young and immature girls through force and intimidation, which was the method
from the ages of twelve to sixteen, courts are inclined to alleged - would violate his constitutional right to be informed
lend credence to their version of what transpired, of the nature and cause of the accusation against him.
considering not only their relative vulnerability but also the
shame and embarrassment to which they would be exposed That case works against the appellant. In Pailano, this Court
by court trial if the matter about which they testified is not impliedly recognized that an accused charged with rape
true. through one mode of commission may still be convicted of
the crime if the evidence shows another mode of
The accused-appellant next contends that the trial court's commission provided that the accused did not object to
order to amend the information as to the mode of such evidence. The Court said:
It may be argued that although initially deficient, the Be that as it may, the amendment of the information did not
criminal complaint was deemed corrected when the affect the crime committed by the appellant, that is,
prosecution introduced evidence on the complainant's qualified rape. In cases of incestuous rape, force or
mental condition and the defense did not object, thereby intimidation need not even be proven. The overpowering
waiving the procedural defect. Even so, the charge has not moral influence of the father over the daughter takes the
been adequately established. place of violence and offer of resistance required in rape
cases committed by an accused unrelated to the
The prosecution presented evidence to show that Abiera had victim.25 Consequently, his conviction is in order.
carnal knowledge of the complainant when by means of
force, violence and intimidation, he boxed her in the Having determined that rape was indeed committed by
stomach, causing her to lose consciousness, after which he Gregorio against Juvilie, we come now to the question of the
violated her. When Alma regained consciousness, the appropriate imposable penalty under the circumstances.
outrage had already been committed. Her deshabille, her
bleeding vagina, the near-naked man beside her - all these The death penalty is imposed if the crime of rape is
reasonably indicated that Abiera had deflowered Alma while committed with the attendance of certain circumstances,
she was unconscious. The defense did not object to the one of these being when the victim is under eighteen years
presentation of evidence to establish all these of age and the offender is a parent, ascendant, stepparent,
circumstances. guardian, relative by consanguinity and affinity within the
third civil degree, or the common-law spouse of the parent
The Pailano case is different from the case at bar because it of the victim.
has been proven that Abiera had carnal knowledge of Alma
after rendering her unconscious. Pailano was acquitted Gregorio's paternity was alleged in the information and duly
because it was not established that he used force and proven in the course of the trial. He was duly identified as
intimidation upon the complainant or that the girl was such by Rogelio Antonio,26 Juvilie's maternal uncle and close
mentally deficient.24 neighbor, by Juvilie herself,27 and admitted by the appellant
during direct examination.28
In the case at bar, the appellant never raised any objection
when the prosecution showed another mode of commission Juvelie's minority was also alleged in the information and
of the crime charged as alleged in the original information. duly proven during trial, in the course of which her birth
Nor did he interpose any objections after the judge issued certificate was offered in evidence.29 Appellant himself also
his order of 25 June 1999 directing the trial prosecutor to expressly and clearly testified as to her age under direct
amend the information to conform with the evidence and examination.30
before he rendered judgment.
We have consistently held that the concurrence of the Trial Court, Branch 27, Lapu-Lapu City, CLEOFE
minority of the victim and her relationship to the offender is OMOLON, respondents.
a special qualifying circumstance which increases the
penalty, and must be properly alleged in the information DECISION
because of the accused's right to be informed of the nature CALLEJO, SR., J.:
and cause of the accusation against him.31 Juvilie's minority
and her relationship with Gregorio having been duly This is a petition for certiorari under Rule 65 of the 1997
established by evidence, the death penalty was correctly Rules of Court, as amended, filed by Ruben Augusto and
imposed upon the appellant. Atty. Noel D. Archival, for the nullification of the December
5, 1997 Order[1] of the Regional Trial Court Branch 7, Lapu-
Lapu City.
WHEREFORE, the Decision of the Court of Appeals of 08 April
2005 affirming the Decision dated 19 July 1999 of the THE ANTECEDENTS
Regional Trial Court, Branch 08, Aparri, Cagayan in Criminal
Felisa Augusto and her siblings, Jose Augusto,
Case No. 08-974, finding accused-appellant Gregorio Corpuz Magdalena Augusto and Alfonso Augusto, all married, were
guilty beyond reasonable doubt of qualified rape and the co-owners of a parcel of land, identified as Cadastral Lot
sentencing him to suffer the DEATH penalty with the No. 4429, with an area of 1,857 square meters. The lot is
MODIFICATION that he is ordered to pay the victim, Juvilie located in Barrio Mactan, Opon, Cebu.
Corpuz, P75,000.00 as civil indemnity, P75,000.00 as moral On April 20, 1961, the then Justice of the Peace and Ex-
damages, and P25,000.00 as exemplary damages, is hereby Officio Notary Public notarized a Deed of Absolute Sale
AFFIRMED.32 where Felisa, Jose, Magdalena and Alfonso, all surnamed
Augusto, sold the property to Guillermo Omolon for P200.00.
In accordance with Article 83 of the Revised Penal Code, as Guillermo Omolon and his wife, Cleofe Omolon, caused the
amended by Section 25 of Republic Act 7659, upon finality aforesaid document to be registered in the Office of the City
Assessor of Lapu-Lapu City. Tax Declaration No. 02729 was
of this Decision, let the records of this case be forwarded
issued thereafter, and the vendors took possession of the
forthwith to the Office of the President for possible exercise property.
of executive clemency.
In the meantime, the property was registered in the
names of Monico, Felisa, Jose, Filomeno, Teofilo and Sinfroso,
SO ORDERED.
all surnamed Augusto, under Original Certificate of Title
(OCT) No. RO-3560.
SECOND DIVISION
Guillermo Omolon died intestate and was survived by
[G.R. No. 131794. December 10, 2003] Cleofe Omolon.
RUBEN AUGUSTO and ATTY. NOEL D. Sometime in July 1995, Cleofe Omolon filed a petition
ARCHIVAL, petitioners, vs. HON. JUDGE for the reconstitution of the OCT covering Lot No. 4429,
TEODORO K. RISOS, Presiding Judge, Regional before the RTC of Lapu-Lapu City, Branch 54, docketed as
LRC Case No. 21. On January 10, 1997, the RTC rendered a On October 22, 1997, the RTC issued an order directing
decision, the dispositive portion of which reads: Atty. Noel Archival to produce the owners copy of OCT No.
3560 to allow the annotation of Cleofes interest, upon which
WHEREFORE, all premises considered, the Court grants the the owners duplicate copy of the title may thereafter be
petition and thus directs the Register of Deeds of Lapu-Lapu returned:
City to reconstitute the Original Certificate of Title for Lot No.
4429 of the Cadastral Survey of Opon strictly in accordance WHEREFORE, respondent Atty. Noel Archival is hereby
with the technical description of said lot.[2] directed to produce the owners copy of OCT No. 3560,
before the Office of the Clerk of Court within ten (10) days
However, upon presentation of the aforesaid order to from receipt of this order to allow the annotation of
the Office of the Register of Deeds of Lapu-Lapu City, Cleofe petitioners interest, after which title may be returned to the
was informed that the owners copy had already been issued respondent.
to Ruben Augusto, pursuant to an Order issued by the court
dated August 23, 1996, and that based on the record, the Furnish copies of this order to petitioner and respondents as
same was in the possession of Atty. Noel Archival. well as their respective counsels.[4]
Hence, on May 14, 1997, Cleofe filed a petition before
the RTC of Lapu-Lapu City, docketed as Cad. Case No. 21, The trial court declared that, based on the pleadings of
alleging that as lawful co-owner and possessor of Lot No. the parties, the issue of ownership over the property had
4429, she had every right to have and hold the owners been raised, a matter which the court, sitting as a cadastral
duplicate of the said OCT. She prayed that after due court, could not pass upon. The trial court further ruled that
proceedings, the respondents Ruben Augusto and Atty. Noel pending resolution of the issue of ownership over the
Archival be ordered to surrender the owners copy of the said property in an appropriate proceedings therefor, there was a
title: need for the annotation of the petitioners interest over the
property. The respondents therein filed a Motion for a Partial
Reconsideration of the Order alleging that Cleofes interest
WHEREFORE, it is most respectfully prayed of this Honorable over the property had been sufficiently protected by the
Court that after due consideration, respondents be ordered annotation of her adverse claim. The respondents suggested
to surrender the owners copy of Original Certificate of Title that:
No. 3560 of the Register of Deeds of Lapu-Lapu City to the
petitioner herein.[3]
WHEREFORE, it is respectfully prayed of this Honorable
Court to partially reconsider its Order dated 22 October
In their Comment on the petition, therein respondents 1997 and issue a new order enjoin (sic) the respondent to
Ruben Augusto and Atty. Noel Archival alleged, inter produce the owners copy of OCT No. 3560 before the Office
alia, that the Deed of Absolute Sale executed by Felisa, of the Register of Deeds, Lapu-Lapu City on 25 November
Magdalena, Alfonso and Jose, all surnamed Augusto, was 1997 at 2:30 p.m. Other reliefs just and equitable are
falsified and fictitious, and, thus, null and void. In likewise prayed for under the premises.
the interim, Cleofe had her adverse claim annotated at the
dorsal portion of the title in the Office of the Register of
Deeds of Lapu-Lapu City. Cebu City, 06 November 1997, Philippines.[5]
However, on November 14, 1997, the court issued an definite and separate branch thereof, and concludes them
Order denying the motion of the respondents therein. until it is reversed or set aside. Where no issue is left for
future consideration, except the fact of compliance with the
On November 26, 1997, the respondents filed a notice terms of the order, such order is final and appealable. [8]In
of appeal from the said order to the Court of contrast, an order is interlocutory if it does not finally
Appeals. On December 5, 1997, the RTC issued an order dispose of the case.
denying due course therefor, on its perception that the
orders subject thereof were interlocutory; hence, not In this case, the order of the public respondent directing
appealable. the petitioners to produce the owners copy of OCT No. 3560
in the Office of the Register of Deeds for the annotation of
The respondents, now the petitioners, filed the instant the private respondents interest over the property is merely
petition alleging that the public respondent committed a interlocutory and not final; hence, not appealable by means
grave abuse of discretion amounting to excess or lack of of a writ of error. The public respondent had not fully
jurisdiction when it issued the assailed orders, and that disposed of the case as it had not yet ruled on whether to
there is no appeal nor any plain, speedy and adequate grant the private respondents prayer for the surrender of
remedy in the ordinary course of law available to them. The the owners copy of OCT No. 3560. As gleaned from the order
petitioners argue that contrary to the ruling of the public of the respondent judge, he believed that he had no
respondent, its October 22, 1997 Order was final and jurisdiction to delve into and resolve the issue of ownership
appealable, as the same disposed of the case. over the property and was disposed to dismiss the petition.
In her comment on the petition, the private respondent Before so doing, he believed it was necessary that the
averred that the October 22, 1997 Order of the public petitioners claim over the property be annotated at the
respondent was merely interlocutory as it did not fully dorsal portion of the title before the institution of an
dispose of the case and had reserved the further ordinary motion for the resolution of the conflicting claims of
determination of other questions. By its order, the RTC ownership over the property:
merely required the petitioners to present the owners copy
of OCT No. 3560 in the Office of the Register of Deeds for Going over the pleadings of the parties, the court gathers
the annotation of her proprietary interest over the property that ownership over the land in question is disputed by the
and ordered the return of the said owners duplicate to the parties, which this court, sitting as a cadastral court, cannot
respondents after such annotation. pass upon. However, since the petitioner has also shown
enough basis for claiming possession of the owners copy of
THE RULING OF THE COURT OCT No. 3560, by virtue of the Deed of Absolute Sale
Section 1, Rule 41 of the Rules of Court provides that an (Annex A), and in view of the willingness of Atty. Archival to
appeal may be taken only from a final order, and not from have petitioners interest annotated at the back of the title,
an interlocutory one.[6] A final order is one which disposes of the court feels that for the protection of both parties, the
the whole subject matter or terminates a particular owners copy of OCT No. 3560 in the possession of Atty. Noel
proceeding or action, leaving nothing to be done but to Archival must be produced, in order that petitioners interest
enforce by execution what has been determined.[7] An order may be annotated therein pending resolution of the issue on
or judgment is deemed final if it finally disposes of, ownership in the proper proceedings.
adjudicates, or determines the rights, or some right or rights
of the parties, either on the entire controversy or on some
WHEREFORE, respondent Atty. Noel Archival is hereby it has been held that the rule is not, in reality, one of
directed to produce the owners copy of OCT No. 3560, jurisdiction, but rather, of mere procedure, which may be
before the Office of the Clerk of Court within ten (10) days waived. It is not amiss to state likewise that where the issue,
from receipt of this order to allow the annotation of say, of ownership, is ineluctably tied up with the question of
petitioners interest, after which the title may be returned to right of registration, the cadastral court commits no error in
the respondent.[9] assuming jurisdiction over it, as, for instance, in this case,
where both parties rely on their respective exhibits to defeat
In fine, the assailed order of the respondent judge one anothers claims over the parcels sought to be
partook of the nature of an ad cautelam order. This is not to registered, in which case, registration would not be possible
say that the respondent court sitting as a cadastral court or would be unduly prolonged unless the court first decided
had no jurisdiction to delve into and resolve the issue of it.[11]
ownership over the property. Apropos is our ruling in Vda.
de Arceo v. Court of Appeals, et al.,[10] viz: Earlier, we ruled in Averia, Jr. v. Caguioa,[12] thus:

The first question must, however, be resolved against the The above provision has eliminated the distinction between
petitioners. We have held that under Section 2 of the the general jurisdiction vested in the regional trial court and
Property Registration Decree, the jurisdiction of the Regional the limited jurisdiction conferred upon it by the former law
Trial Court, sitting as a land registration court, is no longer when acting merely as a cadastral court. Aimed at avoiding
as circumscribed as it was under Act No. 496, the former multiplicity of suits, the change has simplified registration
land registration law. We said that the Decree has proceedings by conferring upon the regional trial courts the
eliminated the distinction between the general jurisdiction authority to act not only on applications for original
vested in the regional trial court and the limited jurisdiction registration but also over all petitions filed after original
conferred upon it by the former law when acting merely as a registration of title, with power to hear and determine all
cadastral court. The amendment was [a]imed at avoiding questions arising upon such applications or petitions.
multiplicity of suits, the change has simplified registration
proceedings by conferring upon the required trial courts the Consequently, and specifically with reference to Section 112
authority to act not only on applications for original of the Land Registration Act (now Section 108 of P.D. No.
registration but also over all petitions filed after original 1529), the court is no longer fettered by its former limited
registration of title, with power to hear and determine all jurisdiction which enabled it to grant relief only in cases
questions arising from such applications or petitions. At any where there was unanimity among the parties or none of
rate, we have also stated that the limited jurisdiction-rule them raised any adverse claim o serious objection. Under
governing land registration courts is subject to recognized the amended law, the court is now authorized to hear and
exceptions, to wit, (1) where the parties mutually agreed or decide not only such non-controversial cases but even the
have acquiesced in submitting controversial issues for contentious and substantial issues, such as the question at
determination; (2) where they have been given full bar, which were beyond its competence before.[13]
opportunity to present their evidence; and (3) where the
court has considered the evidence already of record and is IN LIGHT OF ALL THE FOREGOING, the petition is
convinced that the same is sufficient for rendering a DISMISSED. The December 5, 1997 Order of the Regional
decision upon such controversial issues. By the same token,
Trial Court, Branch 7, Lapu-Lapu City, is AFFIRMED. Costs and issuance of [a hold-departure order] from the
against the petitioners. Philippines against Ignacio E. Rubio. Respondent amended
SO ORDERED. her complaint to include specific performance and damages.

Puno, (Chairman), Quisumbing, Austria- In her amended complaint, respondent averred inter alia
Martinez, and Tinga, JJ., concur.
that she bought the hereditary shares (consisting of 10 lots)
Republic of the Philippines
of Ignacio Rubio [and] the heirs of Luz Baloloy, namely:
SUPREME COURT
Alejandrino, Bayani, and other co-heirs; that said vendors
Manila
executed a contract of sale dated April 10, 1990 in her
favor; that Ignacio Rubio and the heirs of Luz Baloloy
FIRST DIVISION
received [a down payment] or earnest money in the amount
of P102,169.86 and P450,000, respectively; that it was
G.R. No. 137162 January 24, 2007
agreed in the contract of sale that the vendors would secure
certificates of title covering their respective hereditary
CORAZON L. ESCUETA, assisted by her husband
shares; that the balance of the purchase price would be paid
EDGAR ESCUETA, IGNACIO E. RUBIO, THE HEIRS OF
to each heir upon presentation of their individual
LUZ R. BALOLOY, namely, ALEJANDRINO R. BALOLOY
certificate[s] of [title]; that Ignacio Rubio refused to receive
and BAYANI R. BALOLOY, Petitioners,
the other half of the down payment which is P[100,000];
vs.
that Ignacio Rubio refused and still refuses to deliver to
RUFINA LIM, Respondent.
[respondent] the certificates of title covering his share on
the two lots; that with respect to the heirs of Luz Baloloy,
DECISION
they also refused and still refuse to perform the delivery of
the two certificates of title covering their share in the
AZCUNA, J.: disputed lots; that respondent was and is ready and willing
to pay Ignacio Rubio and the heirs of Luz Baloloy upon
This is an appeal by certiorari1 to annul and set aside the presentation of their individual certificates of title, free from
Decision and Resolution of the Court of Appeals (CA) dated whatever lien and encumbrance;
October 26, 1998 and January 11, 1999, respectively, in CA-
G.R. CV No. 48282, entitled "Rufina Lim v. Corazon L. As to petitioner Corazon Escueta, in spite of her knowledge
Escueta, etc., et. al." that the disputed lots have already been sold by Ignacio
Rubio to respondent, it is alleged that a simulated deed of
The facts2 appear as follows: sale involving said lots was effected by Ignacio Rubio in her
favor; and that the simulated deed of sale by Rubio to
Respondent Rufina Lim filed an action to remove cloud on, Escueta has raised doubts and clouds over respondents
or quiet title to, real property, with preliminary injunction title.
In their separate amended answers, petitioners denied the IN VIEW OF THE FOREGOING, judgment is hereby rendered
material allegations of the complaint and alleged inter alia in favor of [respondent] and against [petitioners, heirs] of
the following: Luz R. Balolo[y], namely: Alejandrino Baloloy and Bayani
Baloloy. The [petitioners] Alejandrino Baloloy and Bayani
For the heirs of Luz Baloloy (Baloloys for brevity): Baloloy are ordered to immediately execute an [Absolute]
Deed of Sale over their hereditary share in the properties
Respondent has no cause of action, because the subject covered by TCT No. 74392 and TCT No. 74394, after
contract of sale has no more force and effect as far as the payment to them by [respondent] the amount
Baloloys are concerned, since they have withdrawn their of P[1,050,000] or consignation of said amount in Court.
offer to sell for the reason that respondent failed to pay the [For] failure of [petitioners] Alejandrino Baloloy and Bayani
balance of the purchase price as orally promised on or Baloloy to execute the Absolute Deed of Sale over their
before May 1, 1990. hereditary share in the property covered by TCT No. T-74392
and TCT No. T-74394 in favor of [respondent], the Clerk of
For petitioners Ignacio Rubio (Rubio for brevity) and Corazon Court is ordered to execute the necessary Absolute Deed of
Escueta (Escueta for brevity): Sale in behalf of the Baloloys in favor of [respondent,] with a
consideration of P[1,500,000]. Further[,] [petitioners]
Respondent has no cause of action, because Rubio has not Alejandrino Baloloy and Bayani Baloloy are ordered to jointly
entered into a contract of sale with her; that he has and severally pay [respondent] moral damages in the
appointed his daughter Patricia Llamas to be his attorney-in- amount of P[50,000] and P[20,000] for attorneys fees. The
fact and not in favor of Virginia Rubio Laygo Lim (Lim for adverse claim annotated at the back of TCT No. T-74392 and
brevity) who was the one who represented him in the sale of TCT No. T-74394[,] insofar as the shares of Alejandrino
the disputed lots in favor of respondent; that the P100,000 Baloloy and Bayani Baloloy are concerned[,] [is] ordered
respondent claimed he received as down payment for the cancelled.
lots is a simple transaction by way of a loan with Lim.
With costs against [petitioners] Alejandrino Baloloy and
The Baloloys failed to appear at the pre-trial. Upon motion of Bayani Baloloy.
respondent, the trial court declared the Baloloys in default.
They then filed a motion to lift the order declaring them in SO ORDERED.3
default, which was denied by the trial court in an order
dated November 27, 1991. Consequently, respondent was The Baloloys filed a petition for relief from judgment and
allowed to adduce evidence ex parte. Thereafter, the trial order dated July 4, 1994 and supplemental petition dated
court rendered a partial decision dated July 23, 1993 against July 7, 1994. This was denied by the trial court in an order
the Baloloys, the dispositive portion of which reads as dated September 16, 1994. Hence, appeal to the Court of
follows: Appeals was taken challenging the order denying the
petition for relief.
Trial on the merits ensued between respondent and Rubio b. Rubio is directed to execute a Deed of Absolute Sale
and Escueta. After trial, the trial court rendered its assailed conditioned upon the payment of the balance of the
Decision, as follows: purchase price by [respondent] within 30 days from the
receipt of the entry of judgment of this Decision.
IN VIEW OF THE FOREGOING, the complaint [and] amended
complaint are dismissed against [petitioners] Corazon L. c. the contracts of sale between Rubio and Escueta involving
Escueta, Ignacio E. Rubio[,] and the Register of Deeds. The Rubios share in the disputed properties is declared NULL
counterclaim of [petitioners] [is] also dismissed. However, and VOID.
[petitioner] Ignacio E. Rubio is ordered to return to the
[respondent], Rufina Lim[,] the amount of P102,169.80[,] d. Rubio and Escueta are ordered to pay jointly and severally
with interest at the rate of six percent (6%) per annum from the [respondent] the amount of P[20,000] as moral
April 10, [1990] until the same is fully paid. Without damages and P[20,000] as attorneys fees.
pronouncement as to costs.
3. the appeal of Rubio and Escueta on the denial of their
SO ORDERED.4 counterclaim is DISMISSED.

On appeal, the CA affirmed the trial courts order and partial SO ORDERED.5
decision, but reversed the later decision. The dispositive
portion of its assailed Decision reads: Petitioners Motion for Reconsideration of the CA Decision
was denied. Hence, this petition.
WHEREFORE, upon all the foregoing premises considered,
this Court rules: The issues are:

1. the appeal of the Baloloys from the Order denying the I


Petition for Relief from Judgment and Orders dated July 4,
1994 and Supplemental Petition dated July 7, 1994 is THE HONORABLE COURT OF APPEALS ERRED IN DENYING
DISMISSED. The Order appealed from is AFFIRMED. THE PETITION FOR RELIEF FROM JUDGMENT FILED BY THE
BALOLOYS.
2. the Decision dismissing [respondents] complaint is
REVERSED and SET ASIDE and a new one is entered. II
Accordingly,
THE HONORABLE COURT OF APPEALS ERRED IN
a. the validity of the subject contract of sale in favor of REINSTATING THE COMPLAINT AND IN AWARDING MORAL
[respondent] is upheld.
DAMAGES AND ATTORNEYS FEES IN FAVOR OF First, the CA did not consider the circumstances surrounding
RESPONDENT RUFINA L. LIM CONSIDERING THAT: petitioners failure to appear at the pre-trial and to file the
petition for relief on time.
A. IGNACIO E. RUBIO IS NOT BOUND BY THE CONTRACT OF
SALE BETWEEN VIRGINIA LAYGO-LIM AND RUFINA LIM. As to the failure to appear at the pre-trial, there was fraud,
accident and/or excusable neglect, because petitioner
B. THE CONTRACT ENTERED INTO BETWEEN RUFINA LIM Bayani was in the United States. There was no service of the
AND VIRGINIA LAYGO-LIM IS A CONTRACT TO SELL AND NOT notice of pre-trial or order. Neither did the former counsel of
A CONTRACT OF SALE. record inform him. Consequently, the order declaring him in
default is void, and all subsequent proceedings, orders, or
C. RUFINA LIM FAILED TO FAITHFULLY COMPLY WITH HER decision are void.
OBLIGATIONS UNDER THE CONTRACT TO SELL THEREBY
WARRANTING THE CANCELLATION THEREOF. Furthermore, petitioner Alejandrino was not clothed with a
power of attorney to appear on behalf of Bayani at the pre-
D. CORAZON L. ESCUETA ACTED IN UTMOST GOOD FAITH IN trial conference.
ENTERING INTO THE CONTRACT OF SALE WITH IGNACIO E.
RUBIO. Second, the sale by Virginia to respondent is not binding.
Petitioner Rubio did not authorize Virginia to transact
III business in his behalf pertaining to the property. The Special
Power of Attorney was constituted in favor of Llamas, and
THE CONTRACT OF SALE EXECUTED BETWEEN IGNACIO E. the latter was not empowered to designate a substitute
RUBIO AND CORAZON L. ESCUETA IS VALID. attorney-in-fact. Llamas even disowned her signature
appearing on the "Joint Special Power of Attorney," which
IV constituted Virginia as her true and lawful attorney-in-fact in
selling Rubios properties.
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING
PETITIONERS COUNTERCLAIMS. Dealing with an assumed agent, respondent should
ascertain not only the fact of agency, but also the nature
Briefly, the issue is whether the contract of sale between and extent of the formers authority. Besides, Virginia
petitioners and respondent is valid. exceeded the authority for failing to comply with her
obligations under the "Joint Special Power of Attorney."
Petitioners argue, as follows:
The amount encashed by Rubio represented not the down
payment, but the payment of respondents debt. His
acceptance and encashment of the check was not a controverted by the party making such admission, and [is]
ratification of the contract of sale. conclusive"8 as to them. All proofs submitted by them
"contrary thereto or inconsistent therewith should be
Third, the contract between respondent and Virginia is a ignored whether objection is interposed by a party or
contract to sell, not a contract of sale. The real character of not."9 Besides, there is no showing that a palpable mistake
the contract is not the title given, but the intention of the has been committed in their admission or that no admission
parties. They intended to reserve ownership of the property has been made by them.
to petitioners pending full payment of the purchase price.
Together with taxes and other fees due on the properties, Pre-trial is mandatory.10 The notices of pre-trial had been
these are conditions precedent for the perfection of the sale. sent to both the Baloloys and their former counsel of record.
Even assuming that the contract is ambiguous, the same Being served with notice, he is "charged with the duty of
must be resolved against respondent, the party who caused notifying the party represented by him." 11 He must "see to it
the same. that his client receives such notice and attends the pre-
trial."12 What the Baloloys and their former counsel have
Fourth, Respondent failed to faithfully fulfill her part of the alleged instead in their Motion to Lift Order of As In Default
obligation. Thus, Rubio had the right to sell his properties to dated December 11, 1991 is the belated receipt of Bayani
Escueta who exercised due diligence in ascertaining Baloloys special power of attorney in favor of their former
ownership of the properties sold to her. Besides, a purchaser counsel, not that they have not received the notice or been
need not inquire beyond what appears in a Torrens title. informed of the scheduled pre-trial. Not having raised the
ground of lack of a special power of attorney in their motion,
The petition lacks merit. The contract of sale between they are now deemed to have waived it. Certainly, they
petitioners and respondent is valid.lawphil.net cannot raise it at this late stage of the proceedings. For lack
of representation, Bayani Baloloy was properly declared in
Bayani Baloloy was represented by his attorney-in-fact, default.
Alejandrino Baloloy. In the Baloloys answer to the original
complaint and amended complaint, the allegations relating Section 3 of Rule 38 of the Rules of Court states:
to the personal circumstances of the Baloloys are clearly
admitted. SEC. 3. Time for filing petition; contents and verification. A
petition provided for in either of the preceding sections of
"An admission, verbal or written, made by a party in the this Rule must be verified, filed within sixty (60) days after
course of the proceedings in the same case, does not the petitioner learns of the judgment, final order, or other
require proof."6 The "factual admission in the pleadings on proceeding to be set aside, and not more than six (6)
record [dispenses] with the need x x x to present evidence months after such judgment or final order was entered, or
to prove the admitted fact."7 It cannot, therefore, "be such proceeding was taken; and must be accompanied with
affidavits showing the fraud, accident, mistake, or excusable
negligence relied upon, and the facts constituting the determination of the reglementary period within which to
petitioners good and substantial cause of action or defense, file the said petition for relief.
as the case may be.
Furthermore, no fraud, accident, mistake, or excusable
There is no reason for the Baloloys to ignore the effects of negligence exists in order that the petition for relief may be
the above-cited rule. "The 60-day period is reckoned from granted.14 There is no proof of extrinsic fraud that "prevents
the time the party acquired knowledge of the order, a party from having a trial x x x or from presenting all of his
judgment or proceedings and not from the date he actually case to the court"15 or an "accident x x x which ordinary
read the same."13 As aptly put by the appellate court: prudence could not have guarded against, and by reason of
which the party applying has probably been impaired in his
The evidence on record as far as this issue is concerned rights."16 There is also no proof of either a "mistake x x x of
shows that Atty. Arsenio Villalon, Jr., the former counsel of law"17 or an excusable negligence "caused by failure to
record of the Baloloys received a copy of the partial decision receive notice of x x x the trial x x x that it would not be
dated June 23, 1993 on April 5, 1994. At that time, said necessary for him to take an active part in the case x x x by
former counsel is still their counsel of record. The reckoning relying on another person to attend to the case for him,
of the 60 day period therefore is the date when the said when such other person x x x was chargeable with that duty
counsel of record received a copy of the partial decision x x x, or by other circumstances not involving fault of the
which was on April 5, 1994. The petition for relief was filed moving party."18
by the new counsel on July 4, 1994 which means that 90
days have already lapsed or 30 days beyond the 60 day Article 1892 of the Civil Code provides:
period. Moreover, the records further show that the Baloloys
received the partial decision on September 13, 1993 as Art. 1892. The agent may appoint a substitute if the
evidenced by Registry return cards which bear the numbers principal has not prohibited him from doing so; but he shall
02597 and 02598 signed by Mr. Alejandrino Baloloy. be responsible for the acts of the substitute:

The Baloloys[,] apparently in an attempt to cure the lapse of (1) When he was not given the power to appoint one x x x.
the aforesaid reglementary period to file a petition for relief
from judgment[,] included in its petition the two Orders
dated May 6, 1994 and June 29, 1994. The first Order denied
Baloloys motion to fix the period within which plaintiffs-
appellants pay the balance of the purchase price. The
second Order refers to the grant of partial execution, i.e. on
the aspect of damages. These Orders are only
consequences of the partial decision subject of the petition
for relief, and thus, cannot be considered in the
Applying the above-quoted provision to the special power of Similarly, the Baloloys have ratified the contract of sale
attorney executed by Ignacio Rubio in favor of his daughter when they accepted and enjoyed its benefits. "The doctrine
Patricia Llamas, it is clear that she is not prohibited from of estoppel applicable to petitioners here is not only that
appointing a substitute. By authorizing Virginia Lim to sell which prohibits a party from assuming inconsistent
the subject properties, Patricia merely acted within the limits positions, based on the principle of election, but that which
of the authority given by her father, but she will have to be precludes him from repudiating an obligation voluntarily
"responsible for the acts of the sub-agent,"19 among which is assumed after having accepted benefits therefrom. To
precisely the sale of the subject properties in favor of countenance such repudiation would be contrary to equity,
respondent. and would put a premium on fraud or misrepresentation."21

Even assuming that Virginia Lim has no authority to sell the Indeed, Virginia Lim and respondent have entered into a
subject properties, the contract she executed in favor of contract of sale. Not only has the title to the subject
respondent is not void, but simply unenforceable, under the properties passed to the latter upon delivery of the thing
second paragraph of Article 1317 of the Civil Code which sold, but there is also no stipulation in the contract that
reads: states the ownership is to be reserved in or "retained by the
vendor until full payment of the price."22
Art. 1317. A contract entered into in the name of another
by one who has no authority or legal representation, or who Applying Article 1544 of the Civil Code, a second buyer of
has acted beyond his powers, shall be unenforceable, unless the property who may have had actual or constructive
it is ratified, expressly or impliedly, by the person on whose knowledge of such defect in the sellers title, or at least was
behalf it has been executed, before it is revoked by the charged with the obligation to discover such defect, cannot
other contracting party. be a registrant in good faith. Such second buyer cannot
defeat the first buyers title. In case a title is issued to the
Ignacio Rubio merely denies the contract of sale. He claims, second buyer, the first buyer may seek reconveyance of the
without substantiation, that what he received was a loan, property subject of the sale.23 Even the argument that a
not the down payment for the sale of the subject properties. purchaser need not inquire beyond what appears in a
His acceptance and encashment of the check, however, Torrens title does not hold water. A perusal of the certificates
constitute ratification of the contract of sale and "produce of title alone will reveal that the subject properties are
the effects of an express power of agency."20"[H]is action registered in common, not in the individual names of the
necessarily implies that he waived his right of action to heirs.
avoid the contract, and, consequently, it also implies the
tacit, if not express, confirmation of the said sale effected" Nothing in the contract "prevents the obligation of the
by Virginia Lim in favor of respondent. vendor to convey title from becoming effective"24 or gives
"the vendor the right to unilaterally resolve the contract the
moment the buyer fails to pay within a fixed
period."25Petitioners themselves have failed to deliver their unless the contract is resolved or rescinded x x x."31 The
individual certificates of title, for which reason it is obvious records do not show that Ignacio Rubio asked for a
that respondent cannot be expected to pay the stipulated rescission of the contract. What he adduced was a belated
taxes, fees, and expenses. revocation of the special power of attorney he executed in
favor of Patricia Llamas. "In the sale of immovable property,
"[A]ll the elements of a valid contract of sale under Article even though it may have been stipulated that upon failure
1458 of the Civil Code are present, such as: (1) consent or to pay the price at the time agreed upon the rescission of
meeting of the minds; (2) determinate subject matter; and the contract shall of right take place, the vendee may pay,
(3) price certain in money or its equivalent." 26Ignacio Rubio, even after the expiration of the period, as long as no
the Baloloys, and their co-heirs sold their hereditary shares demand for rescission of the contract has been made upon
for a price certain to which respondent agreed to buy and him either judicially or by a notarial act."32
pay for the subject properties. "The offer and the
acceptance are concurrent, since the minds of the WHEREFORE, the petition is DENIED. The Decision and
contracting parties meet in the terms of the agreement." 27 Resolution of the Court of Appeals in CA-G.R. CV No. 48282,
dated
In fact, earnest money has been given by respondent. "[I]t
shall be considered as part of the price and as proof of the October 26, 1998 and January 11, 1999, respectively, are
perfection of the contract.28 It constitutes an advance hereby AFFIRMED. Costs against petitioners.
payment to "be deducted from the total price."29
SO ORDERED.
Article 1477 of the same Code also states that "[t]he
ownership of the thing sold shall be transferred to the Republic of the Philippines
vendee upon actual or constructive delivery thereof."30 In SUPREME COURT
the present case, there is actual delivery as manifested by Manila THIRD DIVISION G.R. NO. 142628,February 6,
acts simultaneous with and subsequent to the contract of 2007
sale when respondent not only took possession of the
subject properties but also allowed their use as parking SPRINGFIELD DEVELOPMENT CORPORATION, INC. and
terminal for jeepneys and buses. Moreover, the execution HEIRS OF PETRA CAPISTRANO PIIT, Petitioners,
itself of the contract of sale is constructive delivery. vs.
HONORABLE PRESIDING JUDGE OF REGIONAL TRIAL
Consequently, Ignacio Rubio could no longer sell the subject COURT OF MISAMIS ORIENTAL, BRANCH 40, CAGAYAN
properties to Corazon Escueta, after having sold them to DE ORO CITY, Respondents.
respondent. "[I]n a contract of sale, the vendor loses
ownership over the property and cannot recover it until and DECISION
AUSTRIA-MARTINEZ, J.: The DAR Regional Director then filed a petition for relief
from judgment of the DARAB Decision, docketed as DARAB
Before the Court is a petition for review on certiorari under Case No. 0555. In its Decision dated October 5, 1995, the
Rule 45 of the Rules of Court. The principal issue presented DARAB granted the petition and gave due course to the
for resolution is whether the Regional Trial Court (RTC) has Notice of Coverage. It also directed the Municipal Agrarian
jurisdiction to annul final judgment of the Department of Reform Office to proceed with the documentation,
Agrarian Reform Adjudication Board (DARAB). acquisition, and distribution of the property to the true and
lawful beneficiaries.8
The antecedent facts:
The DARAB also issued an Order dated May 22, 1997,
Petra Capistrano Piit previously owned Lot No. 2291 located ordering the heirs of Piit and Springfield to pay the farmer-
in Cagayan de Oro City which measured 123,408 square beneficiaries the amount of Twelve Million, Three Hundred
meters under Transfer Certificate of Title No. T-62623. Forty Thousand, Eight Hundred Pesos (P12,340,800.00),
Springfield Development Corporation, Inc. (Springfield) corresponding to the value of the property since the
bought Lot No. 2291-C with an area of 68,732 square property has already been developed into a subdivision.
meters, and Lot No. 2291-D with an area of 49,778 square
meters.1 Springfield developed these properties into a On June 13, 1997, Springfield and the heirs of Piit
subdivision project called Mega Heights Subdivision.2 (petitioners) filed with the RTC of Cagayan de Oro City,
Branch 40, a petition for annulment of the DARAB Decision
On May 4, 1990, the Department of Agrarian Reform (DAR), dated October 5, 1995 and all its subsequent proceedings.
through its Municipal Agrarian Reform Officer, issued a Petitioners contend that the DARAB decision was rendered
Notice of Coverage,3 placing the property under the without affording petitioners any notice and hearing.9
coverage of Republic Act (R.A.) No. 6657 or the
Comprehensive Agrarian Reform Law of 1988. There being On motion filed by the farmer-beneficiaries, the RTC issued
an opposition from the heirs of Petra Piit, the case was an Order dated June 25, 1997, dismissing the case for lack
docketed as DARAB Case No. X-305. On August 27, 1991, of jurisdiction.10
DARAB Provincial Adjudicator Abeto A. Salcedo, Jr. rendered
a decision declaring the nature of the property as residential On July 2, 1997, petitioners filed with the Court of Appeals
and not suitable for agriculture.4 The Regional Director filed (CA) a special civil action for certiorari, mandamus, and
a notice of appeal, which the Provincial Adjudicator prohibition with prayer for the issuance of writ of preliminary
disallowed for being pro forma and frivolous.5 The decision injunction and/or temporary restraining order, docketed as
became final and executory6 and Springfield proceeded to CA-G.R. SP No. 44563.11 Petitioners alleged that the RTC
develop the property.7 committed grave abuse of discretion when it ruled that the
annulment of judgment filed before it is actually an action
for certiorari in a different color. According to petitioners, WHERE THE EXCLUSIVE JURISDICTION WAS NOT EXPRESSLY
what it sought before the RTC is an annulment of the DARAB GRANTED TO ANY OTHER COURTS [SIC] OR TRIBUNAL, IN
Decision and not certiorari, as the DARAB Decision is void ab EFFECT, MODIFYING THE APPLICABLE LAW ON THE MATTER.
initio for having been rendered without due process of law. 12
II
13
In the assailed Decision dated July 16, 1998, the CA
dismissed the petition for lack of merit, ruling that the RTC THE COURT OF APPEALS IRREGULARLY DISMISSED
does not have jurisdiction to annul the DARAB Decision PETITIONERS' MOTION FOR RECONSIDERATION AFTER IT
because it is a co-equal body.14 HAD RESOLVED TO ENTERTAIN PETITIONERS' PETITION FOR
PROHIBITION AND TO REVIEW THE DARAB PROCEEDINGS,
However, on January 12, 1999, the CA ordered the elevation THEREBY DEPARTING FROM THE USUAL COURSE OF JUDICIAL
of the DARAB records before it, declaring that it "overlooked PROCEEDINGS.
the fact that petitioners likewise applied for a writ of
prohibition against the enforcement of the DARAB decision III
which they claim to be patently void."15 Forwarded to the CA
were the records of the original case filed with the DARAB- THE HONORABLE SUPREME COURT, BEING THE HIGHEST
Region X, and it appearing that the petition for relief from TEMPLE OF RIGHTS, AND TO AVOID SERIOUS MISCARRIAGE
judgment and its pertinent records were forwarded to the OF JUSTICE AND NEEDLESS DELAYS, IS MOST RESPECTFULLY
DARAB Central Office, the CA issued another Resolution on URGED TO TAKE COGNIZANCE OF THE PETITION FILED IN
December 20, 1999,16 requiring the DARAB Central Office to CA-G.R. SP No. 44563 IN THE EXERCISE OF ITS CONCURRENT
forward the records of the case. But after receipt of the JURISDICTION, AS IF THE PETITION WAS ORIGINALLY LODGED
records, the CA simply denied petitioners' motion for BEFORE IT.18
reconsideration per Resolution17 dated February 23, 2000
without specifically resolving the issues raised concerning Petitioners argue that under Batas Pambansa (B.P.) Blg. 129,
the prayer for a writ of prohibition. there is no provision that vests with the CA jurisdiction over
actions for annulment of DARAB judgments. Petitioners,
Hence, the present petition on the following grounds: however, contend that the RTC may take cognizance of the
annulment case since Section 19 of B.P. Blg. 129 vests the
I RTC with general jurisdiction and an action for annulment is
covered under such general jurisdiction. According to
THE COURT OF APPEALS COMMITTED A CLEAR ERROR OF petitioners, "this is but a logical consequence of the fact
LAW IN APPLYING THE PRINCIPLE OF JUDICIAL STABILITY TO that no other courts were expressly given the jurisdiction
JUSTIFY ITS CONCLUSION DIVESTING THE REGIONAL TRIAL over such actions."19Petitioners further argue that the CA
COURT OF ITS JURISDICTION VESTED BY LAW OVER CASES was in error when it summarily ignored their application for
a writ of prohibition, as it was necessary to restrain the of first instance and the branches thereof, is for the
DARAB from enforcing its void decision; and even if the annulment cases to be tried by the same court or branch
DARAB decision was valid, the writ of prohibition could have which heard the main action.
enjoined the execution of the DARAB decision since there
have been changes which will make the execution unjust The foregoing doctrines were modified in Ngo Bun Tiong v.
and inequitable. Sayo,22 where the Court expressed that pursuant to the
policy of judicial stability, the doctrine of non-interference
In their Joint-Comments, the farmer-beneficiaries and the between concurrent and coordinate courts should be
DARAB (respondents) refute petitioners' allegation that they regarded as highly important in the administration of justice
were not afforded due process in the DARAB proceedings, whereby the judgment of a court of competent jurisdiction
stating that petitioners were impleaded as a party thereto, may not be opened, modified or vacated by any court of
and in fact, they attended some of the hearings although concurrent jurisdiction.
their counsel was absent. Respondents also adopt the CA's
ruling that the RTC is not vested with any jurisdiction to With the introduction of B.P. Blg. 129,23 the rule on
annul the DARAB decision. annulment of judgments was specifically provided in Section
9(2), which vested in the then Intermediate Appellate Court
As stated at the outset, the main issue in this case is (now the CA) the exclusive original jurisdiction over actions
whether the RTC has jurisdiction to annul a final judgment of for annulment of judgments of RTCs. Sec. 9(3) of B.P. Blg.
the DARAB. 129 also vested the CA with "exclusive appellate jurisdiction
over all final judgments, decisions, resolutions, orders, or
Note must be made that the petition for annulment of the awards of Regional Trial Courts and quasi-judicial agencies,
DARAB decision was filed with the RTC on June 13, 1997, instrumentalities, boards or commissions, except those
before the advent of the 1997 Rules of Civil Procedure, falling within the appellate jurisdiction of the Supreme Court
which took effect on July 1, 1997. Thus, the applicable law is in accordance with the Constitution, the provisions of this
B.P. Blg. 129 or the Judiciary Reorganization Act of 1980, Act, and of sub-paragraph (1) of the third paragraph and
enacted on August 10, 1981. subparagraph (4) of the fourth paragraph of Section 17 of
the Judiciary Act of 1948." As provided in paragraph 16 of
It is also worthy of note that before the effectivity of B.P. Blg. the Interim Rules and Guidelines implementing B.P. Blg. 129,
129, a court of first instance has the authority to annul a the quasi-judicial bodies whose decisions are exclusively
final and executory judgment rendered by another court of appealable to the CA are those, which under the law, R.A.
first instance or by another branch of the same court. This No. 5434,24 or its enabling acts, are specifically appealable
was the Court's ruling in Dulap v. Court of Appeals.20 Yet, in to the CA.
subsequent cases,21 the Court held that the better policy, as
a matter of comity or courteous interaction between courts Significantly, B.P. Blg. 129 does not specifically provide for
any power of the RTC to annul judgments of quasi-judicial
bodies. However, in BF Northwest Homeowners Association, SECTION 1. Certiorari to the Court of Appeals. Any decision,
Inc. v. Intermediate Appellate Court,25 the Court ruled that order, award or ruling by the Board or its Adjudicators on
the RTCs have jurisdiction over actions for annulment of the any agrarian dispute or on any matter pertaining to the
decisions of the National Water Resources Council, which is application, implementation, enforcement or interpretation
a quasi-judicial body ranked with inferior courts, pursuant to of agrarian reform laws or rules and regulations
its original jurisdiction to issue writs of certiorari, prohibition, promulgated thereunder, may be brought within fifteen (15)
and mandamus, under Sec. 21(1) of B.P. Blg. 129, in relation days from receipt of a copy thereof, to the Court of Appeals
to acts or omissions of an inferior court. This led to the by certiorari, except as provided in the next succeeding
conclusion that despite the absence of any provision in B.P. section. Notwithstanding an appeal to the Court of Appeals
Blg. 129, the RTC had the power to entertain petitions for the decision of the Board or Adjudicator appealed from, shall
annulment of judgments of inferior courts and be immediately executory.
administrative or quasi-judicial bodies of equal ranking.
This is also in harmony with the "pre-B.P. Blg. 129" rulings of Further, the prevailing 1997 Rules of Civil Procedure, as
the Court recognizing the power of a trial court (court of first amended, expressly provides for an appeal from the DARAB
instance) to annul final judgments.26 Hence, while it is true, decisions to the CA.28
as petitioners contend, that the RTC had the authority to
annul final judgments, such authority pertained only to final The rule is that where legislation provides for an appeal
judgments rendered by inferior courts and quasi-judicial from decisions of certain administrative bodies to the CA, it
bodies of equal ranking with such inferior courts. means that such bodies are co-equal with the RTC, in terms
of rank and stature, and logically, beyond the control of the
The foregoing statements beg the next question, i.e., latter.29
whether the DARAB is a quasi-judicial body with the rank
of an inferior court such that the RTC may take Given that DARAB decisions are appealable to the CA, the
cognizance of an action for the annulments of its judgments. inevitable conclusion is that the DARAB is a co-equal
The answer is no. body with the RTC and its decisions are beyond the
RTC's control. The CA was therefore correct in sustaining
The DARAB is a quasi-judicial body created by Executive the RTC's dismissal of the petition for annulment of the
Order Nos. 229 and 129-A. R.A. No. 6657 delineated its DARAB Decision dated October 5, 1995, as the RTC does not
adjudicatory powers and functions. The DARAB Revised have any jurisdiction to entertain the same.
Rules of Procedure adopted on December 26,
198827specifically provides for the manner of judicial review This brings to fore the issue of whether the petition for
of its decisions, orders, rulings, or awards. Rule XIV, Section annulment of the DARAB judgment could be brought to the
1 states: CA. As previously noted, Section 9(2) of B.P. Blg. 129 vested
in the CA the exclusive original jurisdiction over actions for
annulment of judgments, but only those rendered by the arguendo that the annulment petition can be treated as a
RTCs. It does not expressly give the CA the power to annul petition for review under Rule 43 of the 1997 Rules of Civil
judgments of quasi-judicial bodies. Thus, in Elcee Farms, Inc. Procedure, the same should have been dismissed by the
v. Semillano,30 the Court affirmed the ruling of the CA that it Court of Appeals, because no error of judgment was imputed
has no jurisdiction to entertain a petition for annulment of a to the HLURB and the Office of the President. Fraud and lack
final and executory judgment of the NLRC, citing Section 9 of jurisdiction are beyond the province of petitions under
of B.P. Blg. 129, as amended, which only vests in the CA Rule 43 of the Rules of Court, as it covers only errors of
"exclusive jurisdiction over actions for annulment of judgment. A petition for annulment of judgment is an
judgments of Regional Trial Courts." This was reiterated in initiatory remedy, hence no error of judgment can be the
Galang v. Court of Appeals,31 where the Court ruled that that subject thereof. Besides, the Arbiter and the Office of the
the CA is without jurisdiction to entertain a petition for President indisputably have jurisdiction over the cases
annulment of judgment of a final decision of the Securities brought before them in line with our ruling in Francisco
and Exchange Commission. Sycip, Jr. vs. Court of Appeals, promulgated on March 17,
2000, where the aggrieved townhouse buyers may seek
Recent rulings on similar cases involving annulments of protection from the HLURB under Presidential Decree No.
judgments of quasi-judicial bodies are also quite instructive 957, otherwise known as "Subdivision and Condominium
on this matter. Buyers' Protective Decree."33 (Emphasis supplied)

In Cole v. Court of Appeals,32 involving an annulment of the In Macalalag v. Ombudsman,34 the Court ruled that Rule 47
judgment of the HLURB Arbiter and the Office of the of the 1997 Rules of Civil Procedure on annulment of
President (OP), filed with the CA, the Court stated that, judgments or final orders and resolutions covers "annulment
"(U)nder Rule 47 of the Rules of Court, the remedy of by the Court of Appeals of judgments or final orders and
annulment of judgment is confined to decisions of the resolutions in civil actions of Regional Trial Courts for which
Regional Trial Court on the ground of extrinsic fraud and lack the ordinary remedies of new trial, appeal, petition for relief
of jurisdiction x x x." The Court further ruled, viz.: or other appropriate remedies could no longer be availed of
through no fault of the petitioner." Thus, the Court
Although the grounds set forth in the petition for annulment concluded that judgments or final orders and resolutions of
of judgment are fraud and lack of jurisdiction, said petition the Ombudsman in administrative cases cannot be annulled
cannot prosper for the simple reason that the decision by the CA, more so, since The Ombudsman Act specifically
sought to be annulled was not rendered by the deals with the remedy of an aggrieved party from orders,
Regional Trial Court but by an administrative agency directives and decisions of the Ombudsman in
(HLU Arbiter and Office of the President), hence, not administrative disciplinary cases only, and the right to
within the jurisdiction of the Court of Appeals. There appeal is not to be considered granted to parties aggrieved
is no such remedy as annulment of judgment of the by orders and decisions of the Ombudsman in criminal or
HLURB or the Office of the President. Assuming non-administrative cases.
While these cases involve annulments of judgments under Comprehensive Agrarian Reform Program for distribution to
the 1997 Rules of Civil Procedure, as amended, still, they all qualified beneficiaries. This prompted Governor Carlos O.
still find application in the present case, as the provisions of Fortich of Bukidnon to file an appeal with the OP, while
B.P. Blg. 129 and the 1997 Rules of Civil Procedure, as NQSRMDC filed with the CA a petition for certiorari, and
amended, on annulment of judgments are identical. prohibition with preliminary injunction.

Consequently, the silence of B.P. Blg. 129 on the jurisdiction The OP then issued a Decision dated March 29, 1996
of the CA to annul judgments or final orders and resolutions reversing the DAR Secretary's decision and approving the
of quasi-judicial bodies like the DARAB indicates its lack of application for conversion. Executive Secretary Ruben D.
such authority. Torres denied the DAR's motion for reconsideration for
having been filed beyond the reglementary period of 15
Further, petitioners are also asking the Court to take days, and it was also declared that the OP Decision dated
cognizance of their prayer for the issuance of a writ of March 29, 1996 had already become final and executory.
prohibition, which they claim was not acted upon by the CA,
citing the Court's action in Fortich v. Corona35 where the Because of this, the farmer-beneficiaries staged a hunger
Court took cognizance of the petition previously filed with strike on October 9, 1997, protesting the OP's decision. In
the CA due to compelling reasons. The Court is not order to resolve the strike, the OP issued a so-called
persuaded to do so. "Win/Win" resolution on November 7, 1997, modifying the
decision in that NQSRMDC's application for conversion is
Fortich involved a 144-hectare land located at San Vicente, approved only with respect to the approximately 44-hectare
Sumilao, Bukidnon, owned by the Norberto Quisumbing, Sr. portion of the land adjacent to the highway, as
Management and Development Corporation (NQSRMDC), recommended by the Department of Agriculture, while the
which was leased as a pineapple plantation to Del Monte remaining approximately 100 hectares traversed by an
Philippines, Inc. for a period of 10 years. During the irrigation canal and found to be suitable for agriculture shall
existence of the lease, the DAR placed the entire 144- be distributed to qualified farmer-beneficiaries.1awphi1.net
hectare property under compulsory acquisition and
assessed the land value at P2.38 million. When the A petition for certiorari and prohibition under Rule 65 of the
NQSRMDC/BAIDA (Bukidnon Agro-Industrial Development Revised Rules of Court36 was then filed with the Court, which
Association) filed an application for conversion due to the was contested by the Office of the Solicitor General on the
passage of Resolution No. 6 by the Provincial Development ground that the proper remedy should have been to file a
Council of Bukidnon and Ordinance No. 24 by the petition for review directly with the CA in accordance with
Sangguniang Bayan of Sumilao, Bukidnon, reclassifying the Rule 43 of the Revised Rules of Court.
area from agricultural to industrial/institutional, the same
was disapproved by the DAR Secretary and instead, the
property was placed under the compulsory coverage of
In resolving the issue, the Court recognized the rule that the In the present case, the assailed DARAB Decision dated
Supreme Court, CA and RTC have original concurrent October 5, 1995 granting the petition for relief from
jurisdiction to issue a writ of certiorari, prohibition, and judgment and giving due course to the Notice of Coverage
mandamus. However, due to compelling reasons and in the was made pursuant to a petition for relief from judgment
interest of speedy justice, the Court resolved to take primary filed by the DAR, albeit petitioners are contesting the
jurisdiction over the petition in the interest of speedy validity of the proceedings held thereon. On the other hand,
justice, after which the Court nullified the act of the OP in re- in Fortich, the OP's "Win/Win" resolution dated November 7,
opening the case and substantially modifying its March 29, 1997 was made motu proprio, as a result of the hunger
1996 Decision which had already become final and strike staged by the farmer-beneficiaries.
executory, as it was in gross disregard of the rules and basic
legal precept that accord finality to administrative Further, the OP's "Win/Win" Resolution dated November 7,
determinations. 1997 in the Fortich case is a patently void judgment since it
was evident that there was already an existing final and
It must be stressed at this point that the Court, as a rule, will executory OP Decision dated March 29, 1996. In this case,
not entertain direct resort to it unless the redress desired the assailed DARAB Decision dated October 5, 1995 appears
cannot be obtained in the appropriate courts, and to be regular on its face, and for its alleged nullity to be
exceptional and compelling circumstances, such as cases of resolved, the Court must delve into the records of the case
national interest and of serious implications, justify the in order to determine the validity of petitioners' argument of
availment of the extraordinary remedy of writ of certiorari, lack of due process, absent notice and hearing.
prohibition, or mandamus calling for the exercise of its
primary jurisdiction.37 The Court finds no compelling Moreover, the principle of hierarchy of courts applies
circumstances in this case to warrant a relaxation of the generally to cases involving factual questions. As it is not a
foregoing rule. The Fortich case is not analogous with the trier of facts, the Court cannot entertain cases involving
present case such that the Court is not bound to abandon all factual issues.38 The question of whether the DARAB
rules, take primary jurisdiction, and resolve the merits of Decision dated October 5, 1995 is null and void and
petitioners' application for a writ of prohibition. enforceable against petitioners for having been rendered
without affording petitioners due process is a factual
question which requires a review of the records of this case
for it to be judiciously resolved.

The Court notes that the CA, indeed, failed to resolve


petitioners' prayer for the issuance of the writ of prohibition,
which, significantly, focuses on the alleged nullity of the
DARAB Decision dated October 5, 1995. On this score, the
CA found that the application for the issuance of the writ of
prohibition was actually a collateral attack on the validity of the findings of the Provincial Adjudicator and of the DARAB.
the DARAB decision. But, a final and executory judgment In addition, the CA is empowered by its internal rules to
may be set aside in three ways;39 and a collateral attack, require parties to submit additional documents, as it may
whereby in an action to obtain a different relief, an attack on find necessary to promote the ends of substantial justice,
the judgment is nevertheless made as an incident and further order the transmittal of the proper records for it
thereof,40 is one of these. This tenet is based upon a court's to fully adjudicate the case. After all, it is an avowed policy
inherent authority to expunge void acts from its of the courts that cases should be determined on the merits,
records.41 Despite recognizing the need to resolve after full opportunity to all parties for ventilation of their
petitioners' application for the writ of prohibition in its causes and defenses, rather than on technicality or some
Resolution dated January 12, 1999, the CA nonetheless procedural imperfections. In that way, the ends of justice
summarily denied petitioners' motion for reconsideration in would be served better.44
its Resolution dated February 23, 2000,42 leaving the matter
hanging and unresolved. WHEREFORE, the petition is PARTLY GRANTED. This case
is REMANDED to the Court of Appeals which
At first, the Court considered resolving the merits of is DIRECTED to resolve petitioners' prayer for the issuance
petitioners' motion for reconsideration concerning their of the writ of prohibition in their Motion for Reconsideration.
application for a writ of prohibition against enforcing the
DARAB Decision dated October 5, 1995. Thus, in a Upon finality of this Decision, let the records be remanded
Resolution dated June 5, 2006, the Court directed the CA to forthwith to the Court of Appeals.
transmit the records of DARAB Case No. 0555, which was
previously required by the CA to be forwarded to it per No pronouncement as to costs.
Resolution dated December 20, 1999.43 However, as of even
date, the CA has not complied with the Court's Resolution. SO ORDERED.
Withal, upon re-examination of the issues involved in this
case, the Court deems it more judicious to remand this case Republic of the Philippines
to the CA for immediate resolution of petitioners' motion for SUPREME COURT
reconsideration, re: their application for the writ of Manila
prohibition.
SECOND DIVISION
Moreover, the radical conflict in the findings of the Provincial
Adjudicator and the DARAB as regards the nature of the G.R. No. 173559 January 7, 2013
subject property necessitates a review of the present case.
In this regard, the CA is in a better position to fully LETICIA DIONA, represented by her Attorney-in-Fact,
adjudicate the case for it can delve into the records to MARCELINA DIONA, Petitioner,
determine the probative value of the evidence supporting
vs. by Transfer Certificate of Title (TCT) No. V-12296.7 When the
ROMEO A. BALANGUE, SONNY A. BALANGUE, debt became due, respondents failed to pay
REYNALDO A. BALANGUE, and ESTEBAN A. notwithstanding demand. Thus, on September 17, 1999,
BALANGUE, JR., Respondents. petitioner filed with the RTC a Complaint8 praying that
respondents be ordered:
DECISION
(a) To pay petitioner the principal obligation of P45,000.00,
DEL CASTILLO, J.: with interest thereon at the rate of 12% per annum, from 02
March 1991 until the full obligation is paid.
The great of a relief neither sought by the party in whose
favor it was given not supported by the evidence presented (b) To pay petitioner actual damages as may be proven
violates the opposing partys right to due process and may during the trial but shall in no case be less
be declared void ab initio in a proper proceeding. than P10,000.00; P25,000.00 by way of attorneys fee,
plus P2,000.00 per hearing as appearance fee.
This Petition for Review on Certiorari1 assails the November
24, 2005 Resolution2 of the Court of Appeals (CA) issued in (c) To issue a decree of foreclosure for the sale at public
G.R. SP No. 85541 which granted the Petition for Annulment auction of the aforementioned parcel of land, and for the
of Judgment3 filed by the respondents seeking to nullify that disposition of the proceeds thereof in accordance with law,
portion of the October 17, 2000 Decision4 of the Regional upon failure of the respondents to fully pay petitioner within
Trial Court (RTC), Branch 75, Valenzuela City awarding the period set by law the sums set forth in this complaint.
petitioner 5% monthly interest rate for the principal amount
of the loan respondent obtained from her. (d) Costs of this suit.

This Petition likewise assails the CAs June 26, 2006 Other reliefs and remedies just and equitable under the
Resolution5 denying petitioners Motion for Reconsideration. premises are likewise prayed for. 9 (Emphasis supplied)

Factual Antecedents Respondents were served with summons thru respondent


Sonny A. Balangue (Sonny). On October 15, 1999, with the
The facts of this case are simple and undisputed. assistance of Atty. Arthur C. Coroza (Atty. Coroza) of the
Public Attorneys Office, they filed a Motion to Extend Period
On March 2, 1991, respondents obtained a loan to Answer. Despite the requested extension, however,
of P45,000.00 from petitioner payable in six months and respondents failed to file any responsive pleadings. Thus,
secured by a Real Estate Mortgage6 over their 202-square upon motion of the petitioner, the RTC declared them in
meter property located in Marulas, Valenzuela and covered
default and allowed petitioner to present her evidence ex Judgment14 dated January 26, 2001, claiming that not all of
parte.10 them were duly served with summons. According to the
other respondents, they had no knowledge of the case
Ruling of the RTC sought to be annulled. because their co-respondent Sonny did not inform them
about it. They prayed that the RTCs October 17, 2000
In a Decision11 dated October 17, 2000, the RTC granted Decision be set aside and a new trial be conducted.
petitioners Complaint. The dispositive portion of said
Decision reads: But on March 16, 2001, the RTC ordered15 the issuance of a
Writ of Execution to implement its October 17, 2000
WHEREFORE, judgment is hereby rendered in favor of the Decision. However, since the writ could not be satisfied,
petitioner, ordering the respondents to pay the petitioner as petitioner moved for the public auction of the mortgaged
follows: property,16 which the RTC granted.17 In an auction sale
conducted on November 7, 2001, petitioner was the only
a) the sum of FORTY FIVE THOUSAND (P45,000.00) PESOS, bidder in the amount of P420,000.00. Thus, a Certificate of
representing the unpaid principal loan obligation plus Sale18 was issued in her favor and accordingly annotated at
interest at 5% per month [sic] reckoned from March 2, 1991, the back of TCT No. V-12296.
until the same is fully paid;
Respondents then filed a Motion to Correct/Amend Judgment
b) P20,000.00 as attorneys fees plus cost of suit; and To Set Aside Execution Sale19 dated December 17, 2001,
claiming that the parties did not agree in writing on any rate
c) in the event the [respondents] fail to satisfy the aforesaid of interest and that petitioner merely sought for a 12% per
obligation, an order of foreclosure shall be issued annum interest in her Complaint. Surprisingly, the RTC
accordingly for the sale at public auction of the subject awarded 5% monthly interest (or 60% per annum) from
property covered by Transfer Certificate of Title No. V-12296 March 2, 1991 until full payment. Resultantly, their
and the improvements thereon for the satisfaction of the indebtedness inclusive of the exorbitant interest from March
petitioners claim. 2, 1991 to May 22, 2001 ballooned from P124,400.00
to P652,000.00.
SO ORDERED.12 (Emphasis supplied)
In an Order20 dated May 7, 2002, the RTC granted
Subsequently, petitioner filed a Motion for respondents motion and accordingly modified the interest
Execution,13 alleging that respondents did not interpose a rate awarded from 5% monthly to 12% per annum. Then on
timely appeal despite receipt by their former counsel of the August 2, 2002, respondents filed a Motion for Leave To
RTCs Decision on November 13, 2000. Before it could be Deposit/Consign Judgment Obligation21 in the total amount
resolved, however, respondents filed a Motion to Set Aside of P126,650.00.22
Displeased with the RTCs May 7, 2002 Order, petitioner SO ORDERED.25 (Emphases in the original; italics supplied.)
elevated the matter to the CA via a Petition for
Certiorari23 under Rule 65 of the Rules of Court. On August 5, Proceedings before the Court of Appeals
2003, the CA rendered a Decision24 declaring that the RTC
exceeded its jurisdiction in awarding the 5% monthly Taking their cue from the Decision of the CA in the special
interest but at the same time pronouncing that the RTC civil action for certiorari, respondents filed with the same
gravely abused its discretion in subsequently reducing the court a Petition for Annulment of Judgment and Execution
rate of interest to 12% per annum. In so ruling, the CA Sale with Damages.26 They contended that the portion of the
ratiocinated: RTC Decision granting petitioner 5% monthly interest rate is
in gross violation of Section 3(d) of Rule 9 of the Rules of
Indeed, We are convinced that the Trial Court exceeded its Court and of their right to due process. According to
jurisdiction when it granted 5% monthly interest instead of respondents, the loan did not carry any interest as it was
the 12% per annum prayed for in the complaint. However, the verbal agreement of the parties that in lieu thereof
the proper remedy is not to amend the judgment but to petitioners family can continue occupying respondents
declare that portion as a nullity. Void judgment for want of residential building located in Marulas, Valenzuela for free
jurisdiction is no judgment at all. It cannot be the source of until said loan is fully paid.
any right nor the creator of any obligation (Leonor vs. CA,
256 SCRA 69). No legal rights can emanate from a resolution Ruling of the Court of Appeals
that is null and void (Fortich vs. Corona, 312 SCRA 751).
Initially, the CA denied due course to the Petition.27 Upon
From the foregoing, the remedy of the respondents is to respondents motion, however, it reinstated and granted the
have the Court declare the portion of the judgment Petition. In setting aside portions of the RTCs October 17,
providing for a higher interest than that prayed for as null 2000 Decision, the CA ruled that aside from being
and void for want of or in excess of jurisdiction. A void unconscionably excessive, the monthly interest rate of 5%
judgment never acquire[s] finality and any action to declare was not agreed upon by the parties and that petitioners
its nullity does not prescribe (Heirs of Mayor Nemencio Complaint clearly sought only the legal rate of 12% per
Galvez vs. CA, 255 SCRA 672). annum. Following the mandate of Section 3(d) of Rule 9 of
the Rules of Court, the CA concluded that the awarded rate
WHEREFORE, foregoing premises considered, the Petition of interest is void for being in excess of the relief sought in
having merit, is hereby GIVEN DUE COURSE. Resultantly, the the Complaint. It ruled thus:
challenged May 7, 2002 and September 5, 2000 orders of
Public Respondent Court are hereby ANNULLED and SET WHEREFORE, respondents motion for reconsideration is
ASIDE for having been issued with grave abuse of discretion GRANTED and our resolution dated October 13, 2004 is,
amounting to lack or in excess of jurisdiction. No costs.
accordingly, REVERSED and SET ASIDE. In lieu thereof, FOR ANNULMENT OF JUDGMENT OF THE DECISION OF THE
another is entered ordering the ANNULMENT OF: REGIONAL TRIAL COURT OF VALENZUELA, BRANCH 75
DATED OCTOBER 17, 2000 IN CIVIL CASE NO. 241-V-99,
(a) public respondents impugned October 17, 2000 DESPITE THE FACT THAT SAID DECISION HAS BECOME FINAL
judgment, insofar as it awarded 5% monthly interest in favor AND ALREADY EXECUTED CONTRARY TO THE DOCTRINE OF
of petitioner; and IMMUTABILITY OF JUDGMENT.30

(b) all proceedings relative to the sale at public auction of Petitioners Arguments
the property titled in respondents names under Transfer
Certificate of Title No. V-12296 of the Valenzuela registry. Petitioner claims that the CA erred in partially annulling the
RTCs October 17, 2000 Decision. She contends that a
The judgment debt adjudicated in public respondents Petition for Annulment of Judgment may be availed of only
impugned October 17, 2000 judgment is, likewise, ordered when the ordinary remedies of new trial, appeal, petition for
RECOMPUTED at the rate of 12% per annum from March 2, relief or other appropriate remedies are no longer available
1991. No costs. through no fault of the claimant. In the present case,
however, respondents had all the opportunity to question
SO ORDERED.28 (Emphases in the original.) the October 17, 2000 Decision of the RTC, but because of
their own inaction or negligence they failed to avail of the
Petitioner sought reconsideration, which was denied by the remedies sanctioned by the rules. Instead, they contented
CA in its June 26, 2006 Resolution. 29 themselves with the filing of a Motion to Set Aside Judgment
and then a Motion to Correct/Amend Judgment and to Set
Issues Aside Execution Sale.

Hence, this Petition anchored on the following grounds: Petitioner likewise argues that for a Rule 47 petition to
prosper, the same must either be based on extrinsic fraud or
I. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE lack of jurisdiction. However, the allegations in respondents
AND SERIOUS ERROR OF LAW WHEN IT GRANTED Rule 47 petition do not constitute extrinsic fraud because
RESPONDENTS PETITION FOR ANNULMENT OF JUDGMENT they simply pass the blame to the negligence of their former
AS A SUBSTITUTE OR ALTERNATIVE REMEDY OF A LOST counsel. In addition, it is too late for respondents to pass the
APPEAL. buck to their erstwhile counsel considering that when they
filed their Motion to Correct/Amend Judgment and To Set
II. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE Aside Execution Sale they were already assisted by their
AND SERIOUS ERROR AND MISAPPREHENSION OF LAW AND new lawyer, Atty. Reynaldo A. Ruiz, who did not also avail of
THE FACTS WHEN IT GRANTED RESPONDENTS PETITION the remedies of new trial, appeal, etc. As to the ground of
lack of jurisdiction, petitioner posits that there is no reason
to doubt that the RTC had jurisdiction over the subject Coroza did not file any pleading resulting to their being
matter of the case and over the persons of the respondents. declared in default. While the said lawyer filed on their
behalf a Motion to Set Aside Judgment dated January 26,
While conceding that the RTC patently made a mistake in 2001, he however took no steps to appeal from the Decision
awarding 5% monthly interest, petitioner nonetheless of the RTC, thereby allowing said judgment to lapse into
invokes the doctrine of immutability of final judgment and finality. Citing Legarda v. Court of Appeals,31 respondents
contends that the RTC Decision can no longer be corrected aver that clients are not always bound by the actions of
or modified since it had long become final and executory. their counsel, as in the present case where the clients are to
She likewise points out that respondents received a copy of lose their property due to the gross negligence of their
said Decision on November 13, 2000 but did nothing to counsel.
correct the same. They did not even question the award of
5% monthly interest when they filed their Motion to Set With regard to petitioners invocation of immutability of
Aside Judgment which they anchored on the sole ground of judgment, respondents argue that said doctrine applies only
the RTCs lack of jurisdiction over the persons of some of the to valid and not to void judgments.
respondents.
Our Ruling
Respondents Arguments
The petition must fail.
Respondents do not contest the existence of their obligation
and the principal amount thereof. They only seek quittance We agree with respondents that the award of 5% monthly
from the 5% monthly interest or 60% per annum imposed by interest violated their right to due process and, hence, the
the RTC. Respondents contend that Section (3)d of Rule 9 of same may be set aside in a Petition for Annulment of
the Rules of Court is clear that when the defendant is Judgment filed under Rule 47 of the Rules of Court.
declared in default, the court cannot grant a relief more
than what is being prayed for in the Complaint. A judgment Annulment of judgment under Rule 47; an exception to the
which transgresses said rule, according to the respondents, final judgment rule; grounds therefor.
is void for having been issued without jurisdiction and for
being violative of due process of law. A Petition for Annulment of Judgment under Rule 47 of the
Rules of Court is a remedy granted only under exceptional
Respondents maintain that it was through no fault of their circumstances where a party, without fault on his part, has
own, but through the gross negligence of their former failed to avail of the ordinary remedies of new trial, appeal,
counsel, Atty. Coroza, that the remedies of new trial, appeal petition for relief or other appropriate remedies. Said rule
or petition for relief from judgment were lost. They allege explicitly provides that it is not available as a substitute for
that after filing a Motion to Extend Period to Answer, Atty. a remedy which was lost due to the partys own neglect in
promptly availing of the same. "The underlying reason is opposing party an opportunity to be heard with respect to
traceable to the notion that annulling final judgments goes the proposed relief. The fundamental purpose of the
against the grain of finality of judgment. Litigation must end requirement that allegations of a complaint must provide
and terminate sometime and somewhere, and it is essential the measure of recovery is to prevent surprise to the
to an effective administration of justice that once a defendant.
judgment has become final, the issue or cause involved
therein should be laid to rest."32 Notably, the Rules is even more strict in safeguarding the
right to due process of a defendant who was declared in
While under Section 2, Rule 4733 of the Rules of Court a default than of a defendant who participated in trial. For
Petition for Annulment of Judgment may be based only on instance, amendment to conform to the evidence presented
the grounds of extrinsic fraud and lack of jurisdiction, during trial is allowed the parties under the Rules.37 But the
jurisprudence recognizes lack of due process as additional same is not feasible when the defendant is declared in
ground to annul a judgment.34 In Arcelona v. Court of default because Section 3(d), Rule 9 of the Rules of Court
Appeals,35 this Court declared that a final and executory comes into play and limits the relief that may be granted by
judgment may still be set aside if, upon mere inspection the courts to what has been prayed for in the Complaint. It
thereof, its patent nullity can be shown for having been provides:
issued without jurisdiction or for lack of due process of law.
(d) Extent of relief to be awarded. A judgment rendered
Grant of 5% monthly interest is way beyond the 12% per against a party in default shall not exceed the amount or be
annum interest sought in the Complaint and smacks of different in kind from that prayed for nor award unliquidated
violation of due process. damages.

It is settled that courts cannot grant a relief not prayed for in The raison dtre in limiting the extent of relief that may be
the pleadings or in excess of what is being sought by the granted is that it cannot be presumed that the defendant
party. They cannot also grant a relief without first would not file an Answer and allow himself to be declared in
ascertaining the evidence presented in support thereof. Due default had he known that the plaintiff will be accorded a
process considerations require that judgments must relief greater than or different in kind from that sought in
conform to and be supported by the pleadings and evidence the Complaint.38 No doubt, the reason behind Section 3(d),
presented in court. In Development Bank of the Philippines Rule 9 of the Rules of Court is to safeguard defendants right
v. Teston,36 this Court expounded that: to due process against unforeseen and arbitrarily issued
judgment. This, to the mind of this Court, is akin to the very
Due process considerations justify this requirement. It is essence of due process. It embodies "the sporting idea of
improper to enter an order which exceeds the scope of relief fair play"39 and forbids the grant of relief on matters where
sought by the pleadings, absent notice which affords the the defendant was not given the opportunity to be heard
thereon.
In the case at bench, the award of 5% monthly interest rate Spouses Bautista v. Pilar Development Corporation and the
is not supported both by the allegations in the pleadings and recent case of Spouses Solangon v. Salazar, this Court
the evidence on record. The Real Estate considered the 3% interest per month or 36% interest per
Mortgage40 executed by the parties does not include any annum as excessive and unconscionable. Thereby, the
provision on interest. When petitioner filed her Complaint Court, in the said case, equitably reduced the rate of
before the RTC, she alleged that respondents borrowed from interest to 1% interest per month or 12% interest per
her "the sum of FORTY-FIVE THOUSAND PESOS (P45,000.00), annum. (Citations omitted)
with interest thereon at the rate of 12% per annum"41 and
sought payment thereof. She did not allege or pray for the It is understandable for the respondents not to contest the
disputed 5% monthly interest. Neither did she present default order for, as alleged in their Comment, "it is not their
evidence nor testified thereon. Clearly, the RTCs award of intention to impugn or run away from their just and valid
5% monthly interest or 60% per annum lacks basis and obligation."45 Nonetheless, their waiver to present evidence
disregards due process. It violated the due process should never be construed as waiver to contest patently
requirement because respondents were not informed of the erroneous award which already transgresses their right to
possibility that the RTC may award 5% monthly interest. due process, as well as applicable jurisprudence.
They were deprived of reasonable opportunity to refute and
present controverting evidence as they were made to Respondents former counsel was grossly negligent in
believe that the complainant petitioner was seeking for what handling the case of his clients; respondents did not lose
she merely stated in her Complaint. ordinary remedies of new trial, petition for relief, etc.
through their own fault.
Neither can the grant of the 5% monthly interest be
considered subsumed by petitioners general prayer for Ordinarily, the mistake, negligence or lack of competence of
"other reliefs and remedies just and equitable under the counsel binds the client.1wphi1 This is based on the rule
premises x x x."42 To repeat, the courts grant of relief is that any act performed by a counsel within the scope of his
limited only to what has been prayed for in the Complaint or general or implied authority is regarded as an act of his
related thereto, supported by evidence, and covered by the client. A recognized exception to the rule is when the
partys cause of action.43 Besides, even assuming that the lawyers were grossly negligent in their duty to maintain
awarded 5% monthly or 60% per annum interest was their clients cause and such amounted to a deprivation of
properly alleged and proven during trial, the same remains their clients property without due process of law.46 In which
unconscionably excessive and ought to be equitably case, the courts must step in and accord relief to a client
reduced in accordance with applicable jurisprudence. In who suffered thereby.47
Bulos, Jr. v. Yasuma,44 this Court held:
The manifest indifference of respondents former counsel in
In the case of Ruiz v. Court of Appeals, citing the cases of handling the cause of his client was already present even
Medel v. Court of Appeals, Garcia v. Court of Appeals,
from the beginning. It should be recalled that after filing in the end that nothing can be taken or withheld from his client
behalf of his clients a Motion to Extend Period to Answer, except in accordance with the law."51 Judging from how
said counsel allowed the requested extension to pass respondents former counsel handled the cause of his
without filing an Answer, which resulted to respondents clients, there is no doubt that he was grossly negligent in
being declared in default. His negligence was aggravated by protecting their rights, to the extent that they were deprived
the fact that he did not question the awarded 5% monthly of their property without due process of law.
interest despite receipt of the RTC Decision on November
13, 2000.48 A simple reading of the dispositive portion of the In fine, respondents did not lose the remedies of new trial,
RTC Decision readily reveals that it awarded exorbitant and appeal, petition for relief and other remedies through their
unconscionable rate of interest. Its difference from what is own fault. It can only be attributed to the gross negligence
being prayed for by the petitioner in her Complaint is so of their erstwhile counsel which prevented them from
blatant and very patent. It also defies elementary pursuing such remedies. We cannot also blame respondents
jurisprudence on legal rate of interests. Had the counsel for relying too much on their former counsel. Clients have
carefully read the judgment it would have caught his reasonable expectations that their lawyer would amply
attention and compelled him to take the necessary steps to protect their interest during the trial of the case.52 Here,
protect the interest of his client. But he did not. Instead, he
filed in behalf of his clients a Motion to Set Aside "respondents are plain and ordinary people x x x who are
Judgment49 dated January 26, 2001 based on the sole totally ignorant of the intricacies and technicalities of law
ground of lack of jurisdiction, oblivious to the fact that the and legal procedures. Being so, they completely relied upon
erroneous award of 5% monthly interest would result to his and trusted their former counsel to appropriately act as their
clients deprivation of property without due process of law. interest may lawfully warrant and require."53
Worse, he even allowed the RTC Decision to become final by
not perfecting an appeal. Neither did he file a petition for As a final word, it is worth noting that respondents principal
relief therefrom. It was only a year later that the patently obligation was only P45,000.00. Due to their former
erroneous award of 5% monthly interest was brought to the counsels gross negligence in handling their cause, coupled
attention of the RTC when respondents, thru their new with the RTCs erroneous, baseless, and illegal award of 5%
counsel, filed a Motion to Correct/Amend Judgment and To monthly interest, they now stand to lose their property and
Set Aside Execution Sale. Even the RTC candidly admitted still owe petitioner a large amount of money. As aptly
that it "made a glaring mistake in directing the defendants observed by the CA:
to pay interest on the principal loan at 5% per month which
is very different from what was prayed for by the plaintiff."50 x x x If the impugned judgment is not, therefore, rightfully
nullified, petitioners will not only end up losing their
"A lawyer owes entire devotion to the interest of his client, property but will additionally owe private respondent the
warmth and zeal in the maintenance and defense of his sum of P232,000.00 plus the legal interest said balance had,
rights and the exertion of his utmost learning and ability, to
in the meantime, earned. As a court of justice and equity, This refers to the petition for review on certiorari filed
we cannot, in good conscience, allow this unconscionable by the National Housing Authority assailing the decision [2] of
situation to prevail.54 the Court of Appeals (CA) in CA-G.R. SP No. 51646, granting
respondents petition for annulment of judgment. The
Indeed, this Court is appalled by petitioners invocation of dispositive portion of the decision reads:
the doctrine of immutability of judgment. Petitioner does not
contest as she even admits that the RTC made a glaring WHEREFORE, the petition is granted. The assailed part of
mistake in awarding 5% monthly interest.55Amazingly, she paragraph No. 3 of the dispositive portion of the decision
wants to benefit from such erroneous award. This Court dated November 29, 1995 of the Regional Trial Court, Br.
cannot allow this injustice to happen. CIII, Quezon City in Civil Case No. Q-91-10071 is hereby
declared void, non-binding and inapplicable in so far as
WHEREFORE, the instant Petition is hereby DENIED and the petitioners TCT No. 122944 is concerned.
assailed November 24, 2005 and June 26, 2006 Resolution
of the Court of Appeals in CA-G.R. SP No. 85541 are Let a copy hereof be furnished the Register of Deeds of
AFFIRMED. Quezon City for the proper annotation. No pronouncement
as to costs.
SO ORDERED.
SO ORDERED.[3]
SECOND DIVISION
Petitioner now comes before the Court with the
[G.R. No. 140945. May 16, 2005]NATIONAL HOUSING following assignment of errors allegedly committed by the
AUTHORITY, petitioner, vs. JOSE CA:
EVANGELISTA, respondent.
I
DECISION
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
AUSTRIA-MARTINEZ, J.: THAT THE DECISION OF THE LOWER COURT IS NOT BINDING
ON HEREIN RESPONDENT JOSE EVANGELISTA BECAUSE THE
A person who was not impleaded in the complaint LOWER COURT DID NOT ACQUIRE JURISDICTION OVER HIS
cannot be bound by the decision rendered therein, for no PERSON.
man shall be affected by a proceeding in which he is a
stranger.[1] II
THE HONORABLE COURT LIKEWISE ERRED IN ANNULLING Register of Deeds issued Transfer Certificate of Title (TCT)
THE DECISION OF THE LOWER COURT ON THE GROUND OF No. 28182 in the name of Sarte, who di