MANUEL C. BUNGCAYAO v.

FORT ILOCANDIA PROPERTY HOLDINGS AND DEVELOPMENT

CORPORATION (G.R. No. 170483, April 19, 2010)

The Case

Before the Court is a petition for review[1] assailing the 21 November 2005 Decision[2] of the Court of Appeals in
CA-G.R. CV No. 82415.

The Antecedent Facts

Manuel C. Bungcayao, Sr. (petitioner) claimed to be one of the two entrepreneurs who introduced improvements
on the foreshore area of Calayab Beach in 1978 when Fort Ilocandia Hotel started its construction in the
area. Thereafter, other entrepreneurs began setting up their own stalls in the foreshore area. They later formed
themselves into the DSierto Beach Resort Owners Association, Inc. (DSierto).

In July 1980, six parcels of land in Barrio Balacad (now Calayad) were transferred, ceded, and conveyed to the
Philippine Tourism Authority (PTA) pursuant to Presidential Decree No. 1704. Fort Ilocandia Resort Hotel was
erected on the area. In 1992, petitioner and other DSierto members applied for a foreshore lease with the
Community Environment and Natural Resources Office (CENRO) and was granted a provisional permit. On 31
January 2002, Fort Ilocandia Property Holdings and Development Corporation (respondent) filed a foreshore
application over a 14-hectare area abutting the Fort Ilocandia Property, including the 5-hectare portion applied
for by DSierto members. The foreshore applications became the subject matter of a conflict case, docketed
Department of Environment and Natural Resources (DENR) Case No. 5473, between respondent and DSierto
members. In an undated Order,[3] DENR Regional Executive Director Victor J. Ancheta denied the foreshore
lease applications of the DSierto members, including petitioner, on the ground that the subject area applied for
fell either within the titled property or within the foreshore areas applied for by respondent. The DSierto members
appealed the denial of their applications. In a Resolution[4] dated 21 August 2003, then DENR Secretary Elisea
G. Gozun denied the appeal on the ground that the area applied for encroached on the titled property of respondent
based on the final verification plan.

In a letter dated 18 September 2003,[5] respondent, through its Public Relations Manager Arlene de Guzman,
invited the DSierto members to a luncheon meeting to discuss common details beneficial to all parties
concerned. Atty. Liza Marcos (Atty. Marcos), wife of Governor Bongbong Marcos, was present as she was asked
by Fort Ilocandia hotel officials to mediate over the conflict among the parties. Atty. Marcos offered P300,000 as
financial settlement per claimant in consideration of the improvements introduced, on the condition that they
would vacate the area identified as respondents property. A DSierto member made a counter-offer of P400,000,
to which the other DSierto members agreed.
Petitioner alleged that his son, Manuel Bungcayao, Jr., who attended the meeting, manifested that he still had to
consult his parents about the offer but upon the undue pressure exerted by Atty. Marcos, he accepted the payment
and signed the Deed of Assignment, Release, Waiver and Quitclaim[6] in favor of respondent.

Petitioner then filed an action for declaration of nullity of contract before the Regional Trial Court of Laoag, City,
Branch 13 (trial court), docketed as Civil Case Nos. 12891-13, against respondent. Petitioner alleged that his son
had no authority to represent him and that the deed was void and not binding upon him.

Respondent countered that the area upon which petitioner and the other DSierto members constructed their
improvements was part of its titled property under Transfer Certificate of Title No. T-31182. Respondent alleged
that petitioners sons, Manuel, Jr. and Romel, attended the luncheon meeting on their own volition and they were
able to talk to their parents through a cellular phone before they accepted respondents offer. As a counterclaim,
respondent prayed that petitioner be required to return the amount of P400,000 from respondent, to vacate the
portion of the respondents property he was occupying, and to pay damages because his continued refusal to vacate
the property caused tremendous delay in the planned implementation of Fort Ilocandias expansion projects.

In an Order[7] dated 6 November 2003, the trial court confirmed the agreement of the parties to cancel the Deed
of Assignment, Release, Waiver and Quitclaim and the return ofP400,000 to respondent. Petitioners counsel,
however, manifested that petitioner was still maintaining its claim for damages against respondent.

Petitioner and respondent agreed to consider the case submitted for resolution on summary judgment. Thus, in its
Order[8] dated 28 November 2003, the trial court considered the case submitted for resolution. Petitioner filed a
motion for reconsideration, alleging that he manifested in open court that he was withdrawing his earlier
manifestation submitting the case for resolution. Respondent filed a Motion for Summary Judgment.

The trial court rendered a Summary Judgment[9] dated 13 February 2004.

The Decision of the Trial Court

The trial court ruled that the only issue raised by petitioner was his claim for damages while respondents issue
was only his claim for possession of the property occupied by petitioner and damages. The trial court noted that
the parties already stipulated on the issues and admissions had been made by both parties. The trial court ruled
that summary judgment could be rendered on the case.

The trial court ruled that the alleged pressure on petitioners sons could not constitute force, violence or
intimidation that could vitiate consent. As regards respondents counterclaim, the trial court ruled that based on
the pleadings and admissions made, it was established that the property occupied by petitioner was within the
titled property of respondent. The dispositive portion of the trial courts decision reads:
 WHEREFORE, the Court hereby renders judgment DISMISSING the claim of plaintiff for
damages as it is found to be without legal basis, and finding the counterclaim of the defendant for
recovery of possession of the lot occupied by the plaintiff to be meritorious as it is hereby
GRANTED. Consequently, the plaintiff is hereby directed to immediately vacate the premises
administratively adjudicated by the executive department of the government in favor of the
defendant and yield its possession unto the defendant. No pronouncement is here made as yet of
the damages claimed by the defendant.

SO ORDERED.[10]

Petitioner appealed from the trial courts decision.

The Decision of the Court of Appeals

In its 21 November 2005 Decision, the Court of Appeals affirmed the trial courts decision in toto.

The Court of Appeals sustained the trial court in resorting to summary judgment as a valid procedural device for
the prompt disposition of actions in which the pleadings raise only a legal issue and not a genuine issue as to any
material fact. The Court of Appeals ruled that in this case, the facts are not in dispute and the only issue to be
resolved is whether the subject property was within the titled property of respondent. Hence, summary judgment
was properly rendered by the trial court.

The Court of Appeals ruled that the counterclaims raised by respondent were compulsory in nature, as they arose
out of or were connected with the transaction or occurrence constituting the subject matter of the opposing partys
claim and did not require for its adjudication the presence of third parties of whom the court could not acquire
jurisdiction.The Court of Appeals ruled that respondent was the rightful owner of the subject property and as
such, it had the right to recover its possession from any other person to whom the owner has not transmitted the
property, including petitioner.

The dispositive portion of the Court of Appeals decision reads:

WHEREFORE, the assailed decision dated February 13, 2004 of the Regional Trial Court of
Laoag City, Branch 13 is hereby AFFIRMED in toto.

SO ORDERED.[11]

Thus, the petition before this Court.

The Issues

Petitioner raises the following issues in his Memorandum:[12]

1. Whether respondents counterclaim is compulsory; and

 2. Whether summary judgment is appropriate in this case.

The Ruling of this Court

The petition has merit.

Compulsory Counterclaim

A compulsory counterclaim is any claim for money or any relief, which a defending party may have against an
opposing party, which at the time of suit arises out of, or is necessarily connected with, the same transaction or
occurrence that is the subject matter of the plaintiffs complaint.[13] It is compulsory in the sense that it is within
the jurisdiction of the court, does not require for its adjudication the presence of third parties over whom the court
cannot acquire jurisdiction, and will be barred in the future if not set up in the answer to the complaint in the same
case.[14] Any other counterclaim is permissive.[15]

The Court has ruled that the compelling test of compulsoriness characterizes a counterclaim as compulsory if
there should exist a logical relationship between the main claim and the counterclaim.[16] The Court further
ruled that there exists such a relationship when conducting separate trials of the respective claims of the parties
would entail substantial duplication of time and effort by the parties and the court; when the multiple claims
involve the same factual and legal issues; or when the claims are offshoots of the same basic controversy between
the parties.[17]

The criteria to determine whether the counterclaim is compulsory or permissive are as follows:

(a) Are issues of fact and law raised by the claim and by the counterclaim largely the same?

(b) Would res judicata bar a subsequent suit on defendants claim, absent the compulsory rule?

(c) Will substantially the same evidence support or refute plaintiffs claim as well as
defendants counterclaim?

(d) Is there any logical relations between the claim and the counterclaim?

A positive answer to all four questions would indicate that the counterclaim is compulsory.[18]

In this case, the only issue in the complaint is whether Manuel, Jr. is authorized to sign the Deed of Assignment,
Release, Waiver and Quitclaim in favor of respondent without petitioners express approval and authority. In an
Order dated 6 November 2003, the trial court confirmed the agreement of the parties to cancel the Deed of
Assignment, Release, Waiver and Quitclaim and the return of P400,000 to respondent. The only claim that
remained was the claim for damages against respondent. The trial court resolved this issue by holding that any
damage suffered by Manuel, Jr. was personal to him. The trial court ruled that petitioner could not have suffered
any damage even if Manuel, Jr. entered into an agreement with respondent since the agreement was null and void.

Respondent filed three counterclaims. The first was for recovery of the P400,000 given to Manuel, Jr.; the second
was for recovery of possession of the subject property; and the third was for damages. The first counterclaim was
rendered moot with the issuance of the 6 November 2003 Order confirming the agreement of the parties to cancel
the Deed of Assignment, Release, Waiver and Quitclaim and to return the P400,000 to respondent. Respondent
waived and renounced the third counterclaim for damages.[19] The only counterclaim that remained was for the
recovery of possession of the subject property. While this counterclaim was an offshoot of the same basic
controversy between the parties, it is very clear that it will not be barred if not set up in the answer to the complaint
in the same case. Respondents second counterclaim, contrary to the findings of the trial court and the Court of
Appeals, is only a permissive counterclaim. It is not a compulsory counterclaim. It is capable of proceeding
independently of the main case.

The rule in permissive counterclaim is that for the trial court to acquire jurisdiction, the counterclaimant is bound
to pay the prescribed docket fees.[20] Any decision rendered without jurisdiction is a total nullity and may be
struck down at any time, even on appeal before this Court.[21] In this case, respondent did not dispute the non-
payment of docket fees. Respondent only insisted that its claims were all compulsory counterclaims. As such, the
judgment by the trial court in relation to the second counterclaim is considered null and void[22] without prejudice
to a separate action which respondent may file against petitioner.

Summary Judgment

Section 1, Rule 35 of the 1997 Rules of Civil Procedure provides:

Section 1. Summary Judgment for claimant. - A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in
answer thereto has been served, move with supporting affidavits, depositions or admissions for a
summary judgment in his favor upon all or any part thereof.

Summary judgment has been explained as follows:

Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations
and useless delays. When the pleadings on file show that there are no genuine issues of fact to be
tried, the Rules allow a party to obtain immediate relief by way of summary judgment, that is,
when the facts are not in dispute, the court is allowed to decide the case summarily by applying
the law to the material facts. Conversely, where the pleadings tender a genuine issue, summary
judgment is not proper. A genuine issue is such issue of fact which requires the presentation of
evidence as distinguished from a sham, fictitious, contrived or false claim. Section 3 of the said
rule provides two (2) requisites for summary judgment to be proper: (1) there must be no genuine
issue as to any material fact, except for the amount of damages; and (2) the party presenting the
motion for summary judgment must be entitled to a judgment as a matter of law. A summary
judgment is permitted only if there is no genuine issue as to any material fact and a moving party
 is entitled to a judgment as a matter of law. A summary judgment is proper if, while the pleadings
on their face appear to raise issues, the affidavits, depositions, and admissions presented by the
moving party show that such issues are not genuine.[23]

Since we have limited the issues to the damages claimed by the parties, summary judgment has been properly
rendered in this case.

WHEREFORE, we MODIFY the 21 November 2005 Decision of the Court of Appeals in CA-G.R. CV No.
82415 which affirmed the 13 February 2004 Decision of the Regional Trial Court of Laoag City, Branch 13,
insofar as it ruled that respondents counterclaim for recovery of possession of the subject property is compulsory
in nature. WeDISMISS respondents permissive counterclaim without prejudice to filing a separate action against
petitioner.

SO ORDERED.
PERFECTA QUINTANILLA, petitioner, vs. COURT OF APPEALS** and RIZAL COMMERCIAL
BANKING CORPORATION, respondents.
[G.R. No. 101747. September 24, 1997]

DECISION
FRANCISCO, J.:

The antecedents, as found by the trial court and affirmed by the Court of Appeals (CA), are as follows:

Defendant, x x x (respondent RCBC) is a commercial banking institution, organized under existing laws, doing
business through its duly accredited offices in the City of Cebu.

On 12 July 1983, plaintiff (petitioner) executed a Real Estate Mortgage on a parcel of land, situated in the City
of Cebu, under TCT No. 39409, in favor of defendant, RCBC, to secure a credit line in the amount of
P45,000.00. Plaintiff availed, from this collateralized credit line, the amount of P25,000.00 only, secured and
evidenced by promissory note no. 84/615 in the said sum of P25,000.00, with interest at the rate of 38% per
annum, on 23 October 1984.

Plaintiff, Perfecta Quintanilla, who is engaged in business, under the name and style, Cebu Cane Products,
exports rattan products abroad. In connection therewith, she established with defendant, RCBC, advance credit
line, for her export bills against Letters of Credit from her customers abroad.

Also, on an even date, 23 October 1984, plaintiff secured from defendant, RCBC, a loan of P100,000.00,
against her advance export credit line, secured by promissory note no. 84/614, on a maturing period, one month
from thence.

Again on November 8, 1984, plaintiff secured another advance credit of P100,000.00 against her advance
export credit line, which she again secured by another promissory note no. 84/632, of even date.

On 20 November 1984, plaintiff shipped stocks of her Cane Products to her buyer in Belgium, upon a Letter of
Credit, under Export Bill No. 84/199, in the amount of US $10,638.15. Defendant, RCBC, received the
proceeds of this export shipment, in the amount of P208,630.00, from Bank Brussels Lambert-New York.

The full amount of the proceeds, was therefore credited to plaintiffs Current Account No. 218 with defendant
bank. Defendant RCBC, then debited plaintiffs current account, in the amount of P125,000.00 as payment for
the latters loan of P100,000.00 to promissory note no. 84/614 and P25,000.00 to promissory note no.
84/615. The latter amount was what plaintiff secured by the Real Estate Mortgage, Exhibit A.

On November 27, 1984, plaintiff made another shipment from her Cebu Cane Products, under Export Bill No.
84-205 for US $10,083.00. Consequently, RCBC sent the export documents to the issuing bank for collection of
this, latter export shipment.

However, on November 28, 1984, the issuing bank, Brussels Lambert-Belgium, refused payment on Export Bill
No. 84-199, and demanded reimbursement from defendant, RCBC, the amount of US $20,721.70, invoking its
right for immediate reimbursement, under Art. 16 of the International Chamber of Commerce (ICC) Publication
400 through telex, to which plaintiff was so notified by defendant, RCBC. The latter, subsequently advised
plaintiff to communicate and arrange matters with her buyers and customers in Belgium. After persistent
demand for reimbursement, from Bank Brussels Lambert-Belgium, defendant, RCBC, returned and reimbursed
the total sum of US $20,721.70 to Bank Brussels Lambert-Belgium.
RCBC, then proceeded to revert the credit and debit entries on plaintiffs current account, which it supposedly
paid to promissory note nos. 84/614 and 84/615 and demanded payments from the plaintiff, the whole amount,
including the amount of P25,000.00, it collaterized by the real estate mortgage, Exh. A.[1]

For failing to comply with the demands, RCBC sought to foreclose the real estate mortgage, not only for the
amount of P25,000.00 but also for the amount of P500,994.39 which represents petitioners subsequent credit
accommodations. RCBC alleged that the latter amount was likewise secured under the mortgage contract.
Rejecting RCBCs claim, petitioner filed an action for specific performance, damages and attorneys fees with
prayer for a writ of preliminary injunction, alleging that the obligation for which the mortgage was executed was
only for the maximum amount of P45,000.00 and that petitioner had already paid her other unsecured
loans. RCBC filed an answer denying petitioners claim and set up a counterclaim for the payment of all her other
outstanding loans totalling P500,694.39.
After trial, the RTC rendered judgment, the dispositive portion of which reads:

WHEREFORE, the writ of preliminary injunction, issued by this Court is hereby lifted. The defendant, RCBC,
and defendants may proceed to foreclose the real estate mortgage for the satisfaction of plaintiffs obligation of
P25,000.00 plus stipulated interests thereon in accordance with the terms thereof, but not to satisfy the other
obligation of the plaintiff in excess thereof, which the said mortgage did not secure, therefor. No
pronouncement as to costs.

SO ORDERED.[2]

RCBC appealed to the CA imputing error to the trial court in not granting its counterclaim and in ruling that the
foreclosure of the mortgage was limited to the P25,000.00 availed of by petitioner. The CA affirmed the RTC
ruling in so far as the foreclosure was limited to the amount of P25,000.00 but modified the same by granting the
counterclaim. The dispositive portion of the CA decision provides:

Premises considered, We affirm the appealed decision with the modification consisting of ordering the appellee
to pay the appellant, on the latters counter-claims, the sum of P500,694.39 due as of May 22, 1987 plus interest
on the principal sum of P298,097.47 at the rate of 18% per annum from May 23, 1987 and penalty charges of
12% per annum from the same date, until fully paid, and the sum of P8,000.00 as reasonable attorneys fees plus
the costs.

SO ORDERED.[3]

Aggrieved, petitioner moved for a partial reconsideration, arguing for the first time that respondent RCBCs
counterclaim is permissive in nature for which the trial court has not acquired jurisdiction due to the non-payment
of the docket fees. Petitioners motion was denied by the CA, though it amended its earlier decision by ordering
respondent RCBC to pay docket fees on the counterclaim.[4] Hence this petition.
The pivotal issue is whether respondent RCBCs counterclaim is compulsory or permissive in nature, the
resolution of which hinges on the interpretation of the following provision in the real estate mortgage which reads:

That for and in consideration of certain loans overdrafts and other credit accommodations obtained from the
mortgagee by the same and those that hereafter be obtained, the principal of all of which is hereby fixed at
forty-five Thousand Pesos (P45,000.00), Philippine Currency, as well as those that the mortgagee may extend
to the mortgagor including interest and expenses of any other obligation owing to the mortgagee, whether
direct or indirect, principal or secondary, as appears in the accounts, books and records of the mortgagee, the
mortgagor does hereby transfer and convey by way of mortgage unto the mortgagee x x x (emphasis
supplied).[5]
 We disagree with the CAs ruling that RCBCs counterclaim is permissive. In Ajax Marketing & Development
Corporation vs. Court of Appeals,[6] a substantially similar provision appears, to wit:

That for and in consideration of credit accommodations obtained from the MORTGAGEE (Metropolitan Bank
and Trust Company), by the MORTGAGOR and/or AJAX MKTG. & DEV. CORP./AJAX MARKETING
COMPANY/YLANG-YLANG MERCHANDISING COMPANY detailed as follows:

Nature Date Granted Due Amount or Line

Date

Loans and/or P600,000.00

Advances in 150,000.00

current account 250,000.00

and to secure the payment of the same and those that may hereafter be obtained including the renewals or
extension thereof.

xxxxxxxxx

the principal of all of which is hereby fixed at (P600,000.00/P150,000.00/P250,000.00)... as well as those that
the MORTGAGEE may have previously extended or may later extend to the MORTGAGOR, including
interest and expenses or any other obligation owing to the MORTGAGEE, whether direct or indirect,
principal or secondary, as appears in the accounts, books and records of the MORTGAGEE, the
MORTGAGOR hereby transfer and convey by way of mortgage unto the MORTGAGEE, x x x.

This Court in the Ajax case, in upholding the validity of the extra-judicial foreclosure of mortgage which included
the loans obtained in excess of the amount fixed in the mortgage contract as expressed in said proviso, ruled that:

An action to foreclose a mortgage is usually limited to the amount mentioned in the mortgage, but where on the
four corners of the mortgage contracts, as in this case, the intent of the contracting parties is manifest that the
mortgage property shall also answer for future loans or advancements, then the same is not improper as it is
valid and binding between the parties.[7] (Italics supplied).

The amount stated in the mortgage contract between petitioner and RCBC does not limit the amount for
which it may stand as security considering that under the terms of that contract, the intent to secure future
indebtedness is apparent. It would have been different if the mortgage contract in the case at bar simply provides
that it was intended only to secure the payment of the same and those that may hereafter be obtained the principal
of all of which is hereby fixed at P45,000.00...[8] Yet the parties to the mortgage contract further stipulated: as
well as those that the Mortgagee may extend to the Mortgagor.[9] The latter phrase clearly means that the mortgage
is not limited to just the fixed amount but also covers other credit accommodations in excess thereof. Thus, the
general rule that mortgage must be limited to the amount mentioned in the mortgage cannot be applied herein.
Rather by specific provision and agreement of the parties, the mortgage contract was designed to secure even
future advancements.[10]
Having determined that the mortgage contract extends even to petitioners other advances in excess of the
P25,000.00, RCBCs counterclaim for such other advances cannot but be considered as compulsory in nature.
Such counterclaim necessarily arises out of the transaction or occurrence that is the subject matter of petitioners
claim which is to enjoin the foreclosure of the latters other credit accommodations in excess of P25,000.00. It
thus satisfies the compelling test of compulsoriness which requires a logical relationship between the claim and
counterclaim, that is, where conducting separate trials of the respective claims of the parties would entail a
substantial duplication of effort and time by the parties and the court.[11]Both claims are merely offshoots of the
same basic controversy.[12] Moreover, RCBCs counterclaim does not require for its adjudication the presence of
third parties upon whom the court cannot acquire jurisdiction and the court has jurisdiction to entertain the
claim.[13]
RCBCs counterclaim being compulsory in nature, there is no need to pay docket fees therefor. Nevertheless,
RCBC is still bound to pay the docket fees as ordered by the CA in its August 19, 1991 Resolution, having failed
to appeal therefrom. The entrenched procedural rule in this jurisdiction is that a party who has not himself
appealed cannot obtain from the appellate court any affirmative relief other than those granted in the decision of
the lower court.[14]
Finally, even granting that RCBCs counterclaim is permissive where the trial court has no/cannot exercise
jurisdiction over said claim unless/until the corresponding docket fees therefor has been paid, petitioner is
however barred by estoppel from challenging the trial courts jurisdiction. We quote with approval the CAs
observation in this matter.

x x x. The record clearly shows that never once, during the proceedings below, was the question of docket fees
and of jurisdiction raised by the appellee. Not only did appellee not bother to answer counterclaim but she did
[not] even hint at it in her memorandum, notwithstanding that the Bank adduced the required evidence to prove
the counterclaim which was included in the Banks former (sic) offer of evidence (EXG. C, Record, pp; 114-
117). Neither was the issue raised in appellees brief, again notwithstanding the fact that the counterclaim is the
subject of the first and second errors of the brief of the Bank, against which appellee did not raise a single
argument. The issue surfaced for the first time in the motion for partial reconsideration filed by the appellee.

The objection should have been raised more seasonably, before the trial court or at the very least in appellees
brief. In the circumstances appellee is barred by laches from raising the question of jurisdiction at this very late
stage (Vide Maersk vs. Court of Appeals, 187 SCRA 646).[15]

In addition, it has been consistently held by this Court that while jurisdiction may be assailed at any stage, a partys
active participation in the proceedings before a court without jurisdiction will estop such party from assailing
such lack of it. It is an undesirable practice of a party participating in the proceedings and submitting his case for
decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when
adverse.[16]
WHEREFORE, save for the modification anent the nature of RCBCs counterclaim and its related incidents,
the decision of the Court of Appeals promulgated October 31, 1990 as amended by its Resolution promulgated
August 19, 1991 is hereby AFFIRMED in all other respects.
SO ORDERED.
MARTOS, et al., v. NEW SAN JOSE BUILDERS (G.R. No. 192650, October 24, 2012)

Questioned in this Petition for Review is the July 31, 2009 Decision1 of the Court of Appeals (CA) and its June
17, 2010 Resolution,2 which h reversed and set aside the July 30, 2008 Decision3 and October 28, 2008,
Resolution4of the National Labor Relations Commission (NLRC); and reinstated the May 23, 2003 Decision5 of
the Labor Arbiter (LA). The dispositive portion of the CA Decision reads:

WHEREFORE, decision is hereby rendered, as follows:

1. Declaring the complainant Felix Martos was illegally dismissed and ordering respondent New San Jose
Builders, Inc. to pay him his separation pay, backwages, salary differentials, 13th month pay, service incentive
leave pay, and attorney’s fees in the total amount of TWO HUNDRED SIXTY THOUSAND SIX HUNDRED
SIXTY ONE PESOS and 50/1000 (P260, 661.50).

The awards for separation pay, backwages and the corresponding attorney’s fees are subject to further
computation until the decision in this case becomes final and executory; and

2. Dismissing the complaints/claim of the other complainants without prejudice.

SO ORDERED.6

The Facts

The factual and procedural antecedents were succinctly summarized by the CA as follows:

New San Jose Builders, Inc. (hereafter petitioner) is a domestic corporation duly organized and existing under
the laws of the Philippines and is engaged in the construction of road, bridges, buildings, and low cost houses
primarily for the government. One of the projects of petitioner is the San Jose Plains Project (hereafter SJPP),
located in Montalban, Rizal. SJPP, which is also known as the "Erap City" calls for the construction of low cost
housing, which are being turned over to the National Housing Authority to be awarded to deserving poor
families.

Private respondents alleged that, on various dates, petitioner hired them on different positions, hereunder
specified:

1âwphi1
Names Date Employed Date Dismissed
1. Felix Martos October 5, 1998 February 25, 2002
2. Jimmy Eclana 1999 July 2001
3. Rodel Pilones February 1999 July 2001
4. Ronaldo Noval
5. Jonathan Pailago
6. Ernesto Montaño 1998 2000
7. Doyong Jose 1996 July 2001
8. Deo Mamalateo 1999 July 2001
9. Roselo Magno 1994 November 2000
10. Bonnie Santillan 1998 July 2001
11. Arsenio Gonzales 1998 July 2001
12. Alex Edradan 1998 November 2001
13. Michael Erasca 1999 July 2001
14. Marlon Montaño 1998 July 2001
15. Vicente Oliveros April 5, 1998 July 2001
16. Reynaldo Lamboson 1999 July 2001
17. Domingo Rota 1998
18. Eddie Rota 1998
19. Zaldy Oliveros 1999 July 2001
20. Antonio Natel 1998 July 2001
21. Hermie Buison 1998 July 2001
22. Roger Buison 1998 2000
23. Mariano Lazate February 19, 1995
24. Juan Villaber January 10, 1997
25. Limuel Llaneta March 5, 1994
26. Lito Bantilo May 1987
27. Terso Garay October 3, 1986
28. Rowel Bestolo February 6, 1999
29. Jerry Yortas May 1994
30. Pastor Pantig April 11,1998
31. Gavino Nicolas June 20, 1997
32. Rafael Villa March 9, 1998
33. Felix Yortas 1992
34. Melvin Garay February 2, 1994
35. Neil Dominguez February 16, 1998
36. Reynaldo Evangelista, Jr. October 10, 1998
37. Jose Ramos October 10, 1998
38. Elvis Rosales June 14, 1998
39. Jun Graneho January 15, 1998
40. Danny Espares April 1999
41. Salvador Tonloc January 8, 1998
42. Rolando Evangelista March 15, 1998
43. Ricky M. Francisco September 28, 1991
44. Eduardo Alegria May 2001
45. Salvador Santos September 22, 2000
46. Greg Bisonia March 28, 1993
47. Rufo Carbillo March 28, 1993
48. Marvin Montero 1997 January 2001
49. Danilo Bessiri 1997 2002
50. Allan Caballero 1997 2002
51. Orlando Limos 1997 July 2001
52. Edgardo Biclar 1997 July 2001
53. Mandy Mamalatco 1989 2002
54. Alfred Gajo 1998 July 2001
55. Eric Castrence 1988 2002
56. Anthony Molina 1997 2002
57. Jaime Salin
58. Roy Silva 1997 2002
59. Danilo V. Begorie 1994 January 2001
60. Peping Celisana 1999 July 2001
61. Eric Ronda 1998 July 2001
62. Rufo Carbanillo 1998 July 2001
63. Rowel Batta 1999 July 2001
64. Ricardo Tolentino 1997 July 2001
65. Arnel Ardinez 1998 July 2001
66. Ferdinand P. Arandia 1998 1999
67. Romeo R. Garbo 1998 2000
68. Antonio Rota 1998 July 2001
69. Reynielande Quintanilla February 28, 1998 2002
70. Joselito Hilario 1998 2002
 71. Jimmy Campana August 15, 1998 August 2001
72. Danilo Lido-An September 8, 1998
73. Emerson Peñaflor August 8,1998
74. Cesar Pabalinas
75. Jonathan Melchor November 1998
76. Alex David 1998
77. Eutiquio Alcala December 1999
78. Michael Carandang June 2000
79. Eduardo Nanuel October 1999
80. Ramon Evangelista February 15, 1998
81. Ruben Mendoza 1999 July 2001
82. Ernesto A. Mendoza 1998 July 2001
83. Ricky Ramos 1999 July 2001
84. Roberto Novella 1998 July 2001
85. Ruben Conde 1998 July 2001
86. Ramon Evangelista 1997 July 2001
87. Danilo Polistico 1999 July 2001
88. Domingo Mendoza 1999 July 2001
89. Fernando San Gabriel 1999 July 2001
90. Domingo Roto 1994 July 2001

Sometime in 2000, petitioner was constrained to slow down and suspend most of the works on the SJPP project
due to lack of funds of the National Housing Authority. Thus, the workers were informed that many of them
[would] be laid off and the rest would be reassigned to other projects. Juan Villaber, Terso Garay, Rowell Batta,
Pastor Pantig, Rafael Villa, and Melvin Garay were laid off. While on the other hand, Felix Martos, Ariel
Dominguez, Greg Bisonia, Allan Caballera, Orlando Limos, Mandy Mamalateo, Eric Castrence, Anthony
Molina, and Roy Silva were among those who were retained and were issued new appointment papers to their
respective assignments, indicating therein that they are project employees. However, they refused to sign the
appointment papers as project employees and subsequently refused to continue to work.

On different dates, three (3) Complaints for Illegal Dismissal and for money claims were filed before the NLRC
against petitioner and Jose Acuzar, by private respondents who claimed to be the former employees of
petitioner, to wit:

1. Complaint dated March 11, 2002, entitled "Felix Martos, et al. vs. NSJBI", docketed as NLRC-NCR
Case No. 03-01639-2002;

2. Complaint dated July 9, 2002, entitled "Jimmy Campana, et al. vs. NSJBI," docketed as NLRC-NCR
Case No. 07-04969-2002;
 3. Complaint dated July 4, 2002, entitled "Greg Bisonia, et al. vs. NSJBI", docketed as NLRC-NCR
Case No. 07-02888-2002.

Petitioner denies that private respondents were illegally dismissed, and alleged that they were project
employees, whose employments were automatically terminated upon completion of the project for which they
were hired. On the other hand, private respondents claim that petitioner hired them as regular employees,
continuously and without interruption, until their dismissal on February 28, 2002.

Subsequently, the three Complaints were consolidated and assigned to Labor Arbiter Facundo Leda.7

Ruling of the Labor Arbiter

As earlier stated, on May 23, 2003, the LA handed down a decision declaring, among others, that petitioner
Felix Martos (Martos) was illegally dismissed and entitled to separation pay, backwages and other monetary
benefits; and dismissing, without prejudice, the complaints/claims of the other complainants (petitioners).

Ruling of The NLRC

Both parties appealed the LA decision to the NLRC. Petitioners appealed that part which dismissed all the
complaints, without prejudice, except that of Martos. On the other hand, New San Jose Builders, Inc.
(respondent) appealed that part which held that Martos was its regular employee and that he was illegally
dismissed.

On July 30, 2008, the NLRC resolved the appeal by dismissing the one filed by respondent and partially
granting that of the other petitioners. The dispositive portion of the NLRC decision reads as follows:

WHEREFORE, premises considered, respondent’s appeal is DISMISSED for lack of merit. The appeal of the
complainants is, however, PARTIALLY GRANTED by modifying the 23 May 2003 Decision of the Labor
Arbiter Facundo L. Leda, in that, respondents are ordered to reinstate all the complainants to their former
positions, without loss of seniority rights and with full backwages, counted from the time their compensation
was withheld from them until actual reinstatement.

Respondents are likewise ordered to pay complainants their salary differentials, service incentive leave pay, and
13th month pay, using, as basis, the computation made on the claims of complainant Felix Martos.

In all other aspects, the Decision is AFFIRMED.

SO ORDERED.8

Ruling Of The CA

After the denial of its motion for reconsideration, respondent filed before the CA a petition for certiorari under
Rule 65 of the 1997 Rules of Civil Procedure, as amended, raising the following issues:

I) The public respondent has committed grave abuse of discretion in holding that the private respondents
were regular employees and, thus, have been illegally dismissed.

II) The public respondent has committed grave abuse of discretion in reviving the complaints of the
other private respondents despite their failure to verify the same.
 III) The public respondent has committed grave abuse of discretion when it upheld the findings of the
Labor Arbiter granting relief in favor of those supposed complainants who did not even render service to
the petitioner and, hence, are not on its payroll.

On July 31, 2009, the CA rendered a decision reversing and setting aside the July 30, 2008 Decision and the
October 28, 2008 Resolution of the NLRC and reinstating the May 23, 2003 Decision of the LA. The
dispositive portion of the CA decision reads:

WHEREFORE, premises considered, the present petition is hereby GRANTED. Accordingly, the assailed
Resolution dated October 28, 2008 of public respondent National Labor Relations Commission is REVERSED
and SET ASIDE, and the Decision dated May 23, 2003 of Labor Arbiter Facundo L. Leda, is hereby ordered
reinstated.

SO ORDERED.9

The CA explained that the NLRC committed grave abuse of discretion in reviving the complaints of petitioners
despite their failure to verify the same. Out of the 102 complainants, only Martos verified the position paper and
his counsel never offered any explanation for his failure to secure the verification of the others. The CA also
held that the NLRC gravely abused its discretion when it took cognizance of petitioners’ appeal because Rule
41, Section 1(h) of the 1997 Rules of Civil Procedure, as amended, which is suppletory, provides that no appeal
may be taken from an order dismissing an action without prejudice.

Nevertheless, the CA stated that the factual circumstances of Martos’ employment and his dismissal from work
could not equally apply to petitioners because they were not similarly situated. The NLRC did not even bother
to look at the evidence on record and inappropriately granted monetary awards to petitioners who had either
denied having filed a case or withdrawn the case against respondent. According to the CA, the position papers
should have covered only those claims and causes of action raised in the complaint excluding those that might
have been amicably settled.

With respect to Martos, the CA ruled that he was a regular employee of respondent and his termination was
illegal. It explained that Martos should have been considered a regular employee because there was no
indication that he was merely a project employee when he was hired. To show otherwise, respondent should
have presented his employment contract for the alleged specific project and the successive employment
contracts for the different projects or phases for which he was hired. In the absence of such document, he could
not be considered such an employee because his work was necessary and desirable to the respondent’s usual
business and that he was not required to sign any employment contract fixing a definite period or duration of his
engagement. Thus, Martos already attained the status of a regular employee. Moreover, the CA noted that
respondent did not report the termination of Martos’ supposed project employment to the Department of Labor
and Employment (DOLE), as required under Department Order No. 19.

Being a regular employee, the CA concluded that he was constructively dismissed when he was asked to sign a
new appointment paper indicating therein that he was a project employee and that his appointment would be co-
terminus with the project.

Not in conformity with the CA decision, petitioners filed this petition anchored on the following

ASSIGNMENT OF ERRORS

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS AND THE LABOR ARBITER
BELOW GRAVELY ERRED IN DISMISSING THE COMPLAINTS OF THE NINETY NINE (99)
 PETITIONERS DUE TO FAILURE OF THE LATTER TO VERIFY THEIR POSITION PAPER
WHEN, OBVIOUSLY, SUCH TECHNICALITY SHOULD NOT HAVE BEEN RESORTED TO BY
THEM AS IT WILL DEPRIVE THESE PETITIONERS OF THEIR PROPERTY RIGHT TO WORK.

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS AND THE LABOR ARBITER
BELOW GRAVELY ERRED IN NOT ORDERING THE REINSTATEMENT OF PETITIONER
MARTOS AND THE OTHER 99 PETITIONERS WHEN, OBVIOUSLY, AND AS FOUND BY
THEM, THE DISMISSAL OF MARTOS IS ILLEGAL WHICH WOULD WARRANT HIS
REINSTATEMENT AND THE GRANT TO HIM OF FULL BACKWAGES AND OTHER
EMPLOYEES’ BENEFITS.

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT
ORDERING THE RESPONDENTS TO PAY THE PETITIONERS ACTUAL, MORAL AND
EXEMPLARY DAMAGES.

Position of Petitioners

Petitioners basically argue that the CA was wrong in affirming the dismissal of their complaints due to their
failure to verify their position paper. They insist that the lack of verification of a position paper is only a formal
and not a jurisdictional defect. Hence, it was not fatal to their cause of action considering that the CA could
have required them to submit the needed verification.

The CA overlooked the fact that all of them verified their complaints by declaring under oath relevant and
material facts such as their names, addresses, employment status, salary rates, facts, causes of action, and reliefs
common to all of them. The information supplied in their complaints is sufficient to prove their status of
employment and entitlement of their monetary claims. In the adjudication of labor cases, the adherence to
stringent technical rules may be relaxed in the interest of the working man. Moreover, respondent failed to
adduce evidence of payment of their money claims.

Finally, petitioners argue that they and Martos were similarly situated. The award of separation pay instead of
reinstatement to an illegally dismissed employee was improper because the strained relations between the
parties was not clearly established. Moreover, they are entitled to actual, moral and exemplary damages for
respondent’s illegal act of violating labor standard laws, the minimum wage law and the 13th month pay law.

Position of Respondents

On the other hand, respondent principally counters that the CA and the LA 1) did not err in dismissing the
complaints of the 88 petitioners who failed to verify their position paper, without prejudice; 2) correctly ruled
that Martos and the 88 petitioners concerned were not entitled to reinstatement; and 3) correctly ruled that
petitioners were not entitled to an award of actual, moral and exemplary damages.

Petitioners have the propensity to disregard the mandatory provisions of the 2005 Revised Rules of Procedure
of the NLRC (NLRC Rules) which require the parties to submit simultaneously their verified position papers
with supporting documents and affidavits. In the proceedings before the LA, the complaints of the 99 workers
were dismissed because they failed to verify or affix their signatures to the position paper filed with the LA.

While it is true that the NLRC Rules must be liberally construed and that the NLRC is not bound by the
technicalities of law and procedure, it should not be the first to arbitrarily disregard specific provisions of the
rules which are precisely intended to assist the parties in obtaining just, expeditious and inexpensive settlement
of labor disputes. It was only Felix Martos who verified their position paper and their memorandum of appeal. It
was only he alone who was vigilant in looking after his interest and enforcing his rights. Petitioners should be
considered to have waived their rights and interests in the case for their consistent neglect and passive attitude.

Moreover, Martos was never authorized by any of his fellow complainants through a special power of attorney
or other document in the proceedings to represent them before the LA and the NLRC. His acts and verifications
were made only in his own personal capacity and did not bind or benefit petitioners. There is only one logical
reason why a majority of them failed to verify their position paper, their appeal and now their petition: they
were not in any way employees of the respondent. They were total strangers to the respondent. They even
refused to identify themselves during the proceedings by their failure to appear thereat. Hence, it is too late for
the others to participate in the fruits, if any, of this litigation.

Finally, the reinstatement being sought by Martos and the others was no longer practicable because of the
strained relation between the parties. Petitioners can no longer question this fact. This issue was never raised or
taken up on appeal before the NLRC. It was only when the petitioners lost in the appeal in the CA that they first
raised the issue of strained relation. Moreover, no proof of actual damages was presented by the petitioners.
There is no clear and convincing evidence on record showing that the termination of an employee’s services had
been carried out in an arbitrary, capricious or malicious manner.

The Court’s Ruling

The Court is basically asked to resolve two (2) issues: 1 whether or not the CA was correct in dismissing the
complaints filed by those petitioners who failed to verify their position papers; and 2 whether or not Martos
should be reinstated.

Regarding the first issue, the Court agrees with the respondent.

Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil Procedure provide:

SEC. 4. Verification. – Except when otherwise specifically required by law or rule, pleadings need not be under
oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleadings and that the allegations therein are
true and correct of his personal knowledge or based on authentic records.

A pleading required to be verified which contains a verification based on "information and belief" or upon
"knowledge, information and belief" or lacks a proper verification, shall be treated as an unsigned pleading.

SEC. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath in the
complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and
simultaneously filed therewith:

(a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court,
tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending
therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and
(c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall
report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading
has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or
other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise
provided, upon motion and after hearing. The submission of a false certification or non-compliance with any of
the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding
administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and
deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute
direct contempt, as well as a cause for administrative sanctions. x x x. [Emphases supplied]

The verification requirement is significant, as it is intended to secure an assurance that the allegations in the
pleading are true and correct and not the product of the imagination or a matter of speculation, and that the
pleading is filed in good faith.10 Verification is deemed substantially complied with when, as in this case, one
who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the
verification, and when matters alleged in the petition have been made in good faith or are true and correct.11

The absence of a proper verification is cause to treat the pleading as unsigned and dismissible.12

The lone signature of Martos would have been sufficient if he was authorized by his co-petitioners to sign for
them. Unfortunately, petitioners failed to adduce proof that he was so authorized. The complaints of the other
parties in the case of Nellie Vda. De Formoso v. v. PNB13 suffered a similar fate. Thus:

Admittedly, among the seven (7) petitioners mentioned, only Malcaba signed the verification and certification
of non-forum shopping in the subject petition. There was no proof that Malcaba was authorized by his co-
petitioners to sign for them. There was no special power of attorney shown by the Formosos authorizing
Malcaba as their attorney-in-fact in filing a petition for review on certiorari. Neither could the petitioners give at
least a reasonable explanation as to why only he signed the verification and certification of non-forum
shopping.

The liberal construction of the rules may be invoked in situations where there may be some excusable formal
deficiency or error in a pleading, provided that the same does not subvert the essence of the proceeding and it at
least connotes a reasonable attempt at compliance with the rules. Besides, fundamental is the precept that rules
of procedure are meant not to thwart but to facilitate the attainment of justice; hence, their rigid application
may, for deserving reasons, be subordinated by the need for an apt dispensation of substantial justice in the
normal course. They ought to be relaxed when there is subsequent or even substantial compliance, consistent
with the policy of liberality espoused by Rule 1, Section 6.14 Not being inflexible, the rule on verification allows
for such liberality.15

Considering that the dismissal of the other complaints by the LA was without prejudice, the other complainants
should have taken the necessary steps to rectify their procedural mistake after the decision of the LA was
rendered. They should have corrected this procedural flaw by immediately filing another complaint with the
correct verification this time. Surprisingly, they did not even attempt to correct this technical blunder. Worse,
they committed the same procedural error when they filed their appeal16 with the NLRC.

Under the circumstances, the Court agrees with the CA that the dismissal of the other complaints were brought
about by the own negligence and passive attitude of the complainants themselves. In Formoso, the Court further
wrote:

The petitioners were given a chance by the CA to comply with the Rules when they filed their motion for
reconsideration, but they refused to do so. Despite the opportunity given to them to make all of them sign the
verification and certification of non-forum shopping, they still failed to comply. Thus, the CA was constrained
to deny their motion and affirm the earlier resolution.

The Court can only do so much for them.

Most probably, as the list17 submitted is not complete with the information as to when each started and when
each was dismissed there must be some truth in the claim of respondent that those complainants who failed to
affix their signatures in the verification were either not employees of respondent at all or they simply refused to
prosecute their complaints. In its position paper,18 respondent alleged that, aside from the four (4) complainants
who withdrew their complaints, only 17 out of the more or less 104 complainants appeared on its records as its
former project employees or at least known by it to have worked in one of its construction projects. From the
sworn statements executed by Felix Yortas,19 Marvin Batta,20

Lito Bantillo,21 Gavino Felix Nicolas,22 and Romeo Pangacian Martos,23 they already withdrew their complaints
against respondent. Their status and cause of action not being clear and proven, it is just not right that these
complaints be considered as similarly situated as Martos and entitled to the same benefits.

As to Martos, the Court agrees that the reinstatement being sought by him was no longer practicable because of
strained relation between the parties. Indeed, he can no longer question this fact. This issue was never raised or
taken up on appeal before the MLRC. It was only after he lost the appeal in the CA that he raised it.

Thus, the Court deems it fair to award separation pay in lieu of reinstatement.1âwphi1 In addition to his
separation pay. Martos is also entitled to payment of full backwages, 13th month pay, service incentive leave
pay, and attorney’s fees.

The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer
practical or in the best interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded if
the employee decides not to be reinstated.

Under the doctrine of stained relations, the payment of separation pay is considered an acceptable alternative to
reinstatement when the latter opinion is no longer desirable or viable. On one hand, such payment liberates the
employee from what could be highly oppressive work environment. On the other hand, it release the employer
from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.24

WHEREFORE, the petition is DENIED.

SO ORDERED.
CONGRESSWOMAN LUCY MARIE TORRES-GOMEZ v. EUFROCINO C. CODILLA, JR. (G. R. No.
195191, March 20, 2012)

This is a Petition for Certiorari under Rule 65 of the Rules of Court, with application for Temporary
Restraining Order and/or Writ of Preliminary Prohibitory Injunction. The Petition seeks to annul and set aside
Resolution No. 10-482 of the House of Representatives Electoral Tribunal (HRET) in HRET Case No. 10-009
(EP) entitled Eufrocino C. Codilla, Jr. v. Lucy Marie Torres-Gomez (Fourth District, Leyte), which denied the
Motion for Reconsideration filed by petitioner.

Statement of the Facts and the Case

On 30 November 2009, Richard I. Gomez (Gomez) filed his Certificate of Candidacy for representative
of the Fourth Legislative District of Leyte under the Liberal Party of the Philippines. On even date, private
respondent Codilla Jr. filed his Certificate of Candidacy for the same position under Lakas Kampi CMD.

On 6 December 2009, Buenaventura O. Juntilla (Juntilla), a registered voter of Leyte, filed a Verified
Petition for Gomezs disqualification with the Commission on Elections (COMELEC) First Division on the ground
that Gomez lacked the residency requirement for a Member of the House of Representatives.

In a Resolution dated 17 February 2010, the COMELEC First Division granted Juntillas Petition and
disqualified Gomez. On 20 February 2010, the latter filed a Motion for Reconsideration with the COMELEC En
Banc, which dismissed it on 4 May 2010, six days before the May 2010 national and local elections. The
dispositive portion of the COMELECs Resolution[1] is worded as follows:

WHEREFORE, premises considered, the motion for reconsideration filed by the

Respondent is DISMISSED for lack of merit. The Resolution of the Commission (First Division)
is hereby AFFIRMED.
SO ORDERED.[2]

On the same date, Gomez filed a Manifestation with the COMELEC En Banc, alleging that, without
necessarily admitting the allegations raised by Juntilla, he
wasaccepting the aforementioned Resolution with finality, in order to enable his substitute to facilitate the filing
of the necessary documents for substitution.

On 5 May 2010, petitioner Lucy Marie Torres-Gomez filed her Certificate of Candidacy as substitute for
the position of representative of the Fourth Congressional District for the Province of Leyte vice Gomez, her
husband.
 On 6 May 2010, Juntilla filed a Counter-Manifestation with the COMELEC En Banc. At the same time,
he wrote a letter to Atty. Ferdinand T. Rafanan, Director of the Law Department of the COMELEC, alleging the
invalidity of the proposed substitution of Gomez by petitioner.

On 8 May 2010, the COMELEC En Banc issued Resolution No. 8890, which approved and adopted the
recommendation of its Law Department to allow petitioner as a substitute candidate for Gomez for representative
of the Fourth Legislative District of Leyte.

On 9 May 2010, Juntilla filed an Extremely Urgent Motion for Reconsideration of the above COMELEC
Resolution No. 8890. Pending resolution of his motion, the national and local elections were conducted as
scheduled.

After the casting, counting and canvassing of votes in the said elections, petitioner emerged as the winner
with 101,250 votes or a margin of 24,701 votes over private respondent Codilla, who obtained 76,549 votes.

On 11 May 2010, Codilla filed an Urgent Ex-Parte Motion to Suspend the Proclamation of Substitute
Candidate Lucy Marie T. Gomez (vice Richard I. Gomez) as the Winning Candidate of the May 10, 2010
Elections for the Fourth Congressional District of Leyte.

On the same date, Juntilla filed an Extremely Urgent Motion to resolve the pending Motion for
Reconsideration filed on 9 May 2010 relative to Resolution No. 8890 and to immediately order the Provincial
Board of Canvassers of the Province of Leyte to suspend the proclamation of petitioner as a Member of the House
of Representatives, Fourth District, Province of Leyte.

On 12 May 2010, petitioner was proclaimed the winning candidate for the congressional seat of the Fourth
District of Leyte.

Accordingly, on 21 May 2010, private respondent Codilla filed a Petition with public respondent HRET
against petitioner docketed as HRET Case No. 10-009 (Election Protest).

On 2 July 2010, petitioner filed her Verified Answer to Codillas Election Protest questioning the alleged
lack of the required Verification and praying for its dismissal.

On 8 July 2010, Codilla filed a Reply to petitioners Verified Answer.

In an Order issued by public respondent HRET, the instant case was set for preliminary conference on 2
September 2010.

On 1 September 2010, unsatisfied with the Order of the HRET, petitioner filed an Urgent Manifestation
and Motion, persistent in her position that Codillas Election Protest should be dismissed based on the grounds
raised in her Verified Answer. She also prayed for the deferment of the preliminary conference until after the
resolution of the said motion.

On 9 September 2010, the HRET issued the assailed Resolution No. 10-282[3] resolving the Urgent
Manifestation and Motion filed by petitioner, the dispositive portion of which provides:

The Tribunal NOTES the Urgent Manifestation and Motion filed on September 1, 2010
by the protestee; REITERATES its ruling in Resolution No. 10-160 dated July 29, 2010 that the
protest cannot be considered insufficient in form, considering that the examination of the original
copy of the protest filed before the Tribunal had revealed the existence of the required verification;
and DENIES the respondents motion for deferment of the preliminary conference scheduled on
September 2, 2010.[4]

Accordingly, on 30 September 2010, petitioner filed with public respondent HRET a Motion for
Reconsideration of the above Resolution No. 10-282.

On 22 November 2010, public respondent HRET issued Resolution No. 10-482[5] denying petitioners
Motion for Reconsideration, ruling as follows:

WHEREFORE, the Tribunal DENIES the instant motion for reconsideration as regards
the issues pertaining to absence/defect of the verification and propriety of the election protest;
and DIRECTS the protestant to have his verification properly notarized.[6]

Thereafter, petitioner filed the instant Petition for Certiorari[7] dated 7 February 2011. The Petition raises the
following grounds:

A.

THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT REFUSED TO
DISMISS THE ELECTION PROTEST DESPITE AN ADMITTEDLY DEFECTIVE
VERIFICATION.

B.
THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT ALLOWED THE
PROTESTANT TO RAISE ISSUES ON QUALIFICATION OF CANDIDATES IN AN
ELECTION PROTEST.[8]

Petitioner claims that there was a material defect in the Verification of the Election Protest, a requirement
explicitly provided for in Rule 16 of the 2004 Rules of the House of Representatives Electoral Tribunal (HRET
Rules).[9] The verification being a mandatory requirement, the failure to comply therewith is a fatal defect that
affects the very jurisdiction of the HRET.

On the second issue, petitioner claims that what is in question in the Election Protest is her qualification as a
Member of the House of Representatives, and not the number of votes cast. Her qualification is allegedly not a
proper ground for an election protest, in which the issues should be the appreciation of ballots and the correctness
and number of votes of each candidate.

On 15 February 2011 this Court required respondents to file their comment on the Petition. Thereafter,
Codilla filed his Comment/Opposition dated 28 April 2011. In his Comment, he argues that there was no grave
abuse of discretion on the part of the HRET in issuing the assailed Resolutions. He clarifies that the Election
Protest that he filed contained a validly executed Verification and Certification of Non-Forum Shopping
(Verification).[10] However, the defect that petitioner points to is the portion of the jurat of the Verification, which
states:

Subscribed and sworn to before me this __ day of May 2010 at _____. Affiant personally
and exhibited to me his (1) License ID Card with Card No. H03-80-002135 issued by LTO on
January 16, 2009 (2) Philippine Passport No. XX4793730 issued on October 20, 2009 valid until
October 19, 2014, he, being the same person herein who executed the foregoing document
thereof.[11]

The date May 21 2009 was stamped on the first blank in __ day of May 2010. May 21 2010 was written with a
pen over the stamped date May 21 2009 and countersigned by the notary public. Codilla claims that the date of
the Verification was a mere innocuous mistake or oversight, which did not warrant a finding that the Verification
was defective; much less, fatally defective. He claims he should not be faulted for any alleged oversight that may
have been committed by the notary public. Further, the same argument holds true with respect to the absence of
the Mandatory Continuing Legal Education (MCLE) Compliance Number of the notary public, as well as the
overdue Professional Tax Receipt (PTR) indicated in the notarial stamp. In any case, the insufficiency of the
Verification was not fatal to the jurisdiction of the HRET.

With respect to the second issue, Codilla argues that the issues in the Election Protest do not pertain to petitioners
qualification, but to the casting and counting of votes. He claims that his Election Protest contests the declaration
by the Board of Canvassers that the 101,250 votes should be counted in favor of petitioner and be credited to him
as these should have instead been declared as stray votes.

Thereafter, public respondent HRET filed its Comment[12] on the Petition dated 5 May 2011. In its Comment, the
HRET claims that it did not commit grave abuse of discretion when it took cognizance of Codillas Election Protest
despite an alleged absence/defect in the verification. After all, an unverified petition differs from one which
contains a defective verification, such as in this case. A defective verification is merely a formal defect which
does not affect the jurisdiction of the tribunal. In any case, the summary dismissal of an Election Protest, as well
as the allowance of its amendments in matters of form, is sanctioned by the HRET Rules.

The HRET further argues that it did not commit grave abuse of discretion when it took cognizance of the
Election Protest. The issue raised in the Election Protest was the validity of petitioners proclamation, in view of
her alleged invalid substitution. This is a matter that is addressed to the sound judgment of the HRET.

On 7 June 2011, this Court, among others, required petitioner to file a reply to Codillas Comment.
Petitioner later filed her Reply dated 15 August 2011, citing an additional ground for considering the Verification
as defective. She claimed that Codilla, a resident of Ormoc City, could not have possibly appeared before a notary
public in Quezon City; and that he failed to prove that he was indeed in Quezon City when he supposedly verified
the Election Protest.

The Courts Ruling

The Petition is dismissed for failure to show any grave abuse of discretion on the part of the HRET.

On the Allegedly Defective Verification

While the existence of the Verification is not disputed, petitioner notes three alleged defects. First, the
Election Protest was filed on 21 May 2010, but the Verification was allegedly subscribed and sworn to on 21 May
2009.[13] Second, Codilla, a resident of Ormoc City, could not have possibly appeared personally before the notary
public in Quezon City.[14] Third, in the notarial stamp, the date of expiration of the notarial commission was
handwritten while all other details were stamped; the PTR indicated was issued in 2005; there was no MCLE
Compliance Number as required by Bar Matter No. 1922.[15] Petitioner claims that due to the lack of a proper
verification, the Election Protest should have been treated as an unsigned pleading and must be dismissed.

The alleged defects of the Verification are more apparent than real.

With respect to the date of the notarization, it is clear that the stamped date 2009 was a mere mechanical
error. In fact, the notary public had superimposed in writing the numbers 10 and countersigned the alteration.
Thus, this error need not be overly magnified as to constitute a defect in the Verification.

With respect to the second alleged defect, there is a presumption that official duty has been regularly
performed with respect to the jurat of the Verification, wherein the notary public attests that it was subscribed and
sworn to before him or her, on the date mentioned thereon.[16] Official duties are disputably presumed to have
been regularly performed. Thus, contrary to petitioners allegation, there was no need for Codilla to attach his
plane ticket to prove he flew from Ormoc City to Manila.[17]
 Further, to overcome the presumption of regularity, clear and convincing evidence must be
presented.[18] Absent such evidence, the presumption must be upheld. The burden of proof to overcome the
presumption of due execution of a notarized document lies on the party contesting the execution. [19] Thus,
petitioners contention that she had reliable information that [Codilla] was in Ormoc City on the date indicated in
the Verification cannot be considered as clear and convincing evidence to rebut the presumption that the document
was duly executed and notarized.

With respect to the third alleged defect, the fact that some portions of the stamp of the notary public were
handwritten and some were stamped does not, in itself, indicate any defect. Further, Bar Matter No. 1922 merely
requires lawyers to indicate in all pleadings filed before the courts or quasi-judicial bodies, the number and date
of issue of their MCLE Certificate of Compliance or Certificate of Exemption, whichever is applicable for the
immediately preceding compliance period. Clearly, the regulation does not apply to notarial acts. With respect to
the PTR number which was dated 5 years prior to the date of notarization, the deficiency merely entails the
potential administrative liability of the notary public.[20]

In any case, there was no grave abuse of discretion on the part of the HRET in denying petitioners Motion
to Dismiss the Election Protest and directing Codilla to have his Verification properly notarized.

It has been consistently held that the verification of a pleading is only a formal, not a jurisdictional,
requirement. The purpose of requiring a verification is to secure an assurance that the allegations in the petition
are true and correct, not merely speculative. This requirement is simply a condition affecting the form of
pleadings, and noncompliance therewith does not necessarily render the pleading fatally defective.[21]

This Court has emphasized that in this species of controversy involving the determination of the true will
of the electorate, time is indeed of paramount importance. An election controversy, by its very nature, touches
upon the ascertainment of the peoples choice as gleaned from the medium of the ballot. For this reason, an election
protest should be resolved with utmost dispatch, precedence and regard for due process. Obstacles and
technicalities that fetter the peoples will should not stand in the way of a prompt termination of election
contests.[22] Thus, rules on the verification of protests should be liberally construed.

At this point, it is pertinent to note that such liberalization of the rules was also extended to petitioner. A
perusal of the Verification and Certification attached to this Petition shows she attests that the contents of the
Petition are true and correct of [her] own personal knowledge, belief and based on the records in [her]
possession.[23] Section 4, Rule 7 of the Rules of Court provides that a pleading required to be verified which
contains a verification based on information and belief or knowledge, information and belief, shall be treated as
an unsigned pleading. A pleading, therefore, wherein the verification is based merely on the party's knowledge
and belief such as in the instant Petition produces no legal effect, subject to the discretion of the court to allow
the deficiency to be remedied.[24]

On the Propriety of the Election Protest

Codillas Election Protest contests the counting of 101,250 votes in favor of petitioner. He claims that the denial
of the Certificate of Candidacy of Gomez rendered the latter a non-candidate, who therefore could not have been
validly substituted, as there was no candidacy to speak of.

It bears stressing that the HRET is the sole judge of all contests relating to the election, returns, and
qualifications of the members of the House of Representatives. This exclusive jurisdiction includes the power to
determine whether it has the authority to hear and determine the controversy presented; and the right to decide
whether there exists that state of facts that confers jurisdiction, as well as all other matters arising from the case
legitimately before it.[25] Accordingly, the HRET has the power to hear and determine, or inquire into, the question
of its own jurisdiction both as to parties and as to subject matter; and to decide all questions, whether of law or of
fact, the decision of which is necessary to determine the question of jurisdiction.[26] Thus, the HRET had the
exclusive jurisdiction to determine its authority and to take cognizance of the Election Protest filed before it.

Further, no grave abuse of discretion could be attributed to the HRET on this score. An election protest
proposes to oust the winning candidate from office. It is strictly a contest between the defeated and the winning
candidates, based on the grounds of electoral frauds and irregularities. Its purpose is to determine who between
them has actually obtained the majority of the legal votes cast and is entitled to hold the office.[27] The foregoing
considered, the issues raised in Codillas Election Protest are proper for such a petition, and is within the
jurisdiction of the HRET.

WHEREFORE, the instant Petition for Certiorari is DISMISSED. The Application for a Temporary
Restraining Order and/or Writ of Preliminary Prohibitory Injunction is likewise DENIED. Resolution Nos. 10-
282 and 10-482 of the House of Representatives Electoral Tribunal are hereby AFFIRMED.

SO ORDERED.
JOSELITO MA. P. JACINTO (Formerly President of F. Jacinto Group, Inc.) v.
EDGARDO* GUMARU, JR., (G.R. No. 191906, June 2, 2014)

"When a judgment has been satisfied, it passes beyond review",1 and "there are no more proceedings to speak of
inasmuch as these were terminated by the satisfaction of the judgment."2

This Petition for Review on Certiorari3 seeks to set aside the November 5, 2009 Resolution4 of the Court of
Appeals (CA) in CA-G.R. SP No. 111098, entitled "Joselito Ma. P. Jacinto (Former President of F Jacinto
Group, Inc.), Petitioner, versus Edgardo Gumaru, Jr. and the National Labor Relations Commission,
Respondents," as well as its March 24, 2010 Resolution5 denying the petitioner's Motion for Reconsideration.

Factual Antecedents

On December 6, 2004, a Decision6 was rendered in favor of respondent Eduardo Gumaru, Jr. and against
petitioner Joselito Ma. P. Jacinto and F. Jacinto Group, Inc. in NLRC-NCR Case No. 00-06-07542-037 (the
labor case), the dispositive portion of which reads:

WHEREFORE, premises considered, respondents are hereby jointly and severally liable to pay complainant the
following:

1. Separation pay based on two months per year of service.

P50,000.00 x 2 x 10 years = P1,000,000.00

2. Other monetary claims.

A. 3 mos. unpaid wages & allowance = P133,101.00

B. SL/VL for 2000 = 34,969.00

C. 13th month pay for 2000 = 24,944.00

3. Moral Damages in the sum of P100,000.00

4. Exemplary Damages in the sum of P500,000.00

5. 10% of all sums accruing shall be adjudged as attorney’s fees.

It is understood that the withholding of the separation benefits plus other monetary claims shall earn legal
interest of 12% per annum from the time [they were] unlawfully withheld on September 01, 2000.

SO ORDERED.8

Petitioner and F. Jacinto Group, Inc. filed an appeal with the National Labor Relations Commission (NLRC).
However, the appeal was not perfected for failure to post the proper cash or surety bond; this was the finding of
the NLRC in its Resolution dated September 30, 2005.9

Thus, the December 6, 2004 Decision became final and executory. Entry of judgment was issued by the NLRC
on November 23, 2005.10
On February 6, 2006, a Writ of Execution11 was issued in the labor case. A Second Alias Writ of Execution was
issued and returned when the first one expired. By virtue of such alias writ, real property belonging to petitioner
– located in Baguio City and covered by Original Certificate of Title No. P-2010 – was levied upon, and was
scheduled to be sold at auction on June 27, 2008 or July 4, 2008.

On June 20, 2008, petitioner filed an Extremely Urgent Motion to Lift and Annul Levy on Execution12 praying,
among others, that the scheduled June 27, 2008 auction sale be restrained, and that the execution process
covered by the Second Alias Writ of Execution be invalidated.

On June 26, 2008, the Labor Arbiter issued an Order13 denying petitioner’s Extremely Urgent Motion to Lift
and Annul Levy on Execution, thus:

On June 20, 2008, respondents filed a Motion to Lift and Annul levy on execution on the ground that the writ of
execution served had already elapsed. Finding that the writ of execution was issued on September 07, 2007 and
pursuant to the Supreme Court’s declaration in the case of Merlinda Dagooc vs. Roberto Endina, 453 SCRA
423 quoting section 14 of the Revised Rules of Court, that the writ has a life of five years, the instant Motion is
hereby DENIED.

WHEREFORE, premises considered, the NLRC Sheriff is hereby ORDERED to proceed with the auction sale
set on June 27, 2008 at 10:00 AM before the Register of Deeds of Baguio City.

SO ORDERED.14

The Subject Resolutions of the National Labor Relations Commission

Petitioner appealed the Labor Arbiter’s June 26,2008 Order to the NLRC, which, in a November 28, 2008
Resolution,15set aside the same. The decretal portion of the Resolution states:

WHEREFORE, premises considered, the Order appealed from is hereby SET ASIDE and respondents-
appellants’ Motion to Lift and Annul Levy is GRANTED. The Labor Arbiter is also hereby ordered to oversee
the proper implementation and execution of the judgment award in this case.

Let the records be remanded to the Labor Arbiter of origin for further execution proceedings.

SO ORDERED.16

Petitioner moved for partial reconsideration, but in a July 27, 2009 Resolution,17 the NLRC stood its ground.

The Assailed Resolutions of the Court of Appeals

Petitioner went up to the CA on certiorari, assailing the November 28, 2008 and July 27, 2009 Resolutions of
the NLRC. The Petition18 in CA-G.R. SP No. 111098 contained a verification and certification of non-forum
shopping that was executed and signed not by petitioner, but by his counsel Atty. Ronald Mark S. Daos.

On November 5, 2009, the CA issued the first assailed Resolution, which held thus:

The Verification and Certification of Non-Forum Shopping, which accompanied the petition at bar, was
executed and signed by petitioner’s counsel Atty. Ronald Mark S. Daos, in violation of Section 5,Rule 7 of the
Revised Rules of Court.
Pursuant to Supreme Court Revised Circular No. 28-91, the duty to certify under oath is strictly addressed to
petitioner which in this case is herein petitioner Joselito P. Jacinto and not his counsel to [sic] Atty. Ronald
Mark S. Daos. Thus, to allow the delegation of said duty to anyone would render Supreme Court Revised
Circular No. 28-91 inutile.

Accordingly, the petition is DENIED DUE COURSE and DISMISSED.

SO ORDERED.19

Petitioner filed his Motion for Reconsideration,20 arguing that a verification signed by counsel constitutes
adequate and substantial compliance under Sections 4 and 5, Rule 7 of the 1997 Rules of Civil
Procedure;21 verification is merely a formal, and not jurisdictional, requisite such that an improper verification
or certification against forum-shopping is not a fatal defect.22 Petitioner attached a copy of an Affidavit23 –
acknowledged before the Hon. Paul Raymond Cortes, Consul, Philippine Consulate General, Honolulu, Hawaii,
U.S.A. – attesting that he caused the preparation of the CA Petition, and that he read the contents of the CA
Petition and affirm that they are true and correct and undisputed based on his own personal knowledge and on
authentic records. In said Affidavit, petitioner further certified that he has not commenced any other action or
proceeding, or filed any claims involving the same issues in the Supreme Court, Court of Appeals, or any
Division thereof, or in any other court, tribunal or agency; to the best of his knowledge, no such other action,
proceeding, or claim is pending before the Supreme Court, Court of Appeals, or any division thereof, or in any
court, tribunal or agency; if there is any other action or proceeding which is either pending or may have been
terminated, he will state the status thereof; if he should thereafter learn that a similar action, proceeding or claim
has been filed or is pending before the Supreme Court, Court of Appeals, or any division thereof, or in any
court, tribunal or agency, he undertakes to promptly report the fact within five days from notice thereof.
Petitioner explained further that he was out of the country, and could not return on account of his physical
condition, which thus constrained him to resort to the execution of a sworn statement in lieu of his actual
verification and certification as required under the Rules. Petitioner likewise ratified Atty. Daos’s acts done on
his behalf relative to the labor case and the filing of the CA Petition, and implored the appellate court to
reconsider its November 5, 2009 Resolution and excuse his procedural oversight in respect of the improper
verification and certification in his CA Petition.

On March 24, 2010, the CA issued the second assailed Resolution denying petitioner’s Motion for
Reconsideration, stating that a writ of certiorari is merely a "prerogative writ, never demandable as a matter of
right, never issued except in the exercise of judicial discretion. Hence, he who seeks a writ of certiorari must
apply for it only in the manner and strictly in accordance with the provisions of the law and the Rules."24

Thus, the present Petition was instituted.

Issues

Petitioner raises the following issues:

4.1. THE COURT OF APPEALS SHOULD NOT HAVE DISMISSED THE SUBJECT PETITION.

A PARTY UNABLE TO SIGN THE CERTIFICATION AGAINST FORUM SHOPPING CAN AUTHORIZE
HIS COUNSEL TO SIGN THE CERTIFICATION. IN HIS AFFIDAVIT AND SPECIAL POWER OF
ATTORNEY, PETITIONER EFFECTIVELY EMPOWERED HIS COUNSEL TO EXECUTE THE
REQUIRED VERIFICATION AND CERTIFICATION. MOREOVER, PETITIONER, BEING ABROAD
AND PHYSICALLY UNABLE TO TRAVEL TO THE NEAREST CONSULAR OFFICE, MERITED THE
RELAXATION OF THE TECHNICAL RULES ONVERIFICATION AND CERTIFICATION. IN ANY
EVENT, PETITIONER SUBSEQUENTLY SUBMITTED THE NECESSARY DOCUMENT, IN
SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT OF VERIFICATION AND
CERTIFICATION. VERIFICATION BY COUNSEL IS LIKEWISE ADEQUATE AND SUBSTANTIALLY
COMPLIANT.THE REQUIREMENT OF VERIFICATION IS ALSO DEEMED SUBSTANTIALLY
COMPLIED WITH WHEN THE AFFIANT ACTED IN GOOD FAITH AND X X X [POSSESSES] X X X
SUFFICIENT KNOWLEDGE TO TRUTHFULLY ATTEST THAT THE ALLEGATIONS ARE TRUE AND
CORRECT, AS IN THE CASE AT BAR. IN ANY CASE, VERIFICATION IS A FORMAL, NOT A
JURISDICTIONAL,REQUISITE. IT AFFECTS ONLY THE FORM OF PLEADINGBUT DOES NOT
RENDER THE PLEADING FATALLY DEFECTIVE.

4.2. THE COURT OF APPEALS SHOULD HAVE GIVEN DUE COURSE TO THE SUBJECT PETITION.

THE MERITS, SPECIAL CIRCUMSTANCES AND COMPELLING REASONS FOR THE ALLOWANCE
OF THE SUBJECT PETITION, SPECIFICALLY, THAT IN THE ABSENCE OF A PRIOR VALID
SERVICE ON PETITIONER OF THE RESOLUTION SUPPOSEDLY DISPOSING OF HIS APPEAL OF
THE DECEMBER 6, 2004 DECISION, THE SAID DECISION CANNOT BE IMPLEMENTED AND
EXECUTED BECAUSE IT HAS NOT ATTAINED FINALITY AND JURIDICAL EXISTENCE, IS
APPARENT. IF NOT CORRECTED, IT WOULD CAUSE GREAT AND IRREPARABLE DAMAGE AND
INJURY, NOT TO MENTION GRAVE INJUSTICE, TO PETITIONER, WHO WILL BECOMPELLED
TOSATISFY A JUDGMENT THAT OBVIOUSLY HAS NOT ATTAINED FINALITY AND JURIDICAL
EXISTENCE.25

Petitioner’s Arguments

Essentially, petitioner in his Petition and Reply26 argues that if, for reasonable or justifiable reasons, a party is
unable to sign the verification and certification against forum-shopping, he could execute a special power of
attorney authorizing his lawyer to execute the verification and sign the certification on his behalf. Which is
exactly what petitioner did: he executed a special power of attorney in favor of his counsel, Atty. Daos,
authorizing the latter to file the Petition in CA-G.R. SP No. 111098 and thus sign the verification and
certification against forum-shopping contained therein. Petitioner asserts that, going by the dispositions of the
Court in past controversies,27the said procedure is allowed.

Petitioner next argues that there are compelling reasons to grant his Petition for Certiorari. He asserts that the
NLRC committed grave abuse of discretion in issuing its assailed November 28, 2008 and July 27, 2009
Resolutions remanding the case to the Labor Arbiter for further proceedings on execution, claiming that the
December 6, 2004 Decision of the Labor Arbiter had not attained finality since the NLRC failed to furnish him
with a copy of its September 30, 2005 Resolution which dismissed his appeal for failure to post the required
bond and thus perfect the appeal. Since the Labor Arbiter’s Decision has not attained finality, execution
proceedings could not commence; the NLRC may not direct the Labor Arbiter to conduct execution
proceedings below.

Petitioner therefore prays that the Court annul and set aside the assailed Resolutions of the CA and order the
reinstatement of his Petition for Certiorari in the appellate court.

Respondent’s Arguments

In his Comment,28 respondent contends that with the dismissal of petitioner’s certiorari petition by the CA, it is
for all intents and purposes deemed to have never been filed, and thus may not be corrected by resorting to a
Petition for Review under Rule 45. Respondent reiterates the view taken by the CA that certiorari under Rule 65
is a prerogative writ that is not demandable as a matter of right.

Respondent notes further that the Verification and Certification against forum-shopping accompanying the
instant Petition was not signed by petitioner, but by his counsel, in consistent violation of the Court’s Circular
No. 28-91 and Rule 7 of the 1997 Rules of Civil Procedure.1âwphi1
Respondent cites that he is already 71 years old, yet petitioner continues to undermine execution of the
judgment rendered in the labor case through the instant Petition, which he prays the Court to deny.

Our Ruling

The Court finds that the Petition has become moot and academic.

It is true, as petitioner asserts, that if for reasonable or justifiable reasons he is unable to sign the verification
and certification against forum shopping in his CA Petition, he may execute a special power of attorney
designating his counsel of record to sign the Petition on his behalf. In Altres v. Empleo,29 this view was taken:

For the guidance of the bench and bar, the Court restates in capsule form the jurisprudential pronouncements
already reflected above respecting noncompliance with the requirements on, or submission of defective,
verification and certification against forum shopping:

1) A distinction must be made between non-compliance with the requirement on or submission of

defective verification, and non-compliance with the requirement on or submission of defective
certification against forum shopping.

2) As to verification, non-compliance therewith or a defect therein does not necessarily render the
pleading fatally defective. The court may order its submission or correction or act on the pleading if the
attending circumstances are such that strict compliance with the Rule may be dispensed with in order
that the ends of justice may be served thereby.

3) Verification is deemed substantially complied with when one who has ample knowledge to swear to
the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in
the petition have been made in good faith or are true and correct.

4) As to certification against forum shopping, non-compliance therewith or a defect therein, unlike in

verification, is generally not curable by its subsequent submission or correction thereof, unless there is a
need to relax the Rule on the ground of "substantial compliance" or presence of "special circumstances
or compelling reasons."

5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case;
otherwise, those who did not sign will be dropped as parties to the case. Under reasonable or justifiable
circumstances, however, as when all the plaintiffs or petitioners share a common interest and invoke a
common cause of action or defense, the signature of only one of them in the certification against forum
shopping substantially complies with the Rule.

6) Finally, the certification against forum shopping must be executed by the party-pleader, not by his
counsel. H, however, for reasonable or justifiable reasons, the party-pleader is unable to sign, he must
execute a Special Power of Attorney designating his counsel of record to sign on his behalf.30 (Emphasis
supplied)

However, while the Court takes the petitioner's side with regard to the procedural issue dealing with verification
and the certification against forum shopping, it nonetheless appears that the Petition has been overtaken by
events. In a May 24, 2011 Manifestation,31 respondent informed this Court that the judgment award has been
satisfied in full. The petitioner does not dispute this claim, in which case, the labor case is now deemed ended.
"It is axiomatic that after a judgment has been fully satisfied, the case is deemed terminated once and for
all."32 And "when a judgment has been satisfied, it passes beyond review, satisfaction being the last act and the
end of the proceedings, and payment or satisfaction of the obligation thereby established produces permanent
and irrevocable discharge; hence, a judgment debtor who acquiesces to and voluntarily complies with the
judgment is estopped from taking an appeal therefrom."33

With the above development in the case, the instant Petition is rendered moot and academic. The satisfaction of
the judgment in full has placed the case beyond the Court's review. "Indeed, there are no more proceedings to
speak of inasmuch as these were terminated by the satisfaction of the judgment."34

WHEREFORE, the Petition is DENIED for being moot and academic.

SO ORDERED.
PRISCILLA ALMA JOSE v. RAMON C. JAVELLANA, ET AL. (G.R. No. 158239, January 25, 2012)

The denial of a motion for reconsideration of an order granting the defending partys motion to dismiss is
not an interlocutory but a final order because it puts an end to the particular matter involved, or settles definitely
the matter therein disposed of, as to leave nothing for the trial court to do other than to execute the
order.[1] Accordingly, the claiming party has a fresh period of 15 days from notice of the denial within which to
appeal the denial.[2]

Antecedents

On September 8, 1979, Margarita Marquez Alma Jose (Margarita) sold for consideration of P160,000.00
to respondent Ramon Javellana by deed of conditional sale two parcels of land with areas of 3,675 and 20,936
square meters located in Barangay Mallis, Guiguinto, Bulacan. They agreed that Javellana would pay P80,000.00
upon the execution of the deed and the balance of P80,000.00 upon the registration of the parcels of land under
the Torrens System (the registration being undertaken by Margarita within a reasonable period of time); and that
should Margarita become incapacitated, her son and attorney-in-fact, Juvenal M. Alma Jose (Juvenal), and her
daughter, petitioner Priscilla M. Alma Jose, would receive the payment of the balance and proceed with the
application for registration.[3]

After Margarita died and with Juvenal having predeceased Margarita without issue, the vendors
undertaking fell on the shoulders of Priscilla, being Margaritas sole surviving heir. However, Priscilla did not
comply with the undertaking to cause the registration of the properties under the Torrens System, and, instead,
began to improve the properties by dumping filling materials therein with the intention of converting the parcels
of land into a residential or industrial subdivision.[4] Faced with Priscillas refusal to comply, Javellana commenced
on February 10, 1997 an action for specific performance, injunction, and damages against her in the Regional
Trial Court in Malolos, Bulacan (RTC), docketed as Civil Case No. 79-M-97 entitled Ramon C. Javellana,
represented by Atty. Guillermo G. Blanco v. Priscilla Alma Jose.

In Civil Case No. 79-M-97, Javellana averred that upon the execution of the deed of conditional sale, he
had paid the initial amount of P80,000.00 and had taken possession of the parcels of land; that he had paid the
balance of the purchase price to Juvenal on different dates upon Juvenals representation that Margarita had needed
funds for the expenses of registration and payment of real estate tax; and that in 1996, Priscilla had called to
inquire about the mortgage constituted on the parcels of land; and that he had told her then that the parcels of land
had not been mortgaged but had been sold to him.[5]

Javellana prayed for the issuance of a temporary restraining order or writ of preliminary injunction to
restrain Priscilla from dumping filling materials in the parcels of land; and that Priscilla be ordered to institute
registration proceedings and then to execute a final deed of sale in his favor.[6]
 Priscilla filed a motion to dismiss, stating that the complaint was already barred by prescription; and that
the complaint did not state a cause of action.[7]

The RTC initially denied Priscillas motion to dismiss on February 4, 1998.[8] However, upon her motion
for reconsideration, the RTC reversed itself on June 24, 1999 and granted the motion to dismiss, opining that
Javellana had no cause of action against her due to her not being bound to comply with the terms of the deed of
conditional sale for not being a party thereto; that there was no evidence showing the payment of the balance; that
he had never demanded the registration of the land from Margarita or Juvenal, or brought a suit for specific
performance against Margarita or Juvenal; and that his claim of paying the balance was not credible.[9]

Javellana moved for reconsideration, contending that the presentation of evidence of full payment was not
necessary at that stage of the proceedings; and that in resolving a motion to dismiss on the ground of failure to
state a cause of action, the facts alleged in the complaint were hypothetically admitted and only the allegations in
the complaint should be considered in resolving the motion.[10] Nonetheless, he attached to the motion for
reconsideration the receipts showing the payments made to Juvenal.[11] Moreover, he maintained that Priscilla
could no longer succeed to any rights respecting the parcels of land because he had meanwhile acquired absolute
ownership of them; and that the only thing that she, as sole heir, had inherited from Margarita was the obligation
to register them under the Torrens System.[12]

On June 21, 2000, the RTC denied the motion for reconsideration for lack of any reason to disturb the
order of June 24, 1999.[13]

Accordingly, Javellana filed a notice of appeal from the June 21, 2000 order,[14] which the RTC gave due
course to, and the records were elevated to the Court of Appeals (CA).

In his appeal (C.A.-G.R. CV No. 68259), Javellana submitted the following as errors of the RTC, [15] to
wit:

I
THE TRIAL COURT GRIEVOUSLY ERRED IN NOT CONSIDERING THE FACT THAT
PLAINTIFF-APELLANT HAD LONG COMPLIED WITH THE FULL PAYMENT OF THE
CONSIDERATION OF THE SALE OF THE SUBJECT PROPERTY AND HAD
IMMEDIATELY TAKEN ACTUAL AND PHYSICAL POSSESSION OF SAID PROPERTY
UPON THE SIGNING OF THE CONDITIONAL DEED OF SALE;

II
THE TRIAL COURT OBVIOUSLY ERRED IN MAKING TWO CONFLICTING
INTERPRETATIONS OF THE PROVISION OF THE CIVIL [CODE], PARTICULARLY
ARTICLE 1911, IN THE LIGHT OF THE TERMS OF THE CONDITIONAL DEED OF SALE;

III
 THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT-APPELLEE BEING NOT
A PARTY TO THE CONDITIONAL DEED OF SALE EXECUTED BY HER MOTHER IN
FAVOR OF PLAINTFF-
APPELLANT IS NOT BOUND THEREBY AND CAN NOT BE COMPELLED TO DO THE
ACT REQUIRED IN THE SAID DEED OF CONDITIONAL SALE;

IV
THE TRIAL COURT ERRED IN DISMISSING THE AMENDED COMPLAINT WITHOUT
HEARING THE CASE ON THE MERITS.

Priscilla countered that the June 21, 2000 order was not appealable; that the appeal was not perfected on
time; and that Javellana was guilty of forum shopping.[16]
It appears that pending the appeal, Javellana also filed a petition for certiorari in the CA to assail the June
24, 1999 and June 21, 2000 orders dismissing his complaint (C.A.-G.R. SP No. 60455). On August 6, 2001,
however, the CA dismissed the petition for certiorari,[17] finding that the RTC did not commit grave abuse of
discretion in issuing the orders, and holding that it only committed, at most, an error of judgment correctible by
appeal in issuing the challenged orders.

On November 20, 2002, the CA promulgated its decision in C.A.-G.R. CV No. 68259,[18] reversing and
setting aside the dismissal of Civil Case No. 79-M-97, and remanding the records to the RTC for further
proceedings in accordance with law.[19] The CA explained that the complaint sufficiently stated a cause of action;
that Priscilla, as sole heir, succeeded to the rights and obligations of Margarita with respect to the parcels of land;
that Margaritas undertaking under the contract was not a purely personal obligation but was transmissible to
Priscilla, who was consequently bound to comply with the obligation; that the action had not yet prescribed due
to its being actually one for quieting of title that was imprescriptible brought by Javellana who had actual
possession of the properties; and that based on the
complaint, Javellana had been in actual possession since 1979, and the cloud on his title had come about only
when Priscilla had started dumping filling materials on the premises.[20]

On May 9, 2003, the CA denied the motion for reconsideration, [21] stating that it decided to give due
course to the appeal even if filed out of time because Javellana had no intention to delay the proceedings, as in
fact he did not even seek an extension of time to file his appellants brief; that current jurisprudence afforded
litigants the amplest opportunity to present their cases free from the constraints of technicalities, such that even
if an appeal was filed out of time, the appellate court was given the discretion to nonetheless allow the appeal for
justifiable reasons.

Issues

Priscilla then brought this appeal, averring that the CA thereby erred in not outrightly dismissing
Javellanas appeal because: (a) the June 21, 2000 RTC order was not appealable; (b) the notice of appeal had been
filed belatedly by three days; and (c) Javellana was guilty of forum shopping for filing in the CA a petition
for certiorari to assail the orders of the RTC that were the subject matter of his appeal pending in the CA. She
posited that, even if the CAs decision to entertain the appeal was affirmed, the RTCs dismissal of the complaint
should nonetheless be upheld because the complaint stated no cause of action, and the action had already
prescribed.

On his part, Javellana countered that the errors being assigned by Priscilla involved questions of fact not
proper for the Court to review through petition for review oncertiorari; that the June 21, 2000 RTC order, being
a final order, was appealable; that his appeal was perfected on time; and that he was not guilty of forum shopping
because at the time he filed the

petition for certiorari the CA had not yet rendered a decision in C.A.-G.R.
CV No. 68259, and because the issue of ownership raised in C.A.-G.R. CV No. 68259 was different from the
issue of grave abuse of discretion raised in C.A.-G.R. SP No. 60455.

Ruling

The petition for review has no merit.

I
Denial of the motion for reconsideration of the
order of dismissal was a final order and appealable

Priscilla submits that the order of June 21, 2000 was not the proper subject of an appeal considering that Section
1 of Rule 41 of the Rules of Court provides that no appeal may be taken from an order denying a motion for
reconsideration.

Priscillas submission is erroneous and cannot be sustained.

First of all, the denial of Javellanas motion for reconsideration left nothing more to be done by the RTC because
it confirmed the dismissal of Civil Case No. 79-M-97. It was clearly a final order, not an interlocutory one. The
Court has distinguished between final and interlocutory orders in Pahila-Garrido v. Tortogo,[22] thuswise:

The distinction between a final order and an interlocutory order is well known. The first
disposes of the subject matter in its entirety or terminates a particular proceeding or action, leaving
nothing more to be done except to enforce by execution what the court has determined, but the
latter does not completely dispose of the case but leaves something else to be decided upon. An
interlocutory order deals with preliminary matters and the trial on the merits is yet to be held and
the judgment rendered. The test to ascertain whether or not an order or a judgment is

interlocutory or final is: does the order or judgment leave something to be done in the trial court
with respect to the merits of the case? If it does, the order or judgment is interlocutory; otherwise,
it is final.
 And, secondly, whether an order is final or interlocutory determines whether appeal is the correct remedy
or not. A final order is appealable, to accord with the final judgment rule enunciated in Section 1, Rule 41 of
the Rules of Court to the effect that appeal may be taken from a judgment or final order that completely disposes
of the case, or of a particular matter therein when declared by these Rules to be appealable;[23] but the remedy
from an interlocutory one is not an appeal but a special civil action for certiorari. The explanation for the
differentiation of remedies given in Pahila-Garrido v. Tortogo is apt:

xxx The reason for disallowing an appeal from an interlocutory order is to avoid multiplicity
of appeals in a single action, which necessarily suspends the hearing and decision on the merits of
the action during the pendency of the appeals. Permitting multiple appeals will necessarily delay
the trial on the merits of the case for a considerable length of time, and will compel the adverse
party to incur unnecessary expenses, for one of the parties may interpose as many appeals as there
are incidental questions raised by him and as there are interlocutory orders rendered or issued by
the lower court. An interlocutory order may be the subject of an appeal, but only after a judgment
has been rendered, with the ground for appealing the order being included in the appeal of the
judgment itself.

The remedy against an interlocutory order not subject of an appeal is an appropriate special
civil action under Rule 65, provided that the interlocutory order is rendered without or in excess
of jurisdiction or with grave abuse of discretion. Then is certiorari under Rule 65 allowed to be
resorted to.

Indeed, the Court has held that an appeal from an order denying a motion for reconsideration of a final order or
judgment is effectively an appeal from the final order or judgment itself; and has expressly clarified
that the prohibition against appealing an order denying a motion for

reconsideration referred only to a denial of a motion for reconsideration of an interlocutory order.[24]

II
Appeal was made on time pursuant to Neypes v. CA

Priscilla insists that Javellana filed his notice of appeal out of time. She points out that he received a copy
of the June 24, 1999 order on July 9, 1999, and filed his motion for reconsideration on July 21, 1999 (or after the
lapse of 12 days); that the RTC denied his motion for reconsideration through the order of June 21, 2000, a copy
of which he received on July 13, 2000; that he had only three days from July 13, 2000, or until July 16, 2000,
within which to perfect an appeal; and that having filed his notice of appeal on July 19, 2000, his appeal should
have been dismissed for being tardy by three days beyond the expiration of the reglementary period.

Section 3 of Rule 41 of the Rules of Court provides:

Section 3. Period of ordinary appeal. The appeal shall be taken within fifteen (15) days from
notice of the judgment or final order appealed from. Where a record on appeal is required, the
appellant shall file a notice of appeal and a record on appeal within thirty (30) days from notice of
the judgment or final order.
 The period of appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial or
reconsideration shall be allowed. (n)

Under the rule, Javellana had only the balance of three days from July 13, 2000, or until July 16, 2000,
within which to perfect an appeal due to the timely filing of his motion for reconsideration interrupting the running
of the period of appeal. As such, his filing of the notice of appeal only on July 19, 2000 did not perfect his appeal
on time, as Priscilla insists.
The seemingly correct insistence of Priscilla cannot be upheld, however, considering that the Court
meanwhile adopted the fresh period rule in Neypes v. Court of Appeals,[25] by which an aggrieved party desirous
of appealing an adverse judgment or final order is allowed a fresh period of 15 days within which to file the notice
of appeal in the RTC reckoned from receipt of the order denying a motion for a new trial or motion for
reconsideration, to wit:

The Supreme Court may promulgate procedural rules in all courts. It has the sole prerogative
to amend, repeal or even establish new rules for a more simplified and inexpensive process, and
the speedy disposition of cases. In the rules governing appeals to it and to the Court of Appeals,
particularly Rules 42, 43 and 45, the Court allows extensions of time, based on justifiable and
compelling reasons, for parties to file their appeals. These extensions may consist of 15 days or
more.

To standardize the appeal periods provided in the Rules and to afford litigants fair
opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15 days
within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the
order dismissing a motion for a new trial or motion for reconsideration.

Henceforth, this fresh period rule shall also apply to Rule 40 governing appeals from the
Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review from the
Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial agencies to
the Court of Appeals and Rule 45 governing appeals by certiorari to the Supreme Court. The new
rule aims to regiment or make the appeal period uniform, to be counted from receipt of the order
denying the motion for new trial, motion for reconsideration (whether full or partial) or any final
order or resolution.[26]

The fresh period rule may be applied to this case, for the Court has already retroactively extended the fresh
period rule to actions pending and undetermined at the time of their passage and this will not violate any right of
a person who may feel that he is adversely affected, inasmuch as there are no vested rights in rules of
procedure.[27] According to De los Santos v. Vda. de Mangubat:[28]

Procedural law refers to the adjective law which prescribes rules and forms of procedure in
order that courts may be able to administer justice. Procedural laws do not come within the legal
conception of a retroactive law, or the general rule against the retroactive operation of statues ―
they may be given retroactive effect on actions pending and undetermined at the time of their
passage and this will not violate any right of a person who may feel that he is adversely affected,
insomuch as there are no vested rights in rules of procedure.
 The fresh period rule is a procedural law as it prescribes a fresh period of 15 days within
which an appeal may be made in the event that the motion for reconsideration is denied by the
lower court. Following the rule on retroactivity of procedural laws, the "fresh period rule" should
be applied to pending actions, such as the present case.

Also, to deny herein petitioners the benefit of the fresh period rule will amount to injustice,
if not absurdity, since the subject notice of judgment and final order were issued two years later or
in the year 2000, as compared to the notice of judgment and final order in Neypes which were
issued in 1998. It will be incongruous and illogical that parties receiving notices of judgment and
final orders issued in the year 1998 will enjoy the benefit of the fresh period rule while those later
rulings of the lower courts such as in the instant case, will not.[29]

Consequently, we rule that Javellanas notice of appeal was timely filed pursuant to the fresh period rule.

III
No forum shopping was committed

Priscilla claims that Javellana engaged in forum shopping by filing a notice of appeal and a petition
for certiorari against the same orders. As earlier noted, he denies that his doing so violated the policy against
forum shopping.

The Court expounded on the nature and purpose of forum shopping in In Re: Reconstitution of Transfer
Certificates of Title Nos. 303168 and 303169 and Issuance of Owners Duplicate Certificates of Title In Lieu of
Those Lost, Rolando Edward G. Lim, Petitioner:[30]

Forum shopping is the act of a party litigant against whom an adverse judgment has been
rendered in one forum seeking and possibly getting a favorable opinion in another forum, other
than by appeal or the special civil action of certiorari, or the institution of two or more actions or
proceedings grounded on the same cause or supposition that one or the other court would make a
favorable disposition. Forum shopping happens when, in the two or more pending cases, there is
identity of parties, identity of rights or causes of action, and identity of reliefs sought. Where the
elements of litis pendentia are present, and where a final judgment in one case will amount to res
judicata in the other, there is forum shopping. For litis pendentia to be a ground for the dismissal
of an action, there must be: (a) identity of the parties or at least such as to represent the same
interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded
on the same acts; and (c) the identity in the two cases should be such that the judgment which may
be rendered in one would, regardless of which party is successful, amount tores judicata in the
other.

For forum shopping to exist, both actions must involve the same transaction, same essential
facts and circumstances and must raise identical causes of action, subject matter and issues.
Clearly, it does not exist where different orders were questioned, two distinct causes of action and
issues were raised, and two objectives were sought.
 Should Javellanas present appeal now be held barred by his filing of the petition for certiorari in the CA
when his appeal in that court was yet pending?

We are aware that in Young v. Sy,[31] in which the petitioner filed a notice of appeal to elevate the orders
concerning the dismissal of her case due to non-suit to the CA and a petition for certiorari in the CA assailing the
same orders four months later, the Court ruled that the successive filings of the notice of appeal and the petition
for certiorari to attain the same objective of nullifying the trial courts dismissal orders constituted forum shopping
that warranted the dismissal of both cases. The Court said:

Ineluctably, the petitioner, by filing an ordinary appeal and a petition

for certiorari with the CA, engaged in forum shopping. When the petitioner commenced
the appeal, only four months had elapsed prior to her filing with the CA
the Petition for Certiorari under Rule 65 and which eventually came up to this Court by way of
the instant Petition (re: Non-Suit). The elements oflitis pendentia are present between the two
suits. As the CA, through its Thirteenth Division, correctly noted, both suits are founded on exactly
the same facts and refer to the same subject
matterthe RTC Orders which dismissed Civil Case No. SP-5703 (2000) for

failure to prosecute. In both cases, the petitioner is seeking the reversal of the RTC orders. The
parties, the rights asserted, the issues professed, and the reliefs prayed for, are all the same. It is
evident that the judgment of one forum may amount to res judicata in the other.
xxxx
The remedies of appeal and certiorari under Rule 65 are mutually exclusive and not
alternative or cumulative. This is a firm judicial policy. The petitioner cannot hedge her case by
wagering two or more appeals, and, in the event that the ordinary appeal lags significantly behind
the others, she cannot post facto validate this circumstance as a demonstration that the
ordinary appeal had not been speedy or adequate enough, in order to justify the recourse to Rule
65. This practice, if adopted, would sanction the filing of multiple suits in multiple fora, where
each one, as the petitioner couches it, becomes a precautionary measure for the rest, thereby
increasing the chances of a favorable decision. This is the very evil that the proscription
on forumshopping seeks to put right. In Guaranteed Hotels, Inc. v. Baltao, the Court stated that
the grave evil sought to be avoided by the rule against forum shopping is the rendition by two
competent tribunals of two separate and contradictory decisions. Unscrupulous party litigants,
taking advantage of a variety of competent tribunals, may repeatedly try their luck in several
different forauntil a favorable result is reached. To avoid the resultant confusion, the Court adheres
strictly to the rules against forum shopping, and any violation of these rules results in the dismissal
of the case.[32]

The same result was reached in Zosa v. Estrella,[33] which likewise involved the successive filing of a
notice of appeal and a petition for certiorari to challenge the same orders, with the Court upholding the CAs
dismissals of the appeal and the petition for certiorari through separate decisions.

Yet, the outcome in Young v. Sy and Zosa v. Estrella is unjust here even if the orders of the RTC being
challenged through appeal and the petition for certiorari were the same. The unjustness exists because the appeal
and the petition for certiorari actually sought different objectives. In his appeal in C.A.-G.R. CV No. 68259,
Javellana aimed to undo the RTCs erroneous dismissal of Civil Case No. 79-M-97 to clear the way for his judicial
demand for specific performance to be tried and determined in due course by the RTC; but his petition
for certiorari had the ostensible objective to prevent (Priscilla) from developing the subject property and from
proceeding with the ejectment case until his appeal is finally resolved, as the CA explicitly determined in its
decision in C.A.-G.R. SP No. 60455.[34]

Nor were the dangers that the adoption of the judicial policy against forum shopping designed to prevent
or to eliminate attendant. The first danger, i.e., the multiplicity of suits upon one and the same cause of action,
would not materialize considering that the appeal was a continuity of Civil Case No. 79-M-97, whereas C.A.-
G.R. SP No. 60455 dealt with an independent ground of alleged grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the RTC. The second danger, i.e., the unethical malpractice of shopping for a
friendly court or judge to ensure a favorable ruling or judgment after not getting it in the appeal, would not arise
because the CA had not yet decided C.A.-G.R. CV No. 68259 as of the filing of the petition for certiorari.

Instead, we see the situation of resorting to two inconsistent remedial approaches to be the result of the
tactical misjudgment by Javellanas counsel on the efficacy of the appeal to stave off his caretakers eviction from
the parcels of land and to prevent the development of them into a residential or commercial subdivision pending
the appeal. In the petition for certiorari, Javellana explicitly averred that his appeal was inadequate and not speedy
to prevent private respondent Alma Jose and her transferee/assignee xxx from developing and disposing of the
subject property to other parties to the total deprivation of petitioners rights of possession and ownership over the
subject property, and that the dismissal by the RTC had emboldened private respondents to fully develop the
property and for respondent Alma Jose to file an ejectment case against petitioners overseer xxx. [35] Thereby, it
became far-fetched that Javellana brought the petition for certiorari in violation of the policy against forum
shopping.

WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision promulgated
on November 20, 2002; and ORDERS the petitioner to pay the costs of suit.

SO ORDERED.
MEDISERV, INC., v. COURT OF APPEALS (G.R. No. 161368, April 5, 2010)

Before the Court is a petition for certiorari to nullify the September 16, 2003 Resolution[1] of the Court of
Appeals reinstating the Petition for Review of private respondent Landheights Development Corporation and the
November 7, 2003 Resolution[2] denying the motion for reconsideration thereof.

The facts are as follows:

On September 20, 1994, petitioner Mediserv, Inc. executed a real estate mortgage in favor of China
Banking Corporation as security for a loan. The mortgage was constituted on a 500-square meter lot with
improvements located at 926 A.H. Lacson Street, Sampaloc, Manila and covered by Transfer Certificate of Title
(TCT) No. 205824 of the Registry of Deeds for the City of Manila. Mediserv defaulted on its obligation with
Chinabank and the real estate mortgage was foreclosed. At the public auction sale, private respondent Landheights
Development Corporation emerged as the highest bidder with a bid price of P17,617,960.00 for the subject
property.

Sometime in April 1998, Landheights filed with the Regional Trial Court (RTC) of Manila an Application
for Possession of Real Estate Property Purchased at an Auction Sale under Act No. 3135.[3] On September 21,
1999, the title of the property was consolidated in favor of Landheights and the Register of Deeds for the City
of Manila issued TCT No. 242202 in its favor. On March 13, 2000, Landheights, seeking to recover possession
of the subject property, filed a verified complaint for ejectment against Mediserv before the Metropolitan Trial
Court of Manila (MeTC). The case was docketed as Civil Case No. 166637.

On October 12, 2000, the MeTC of Manila, Branch 15, rendered a decision[4] in favor of Landheights, the
decretal portion of which states:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby entered in favor of

plaintiff and against the defendant ordering the latter and all persons claiming rights under said
entity to VACATE the premises situated at 926 A.H. Lacson Street, Sampaloc, Manila; and to
PAY plaintiff the sum of P25,000.00 as attorneys fees.

Costs against defendant.

SO ORDERED.

Aggrieved, Mediserv appealed[5] the decision to the RTC of Manila docketed as Civil Case No. 00-99395.
On June 14, 2002 the RTC rendered a Decision,[6] the fallo of which reads:

WHEREFORE, the Judgment of the Honorable Metropolitan Trial Court, Branch 15, Manila,
dated October 26, 2000, is hereby reversed and set aside; and the Complaint for Ejectment is
hereby ordered to be dismissed.
 Further, on the Counterclaims, the plaintiff-appellee is hereby directed to pay the defendant-
appellant, the sum of Php 50,000.00 for actual damages and another sum of Php 50,000.00 for and
as attorneys fees.

With costs against plaintiff-appellee.

SO ORDERED.

On September 16, 2002, Landheights motion for reconsideration[7] was likewise denied. [8]

Accordingly, Landheights filed a Petition for Review[9] with the Court of Appeals, which however dismissed the
petition in a Resolution[10] dated December 12, 2002, to wit:

It appearing that the written authority of Dickson Tan to sign the verification and certification on
non-forum shopping, as well as the copies of the complaint and answer, are not attached to the
petition, the petition is DISMISSED.

SO ORDERED.
Landheights seasonably filed a motion for reconsideration[11] on December 26, 2002 and subsequently submitted
a Secretarys Certificate[12] dated January 13, 2003 executed by its Corporate Secretary, Ms. Polly S. Tiu, stating
that the Board of Directors affirms the authority of Mr. Dickson Tan to file the Petition for Review.

On March 19, 2003, the Court of Appeals issued a Resolution[13] granting Landheights a new period of ten (10)
days within which to correct and rectify the deficiencies in the petition. On April 1, 2003, Mediserv filed a motion
for reconsideration[14] praying that the March 19, 2003 Resolution be set aside and the December 12, 2002
Resolution, which dismissed the petition, be reinstated. On even date, Landheights filed its Manifestation of
Compliance.[15]

On September 16, 2003, the appellate court issued the first assailed resolution reinstating the petition for review,
the pertinent portion of which reads as follows:
With the subsequent compliance of the petitioner with the requirement of the rules and in the
interest of substantial justice, We now consider the petition reinstated.

Respondent is hereby directed to file its comment on the petition within ten (10) days from notice
and petitioner may file its reply within five (5) days from receipt of the comment.

SO ORDERED.

Mediserv filed a motion for reconsideration[16] on October 3, 2003, while Landheights filed its
comment[17] thereto on October 14, 2003.

On November 7, 2003, the Court of Appeals issued the second assailed resolution, the significant portion of which
states:
 However, again, in the interest of justice, we shall consider the belatedly filed Secretarys
Certificate as a subsequent compliance of our March 19, 2003 Resolution.

WHEREFORE, this Courts Resolution dated September 16, 2003 is hereby REITERATED. The
petition is hereby REINSTATED and the respondent is directed to file its Comment on the
petition within ten (10) days from notice.

SO ORDERED.

Its motion for reconsideration having been denied by the appellate court, petitioner is now before us via the
present recourse. Petitioner faults the appellate court as follows:

THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION AND ACTED

WITHOUT AND/ OR IN EXCESS OF JURISDICTION IN REINSTATING THE PETITION
DESPITE THE CLEAR MANDATE OF THE RULES AS WELL AS THE JURISPRUDENCE
AS LAID DOWN BY THIS HONORABLE COURT CALLING FOR THE DISMISSAL OF THE
SAID PETITION.[18]

Petitioner argues that from the beginning, the Court of Appeals found the petition filed before it to be defective
for failure to comply with the rules. It points out that there is no showing that the respondent corporation, through
its board of directors, had authorized Mr. Dickson Tan to file the petition for review in its behalf and to sign the
verification and certification against forum-shopping. However, instead of upholding the dismissal of the petition,
the Court of Appeals allowed private respondent to rectify its deficiency, which is contrary to jurisprudence.

Petitioner also cites Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as amended, which provides
that failure to comply with the requirements on certification against forum shopping shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for dismissal of the case. Petitioner
thus asserts that the appellate court acted with grave abuse of discretion amounting to lack or in excess of
jurisdiction in reinstating the petition for review filed by respondent corporation.

We are not persuaded.

Under Rule 46, Section 3, paragraph 3 of the 1997 Rules of Civil Procedure, as amended, petitions
for certiorari must be verified and accompanied by a sworn certification of non-forum shopping.[19] A pleading is
verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct
of his personal knowledge or based on authentic records.[20] The party need not sign the verification. A partys
representative, lawyer or any person who personally knows the truth of the facts alleged in the pleading may sign
the verification.[21]

On the other hand, a certification of non-forum shopping is a certification under oath by the plaintiff or
principal party in the complaint or other initiatory pleading asserting a claim for relief or in a sworn certification
annexed thereto and simultaneously filed therewith, (a) that he has not theretofore commenced any action or filed
any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a
complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar
action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court
wherein his aforesaid complaint or initiatory pleading has been filed.[22]

The requirement that a petitioner or principal party should sign the certificate of non-forum shopping
applies even to corporations, considering that the mandatory directives of the Rules of Court make no distinction
between natural and juridical persons.[23] A corporation, however, exercises its powers through its board of
directors and/or its duly authorized officers and agents. Physical acts, like the signing of documents, can be
performed only by natural persons duly authorized for the purpose by corporate by-laws or by a specific act of
the board of directors.[24]

In the case of Digital Microwave Corp. v. Court of Appeals,[25] the certification of non-forum shopping
was signed by the petitioner corporations counsel; hence, the appellate court dismissed the petition for failure to
comply with Revised Supreme Court Circular No. 28-91, as amended.[26] Petitioner corporations motion for
reconsideration was denied by the appellate court absent any compelling reason for petitioners failure to comply,
at the first instance, with [the circular] .... On appeal, this Court denied the petition in this wise:

In this case, petitioner has not adequately explained its failure to have the certification
against forum shopping signed by one of its officers. Neither has it shown any compelling
reasonfor us to disregard strict compliance with the rules.[27] (Emphasis supplied.)

In Shipside Incorporated v. Court of Appeals,[28] petitioner Shipside Incorporated filed a petition

for certiorari and prohibition with the Court of Appeals, which was, however, dismissed for failure to attach proof
that the one (1) who signed the verification and certification of non-forum shopping, its Manager Lorenzo Balbin,
Jr., was authorized to institute the petition in petitioners behalf. Shipside Incorporated filed a motion for
reconsideration to which it attached a certificate issued by its board secretary stating that ten (10) days before the
filing of the petition, its board of directors authorized Balbin, Jr. to file it. The Court of Appeals denied the motion
for reconsideration, so the petitioner sought relief from this Court. In granting the petition, this Court explained:

It is undisputed that on October 21, 1999, the time petitioners Resident Manager Balbin filed
the petition, there was no proof attached thereto that Balbin was authorized to sign the verification
and non-forum shopping certification therein, as a consequence of which the petition was
dismissed by the Court of Appeals. However, subsequent to such dismissal, petitioner filed a
motion for reconsideration, attaching to said motion a certificate issued by its board secretary
stating that on October 11, 1999, or ten days prior to the filing of the petition, Balbin had been
authorized by petitioners board of directors to file said petition.
The Court has consistently held that the requirement regarding verification of a pleading is
formal, not jurisdictional (Uy v. LandBank, G.R. No. 136100, July 24, 2000, 336 SCRA 419). Such
requirement is simply a condition affecting the form of the pleading, non-compliance with which
does not necessarily render the pleading fatally defective. Verification is simply intended to secure
an assurance that the allegations in the pleading are true and correct and not the product of the
imagination or a matter of speculation, and that the pleading is filed in good faith. The court may
order the correction of the pleading if verification is lacking or act on the pleading although it is
 not verified, if the attending circumstances are such that strict compliance with the rules may be
dispensed with in order that the ends of justice may thereby be served.
On the other hand, the lack of certification against forum shopping is generally not curable by
the submission thereof after the filing of the petition. Section 5, Rule 45 of the 1997 Rules of Civil
Procedure provides that the failure of the petitioner to submit the required documents that should
accompany the petition, including the certification against forum shopping, shall be sufficient
ground for the dismissal thereof. The same rule applies to certifications against forum shopping
signed by a person on behalf of a corporation which are unaccompanied by proof that said
signatory is authorized to file a petition on behalf of the corporation.
In certain exceptional circumstances, however, the Court has allowed the belated filing
of the certification. In Loyola v. Court of Appeals, et al. (245 SCRA 477 [1995]), the Court
considered the filing of the certification one day after the filing of an election protest as substantial
compliance with the requirement. In Roadway Express, Inc. v. Court of Appeals, et al. (264 SCRA
696 [1996]), the Court allowed the filing of the certification 14 days before the dismissal of the
petition. In Uy v. LandBank, supra, the Court had dismissed Uys petition for lack of verification
and certification against non-forum shopping. However, it subsequently reinstated the petition
after Uy submitted a motion to admit certification and non-forum shopping certification. In all
these cases, there were special circumstances or compelling reasons that justified the
relaxation of the rule requiring verification and certification on non-forum shopping.
In the instant case, the merits of petitioners case should be considered special circumstances
or compelling reasons that justify tempering the requirement in regard to the certificate of non-
forum shopping. Moreover, in Loyola, Roadway, and Uy, the Court excused non-compliance with
the requirement as to the certificate of non-forum shopping. With more reason should we allow
the instant petition since petitioner herein did submit a certification on non-forum shopping, failing
only to show proof that the signatory was authorized to do so. That petitioner subsequently
submitted a secretarys certificate attesting that Balbin was authorized to file an action on behalf of
petitioner likewise mitigates this oversight.
It must also be kept in mind that while the requirement of the certificate of non-forum
shopping is mandatory, nonetheless the requirements must not be interpreted too literally and thus
defeat the objective of preventing the undesirable practice of forum-shopping (Bernardo v.
NLRC, 255 SCRA 108 [1996]). Lastly, technical rules of procedure should be used to promote,
not frustrate justice. While the swift unclogging of court dockets is a laudable objective, the
granting of substantial justice is an even more urgent ideal.[29] (Italics in the original; emphasis
and underscoring supplied.)

Unquestionably, there is sufficient jurisprudential basis to hold that Landheights has substantially
complied with the verification and certification requirements. We have held in a catena of cases[30] with similar
factual circumstances that there is substantial compliance with the Rules of Court when there is a belated
submission or filing of the secretarys certificate through a motion for reconsideration of the Court of Appeals
decision dismissing the petition for certiorari.

In Ateneo de Naga University v. Manalo,[31] this Court acknowledged that it has relaxed, under justifiable
circumstances, the rule requiring the submission of these certifications and has applied the rule of substantial
compliance under justifiable circumstances with respect to the contents of the certification. It also conceded that
if this Court has allowed the belated filing of the certification against forum shopping for compelling reasons in
previous rulings, with more reason should it sanction the timely submission of such certification though the proof
of the signatorys authority was submitted thereafter.
 The Court is aware of the necessity for a certification of non-forum shopping in filing petitions
for certiorari as this is required under Section 1, Rule 65, in relation to Section 3, Rule 46 of the Rules of Civil
Procedure, as amended. When the petitioner is a corporation, the certification should obviously be executed by a
natural person to whom the power to execute such certification has been validly conferred by the corporate board
of directors and/or duly authorized officers and agents. Generally, the petition is subject to dismissal if a
certification was submitted unaccompanied by proof of the signatorys authority.[32]

However, we must make a distinction between non-compliance with the requirements for certificate of
non-forum shopping and verification and substantial compliance with the requirements as provided in the Rules
of Court. The Court has allowed the belated filing of the certification on the justification that such act constitutes
substantial compliance. In Roadway Express, Inc. v. CA,[33] the Court allowed the filing of the certification
fourteen (14) days before the dismissal of the petition. In Uy v. Land Bank of the Philippines,[34] the Court
reinstated a petition on the ground of substantial compliance even though the verification and certification were
submitted only after the petition had already been originally dismissed. In Havtor Management Phils. Inc. v.
NLRC,[35] we acknowledged substantial compliance when the lacking secretarys certificate was submitted by the
petitioners as an attachment to the motion for reconsideration seeking reversal of the original decision dismissing
the petition for its earlier failure to submit such requirement.

In the present case, Landheights rectified its failure to submit proof of Mr. Dickson Tans authority to sign
the verification/certification on non-forum shopping on its behalf when the required document was subsequently
submitted to the Court of Appeals. The admission of these documents, and consequently, the reinstatement of
the petition itself, is in line with the cases we have cited. In such circumstances, we deem it more in accord
with substantive justice that the case be decided on the merits.

It is settled that liberal construction of the rules may be invoked in situations where there may be some
excusable formal deficiency or error in a pleading, provided that the same does not subvert the essence of the
proceeding and connotes at least a reasonable attempt at compliance with the rules. After all, rules of procedure
are not to be applied in a very rigid, technical sense; they are used only to help secure substantial justice.[36]

Finally, we note that the instant petition was filed under Rule 65 of the 1997 Rules of Civil Procedure, as
amended, which requires the existence of grave abuse of discretion. Grave abuse of discretion exists where an act
of a court or tribunal is performed with a capricious or whimsical exercise of judgment equivalent to lack of
jurisdiction. The abuse of discretion 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 all in contemplation of law, as where the power
is exercised in an arbitrary and despotic manner by reason of passion or personal hostility.[37] No such grave abuse
of discretion exists in this case to warrant issuance of the extraordinary writ of certiorari.

WHEREFORE, the petition is DISMISSED. The September 16, 2003 and November 7, 2003 Resolutions of
the Court of Appeals are AFFIRMED.
Let the records of this case be REMANDED to the Court of Appeals which is hereby DIRECTED to take
appropriate action thereon in light of the foregoing discussion with DISPATCH.

With costs against the petitioner.

SO ORDERED.
G.R. No. 200868 November 12, 2012

ANITA A. LEDDA, Petitioner,

vs.
BANK OF THE PHILIPPINE ISLANDS, Respondent.

DECISION

CARPIO, J.:

The Case

This petition for rebiew1 assails the 15 July 2011 Decision2 and 9 February 2012 Resolution3 of the Court of
Appeals in CA-G.R. CV No. 93747. The Court of Appeals partially granted the appeal filed by petitioner Anita
A. Ledda (Ledda) and modified the 4 June 2009 Decision4 of the Regional Trial Court, Makati City, Branch 61.
The Court of Appeals denied the motion for reconsideration.

The Facts

This case arose from a collection suit filed by respondent Bank of the Philippine Islands (BPI) against Ledda for
the latter’s unpaid credit card obligation.

BPI, through its credit card system, extends credit accommodations to its clientele for the purchase of goods and
availment of various services from accredited merchants, as well as to secure cash advances from authorized
bank branches or through automated teller machines.

As one of BPI’s valued clients, Ledda was issued a pre-approved BPI credit card under Customer Account
Number 020100-9-00-3041167. The BPI Credit Card Package, which included the Terms and Conditions
governing the use of the credit card, was delivered at Ledda’s residence on 1 July 2005. Thereafter, Ledda used
the credit card for various purchases of goods and services and cash advances.

Ledda defaulted in the payment of her credit card obligation, which BPI claimed in their complaint amounted to
P548,143.73 per Statement of Account dated 9 September 2007.5 Consequently, BPI sent letters6 to Ledda
demanding the payment of such amount, representing the principal obligation with 3.25% finance charge and
6% late payment charge per month.

Despite BPI’s repeated demands, Ledda failed to pay her credit card obligation constraining BPI to file an
action for collection of sum of money with the Regional Trial Court, Makati City, Branch 61. The trial court
declared Ledda in default for failing to file Answer within the prescribed period, despite receipt of the
complaint and summons. Upon Ledda’s motion for reconsideration, the trial court lifted the default order and
admitted Ledda’s Answer Ad Cautelam.

While she filed a Pre-Trial Brief, Ledda and her counsel failed to appear during the continuation of the Pre-
Trial. Hence, the trial court allowed BPI to present its evidence ex-parte.

In its Decision of 4 June 2009, the trial court ruled in favor of BPI, thus:

WHEREFORE, premises duly considered, the instant "Complaint" of herein plaintiff Bank of the Philippine
Islands (BPI) is hereby given DUE COURSE/GRANTED.
Accordingly, judgment is hereby rendered against herein defendant ANITA A. LEDDA and in favor of the
plaintiff.

Ensuably, the herein defendant ANITA A. LEDDA is hereby ordered to pay the herein plaintiff Bank of the
Philippine Islands (BPI) the following sums, to wit:

1. Five Hundred Forty-Eight Thousand One Hundred Forty-Three Pesos and Seventy-Three Centavos
(P548,143.73) as and for actual damages, with finance and late-payment charges at the rate of three and one-
fourth percent (3.25%) and six percent (6%) per month, respectively, to be counted from 19 October 2007 until
the amount is fully paid;

2. Attorney’s fees equivalent to twenty-five percent (25%) of the total obligation due and demandable,
exclusive of appearance fee for every court hearing, and

3. Costs of suit.

SO ORDERED.7 (Emphasis in the original)

The Ruling of the Court of Appeals

The Court of Appeals rejected Ledda’s argument that the document containing the Terms and Conditions
governing the use of the BPI credit card is an actionable document contemplated in Section 7, Rule 8 of the
1997 Rules of Civil Procedure. The Court of Appeals held that BPI’s cause of action is based on "Ledda’s
availment of the bank’s credit facilities through the use of her credit/plastic cards, coupled with her refusal to
pay BPI’s outstanding credit for the cost of the goods, services and cash advances despite lawful demands."

Citing Macalinao v. Bank of the Philippine Islands,8 the Court of Appeals held that the interest rates and penalty
charges imposed by BPI for Ledda’s non-payment of her credit card obligation, totalling 9.25% per month or
111% per annum, are exorbitant and unconscionable. Accordingly, the Court of Appeals reduced the monthly
finance charge to 1% and the late payment charge to 1%, or a total of 2% per month or 24% per annum.

The Court of Appeals recomputed Ledda’s total credit card obligation by deducting P226,000.15, representing
interests and charges, from P548,143.73, leaving a difference of P322,138.58 as the principal amount, on which
the reduced interest rates should be imposed.

The Court of Appeals awarded BPI P10,000 attorney’s fees, pursuant to the ruling in Macalinao.

The dispositive portion of the Court of Appeals’ Decision reads:

WHEREFORE, premises considered, the appeal is PARTLY GRANTED, and accordingly the herein assailed
June 4, 2009 Decision of the trial court is hereby MODIFIED, ordering defendant-appellant Anita Ledda to pay
plaintiff-appellee BPI the amount of Php322,138.58, with 1% monthly finance charges from date of availment
of the plaintiff’s credit facilities, and penalty charge at 1% per month of the amount due from the date the
amount becomes due and payable, until full payment. The award of attorney’s fees is fixed at Php10,000.00.

SO ORDERED.9 (Emphasis in the original)

The Issues

Ledda raises the following issues:

 1. Whether the Court of Appeals erred in holding that the document containing the Terms and
Conditions governing the issuance and use of the credit card is not an actionable document contemplated
in Section 7, Rule 8 of the 1997 Rules of Civil Procedure.

2. Whether the Court of Appeals erred in applying Macalinao v. Bank of the Philippine Islands instead
of Alcaraz v. Court of Appeals10 as regards the imposition of interest and penalty charges on the credit
card obligation.

3. Whether the Court of Appeals erred in awarding attorney’s fees in favor of BPI.

The Ruling of the Court

The petition is partially meritorious.

I.
Whether the document containing the
Terms and Conditions is an actionable document.

Section 7, Rule 8 of the 1997 Rules of Civil Procedure provides:

SEC. 7. Action or defense based on document. — Whenever an action or defense is based upon a written
instrument or document, the substance of such instrument or document shall be set forth in the pleading, and the
original or a copy thereof shall be attached to the pleading as an exhibit, which shall be deemed to be a part of
the pleading, or said copy may with like effect be set forth in the pleading.

Clearly, the above provision applies when the action is based on a written instrument or document.

In this case, the complaint is an action for collection of sum of money arising from Ledda’s default in her credit
card obligation with BPI. BPI’s cause of action is primarily based on Ledda’s (1) acceptance of the BPI credit
card, (2) usage of the BPI credit card to purchase goods, avail services and secure cash advances, and (3) non-
payment of the amount due for such credit card transactions, despite demands.11 In other words, BPI’s cause of
action is not based only on the document containing the Terms and Conditions accompanying the issuance of
the BPI credit card in favor of Ledda. Therefore, the document containing the Terms and Conditions governing
the use of the BPI credit card is not an actionable document contemplated in Section 7, Rule 8 of the 1997 Rules
of Civil Procedure. As such, it is not required by the Rules to be set forth in and attached to the complaint.

At any rate, BPI has sufficiently established a cause of action against Ledda, who admits having received the
BPI credit card, subsequently used the credit card, and failed to pay her obligation arising from the use of such
credit card.12

II.
Whether Alcaraz v. Court of Appeals,
instead of Macalinao v. BPI, is applicable.

Ledda contends that the case of Alcaraz v. Court of Appeals,13 instead of Macalinao v. Bank of the Philippine
Islands14 which the Court of Appeals invoked, is applicable in the computation of the interest rate on the unpaid
credit card obligation. Ledda claims that similar to Alcaraz, she was a "pre-screened" client who did not sign
any credit card application form or terms and conditions prior to the issuance of the credit card. Like Alcaraz,
Ledda asserts that the provisions of the Terms and Conditions, particularly on the interests, penalties and other
charges for non-payment of any outstanding obligation, are not binding on her as such Terms and Conditions
were never shown to her nor did she sign it.
We agree with Ledda. The ruling in Alcaraz v. Court of Appeals15 applies squarely to the present case. In
Alcaraz, petitioner there, as a pre-screened client of Equitable Credit Card Network, Inc., did not submit or sign
any application form or document before the issuance of the credit card. There is no evidence that petitioner
Alcaraz was shown a copy of the terms and conditions before or after the issuance of the credit card in his
name, much less that he has given his consent thereto.

In this case, BPI issued a pre-approved credit card to Ledda who, like Alcaraz, did not sign any credit card
application form prior to the issuance of the credit card. Like the credit card issuer in Alcaraz, BPI, which has
the burden to prove its affirmative allegations, failed to establish Ledda’s agreement with the Terms and
Conditions governing the use of the credit card. It must be noted that BPI did not present as evidence the Terms
and Conditions which Ledda allegedly received and accepted.16 Clearly, BPI failed to prove Ledda’s conformity
and acceptance of the stipulations contained in the Terms and Conditions. Therefore, as the Court held in
Alcaraz, the Terms and Conditions do not bind petitioner (Ledda in this case) "without a clear showing that x x
x petitioner was aware of and consented to the provisions of such document."17

On the other hand, Macalinao v. Bank of the Philippine Islands,18 which the Court of Appeals cited, involves a
different set of facts. There, petitioner Macalinao did not challenge the existence of the Terms and Conditions
Governing the Issuance and Use of the BPI Credit Card and her consent to its provisions, including the
imposition of interests and other charges on her unpaid BPI credit card obligation. Macalinao simply questioned
the legality of the stipulated interest rate and penalty charge, claiming that such charges are iniquitous. In fact,
one of Macalinao’s assigned errors before this Court reads: "The reduction of interest rate, from 9.25% to 2%,
should be upheld since the stipulated rate of interest was unconscionable and iniquitous, and thus
illegal."19 Therefore, there is evidence that Macalinao was fully aware of the stipulations contained in the Terms
and Conditions Governing the Issuance and Use of the Credit Card, unlike in this case where there is no
evidence that Ledda was aware of or consented to the Terms and Conditions for the use of the credit card.

Since there is no dispute that Ledda received, accepted and used the BPI credit card issued to her and that she
defaulted in the payment of the total amount arising from the use of such credit card, Ledda is liable to pay BPI
P322,138.58 representing the principal amount of her unpaid credit card obligation.20

Consistent with Alcaraz, Ledda must also pay interest on the total unpaid credit card amount at the rate of 12%
per annum since her credit card obligation consists of a loan or forbearance of money.21 In Eastern Shipping
Lines, Inc. v. Court of Appeals,22 the Court explained:

1. When an obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance
of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest
due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate
of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand
under and subject to the provisions of Article 1169 of the Civil Code.

We reject Ledda’s contention that, since there was no written agreement to pay a higher interest rate, the interest
rate should only be 6%. Ledda erroneously invokes Article 2209 of the Civil Code.23 Article 2209 refers to
indemnity for damages and not interest on loan or forbearance of money, which is the case here. In Sunga-Chan
v. Court of Appeals,24 the Court held:

Eastern Shipping Lines, Inc. synthesized the rules on the imposition of interest, if proper, and the applicable
rate, as follows: The 12% per annum rate under CB Circular No. 416 shall apply only to loans or forbearance of
money, goods, or credits, as well as to judgments involving such loan or forbearance of money, goods, or credit,
while the 6% per annum under Art. 2209 of the Civil Code applies "when the transaction involves the payment
of indemnities in the concept of damage arising from the breach or a delay in the performance of obligations in
general," with the application of both rates reckoned "from the time the complaint was filed until the adjudged
amount is fully paid." In either instance, the reckoning period for the commencement of the running of the legal
interest shall be subject to the condition "that the courts are vested with discretion, depending on the equities of
each case, on the award of interest. (Emphasis supplied)

In accordance with Eastern Shipping Lines, Inc., the 12% legal interest shall be reckoned from the date BPI
extrajudicially demanded from Ledda the payment of her overdue credit card obligation. Thus, the 12% legal
interest shall be computed from 2 October 2007, when Ledda, through her niece Sally D. Ganceña,25 received
BPI’s letter26 dated 26 September 2007 demanding the payment of the alleged overdue amount of P548,143.73.

III.
Whether the award of attorney’s fees is proper.

Ledda assails the award of attorney’s fees in favor of BPI on the grounds of (1) erroneous reliance by the Court
of Appeals on the case of Macalinao and (2) failure by the trial court to state the reasons for the award of
attorney’s fees.

Settled is the rule that the trial court must state the factual, legal or equitable justification for the award of
attorney’s fees.27 The matter of attorney’s fees cannot be stated only in the dispositive portion of the
decision.28The body of the court’s decision must state the reasons for the award of attorney’s fees.29 In Frias v.
San Diego-Sison,30 the Court held:

Article 2208 of the New Civil Code enumerates the instances where such may be awarded and, in all cases, it
must be reasonable, just and equitable if the same were to be granted. Attorney’s fees as part of damages are not
meant to enrich the winning party at the expense of the losing litigant. They are not awarded every time a party
prevails in a suit because of the policy that no premium should be placed on the right to litigate. The award of
attorney’s fees is the exception rather than the general rule.1âwphi1 As such, it is necessary for the trial court to
make findings of facts and law that would bring the case within the exception and justify the grant of such
award. The matter of attorney’s fees cannot be mentioned only in the dispositive portion of the decision. They
must be clearly explained and justified by the court in the body of its decision. On appeal, the CA is precluded
from supplementing the bases for awarding attorney’s fees when the trial court failed to discuss in its Decision
the reasons for awarding the same. Consequently, the award of attorney’s fees should be deleted.1âwphi1

In this case, the trial court failed to state in the body of its decision the factual or legal reasons for the award of
attorney’s fees in favor of BPI. Therefore, the same must be deleted.

WHEREFORE, we GRANT the petition IN PART. Petitioner Anita A. Ledda is ORDERED to pay respondent
Bank of the Philippine Islands the amount of .P322, 138.58, representing her unpaid credit card obligation, with
interest thereon at the rate of 12% per annum to be computed from 2 October 2007, until full payment thereof.
The award of attorney's fees is DELETED for lack of basis.

SO ORDERED.
G.R. No. 183034 March 12, 2014

SPOUSES FERNANDO and MA. ELENA SANTOS, Petitioners,

vs.
LOLITA ALCAZAR, represented by her Attorney-in-Fact DELFIN CHUA, Respondent.

DECISION

DEL CASTILLO, J.:

The rule that the genuineness and due execution of the instrument shall be deemed admitted, unless the adverse
party specifically denies them under oath, applies only to parties to such instrument.

Assailed in this Petition for Review on Certiorari1 are the September 27, 2007 Decision2 of the Court of
Appeals (CA) in CA-G.R. CV No. 87935, entitled "Lolita Alcazar, represented by her Attorney-in-Fact, Delfin
Chua, Plaintiff-Appellee, versus Spouses Fernando T. Santos, Defendants-Appellants," and its May 23, 2008
Resolution3denying petitioners' Motion for Reconsideration.

Factual Antecedents

In February 2001, respondent Lolita Alcazar, proprietor of Legazpi Color Center (LCC), instituted through her
attorney-in-fact Delfin Chua a Complaint4 for sum of money against the petitioners, spouses Fernando and Ma.
Elena Santos, to collect the value of paint and construction materials obtained by the latter from LCC
amounting to P1,456,000.00, which remained unpaid despite written demand. The case was docketed as Civil
Case No. 9954 and assigned to Branch 5 of the Regional Trial Court of Legazpi City. Respondent’s cause of
action is based on a document entitled "Acknowledgment"5 apparently executed by hand by petitioner
Fernando, thus:

ACKNOWLEDGMENT

This is to certify that I acknowledge my obligation in the amount of One Million Four Hundred Fifty Six
Thousand (P1,456,000), Philippine Currency with LEGAZPI COLOR CENTER, LEGAZPI CITY.

Signed at No. 32 Agno St. Banaue, Quezon City on December 12, 2000.

(signed)
FERNANDO T. SANTOS
Debtor

Signed in the presence of:

(signed)
TESS ALCAZAR
Proprietress
Legazpi Color Center

Witnesses in the signing:

(signed) (signed)
DELFIN A. CHUA AILEEN C. EDADES6
Respondent alleged in her Complaint:

xxxx

4. That as part of the agreement, defendants also obligated themselves to pay plaintiff at the rate of 3%
interest per month based on the unpaid principal, to cover the cost of money;

5. That as of December, 2000, the total obligation of defendants with plaintiff which consists of
principal and interest was P1,456,000.00, a copy of the document where defendants acknowledged their
unpaid obligation is hereto attached as Annex "B"; (referring to the above Acknowledgment)

6. That on January 5, 2001, plaintiff sent a final demand to defendants to pay the indebtedness, but said
demand fell on deaf ears and defendants did not even bother to communicate with plaintiff, copy of the
demand letter is hereto attached as Annex "C";7

She thus prayed that judgment be rendered ordering petitioners to pay her the sum of P1,456,000.00, with
interest at the rate of 3% per month; attorney’s fees in the amount of P72,800.00, and P1,500.00 per court
appearance; and costs of the suit.

In their Answer,8 petitioners sought the dismissal of the Complaint, alleging among others that –

4. Paragraph 5 is specifically denied as the document which Defendant Fernando T. Santos signed does
not reflect the true contract or intention of the parties, the actionable document is incorrect and has to be
reformed to reflect the real indebtedness of the defendants;

5. Paragraph 6 of the complaint is specifically denied as the same does not reflect the correct amount.
The defendants[’] computation is that the amount of P600,000.00 is the only amount due and the
instrument used as the actionable document does not reflect the correct substance of the transaction and
indicates a reformation of the actionable document;

6. Paragraph 7 is specifically denied as defendants are willing to pay the correct amount, not the amount
in the complaint as the same does not indicate the correct amount owing to the plaintiff;

xxxx

VERIFICATION

I, Fernando T. Santos[,] of legal age, Filipino[,] married and resident of Banawe, Quezon City[,] under oath
declare:

1. That I am the defendant in the above entitled case;

2. That I have read and understood the contents thereof and affirm that the allegations contained
therein are true and correct of my personal knowledge[;]

3. That I have not commenced any other action or proceeding involving x x x the same issues in
the Supreme Court, Court of Appeals or any other tribunal/agency[;]

4. That to the best of my knowledge, no such action or proceeding involving the same issues in
the Supreme Court, Court of Appeals or any other tribunal/agency [is pending];
 5. That if I should thereafter learn that a similar action or proceeding has been filed or is pending
before the Supreme Court, Court of Appeals or any other tribunal/agency, I undertake to report
the fact within 5 days therefrom to this court.

IN WITNESS WHEREOF, I have hereunto set [my] hand this April 18, 2001 x x x.

(signed)
Fernando T. Santos
Defendant9

Pre-trial was conducted. On September 26, 2005, the trial court issued its Pre-trial Order10 setting forth the
matters taken up during the pre-trial conference and the schedule of hearings. The presentation of respondent’s
evidence was set on October 10; November 8 and 21; and December 6 and 13, 2005. Petitioners were scheduled
to present their case on January 9 and 23; and February 6, 2006.11

On November 8, 2005, respondent presented her evidence and testified in court as the lone witness. On
November 21, 2005, she made a formal offer of her evidence and rested her case.

On January 17, 2006, petitioners filed a Demurrer to Evidence,12 which respondent opposed. Petitioners argued
that the Acknowledgment – respondent’s Exhibit "A" which was presented in court – was not an original copy
and thus inadmissible; petitioners’ receipt of the written demand was not proved; the alleged deliveries of paint
and construction materials were not covered by delivery receipts; and respondent’s testimony was merely
hearsay and uncorroborated.

On January 26, 2006, the trial court issued an Order13 denying petitioners’ demurrer for lack of merit. In the
same Order, the trial court scheduled the presentation of petitioners’ evidence in the morning and afternoon
sessions of February 20, 2006.

Petitioners moved to reconsider the trial court’s January 26, 2006 Order. On February 20, 2006, the trial court
issued an Order14 denying petitioners’ Motion for Reconsideration and scheduled the presentation of evidence
for the petitioners on March 20, 2006.

On March 15, 2006, petitioners moved to reset the March 20, 2006 scheduled hearing, on the ground that on
said date and time, their counsel was to appear in another scheduled case.

On March 20, 2006, or the day of the scheduled hearing, petitioners’ counsel failed to appear, prompting the
trial court to issue an Order15 1) denying petitioners’ March 15, 2006 motion to reset for lack of merit and for
violating Section 4, Rule 15 of the 1997 Rules of Civil Procedure;16 2) declaring that petitioners have waived
their right to present evidence; and 3) declaring that Civil Case No. 9954 is deemed submitted for decision.

Petitioners went up to the CA on certiorari. Docketed as CA-G.R. SP. No. 93889, the Petition questioned the
denial of petitioners’ demurrer. Meanwhile, they filed a Motion for Reconsideration17 of the March 20, 2006
Order denying their motion to reset, but the trial court denied the same in an Order dated April 24, 2006.18

The Decision of the Regional Trial Court

On June 27, 2006, the trial court rendered its Decision19 in Civil Case No. 9954, which contained the following
decretal portion:

WHEREFORE, Premises Considered, judgment is rendered ordering the defendants to pay the plaintiff the
following amounts, to wit:
 1. The sum of 1,456,000 pesos plus interest thereon at the legal rate commencing from the time the
complaint was filed in court until such time such amount has been paid in full;

2. The sum of 10,000 pesos as litigation expenses; and

3. The sum of 25,000 pesos as attorney’s fees.

The defendants shall pay the costs of suit.

Needless to say, the counterclaim in the Answer is Dismissed.

SO ORDERED.20

The trial court essentially held that petitioners, in their Answer, admitted that they entered into transactions with
the respondent for the delivery of paint and construction materials, which remained unpaid; that from the
Acknowledgment, Exhibit "A," signed by Fernando and duly presented, authenticated, and identified by
respondent during trial, petitioners admitted that their unpaid obligation – including interest – amounted
toP1,456,000.00; and that petitioners’ plea for reformation has no basis.

Petitioners filed their Motion for Reconsideration,21 arguing that the trial court should not have pre-empted CA-
G.R. SP No. 93889, and instead should have awaited the resolution thereof; that the Acknowledgment was
signed by Fernando alone, and thus the judgment should not bind his co-defendant and herein petitioner Ma.
Elena Santos; that petitioners’ liability has not been established since no delivery receipts, invoices and
statements of account were presented during trial to show delivery of paint and construction materials; that
respondent was unable to present the original of the Acknowledgment, which puts the Decision of the trial court
– declaring that the original thereof was presented and authenticated by respondent – in serious doubt; and that
there is no evidentiary basis to hold petitioners liable for P1,456,000.00.

In an Order22 dated August 8, 2006, the trial court denied petitioners’ Motion for Reconsideration.

The Assailed Court of Appeals Decision

Petitioners interposed an appeal with the CA. Docketed as CA-G.R. CV No. 87935, the ruling in the appeal is
the subject of the present Petition. Petitioners claimed that the trial court erred in allowing respondent to present
her evidence ex parte; the Acknowledgment has not been authenticated; the adjudged liability in the amount
ofP1,456,000.00 was not sufficiently proved by respondent, as she failed to present receipts and statements of
account which would show the true amount of their obligation, including interest; the trial court based its
findings on erroneous conclusions, assumptions and inferences; and the trial court erred in declaring them to
have waived their right to present evidence.

Meanwhile, in CA-G.R. SP. No. 93889, the CA issued its Decision23 dated March 30, 2007, dismissing
petitioners’ certiorari petition and sustaining the trial court’s denial of their demurrer. The CA held that
petitioners failed to deny specifically under oath the genuineness and due execution of the Acknowledgment;
consequently, 1) its genuineness and due execution are deemed admitted, 2) there was thus no need to present
the original thereof, and 3) petitioners’ liability was sufficiently established.24 The CA added that under the
circumstances, certiorari was not the proper remedy; petitioners should have gone to trial and awaited the trial
court’s Decision, which they could appeal if adverse.

The Decision became final and executory on April 27, 2007.25

On September 27, 2007, the CA issued the herein assailed Decision in CA-G.R. CV No. 87935, which held as
follows:

WHEREFORE, the instant appeal is DENIED and consequently DISMISSED for lack of merit.

SO ORDERED.26

The CA held that in their Answer, petitioners admitted that they owed respondent, albeit to the extent
ofP600,000.00; this judicial admission of liability required no further proof. And with this admission of
liability, the Acknowledgment which was duly authenticated and formally offered in evidence was sufficient to
establish their liability, and no further proof in the form of receipts and statements of account was required. The
appellate court stated that Fernando’s categorical admission of liability as contained in the Acknowledgment as
well as petitioners’ admissions in their Answer sufficed. It held further that respondent was competent to testify
on the Acknowledgment as she was a signatory therein.

The CA likewise held that since they failed to oppose the Acknowledgment in the court below as a result of
their having waived their right to present evidence, petitioners cannot now belatedly question the document.
Moreover, their claim of a lesser liability in the amount of P600,000.00 remained to be plain unsubstantiated
allegations as a result of their failure to refute respondent’s evidence and present their own.

Finally, the CA held that petitioners were not deprived of due process during trial; on the contrary, they were
afforded sufficient opportunity to participate in the proceedings by way of constant strict reminders by the court
and several continuances, but they failed to take part in the proceedings.

Petitioners moved to reconsider, but in the second assailed May 23, 2008 disposition, the appellate court stood
its ground. Thus, the instant Petition seeking a reversal of the assailed CA dispositions and the dismissal of the
Complaint in Civil Case No. 9954.

Issues

Petitioners now raise the following issues for the Court’s resolution:

IN THE RESOLUTION OF THE COURT OF APPEALS, THE ARGUMENT IN PETITIONERS’

MOTION FOR RECONSIDERATION THAT RESPONDENT FAILED TO PRODUCE AND
PRESENT THE ORIGINAL COPY OF THE ACKNOWLEDGMENT RECEIPT EXHIBIT "A"
WHICH IS A VIOLATION OF THE BEST EVIDENCE RULE, WAS NOT ACTED UPON AND
CONSIDERED "REHASH".

THE COURT OF APPEALS27 FOUND THE NEED FOR RECEIPTS OF STATEMENTS OF

ACCOUNT TO BE PRESENTED REFLECTING THE ACTUAL OBLIGATION OF PETITIONERS
IN ITS DECISION DATED JULY 20, 2004 AND THUS SET ASIDE AND REMANDED TO THE
COURT A QUO THE CASE FOR FURTHER PROCEEDINGS BUT THE SAME WAS
COUNTERMANDED IN THE ASSAILED DECISION.

CONTRARY TO THE FINDINGS OF THE COURT OF APPEALS, PETITIONERS DID NOT

ADMIT IN THEIR ANSWER THAT THEY ARE INDEBTED TO RESPONDENT IN THE
AMOUNT OF P1,456,000.00.

THE COURT OF APPEALS FAILED TO RULE ON THE ABSENCE OF ANY RECORD OF THE
PROCEEDINGS OF THE PRE-TRIAL CONFERENCE HELD ON SEPTEMBER 26, 2005. THE
COURT OF APPEALS SHOULD HAVE SERIOUSLY CONSIDERED TACKLING THE ISSUE OF
 PRESUMPTIONS, INFERENCES, AND MISCONCEPTION OF FACTS USED BY THE COURT A
QUO [IN ARRIVING AT] ITS FINDINGS AND CONCLUSIONS.

PETITIONERS WERE NOT DULY NOTIFIED OF THE NOVEMBER 8, 2005 HEARING IN

VIOLATION OF SECTIONS 4 AND 5 [OF RULE 15] OF THE RULES OF COURT WHICH THE
COURT OF APPEALS FAILED TO RULE.

PETITIONERS HAVE BEEN DEPRIVED OF THEIR DAY IN COURT WHEN THEY WERE
CONSIDERED TO HAVE WAIVED THEIR RIGHT TO PRESENT EVIDENCE AND THE CASE
SUBMITTED FOR DECISION, THE CONTRARY RULING OF THE COURT OF APPEALS
NOTWITHSTANDING.28

Petitioners’ Arguments

Petitioners, in their Petition and Reply,29 assert that during the proceedings below, only a photocopy of the
Acknowledgment was presented and identified by respondent even as the original was not lost, the same having
been made part of the record of the case when respondent’s evidence was first presented ex parte.30 For this
reason, they argue that the photocopy presented and offered in evidence is inadmissible and could not be the
basis for arriving at a finding of liability on their part, pursuant to the best evidence rule.

Petitioners further point out that in the first CA disposition, specifically in CA-G.R. CV No. 71187, the
appellate court’s Thirteenth Division ruled that in establishing petitioners’ pecuniary liability, receipts and
statements of account reflecting the actual amount of their obligation and interest thereon were necessary. Later
on, in CA-G.R. CV No. 87935, the same division of the CA made a complete turnaround, declaring that receipts
and statements of account were no longer necessary. For petitioners, this retraction by the CA was irregular.

Petitioners add that the pre-trial conference in Civil Case No. 9954 is a sham, as there are no records to show
that it was ever conducted. Consequently, this irregularity renders the proceedings below – including the
assailed judgment – null and void. They add that the trial court irregularly proceeded to receive respondent’s
evidence ex parte on November 8, 2005 despite lack of notice of hearing.

Next, petitioners point out inconsistencies and erroneous assumptions made by the appellate court which
formed the basis of its decision, such as Ma. Elena’s undue inclusion in the judgment of liability, when it is
evident from the Acknowledgment that it was executed and signed by Fernando alone.

Finally, petitioners submit that in denying a continuance of the March 20, 2006 hearing and declaring them to
have waived their right to present evidence, the trial court deprived them of their day in court.

Respondent’s Arguments

In her Comment,31 respondent counters that the Petition presents no valid cause for the Court’s exercise of its
power of review; that the issues raised therein have been duly taken up and conclusively resolved by the CA;
that with the finality of the Decision in CA-G.R. SP No. 93889, petitioners may no longer raise any issue
pertaining to the Acknowledgment, the genuineness and due execution of which they are considered to have
admitted; and that with the resolution by the CA of the issues revived in the Petition, petitioners are guilty of
forum shopping.

Respondent adds that petitioners are bound by the proceedings taken during the pre-trial conference, and may
not pretend to be ignorant of the hearing dates agreed upon and set by the trial court. Respondent argues that
petitioners may not claim to be oblivious of the pre-trial conference itself, since their representative was present
all throughout the proceedings, and a pre-trial order was issued thereafter which contained the matters taken up
during pre-trial and the hearing dates scheduled by the court.
 Our Ruling

The Court denies the Petition.

Respondent’s failure to present the original copy of the Acknowledgment during the taking of her testimony for
the second time, and the presentation of a mere photocopy thereof at said hearing, does not materially affect the
outcome of the case. It was a mere procedural inadvertence that could have been cured and did not affect
petitioners’ cause in any manner. As conceded by them and as held by the CA, the original exists and was made
part of the records of the case when respondent’s evidence was first taken. Though respondent now claims that
she had lost the original, the CA proclaimed that the document resides in the record. This would explain then
why respondent cannot find it in her possession; it is with the court as an exhibit. Besides, it evidently appears
that there is no question raised on the authenticity and contents of the photocopy that was presented and
identified in court; petitioners merely insist that the photocopy is inadmissible as a result of respondent’s failure
to present the original, which they nevertheless admit to exist and is found and included in the record of the
case.

While it is a basic rule of evidence that the original copy prevails over a mere photocopy,32 there is no harm if
in a case, both the original and a photocopy thereof are authenticated, identified and formally offered in
evidence by the party proponent.

More to the point is the fact that petitioners failed to deny specifically under oath the genuineness and due
execution of the Acknowledgment in their Answer. The effect of this is that the genuineness and due execution
of the Acknowledgment is deemed admitted. "By the admission of the genuineness and due execution [of such
document] is meant that the party whose signature it bears admits that he signed it or that it was signed by
another for him with his authority; that at the time it was signed it was in words and figures exactly as set out in
the pleading of the party relying upon it; that the document was delivered; and that any formal requisites
required by law, such as a seal, an acknowledgment, or revenue stamp, which it lacks, are waived by him.
Hence, such defenses as that the signature is a forgery x x x; or that it was unauthorized x x x; or that the party
charged signed the instrument in some other capacity than that alleged in the pleading setting it out x x x; or that
it was never delivered x x x, are cut off by the admission of its genuineness and due execution."33

"There is no need for proof of execution and authenticity with respect to documents the genuineness and due
execution of which are admitted by the adverse party."34 With the consequent admission engendered by
petitioners’ failure to properly deny the Acknowledgment in their Answer, coupled with its proper
authentication, identification and offer by the respondent, not to mention petitioners’ admissions in paragraphs 4
to 6 of their Answer that they are indeed indebted to respondent, the Court believes that judgment may be had
solely on the document, and there is no need to present receipts and other documents to prove the claimed
indebtedness. The Acknowledgment, just as an ordinary acknowledgment receipt, is "valid and binding between
the parties who executed it, as a document evidencing the loan agreement they had entered into."35 The absence
of rebutting evidence occasioned by petitioners’ waiver of their right to present evidence renders the
Acknowledgment as the best evidence of the transactions between the parties and the consequential
indebtedness incurred.36 Indeed, the effect of the admission is such that "a prima facie case is made for the
plaintiff which dispenses with the necessity of evidence on his part and entitles him to a judgment on the
pleadings unless a special defense of new matter, such as payment, is interposed by the defendant."37

However, as correctly argued by petitioners, only Fernando may be held liable for the judgment amount
ofP1,456,000.00, since Ma. Elena was not a signatory to the Acknowledgment. She may be held liable only to
the extent of P600,000.00, as admitted by her and Fernando in paragraph 5 of their Answer; no case against her
may be proved over and beyond such amount, in the absence of her signature and an acknowledgment of
liability in the Acknowledgment. The rule that the genuineness and due execution of the instrument shall be
deemed admitted, unless the adverse party specifically denies them under oath, applies only to parties to the
document.38
As for petitioners’ claim that in CA-G.R. CV No. 87935, the same division of the CA made a complete
turnaround from its original pronouncement in CA-G.R. CV No. 71187 – thus doing away with the requirement
of presenting receipts and statements of account which it originally required in the latter case, the Court finds no
irregularity in this. The admission of liability resulting from petitioners’ admission of indebtedness in their
Answer and other pleadings,39 their failure to specifically deny under oath the genuineness and due execution of
the Acknowledgment, as well as their waiver of their right to present evidence – all these did away with the
necessity of producing receipts and statements of account which would otherwise be required under normal
circumstances.

On the claim that they were denied their day in court, the Court notes that despite reminders and admonitions by
the trial court, petitioners caused several continuances of trial, which understandably prompted the trial court to
finally deny their March 15, 2006 motion to reset the scheduled March 20 hearing and declare a waiver of their
right to present evidence. Thus, as found by the CA,

 In its September 26, 2005 Pre-Trial Order, the trial court fixed the hearing dates with a firm declaration
that the same "shall be strictly followed and all postponements made by the parties shall be deducted
from such party’s allotted time to present evidence.

 When plaintiff-appellee finished her presentation of evidence ahead of schedule, the appellants were
again advised of their schedule for presentation of evidence – i.e., December 6 and 13, 2005 and January
9 and 23 and February 6, 2006. Despite said schedule, the appellants failed to appear in court.

 On January 9, 2006, the lower court reiterated the scheduled hearing set on January 26, 2006 and
included February 20, 2006 as an additional hearing date.

 Instead of presenting their evidence, the appellants filed a Demurrer to Evidence on January 17, 2006
which, however, was denied by the trial court in its Order dated January 26, 2006.

 On February 20, 2006, the trial court again allowed another hearing date – March 20, 2006 – to afford
the appellants added opportunity to present their evidence.

The foregoing clearly show that not only were appellants given an opportunity to be heard, an added mileage in
due process was extended to them by the trial court.40

Petitioners submit further that the trial court’s subsequent denial of their motion for continuance of the March
20, 2006 hearing was improper. Yet again, the Court does not subscribe to this view. Petitioners filed their
motion to reset the March 20, 2006 previously scheduled hearing, but the trial court did not act on the motion.
Instead of attending the March 20, 2006 hearing, petitioners’ counsel proceeded to absent himself and attended
the supposed hearing of another case. This was improper. As we have held before,

[A] party moving for postponement should be in court on the day set for trial if the motion is not acted upon
favorably before that day. He has no right to rely either on the liberality of the court or on the generosity of the
adverse party. x x x

[A]n attorney retained in a case the trial of which is set for a date on which he knows he cannot appear because
of his engagement in another trial set previously on the same date, has no right to presume that the court will
necessarily grant him continuance. The most ethical thing for him to do in such a situation is to inform the
prospective client of all the facts so that the latter may retain another attorney, If the client, having full
knowledge of all the facts, still retain[s] the attorney, he assumes the risk himself and cannot complain of the
consequences if the postponement is denied and finds himself without attorney to represent him at the trial.41
The grant or denial of a motion for postponement rests on the court’s sound discretion; it is a matter of
privilege, not a right. "A movant for postponement should not assume beforehand that his motion will be
granted. The grant or denial of a motion for postponement is a matter that is addressed to the sound discretion of
the trial court. Indeed, an order declaring a party to have waived the right to present evidence for performing
dilatory actions upholds the trial court's duty to ensure that trial proceeds despite the deliberate delay and refusal
to proceed on the part of one party."42

On the other questions raised by petitioners, specifically that the pre-trial conference is a sham for lack of
records of the proceedings, and that the November 8, 2005 hearing where respondent's evidence was taken
exparte was irregular for lack of a notice of hearing - the Court finds them to be without merit. It is evident that
a pre-trial conference was held, and that petitioners' representative was present therein; moreover, the
proceedings were covered by the required pre-trial order, which may itself be considered a record of the pre-
trial.43 In said order, the November 8, 2005 pre-scheduled hearing was particularly specified.44 Thus, from the
very start, petitioners knew of the November 8 hearing; if they failed to attend, no fault may be attributed to the
trial court.

WHEREFORE, the Petition is DENIED. The September 27, 2007 Decision and May 23, 2008 Resolution of the
Court of Appeals in CA-G.R. CV No. 87935 are AFFIRMED, with MODIFICATION in that petitioner Ma.
Elena Santos is held liable for the principal and interest only to the extent of P600,000.00.

SO ORDERED.
CASENT REALTY DEVELOPMENT CORP., v. PHILBANKING CORPORATION (G.R. No. 150731,
September 14, 2007)

On appeal to this Court through Rule 45 of the Rules of Court is the March 29, 2001 Decision[1] and
November 7, 2001 Resolution[2] of the Court of Appeals (CA) in CA-G.R. CV No. 63979 entitled Philbanking
Corporation v. Casent Realty Development Corporation. The CA reversed the May 12, 1999 Order[3] of
the Makati City Regional Trial Court (RTC), Branch 145 in Civil Case No. 93-2612, which granted petitioners
demurrer to evidence and dismissed the complaint filed by respondent.

The Facts

The facts according to the appellate court are as follows:

In 1984, petitioner Casent Realty Development Corporation executed two promissory notes in favor of
Rare Realty Corporation (Rare Realty) involving the amounts of PhP 300,000 (PN No. 84-04) and PhP 681,500
(PN No. 84-05). It was agreed in PN No. 84-04 that the loan it covered would earn an interest of 36% per annum
and a penalty of 12% in case of non-payment by June 27, 1985, while the loan covered by PN No. 84-05
would earn an interest of 18% per annum and 12% penalty if not paid by June 25, 1985.[4] On August 8,
1986, these promissory notes were assigned to respondent Philbanking Corporation through a Deed of
Assignment.[5]

Respondent alleged that despite demands, petitioner failed to pay the promissory notes upon maturity
such that its obligation already amounted to PhP 5,673,303.90 as ofJuly 15, 1993. Respondent filed on July 20,
1993 a complaint before the Makati City RTC for the collection of said amount. In its Answer,[6] petitioner raised
the following asspecial/affirmative defenses:

1. The complaint stated no cause of action or if there was any, the same was barred by estoppel,
statute of frauds, statute of limitations, laches, prescription, payment,and/or release;

2. On August 27, 1986, the parties executed a Dacion en Pago[7] (Dacion) which ceded and
conveyed petitioners property in Iloilo City to respondent, with the intention of totally extinguishing petitioners
outstanding accounts with respondent. Petitioner presented a Confirmation Statement[8] dated April 3,
1989 issued by respondentstating that petitioner had no loans with the bank as of December 31, 1988.

3. Petitioner complied with the condition in the Dacion regarding the repurchase of the property
since the obligation was fully paid. Respondent sent confirmation statements in the latter months of 1989, which
showed that petitioner had no more outstanding loan; and
 4. Assuming that petitioner still owed respondent, the latter was already estopped since in
October 1988, it reduced its authorized capital stock by 50% to wipe out a deficit of PhP 41,265,325.12.[9]

Thus, petitioner, by way of compulsory counterclaim, alleged that it made an overpayment of

approximately PhP 4 million inclusive of interest based on Central Bank Reference Lending Rates on dates of
overpayment. Petitioner further claimed moral and exemplary damages and attorneys fee, amounting to PhP 4.5
million plus the costs of suit as a consequence of respondents insistence on collecting.[10]

The parties failed to reach an amicable settlement during the pre-trial

conference. Thereafter, respondent presented its evidence and formally offered its exhibits. Petitionerthen filed a
Motion for Judgment on Demurrer to the Evidence,[11] pointing out that the plaintiffs failure to file a Reply to the
Answer which raised the Dacion and Confirmation Statement constituted an admission of the genuineness and
execution of said documents; and that since the Dacion obliterated petitioners obligation covered by the
promissory notes, the bank had no right to collect anymore.

Respondent subsequently filed an Opposition[12] which alleged that: (1) the grounds relied upon
by petitioner in its demurrer involved its defense and not insufficiency of evidence; (2) the Dacion and
Confirmation Statement had yet to be offered in evidence and evaluated; and (3) since respondent failed to file a
Reply, then all the new matters alleged in the Answer were deemed controverted.[13]

The trial court ruled in favor of petitioner and dismissed the complaint through the May 12,
1999 Order, the dispositive portion of which reads:

WHEREFORE, premises considered[,] finding defendants Motion For Judgment On Demurrer

To The Evidence to be meritorious[,] the same is hereby GRANTED. Consequently, considering
that the obligation of the defendant to the plaintiff having been extinguish[ed] by a Dacion en Pago
duly executed by said parties, the instant complaint is hereby DISMISSED, with
prejudice. Without Cost.[14]

The Ruling of the Court of Appeals

On appeal, respondent alleged that the trial court gravely erred because the promissory notes were not
covered by the Dacion, and that respondent was able to prove its causes of action and right to relief by
overwhelming preponderance of evidence. It explained that at the time of execution of the Dacion, the subject of
the promissory notes wasthe indebtedness of petitioner to Rare Realty and not to the Bankthe party to
the Dacion. It was only in 1989 after Rare Realty defaulted in its obligation to respondent when the latter
enforced the security provided under the Deed of Assignment by trying to collect from petitioner, because it was
only then that petitioner became directly liable torespondent. It was also for this reason that the April 3,
1989 Confirmation Statement stated that petitioner had no obligations to repondent as of December 31, 1988. On
the other hand, petitioner claimed that the Deed of Assignment provided that Rare Realty lost its rights, title, and
interest to directly proceed against petitioner on the promissory notes since these were transferred
to respondent. Petitioner reiterated that the Dacion covered all conceivable amounts including the promissory
notes.[15]

The appellate court ruled that under the Rules of Civil Procedure, the only issue to be resolved in a
demurrer is whether the plaintiff has shown any right to relief under the facts presented and the law. Thus, it held
that the trial court erred when it considered the Answer which alleged the Dacion, and that its genuineness and
due execution were not atissue. It added that the court a quo should have resolved whether the two promissory
notes were covered by the Dacion, and that since petitioners demurrer was granted, it had already lost its right to
present its evidence.[16]

The CA found that under the Deed of Assignment, respondent clearly had the right to proceed against the
promissory notes assigned by Rare Realty. Thus, the CA ruled, as follows:

WHEREFORE, premises considered, the Order dated May 12, 1999 of the Regional Trial Court,
National Capital Judicial Region, Branch 145, Makati City is hereby REVERSED and SET
ASIDE.

Judgment is hereby entered ORDERING [petitioner] Casent Realty [Development] Corporation

to:

1. pay [respondent] Philbanking Corporation the amount of P300,000.00 with an interest of

36% per annum and a penalty of 12% for failure to pay the same on its maturity date, June
27, 1985 as stipulated in Promissory Note No. 84-04;

2. pay [respondent] Philbanking Corporation the amount of P681,500.00 with an interest of

18% per annum and a penalty of 12% for failure to pay the same on its maturity date, June
25, 1985 as stipulated in Promissory Note No. 84-05; and

3. pay [respondent] Philbanking Corporation, the amount representing 25% of total amount
due as attorneys fee as stipulated in the promissory notes.
SO ORDERED.[17]

Petitioner filed a Motion for Reconsideration[18] which was denied by the CA in its November 7,
2001 Resolution.[19]

The Issues

WHETHER OR NOT THE COURT OF APPEALS ERRED IN EXCLUDING THE

PETITIONERS AFFIRMATIVE DEFENSES IN ITS ANSWER IN RESOLVING A
DEMURRER TO EVIDENCE; AND
 WHETHER OR NOT PETITIONER IS LIABLE TO PAY THE RESPONDENT

In other words, the questions posed by this case are:

1. Does respondents failure to file a Reply and deny the Dacion and Confirmation Statement under oath
constitute a judicial admission of the genuineness and due execution of these documents?

2. Should judicial admissions be considered in resolving a demurrer to evidence? If yes, are the judicial
admissions in this case sufficient to warrant the dismissal of the complaint?

Petitioner asserts that its obligation to pay under the promissory notes was already extinguished as
evidenced by the Dacion and Confirmation Statement. Petitioner submits that when it presented these documents
in its Answer, respondent should have denied the same under oath. Since respondent failed to file a Reply, the
genuineness and due execution of said documents were deemed admitted, thus also admitting that the loan was
already paid. On the other hand, respondent states that while it failed to file a Reply, all the new matters were
deemed controverted pursuant to Section 10, Rule 6 of the Rules of Court. Also, the loan which was covered by
the Dacion refers to another loan of petitioner amounting to PhP 3,921,750 which was obtained directly from the
respondent as of August 1986.[20] Furthermore, petitioner argued that assuming respondent admitted the
genuineness and due execution of the Dacion and Confirmation Statement, said admission was not all-
encompassing as to include the allegations and defenses pleaded in petitioners Answer.

The Courts Ruling

The petition is partly meritorious.

Rule 33, Section 1 of the 1997 Rules of Civil Procedure provides:

Section 1. Demurrer to evidence.After the plaintiff has completed the presentation of his evidence,
the defendant may move for dismissal on the ground that upon the facts and the law the plaintiff
has shown no right to relief. If his motion is denied, he shall have the right to present evidence. If
the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have
waived the right to present evidence.

In Gutib v. Court of Appeals, we defined a demurrer to evidence as an objection by one of the parties in
an action, to the effect that the evidence which his adversary produced is insufficient in point of law, whether true
or not, to make out a case or sustain the issue.[21]

What should be resolved in a motion to dismiss based on a demurrer to evidence is whether the plaintiff
is entitled to the relief based on the facts and the law. The evidence contemplated by the rule on demurrer is
that which pertains to the merits of the case, excluding technical aspects such as capacity to sue.[22] However, the
plaintiffs evidence should not be the only basis in resolving a demurrer to evidence. The facts referred to in
Section 8 should include all the means sanctioned by the Rules of Court in ascertaining matters in judicial
proceedings. These include judicial admissions, matters of judicial notice, stipulations made during the pre-trial
and trial, admissions, and presumptions, the only exclusion being the defendants evidence.

Petitioner points out that the defense of Dacion and Confirmation Statement, which were submitted in the
Answer, should have been specifically denied under oath byrespondent in accordance with Rule 8, Section 8 of
the Rules of Court:

Section 8. How to contest such documents.When an action or defense is founded upon a written
instrument, copied in or attached to the corresponding pleading as provided in the preceding
section, the genuineness and due execution of the instrument shall be deemed admitted unless the
adverse party, under oath, specifically denies them, and sets forth, what he claims to be the facts;
but the requirement of an oath does not apply when the adverse party does not appear to be a party
to the instrument or when compliance with an order for an inspection of the original instrument is
refused.

Since respondent failed to file a Reply, in effect, respondent admitted the genuineness and due execution
of said documents. This judicial admission should have been considered by the appellate court in resolving the
demurrer to evidence. Rule 129, Section 4 of the Rules of Court provides:

Section 4. Judicial admissions.An admission, verbal or written, made by a party in the course of
the proceeding in the same case, does not require proof. The admission may be contradicted only
by showing that it was made through palpable mistake or that no such admission was made.

On appeal to the CA, respondent claimed that even though it failed to file a Reply, all the new matters
alleged in the Answer are deemed controverted anyway, pursuant to Rule 6, Section 10:

Section 10. Reply.A reply is a pleading, the office or function of which is to deny, or allege facts
in denial or avoidance of new matters alleged by way of defense in the answer and thereby join or
make issue as to such new matters. If a party does not file such reply, all the new matters alleged
in the answer are deemed controverted.

We agree with petitioner. Rule 8, Section 8 specifically applies to actions or defenses founded upon a
written instrument and provides the manner of denying it. It is more controlling than Rule 6, Section 10 which
merely provides the effect of failure to file a Reply. Thus, where the defense in the Answer is based on an
actionable document, a Reply specifically denying it under oath must be made; otherwise, the genuineness and
due execution of the document will be deemed admitted.[23] Since respondent failed to deny the genuineness and
due execution of the Dacion and Confirmation Statement under oath, then these are deemed admitted and must
be considered by the court in resolving the demurrer to evidence. We held in Philippine American General
Insurance Co., Inc. v. Sweet Lines, Inc. that [w]hen the due execution and genuineness of an instrument are
deemed admitted because of the adverse partys failure to make a specific verified denial thereof, the instrument
need not be presented formally in evidence for it may be considered an admitted fact.[24]

In any case, the CA found that:

From the facts of the case, the genuineness and due execution of the Dacion en Pago were
never put to issue. Genuineness merely refers to the fact that the signatures were not falsified
and/or whether there was no substantial alteration to the document. While due execution refers to
whether the document was signed by one with authority.[25]
The more important issue now is whether the Dacion and Confirmation Statement sufficiently prove that
petitioners liability was extinguished. Respondent asserts that the admission of the genuineness and due execution
of the documents in question is not all encompassing as to include admission of the allegations and defenses
pleaded in petitioners Answer. In executing the Dacion, the intention of the parties was to settle only the loans
of petitioner with respondent, not the obligation of petitioner arising from the promissory notes that were assigned
by Rare Realty to respondent.

We AGREE.

Admission of the genuineness and due execution of the Dacion and Confirmation Statement does not
prevent the introduction of evidence showing that the Dacionexcludes the promissory notes. Petitioner, by way
of defense, should have presented evidence to show that the Dacion includes the promissory notes.

The promissory notes matured in June 1985, and Rare Realty assigned these promissory notes
to respondent through a Deed of Assignment dated August 8, 1986. The Deed of Assignment provides, thus:

Rare Realty Corporation, a corporation duly organized and existing in accordance with law, with
office at 8th Floor Philbanking Building, Ayala Ave., Makati, Metro Manila (herein called
Assignor) in consideration of the sum of THREE MILLION SEVEN HUNDRED NINETY
THOUSAND & 00/100 pesos [PhP 3,790,000.00] and as security fee or in the payment of the sum,
obtained or to be obtained as loan or credit accommodation of whatever form or nature from
the [PHILBANKING] CORPORATION, with office at Ayala Ave., Makati, Metro Manila (herein
called Assignee), including renewals or extensions of such loan or credit accommodation, now
existing or hereinafter incurred, due or to become due, whether absolute or contingent, direct or
indirect, and whether incurred by the Assignor as principal, guarantor, surety, co-maker, or in any
other capacity, including interest, charges, penalties, fees, liquidated damage, collection expenses
and attorneys fee, the Assignor hereby assigns, transfers and conveys to Assignee all its rights,
title and interest in and to: (a) contracts under which monies are or will be due to Assignor, (b)
moneys due or to be due thereunder, or (c) letters of credit and/or proceeds or moneys arising from
negotiations under such credits, all which are herein called moneys or receivables assigned or
assigned moneys or receivables, and are attached, or listed and described in the Attached Annex
A (for contracts) or Annex B (for letters of credit).[26]
 It is clear from the foregoing deed that the promissory notes were given as security for the loan
granted by respondent to Rare Realty. Through the Deed of Assignment,respondent stepped into the shoes of
Rare Realty as petitioners creditor.

Respondent alleged that petitioner obtained a separate loan of PhP 3,921,750. Thus,
when petitioner and respondent executed the Dacion on August 27, 1986, what was then covered was petitioners
loan from the bank. The Dacion provides, thus:

NOW, THEREFORE, in consideration of the foregoing premises, the DEBTOR hereby transfers
and conveys in favor of the BANK by way of Dacion en Pago, the above-described property infull
satisfaction of its outstanding indebtedness in the amount of P3,921,750.00 to the BANK, subject
to x x x terms and conditions.[27] (Emphasis supplied.)

The language of the Dacion is unequivocalthe property serves in full satisfaction of petitioners
own indebtedness to respondent, referring to the loan of PhP 3,921,750. For this reason, the bank issued a
Confirmation Statement saying that petitioner has no unpaid obligations with the bank as of December 31, 1988.

In 1989, however, Rare Realty defaulted in its payment to respondent. Thus, respondent proceeded
against the security assigned to it, that is, the promissory notes issued by the petitioner. Under these promissory
notes, petitioner is liable for the amount of PhP 300,000 with an interest of 36% per annum and a penalty of 12%
for failure to pay on the maturity date, June 27, 1985; and for the amount of PhP 681,500 with an interest of 18%
per annum and a penalty of 12% for failure to pay on the maturity date, June 25, 1985.

WHEREFORE, the March 29, 2001 Decision and November 7, 2001 Resolution of
the CA are AFFIRMED. Costs against petitioner.

SO ORDERED.