P120,000.
00 which Borres unlawfully deducted from her third loan; and (3) recovery of
[G.R. No. 160730. December 10, 2004]
SISTER MA. ANGELINA M. FERNANDO, R.V.M., petitioner, vs. HON. CESAR D.
SANTAMARIA, Presiding Judge of the Regional Trial Court, National Capital
Region, Branch 145, Makati City, CHUA PING HIAN, WILLIBALDO UY,
LAUREANA P. BORRES and the REGISTER of DEEDS FOR MAKATI
CITY, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review of the August 18, 2003 Decision [1]
of the Court of Appeals in
CA-G.R. SP No. 72787, and its November 6, 2003 Resolution[2] denying petitioners motion for
reconsideration.
The antecedent facts are as follows:
On October 13, 2000, petitioner filed a complaint[3] against respondents Willibaldo Uy
(Uy), Chua Ping Hian (Chua) and the latters agent, Laureana P. Borres (Borres). She alleged
that on three separate occasions, she obtained loans from Chua in the total amount of P5.5
million. As security for said loans, she executed a real estate mortgage over a lot [4] covered by
Transfer Certificate of Title (TCT) No. 124391, registered in her name and located at No. 1661,
Evangelista St., Bangkal, Makati City. Before the third loan could be released, she signed a
deed of absolute sale conveying the lot in favor of Chua in consideration of the amount of P3
Million[5] upon the assurance of Borres that the deed was a mere formality. On November 9,
1995, however, she learned that her title over the property was cancelled and that a new one
was issued on November 8, 1995 in the name of Chua.
Thereafter, Chua offered to sell back the property to petitioner for P10 million, which the
latter accepted. However, on December 7, 1995, petitioner came to know that Chua sold the
subject lot for P7 Million to Uy, to whom a new transfer certificate of title was issued by the
Makati Register of Deeds.
Petitioner filed a complaint on the following causes of action: (1) annulment of the deeds
of absolute sale over the subject lot in favor of Chua and Uy and the cancellation of the TCT
issued in the name of the latter; (2) recovery from Borres of the amount of P200,000.00 which
she allegedly gave as payment of the real property taxes of the lot as well as the amount of
damages against all respondents.
Chua filed a motion to dismiss[6] on the ground that petitioners action which is founded on
fraud is barred by prescription. In their Answer,[7] Uy and Borres contended, among others, that
petitioners cause of action, if any, has been waived or abandoned.
On July 24, 2001 the trial court dismissed the complaint against all the respondents on
the grounds of prescription, ratification and abandonment of cause of action. It held that
petitioner ratified Chuas act of selling the lot to Uy by acknowledging that the latter is now the
owner of the lot in her letter dated December 19, 1995 offering to repurchase the same and to
pay the incidental expenses of the sale. The letter reads
Mr. Willie Uy
Quezon City
Philippines
Dear Mr. Uy,
I offer to buy back the property at 1661 Evangelista St., Bangkal, Makati City, M.M.
which once belonged to me and my family at thirteen million (P13,000,000.00) pesos
and I will pay on or before January 22, 1996.
I agree to shoulder all expenses after I buy the said property like the Capital Gains Tax
and others.
My request is to include in the Deed of Sale all necessary documents such as all
receipts etc., and the cancelled Title under my name for keep sake.
Thank you.
Very sincerely yours,
Ma. Angelina M. Fernando[8]
On October 25, 2001, the trial court modified its order dated July 24, 2001 by reinstating
the complaint insofar as the action for recovery of sum of money against Borres is concerned.
Thus
Consequently, the Order dated 24 July 2001 is therefore MODIFIED, as to the dismissal of
the complaint against the defendant Borres is concerned, and the complaint against said
defendant is reinstated. Defendant Borres is given a new fifteen (15) day period from receipt
of a copy of this Order, through counsel, within which to file her Answer to the complaint,
particularly as to plaintiffs cause of action stated in paragraphs 16 to 19 thereof.
The Order of dismissal of the complaint against Chua and Uy still stands.
SO ORDERED. (Emphasis supplied)[9]
On November 16, 2001, petitioner filed a notice of appeal[10] questioning the July 24, 2001
and October 25, 2001 orders of the trial court.
Chua filed a motion to dismiss[11] petitioners appeal for failure to file a record on appeal
within the required period. On August 19, 2002, the trial court granted the motion, thus
PREMISES CONSIDERED, the motion to dismiss filed by defendant Chua is GRANTED for
the reasons aforementioned. Necessarily, the motion for reconsideration filed by plaintiff
dated March 25, 2002 is DENIED for lack of merit. However, the motion for execution filed by
defendant Uy dated April 15, 2002 is not to be acted upon until finality of this Order. On the
other hand, the motion of defendant Borres to have the same scheduled for pre-trial
conference is GRANTED and the same is scheduled on September 16, 2002 at 8:30 a.m.
Notify the plaintiff and defendant Borres of this assignment immediately as well as their
respective counsel.
SO ORDERED.[12]
Petitioner filed a petition for certiorari with the Court of Appeals contending that her
complaint seeks to hold all respondents solidarily liable for the fraudulent conveyance of her
property. She claimed that the trial court cannot render several judgment and separate the
liability of Borres with that of her co-respondents. As such, appeal from the decision of the trial
court can be perfected by the filing of a notice of appeal within 15 days from receipt of the
questioned order without need of submitting a record on appeal.
On August 18, 2003, the Court of Appeals dismissed the petition holding that the trial court
validly rendered several judgment because the liability of Borres in petitioners third cause of
action is distinct from the liability of the other respondents. To perfect an appeal, the Court of
Appeals ruled that petitioner must file a record on appeal in addition to the notice of appeal
within 30 days from notice of the assailed order pursuant to Section 2(a) and 3, Rule 41 of the
Revised Rules of Civil Procedure. The dispositive portion of the decision, states
IN VIEW OF ALL THE FOREGOING, we find that the respondent judge did not commit grave
abuse of discretion in issuing the Order dated 19 August 2002. Accordingly, for lack or merit,
the instant petition is hereby DISMISSED and the assailed Order is hereby AFFIRMED.
SO ORDERED.[13]
On November 6, 2003, petitioners motion for reconsideration was denied. Hence, the
instant petition.
The issue for resolution is whether or not petitioner was able to perfect an appeal within
the required period.
Section 4, Rule 36 of the Revised Rules of Civil Procedure provides
SEC. 4. Several judgments.In an action against several defendants, the court may, when a
several judgment is proper, render judgment against one or more of them, leaving the action
to proceed against the others.
A several judgment is proper when the liability of each party is clearly separable and
distinct from that of his co-parties, such that the claims against each of them could have been
the subject of separate suits, and judgment for or against one of them will not necessarily affect
the other.[14]
In the instant case, the trial court correctly applied the foregoing provision because the
complaint was filed against several defendants with respect to whom, rendition of several
judgment is proper. Pertinent portion of petitioners complaint reads
As Third Cause of Action
17. Defendant BORRES did not comply with her undertaking to pay the real property taxes
on the aforementioned property for the year 1995 the same having been actually paid by
MONTE DE PIEDAD & SAVINGS BANK (later renamed KEPPEL MONTE BANK), the
administrator of the said property for plaintiff for which she received the sum of ONE
HUNDRED TWENTY THOUSAND PESOS (P120,000.00).
18. Furthermore, said defendant BORRES unlawfully deducted the sum of TWO HUNDRED
THOUSAND PESOS (P200,000.00) from the third loan obtained by plaintiff from defendant
CHUA.
19. Plaintiff is entitled to recover the aforesaid sums from defendant BORRES with interest.
Prayer
c. that thereafter, judgment be rendered in favor of plaintiff and against the defendants:
 on the first cause of action, declaring the Deed of Absolute Sale (Annex B) null
and void and of no effect whatsoever, and as a result thereof, directing defendant
RD [Register of Deeds] to cancel Transfer Certificate of Title No. 203326 (Annex C)
which was issued in the name of defendant CHUA pursuant thereto;
on the second cause of action, directing defendant RD similarly to cancel Transfer
Certificate of Title No. 203771 (Annex E) issued in the name of defendant Uy;
on the third cause of action, ordering defendant BORRES to return to plaintiff
the sums of P120,000.00 and P200,000.00 wrongfully obtained by her from
the latter, with interest at the legal rate from the filing of the instant case until
fully paid; and
on the fourth cause of action, ordering defendants, except defendant RD, jointly
and severally, to pay plaintiff:
moral damages in the amount of not less than P1,000,000.00
the sum of P500,000.00 as and for attorneys fees and expenses of litigation.
the sum of P100,000.00 as exemplary or corrective damages;
and ordering defendants, except defendant RD, jointly and severally, to pay
the costs of suit. (Emphasis, supplied)[15]
It is clear that the third cause of action for payment of the amounts of P200,000.00 and
P120,000.00 is directed only against Borres to the exclusion of Uy and Chua. There is no
dispute that Chua, through Borres, granted loans to petitioner secured by a mortgage on the
subject lot. The issues of whether or not Borres should reimburse the amount of P120,000.00
allegedly received from petitioner for payment real estate taxes of the lot, and the P200,000.00
purportedly deducted by Borres from petitioners third loan, are distinct from and independent
of the question of whether petitioner signed the deed of absolute sale through the
misrepresentation of respondents. Otherwise stated, even if the trial court debunk petitioners
claim that respondents (including Borres) connived in defrauding her to convey the property,
the action against Borres for sum of money will still subsist because it is based on issues which
has nothing to do with the issue of fraud, i.e., whether Borres received the amount of
P120,000.00 and whether she has the obligation to pay the real estate taxes of the mortgaged
lot. As to the amount of P200,000.00 the question is the validity of the deduction of said amount
from the third loan obtained by petitioner. The cause of action for collection of sum of money
against Borres can thus proceed independently of the dismissal of the action to hold her
solidarily liable with Chua and Uy for the alleged fraudulent conveyance of the lot (first, second
and fourth causes of action of the complaint). As admitted by petitioner in her motion for
reconsideration of the July 24, 2001 Order, the issue against Borres is one for misappropriation
of the amounts sought to be recovered.
In Roman Catholic Archbishop of Manila v. Court of Appeals,[16] which was cited by
petitioner, private respondent-lessees withhold rental payments to petitioner-lessor in order to
force the latter to make adjustments or correction on the area of the leased lot alleged to be
encroached upon by the fence erected on the adjacent lot. The issues presented before the
trial court were: (1) the existence of a right to compel correction or adjustment the alleged
encroached portion; (2) the validity of petitioner-lessors claim for non-payment of rentals; and
(3) the propriety of compelling petitioner-lessor to sell to the subject lot to respondent-lessees.
Separately resolving the issues in a motion to dismiss and judgment on the pleadings, the trial
court ruled that private respondents-lessees cannot compel petitioner-lessor to sell the lot and
that the former should pay rental arrearages to the latter. The same issues were raised before
the Court of Appeals, except for the existence of private respondents-lessees right to compel
adjustment of the alleged encroachment which was not yet resolved by the trial court. The
Court of Appeals held that the case is not one where multiple appeals can be taken, hence a
notice of appeal is sufficient and a record on appeal is not required to perfect an appeal, thus
The disputes in the case below for specific performance have arisen from the demand to
make adjustments on the property where the adjacent owner is alleged to have usurped a
part thereof, the exercise of the right of pre-emption and the payment of rental arrearages. A
ruling on the issue of encroachment will perforce be determinative of the issue of unpaid
rentals. These two points do not arise from two or more causes of action, but from the same
cause of action. Hence, this suit does not require multiple appeals. There is no ground for the
splitting of appeals in this case, even if it involves an Order granting (and denying) a motion
to dismiss and a Partial Judgment granting a motion for judgment on the pleadings. The
subject matter covered in the Order and in the Partial Judgment pertain to the same lessor-
lessee relationship, lease contract and parcel of land. Splitting appeals in the instant case
would, in effect, be violative of the rule against multiplicity of appeals.
The conclusion is irresistible that since a case has not been made out for multiple appeals, a
record on appeal is unnecessary to perfect the appeal.[17]
In the said cited case, the issue of encroachment and the area thereof, if there is any, will
determine the propriety of awarding back rentals as well as the basis of the computation of
rental arrearages on a per square meter basis. The trial court cannot validly render decision on
the amount of arrearages without resolving first the question on encroachment. Hence, no
several judgments can be rendered and no multiple appeals can be made in the said case
because the issues arose from a single cause of action, i.e., to compel correction or adjustment
of the encroached area. Accordingly, the Court affirmed the decision of the Court of Appeals,
holding among others, that the trial court erred in rendering partial judgment on the rental
arrearages because the averments and available evidence tendered a valid issue which could
not be resolved merely on the pleadings.
 The doctrine laid down in Roman Catholic Archbishop of Manila v. Court of Appeals, is
not applicable to the instant case. Petitioners cause of action against Borres for collection of
sum of money is clearly severable from her action against the other respondents. Thus,
rendition of several judgment is proper.
Sections 2(a), 3 and 13 of Rule 41 of the Revised Rules of Civil Procedure provides
SEC. 2. Modes of appeal.
(a) Ordinary appeal.The appeal to the Court of Appeals in cases decided by the Regional
Trial Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal
with the court which rendered the judgment or final order appealed from and serving a copy
thereof upon the adverse party. No record on appeal shall be required except in special
proceedings and other cases of multiple or separate appeals where the law or these
Rules so require. In such cases, the record on appeal shall be filed and served in like
manner. (Emphasis, supplied)
SEC. 3. Period of ordinary appeal, appeal in habeas corpus 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. (Emphasis, supplied)
SEC. 13. Dismissal of appeal.Prior to the transmittal of the original record or the record on
appeal to the appellate court, the trial court may motu propio or on motion to dismiss the
appeal for having been taken out of time, or for non-payment of the docket and other lawful
fees within the reglementary period. (As amended by A.M. No. 00-2-10-SC, May 21, 2000).
The rationale for requiring the filing of a record on appeal in cases where several judgment
is rendered is to enable the appellate court to decide the appeal without the original record
which should remain with the court a quo pending disposal of the case with respect to the other
defendants.[18]
Under Section 2(a) in relation to Section 3, of Rule 41, petitioner is required to file a record
on appeal within thirty days from November 15, 2001, [19] her date of receipt of the October 25,
2001 order. Considering that no record on appeal was filed, the Court of Appeals correctly
sustained the order of the trial court dismissing her appeal for failure to perfect the same within
the reglementary period. A fundamental precept is that the reglementary periods under the
Rules are to be strictly observed for being considered indispensable interdictions against
needless delays and an orderly discharge of judicial business. The strict compliance with such
periods has more than once been held to be imperative, particularly and most significantly in
respect to the perfection of appeals. Upon expiration of the period without an appeal having
been perfected, the assailed order or decision becomes final and executory and the court loses
all jurisdiction over the case.[20]
While it is true that litigation is not a game of technicalities, it is equally true that every
case must be prosecuted in accordance with the prescribed procedure to insure an orderly and
speedy administration of justice.[21] In instances where we applied a liberal interpretation of the
rules on filing a record on appeal, the parties although late, filed the required record on
appeal.[22] Such, however, is not the case here because petitioner adamantly refused to file the
required record on appeal.
The right to appeal is not a natural right or a part of due process. It is merely a
statutory privilege, and may be exercised only in the manner and in accordance with the
provisions of law. The party who seeks to avail of the same must comply with the requirements
of the rules. Failing to do so, the right to appeal is lost.[23]
Finally, even if we brush aside the procedural flaws in the instant case, the appeal is still
dismissible because petitioners conduct is inconsistent with her claim of fraud. Instead of
impugning the validity of the sale of the lot to Chua, petitioner accepted the latters offer to resell
the property in the amount of P10 Million. After learning that Chua sold the same lot to Uy, she
again offered the buy the lot for P13 Million and to shoulder the payment of all incidental
expenses, thus, confirming that Uy has a valid title over the property. What is more, petitioner
filed a criminal complaint for estafa with the Pasay City Prosecutors Office against respondents
only on October 6, 1998,[24] or almost 3 years from the time she learned of the alleged
fraudulent transfers of her property. In dismissing the complaint, the City Prosecutor found
petitioner to be intelligent to understand the import and consequences of signing the deed of
sale and thus rejected her claim that she was defrauded by respondents. He also gave no
credence to her contention that Borres refused to release the 3 rd loan unless she sign the deed
of sale because said deed was in fact executed on October 24, 1995, a much later date than
the release of the 3rd loan on June 29, 1995.[25]
WHEREFORE, in view of all the foregoing, the petition is DENIED. The August 18, 2003
Decision and the November 6, 2003 Resolution of the Court of Appeals in CA-G.R. No. SP No.
72787, which sustained the August 19, 2002 order of the Regional Trial Court, of Makati Branch
145 dismissing the appeal of petitioner in Civil Case No. 00-1249 are AFFIRMED.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-32644 October 4, 1930
CU UNJIENG E HIJOS, plaintiff-appelle,
vs.
THE MABALACAT SUGAR CO., ET AL., defendants.
THE MABALACAT SUGAR CO., appellant.
Romeo Mercado for appellant.
Araneta and Zaragoza for plaintiff-appellee.
Duran and Lim for defendant-appellee Siuliong and Co.
STREET, J.:
This action was instituted in the Court of First Instance of Pampanga by Cu Unjieng e Hijos,
for the purpose of recovering from the Mabalacat Sugar Company an indebtedness
amounting to more than P163,00, with interest, and to foreclose a mortgage given by the
debtor to secure the same, as well as to recover stipulated attorney's fee and the sum of
P1,206, paid by the plaintiff for insurance upon the mortgaged property, with incidental relief.
In the complaint Siuliong & Co., Inc., was joined as defendant, as a surety of the Mabalacat
Sugar Company, and as having a third mortgage on the mortgaged property. The Philippine
National Bank was also joined by reason of its interest as second mortgagee of the land
covered by the mortgage to the plaintiff. After the cause had been brought to issue by the
answers of the several defendants, the cause was heard and judgment rendered, the
dispositive portion of the decision being as follows:
Por las consideraciones expuestas, el Juzgado condena a The Mabalacat Sugar
Company a pagar a la demandante la suma de P163,534.73, con sus intereses de
12 por ciento al ano, compuestos mensualmente desde el 1. de mayo de 1929.
Tambien se le condena a pagar a dicha demandante la suma de P2,412 por las
primas de seguros abonadas por esta, con sus intereses de 12 por ciento al ano,
compuestos tambien mensualmente desde el 15 de mayo de 1928, mas la de
P7,500 por honorarios de abogados y las costas del juicio. Y si esta deuda no se
pagare dentro del plazo de tres meses, se ejecutaran los bienes hipotecados de
acuerdo con la ley.
Si del producto de la venta hubiese algun remanente, este se destinara al pago del
credito del Banco Nacional, o sea de P32,704.69, con sus intereses de 9 por ciento
al ano desde el 7 de junio de 1929, sin perjuicio de la orden de ejecucion que
pudiera expedirse en el asundo No. 26435 del Juzgado de Primera Instancia de
Manila.
Se condena ademas a The Mabalacat Sugar Company al pago de la suma de
P3,205.78 reclamada por Siuliong & Co., con sus intereses de 9 por ciento al ano
desde el 29 de julio de 1926 hasta su completo pago, ordenandola que rinda cuentas
del azucar por ella producido y pague la comision correspondiente bajo la base de 5
por ciento de su valor, descontandose, desde luego, las cantidades ya pagadas.
Se absuelve de la demanda de Cu Unjieng e Hijos a Siuliong & Co., Inc.1awph!l.net
From this judgment the defendant, the Mabalacat Sugar Company, appealed.
The first point assigned as error has relation to the question whether the action was
prematurely stated. In this connection we note that the mortgage executed by the Mabalacat
Sugar Company contains, in paragraph 5, a provision to the effect that non-compliance on
the part of the mortgage debtor with any of the obligations assumed in virtue of this contract
will cause the entire debt to become due and give occasion for the foreclosure of the
mortgage. The debtor party failed to comply with the obligation, imposed upon it in the
mortgage, to pay the mortgage debt in the stipulated installments at the time specified in the
contract. It results that the creditor was justified in treating the entire mortgage debt as having
been accelerated by such failure of the debtor in paying the installments.
It appears, however, that on or about October 20, 1928, the mortgage creditor, Cu Unjieng e
Hijos, agreed to extend the time for payment of the mortgage indebtedness until June 30,
1929, with certain interim payments to be made upon specified dates prior to the
contemplated final liquidation of the whole indebtedness. But the debtor party failed to make
the interim payments due on February 25, 1929, March 25, 1929, and April 25, 1929, and
failed altogether to pay the balance due, according to the terms of this extension, on June 30,
1929. Notwithstanding the failure of the debtor to comply with the terms of this extension, it is
insisted for the appellant that this agreement for the extension of the time of payment had the
effect of abrogating the stipulation of the original contract with respect to the acceleration of
the maturity of the debt by non-compliance with the terms of the mortgage. As the trial court
pointed out, this contention is untenable. The agreement to extend the time of payment was
voluntary and without consideration so far as the creditor is concerned; and the failure of the
debtor to comply with the terms of the extension justified the creditor in treating it as of no
effect. The first error is therefore without merit.
The second error is directed to the propriety of the interest charges made by the plaintiff in
estimating the amount of the indebtedness. In this connection we note that, under the second
clause of the mortgage, interest should be calculated upon the indebtedness at the rate of 12
per cent per annum. In the same clause, but in a separate paragraph, there is another
provision with respect to the payment of interest expressed in Spanish in the following words:
Los intereses seran pagados mensualmente a fin de cada mes, computados
teniendo en cuenta el capital del prestamo aun no pagado.
Translated into English this provision reads substantially as follows: "Interest, to be computed
upon the still unpaid capital of the loan, shall be paid monthly, at the end of each month."
It is well settled that, under article 1109 of the Civil Code, as well as under section 5 of the
Usury Law (Act No. 2655), the parties may stipulate that interest shall be compounded; and
rests for the computation of compound interest can certainly be made monthly, as well as
quarterly, semiannually, or annually. But in the absence of express stipulation for the
accumulation of compound interest, no interest can be collected upon interest until the debt is
judicially claimed, and then the rate at which interest upon accrued interest must be
computed is fixed at 6 per cent per annum.
In the present case, however, the language which we have quoted above does not justify the
charging of interest upon interest, so far as interest on the capital is concerned. The provision
quoted merely requires the debtor to pay interest monthly at the end of each month, such
interest to be computed upon the capital of the loan not already paid. Clearly this provision
does not justify the charging of compound interest upon the interest accruing upon the capital
monthly. It is true that in subsections (a), (b) and (c) of article IV of the mortgage, it is
stipulated that the interest can be thus computed upon sums which the creditor would have to
pay out (a) to maintain insurance upon the mortgaged property, (b) to pay the land tax upon
the same property, and (c) upon disbursements that might be made by the mortgagee to
maintain the property in good condition. But the chief thing is that interest cannot be thus
accumulated on unpaid interest accruing upon the capital of the debt.
The trial court was of the opinion that interest could be so charged, because of the Exhibit 1
of the Mabalacat Sugar Company, which the court considered as an interpretation by the
parties to the contract and a recognition by the debtor of the propriety of compounding the
interest earned by the capital. But the exhibit referred to is merely a receipt showing that the
sum of P256.28 was, on March 19, 1928, paid by the debtor to the plaintiff as interest upon
interest. But where interest is improperly charged, at an unlawful rate, the mere voluntary
payment of it to the creditor by the debtor is not binding. Such payment, in the case before
us, was usurious, being in excess of 12 per cent which is allowed to be charged, under
section 2 of the Usury Law, when a debt is secured by mortgage upon real property. The
Exhibit 1 therefore adds no support to the contention of the plaintiff that interest upon interest
can be accumulated in the manner adopter by the creditor in this case. The point here ruled
is in exact conformity with the decision of this court in Bachrach Garage and Taxicab
Co. vs. Golingco (39 Phil., 192), where this court held that interest cannot be allowed in the
absence of stipulation, or in default thereof, except when the debt is judicially claimed; and
when the debt is judicially claimed, the interest upon the interest can only be computed at the
rate of 6 per cent per annum.
It results that the appellant's second assignment of error is well taken, and the compound
interest must be eliminated from the judgment. With respect to the amount improperly
charged, we accept the estimate submitted by the president and manager of the Mabalacat
Sugar Company, who says that the amount improperly included in the computation made by
the plaintiff's bookkeeper is P879.84, in addition to the amount of P256.28 covered by Exhibit
1 of the Mabalacat Sugar Company. But the plaintiff creditor had the right to charge interest,
in the manner adopted by it, upon insurance premiums which it had paid out; and if any
discrepancy of importance is discoverable by the plaintiff in the result here reached, it will be
at liberty to submit a revised computation in this court, upon motion for reconsideration,
wherein interest shall be computed in accordance with this opinion, that is to say, that no
accumulation of interest will be permitted at monthly intervals, as regards the capital of the
debt, but such unpaid interest shall draw interest at the rate of 6 per cent from the date of the
institution of the action.
In the third assignment of error the appellant complains, as excessive, of the attorney's fees
allowed by the court in accordance with stipulation in the mortgage. The allowance made on
the principal debt was around 4 per cent, and about the same upon the fee allowed to the
bank. Under the circumstances we think the debtor has no just cause for complaint upon this
score.
The fourth assignment of error complains of the failure of the trial court to permit an
amendment to be filed by the debtor to its answer, the application therefore having been
made on the day when the cause had been set for trial, with notice that the period was non-
extendible. The point was a matter in the discretion of the court, and no abuse of discretion is
shown.
From what has been stated, it follows that the appealed judgment must be modified by
deducting the sum of P1,136.12 from the principal debt, so that the amount of said
indebtedness shall be P162,398.61, with interest at 12 per cent per annum, from May 1,
1929. In other respects the judgment will be affirmed, and it is so ordered, with cost against
the appellant.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-21183 August 31, 1923
THE GOVERNMENT OF THE PHILIPPINE ISLANDS ex rel.,
THE DIRECTOR OF LANDS, applicant,
vs.
JESUS SANZ, ET AL., objectors.
GABINO BARRETO PO EJAP, objector-appellee.
THE MUNICIPALITY OF TACLOBAN, objector-appellant.
Deputy Provincial Fiscal Bayona for appellant.
Ruperto Kapunan for the appellee Barretto Po Ejap.
JOHNSON, J.:
The appellee, Gabino Barretto Po Ejap, presented a motion to dismiss the appeal of the
municipality of Tacloban. The action was commenced by the Director of Lands in cadastral
survey No. 3, G. L. R. O. No. 153. The motion is based upon the ground that the bill of
exceptions was not presented within a period of thirty days from the date of the notice of the
decision. It is alleged in the motion to dismiss that the lower court rendered its decision on the
30th day of January, 1923; that the attorney for the municipality of Tacloban received notice
of said decision on the second day of February, 1923, and that the motion for a new trial was
presented on the 6th day of February, 1923.
The motion to dismiss further alleges that the motion presented in the lower court for a new
trial did not state "generally the nature and grounds of the motion and when and where it
would be heard," and that said motion did not have the effect of extending the time with in
which the bill of exceptions should have been presented, and cites in support of that
allegation the case of Manakil and Tison vs. Revilla and Tuaño (42 Phil., 81).
In reply to the motion of the appellee, the attorney for the appellant alleges the final decision
by the lower court was not rendered until the 2d day of June, 1923; that he had thirty days
from notice of that decision within which to present his bill of exceptions, and that the bill of
exceptions was presented within thirty days from notice of said decision.
An examination of the bill of exceptions shows that the same was presented, in the Court of
First Instance of the Province of Leyte, on the 20th day of June, 1923. It will be seen,
therefore, that if the allegation of the appellant is correct, that the decision of the lower court
was not rendered until the 2nd day of June, 1923, that his bill of exceptions was presented
within thirty days required for presentation of bills of exceptions in land registration cases.
An examination of the record, in relation with the motion to dismiss and the answer thereto,
shows the following facts:
(1) That after the close of the trial of the cause on the 12th day of September, 1922,
the Honorable Eulalio E. Causing, judge, rendered what is generally known as a "sin
perjuicio" decision on the 30th day of January, 1923, which decision was a mere
pronouncement of his judgment, without stating any of the facts in support of his
conclusion;
(2) That notice of said decision (30th day of January, 1923) was sent and received by
the attorney for the municipality of Tacloban, the appellant herein; that the attorney
for the appellant (municipality of Tacloban) on the 6th day of February, 1923,
presented a motion for a new trial, together with an exception to the decision of the
30th day of January, 1923, and that a copy of said decision was served personally
upon the attorney for the defendant, Gabino Barretto Po Ejap on the 5th day of
February, 1923;
(3) That on the 2nd day of June, 1923, the attorney for Gabino Barretto Po Ejap
presented a motion praying that so-called motion of the appellant for a new trial
should be disregarded, for the reason that it had not complied with the rules of the
Court of First Instance, and that the decision of the 30th day of January, 1923, be
declared final and cited in support of his motion the case of Manakil and Tison vs.
Revilla and Tuaño (42 Phil., 81). The judge denied the motion for a new trial upon the
ground "that it was unfounded and had not been presented in accordance with the
rules of the court."
(4) That on the same day (2nd day of June, 1923) the Judge denied the motion
presented by the attorney for the appellee, Gabino Barretto Po Ejap, to dismiss the
motion of the appellant for the reason "that he had not presented any objections
thereto with reference to its sufficiency and had renounced his right to be notified of
said motion;"
(5) That on the same day 2nd day of June, 1923), the trial judge prepared and filed
with the clerk his decision amplifying his decision theretofore rendered on the 30th
day of January, 1923, in which he sets out in full all of the facts upon which he relied
 to justify the conclusion announced in his "sin prejuicio" decision of the 30th day of
January, 1923;
(6) That on the 8th day of June, 1923, the attorney for the municipality of Tacloban
presented an exception to the decision of the 2d day of June, 1923, and on the 12th
day of June, 1923, he gave notice of his intention to present a bill of exceptions. On
the 15th day of June, 1923, he presented a motion for a new trial upon the ground
that the decision of the lower court was "contrary to the law and the evidence
adduced during the trial of the cause," which motion for a new trial was denied by the
court on the 19th day of June, 1923. On the 20th day of June, 1923, the attorney for
the appellant excepted to the order denying his motion for a new trial and gave notice
of his intention to present a bill of exceptions;
undoubtedly, in view of what it has done heretofore, have returned the record to the lower
court, requiring it to comply with the mandatory provisions of said section 133. (Braga vs.
Millora, 3 Phil., 458.) That being true, did not the appellant have a right to wait until the lower
court should render a decision in accordance with the requirements of the law?
In view of the decision of this court in the case of Braga vs. Millora, supra, and many other
published decisions, in which the doctrine there announced has been followed, we are of the
opinion, and so declare, that the appellant, even though he attempted to perfect an appeal
against the "sin perjuicio" decision, had a perfect right to wait until the final decision was filed,
complying with said section 133, and then to perfect his appeal, thereby avoiding a possible
delay of having the record returned to the lower court with directions to prepare and file a
decision in accordance with the provisions of said section.

(7) That on the 20th day of June, 1923, the bill of exceptions was presented in the If we are correct in that conclusion, then the bill of exceptions in the present case was
Court of First Instance of the Province of Leyte. presented within the thirty days required by law, and the motion to dismiss the appeal should
be, and is hereby, denied, without any findings as to costs.
Granting, for the purposes of the argument, (a) that the "sin perjuicio" decision of January 30,
1923, was a final decision; (b) that the motion presented by the appellant on the 6th day of The practice of the lower court in pronouncing "sin perjuicio" decisions and then later, after
February, 1923, complied with the rules of the Court of First Instance; (c) that the appellee the expiration of many months, complying with section 133, is a practice which should not be
had due notice thereof, and (d) that said motion was not acted upon until the 2d day of June, followed and cannot be looked upon with favor. So ordered.
1923, then, and under those conditions, the bill of exceptions which was presented on the
20th day of June, 1923, was presented within thirty days, eliminating the time during which Araullo, C.J., Street, Malcolm, Avanceña, Villamor and Johns, JJ., concur.
the court was considering said motion (from the 6th day of February, 1923 to the 2nd day of
June, 1923). (Layda vs. Legazpi 39 Phil., 83; Roman Catholic Bishop of Tuguegarao vs.
Director of Lands, 34 Phil., 623; Estate of Cordoba, and Zarate vs. Alabado, 34 Phil., 920;
Bermudez vs. Director of Lands, 36 Phil., 774; Director of Lands vs. Municipality of Dingras,
40 Phil., 242; Director of Lands vs. Maurera and Tiongson, 37 Phil., 410; Santiago vs. Manuel
and Tumale, 39 Phil., 869; Government of the Philippine Islands vs. Abural, 39 Phil., 996.)

The purpose of the law and the rules requiring that a bill of exceptions shall be presented
within a definitely fixed period, is to definitely and finally fix the time when a decision is final
so that it may be executed and the litigation terminated. Without some fixed way of
determining when a decision is final, the parties litigant could never know they could enforce
their rights under the judgment or when the litigation is, in fact, terminated.

But was the "sin perjuicio" decision of January 30, 1923, a final decision? Suppose the
defeated party had perfected his appeal and presented his bill of exceptions, would this court
have considered the appeal, in view of the provisions of section 133 of Act No. 190? A
reading of the "sin perjuicio" decision shows that it was nothing more or less than the
conclusion of the lower court with reference to the rights of the parties. It did not contain a
statement of the facts which were essential to a clear understanding of the issues presented
by the respective parties as to the facts involved. Had the appeal come to this court it would,
 [A.M. No. RTJ-96-1338. September 5, 1997]
ENGINEER FERNANDO S. DIZON, complainant, vs. JUDGE LILIA C. LOPEZ, Regional
Trial Court, Branch 109, Pasay City, respondent.
DECISION
MENDOZA, J.:
This is a complaint charging Judge Lilia C. Lopez of the Regional Trial Court, Branch 109,
Pasay City, with violation of the Constitution, serious misconduct, inefficiency, and falsification
in connection with her decision in Criminal Case No. 91-0716 entitled People of the
Philippines v. Engineer Fernando S. Dizon.
It appears that on April 22, 1993, judgment was rendered, convicting complainant of
falsification of private document. The promulgation of the judgment consisted of reading the
dispositive portion of the decision sentencing him to imprisonment, without serving a copy of
the decision on him. The accused and his counsel were told to return in a few days for their
copy of the decision, but although petitioner and his father by turns went to the court to obtain
a copy of the decision they were not able to do so. To protect his right, complainant filed a
partial motion for reconsideration on May 5, 1993, expressly reserving his right to submit a
more elaborate one upon receipt of the decision. The hearing of the motion for reconsideration
was scheduled on May 12, 1993, but the case was not called as complainants counsel was
told that the decision had not yet been finished. On November 29, 1994, complainant filed an
Omnibus Motion to Annul Promulgation of Sentence and to Dismiss the case. On December
16, 1994, the date set for hearing the motion, complainant was served a copy of the decision,
dated April 22, 1993, the dispositive portion of which states:
In view of all the foregoing, the Court finds the accused Fernando Dizon guilty beyond
reasonable doubt of the crime of Falsification of Private Document as defined and penalized
under Art. 172, par. 2 in relation to Art. 171 par. 2 and 4 thereof and hereby sentences him to
imprisonment of Two (2) Years, Four (4) Months and One (1) Day to Six (6) Years and a fine
of P5,000.00.
Complainant alleges that the failure of respondent judge to furnish him a copy of the
decision until almost one year and eight months after the promulgation of its dispositive portion
on April 22, 1993 constitutes a violation of Art. VIII, 14 of the Constitution which prohibits courts
from rendering decisions without expressing therein clearly and distinctly the facts and law on
which they are based and 15 of the same Art. VIII, which provides that in all cases lower courts
must render their decisions within three months from the date of their submission. He alleges
further that he was denied the right to a speedy trial in violation of Art. III, 14(2) of the
Constitution and that Judge Lopez falsified her decision by antedating it and including therein,
as additional penalty, a fine of P5,000.00.
On December 26, 1994, complainant filed another motion for reconsideration after
receiving a copy of the full decision of the court. On January 3, 1995, he moved to disqualify
respondent from hearing the motions for reconsideration which he had filed. Respondent
judge responded by voluntarily inhibiting herself from further consideration of the case and
ordered it forwarded to the Office of the Clerk of Court for re-raffle. The case was eventually
assigned to Judge Manuel F. Dumatol of Branch 113 of the Pasay City RTC.
Judge Lopez claims that on April 22, 1993, when the judgment was promulgated with the
reading of the dispositive portion, her decision was already prepared, although to prevent
leakage in the process of preparing it, she withheld its dispositive portion until the day of its
promulgation. Respondent judge states that after the dispositive portion had been read to
complainant, respondent gave it to Ma. Cleotilde Paulo (Social Worker II, presently OIC of
Branch 109) for typing and incorporation into the text of the decision. The court found
complainant guilty beyond reasonable doubt of falsification of private document under Art. 172,
par. 2 of the Revised Penal Code. Respondent states that the delay in furnishing complainant
with a copy of the decision was unintentional.
Respondent judge referred to difficulties she had in preparing her decision and to a series
of personal problems which contributed to this delay in the release of her decision, to wit: she
has only two (2) stenographers to attend to daily trials in her court, making it necessary for her
to make use of the Social Worker assigned to her to type her decisions. During the period
January to December 1993 she had to dispose of 285 cases, apart from the fact that there was
an unusually big number of criminal, civil, and land registration cases as well as special
proceedings filed in her court which required the holding of hearings in the mornings and in the
afternoons. During the same period, she went through some personal tragedies. She lost her
niece, Gloria Lopez Roque, whom she had raised from childhood, due to a hospital
accident. This was followed by the death on March 1, 1992 of her mother, Margarita Lopez,
who had been under respondents care for the past eight years after suffering a stroke. On
September 17, 1993, respondents father died of diabetes, renal failure, pneumonia, and
cardiac arrest.Respondent was the one who single-handedly brought them in and out of the
hospital because all her able-bodied relatives are abroad. Respondent herself was found to be
suffering from diabetes and hypertension, necessitating her treatment and leave of absence
from September 27, 1994 to December 12, 1994, in addition to her other leaves of
absence. Aside from these, respondents family suffered financial reverses because of estafa
committed against them.
On February 19, 1996, Deputy Court Administrator Bernardo P. Abesamis submitted a
memorandum, finding the charge of violation of the Constitution to be without merit. He called
attention to the written decision of respondent judge, which, albeit delivered to complainant
late, nonetheless states the facts and law on which it is based. He likewise finds the charge of
serious misconduct and falsification to be without basis in view of the absence of
malice. However, he finds the charge of inefficiency to be well founded on the basis
of respondents failure to furnish complainant or his counsel a copy of the decision within a
reasonable time after its promulgation. Hence, the Deputy Court Administrator believes that
Judge Lopez should be given admonition for her negligence, but recommends that the other
charges against her for violation of the Constitution, serious misconduct, and falsification be
dismissed for lack of merit.
The Court finds that respondent violated Art. VIII, 15(1) of the Constitution which
provides:
All cases or matters filed after the effectivity of this Constitution must be decided or resolved
within twenty-four months from date of submission for the Supreme Court, and, unless
reduced by the Supreme Court, twelve months for all lower collegiate courts and three
months for all other lower courts.
Although respondent judge promulgated her decision within three months of the
submission of the case for decision, the fact is that only the dispositive portion was read at
such promulgation. She claims that on April 22, 1993 the text of her decision, containing her
findings and discussion of complainants liability, had already been prepared although it had to
be put in final form by incorporating the dispositive portion. However, the fact is that it took a
year and eight months more before this was done and a copy of the complete decision
furnished the complainant on December 16, 1994. Rule 120 of the Rules on Criminal Procedure
provides:
1. Judgment defined. - The term judgment as used in this Rule means the adjudication by the
court that the accused is guilty or is not guilty of the offense charged, and the imposition of
the proper penalty and civil liability provided for by law on the accused.
2. Form and contents of judgment. - The judgment must be written in the official language,
personally and directly prepared by the judge and signed by him and shall contain clearly and
distinctly a statement of the facts proved or admitted by the accused and the law upon which
the judgment is based.
6. Promulgation of judgment. - The judgment is promulgated by reading the same in the
presence of the accused and any judge of the court in which it was rendered. However, if the
conviction is for a light offense, the judgment may be pronounced in the presence of his
counsel or representative. When the judge is absent or outside of the province or city, the
judgment may be promulgated by the clerk of court.
It is clear that merely reading the dispositive portion of the decision to the accused is not
sufficient. It is the judgment that must be read to him, stating the facts and the law on which
such judgment is based. Since this was done only on December 16, 1994 when a copy of the
complete decision was served on complainant, it is obvious that the respondent failed to render
her decision within three months as required by Art. VIII, 15 of the Constitution.
If indeed all that had to be done after the dispositive portion had been read in open court
on April 22, 1993 was to incorporate it in the text of the decision allegedly then already
prepared, it is difficult to see why it took respondent judge one year and eight more months
before she was able to do so. Respondent claims that she was prevented from putting out her
decision by a series of personal and other problems which leads the Court to believe that when
she promulgated her sentence she had not finished the preparation of the entire decision. At
all events, she could have applied for extension of time to decide the case and put off the
promulgation of judgment until she had finished it.
What respondent did in this case was to render what is known as a sin perjuicio judgment,
which is a judgment without a statement of the facts in support of its conclusion to be later
supplemented by the final judgment.[1] That is why, in answer to complainants charge that the
dispositive portion of the judgment read to him did not impose a fine, respondent contends that
the addition of the fine of P5,000.00 was within her power to do even if no such fine had been
included in the oral sentence given on April 22, 1993. As respondent judge states, because the
decision was not complete it could be modified and cites in support of her contention the case
of Abay, Sr. v. Garcia.[2] Respondent only succeeds in showing that the judgment promulgated
on April 22, 1993 was a sin perjuicio judgment which was incomplete and needed a statement
of the facts and law upon which the judgment was based. As early as 1923, this Court already
expressed its disapproval of the practice of rendering sin perjuicio judgments, what with all the
uncertainties entailed because of the implied reservation that it is subject to modification when
the decision is finally rendered.[3] This Court has expressed approval of the practice of some
judges of withholding the dispositive portion from their opinions until the very last moment of
promulgation of their judgment in order to prevent leakage,[4] but that refers to
the preparation of their decision, not its promulgation. What must be promulgated must be the
complete decision. There would be no more reason to keep the dispositive portion a secret at
the stage of promulgation of judgment.
However, the Court finds the other charges against respondent to be without merit.
First, the claim that complainant was deprived of his right to a speedy trial by reason of
respondents failure to furnish him with a copy of the decision until after one year and eight
months is without basis. It appears that despite the destruction of records by fire in the Pasay
City Hall on January 18, 1992 the parties were required to submit simultaneously their
memoranda on August 18, 1992. The delay, if any, was not such vexatious, capricious, and
oppressive delay[5] as to justify finding a denial of the right to a speedy trial. The fact is that the
reading of the sentence on April 22, 1993, albeit not in compliance with the requirement for
promulgation of judgments, nonetheless put an end to trial.
Second, the delay in furnishing complainant a copy of the complete decision did not
prejudice his right to appeal or file a motion for reconsideration. It is true that an accused must
be given a copy of the decision in order to apprise him of the basis of such decision so that he
can intelligently prepare his appeal or motion for reconsideration. However, in accordance with
the ruling in Director of Lands v. Sanz,[6] complainants period to appeal or file a motion for
reconsideration did not begin to run until after he actually received a copy of the judgment on
December 16, 1994. He therefore suffered no prejudice. If at all, complainant suffered from the
anxiety to refute a conviction which he could not do for lack of a statement of the basis of the
conviction.
Nonetheless, certain factors mitigate respondent judges culpability. Except for this
incident, respondents record of public service as legal officer and agent of the National Bureau
of Investigation, as State Prosecutor, and later Senior State Prosecutor, of the Department of
Justice for 17 years and as Regional Trial Judge for more than 13 years now is unmarred by
malfeasance, misfeasance or wrongdoing. This is the first time she is required to answer an
administrative complaint against her. Her failure to decide the case of complainant was brought
about by factors not within her control, to wit, lack of stenographers and unusually big number
of cases; and her personal loss as a result of the death of her niece and both her parents,
financial reverses of the family, and poor health as a result of diabetes and hypertension.
In Mangulabnan v. Tecson,[7] a joint decision in two criminal cases was rendered by
respondent judge on February 24, 1978, six months and eight days from submission of the
case, and a copy was delivered to complainant on September 28, 1979, over 19 months after
rendition of the decision. Two complaints were filed for violation of the constitutional provision
requiring submitted cases to be decided by lower courts within three months and for violation
of complainants right to a speedy trial. Respondent judge blamed the delay in deciding the
cases on the fact that his clerks had misfiled the records. As to the delay in furnishing
complainant with a copy of the decision, the judge attributed this to the mistake of his clerk who
did not think complainant was entitled to receive the same. The judge was reprimanded. The
reason for the delay in that case was even less excusable than the difficulties experienced by
respondent Judge Lopez, i.e., deaths in respondents family, her own poor state of health,
financial reverses suffered by her family, and the volume of work done within the period in
question, which somewhat mitigate her liability. The Court believes that a similar penalty would
be appropriate.
In view of the foregoing, respondent is hereby REPRIMANDED with WARNING that
repetition of the same acts complained of will be dealt with more severely.
SO ORDERED.
 EN BANC
G.R. No. L-19512 November 21, 1923
FAUSTINO LICHAUCO, as guardian ad litem of the minors Luis and Julita Lichauco,
and of the incapacitated Zacarias Lichauco,Plaintiff-Appellant, vs. TAN PHO, TAN U
( alias Tan O), CHUA GOC PIN, CHUA SON, CHUA MAR, CHUA HO, CHUA PO, CHUA
KA TI, and GALO LICHAUCO, Defendants-Appellees.
-------------------------
G.R. No. L-19511 November 21, 1923
TAN PHO, petitioner-appellee, vs. AMPARO NABLE JOSE, opponent-appellant.
-------------------------
G.R. No. L-19595 November 21, 1923
TAN PHO, petitioner-appellee, vs. AMPARO NABLE JOSE, opponent-appellant.
Juan Sumulong and Gibbs, McDonough & Johnson for appellant. (G. R. No. 19511.)
Fisher, DeWitt, Perkins and Brady for appellees.
Gibbs & McDonough and M. H. de Joya for appellant. (G. R. No. 19512.)
Fisher, DeWitt, Perkins and Brady for appellees.
Juan Sumulong and Gibbs and McDonough for appellant. (G. R. No. 19595.)
Fisher, DeWitt, Perkins and Brady for appellee.
ROMUALDEZ, J.:
These three cases were jointly submitted by both parties in their oral argument by reason of
their relation with one another, as will be seen further
on.chanroblesvirtualawlibrary chanrobles virtual law library
For the same reason they were studied and voted on jointly by this court, and are now
decided in this opinion.chanroblesvirtualawlibrary chanrobles virtual law library
Case G. R. No. 19512 deals with the nullity of a contract of lease of land, and the consequent
rendition of accounts, executed by Galo Lichauco in his own behalf, by Geronimo Jose as
guardian of the spendthrift Zacarias Lichauco, and by Amparo N. Jose as guardian of the
minors Luis and Julita Lichauco, all as lessors, and by Tan Pho as lessee. It was instituted by
Faustino Lichauco, guardian ad litem both of the minors Luis and Julita Lichauco, and of the
incapacitated Zacarias Lichauco, against the lessee Tan Pho, his principal Tan U ( alias Tan
O), the children of the latter, Chua Goc Pin, Chua Son, Chua Mar, Chua Ho, Chua Po, Chua
Ka Ti and against Galo Lichauco one of the lessors. In said case, G. R. No. 19512, the Court
of First Instance of Manila rendered judgment finding, among other things, that said contract
of lease is valid. From this judgment plaintiff appealed.chanroblesvirtualawlibrary chanrobles
virtual law library
Case G. R. No. 19511 was initiated in the original proceedings of the guardianship of the
incapacitated Zacarias Lichauco, wherein Tan Pho, the aforementioned lessee petitioned the
court to issue a nunc pro tunc order as of the month of December, 1913, approving the
contract of lease which is the bone of contention in case G. R. No. 19512. Amparo N. Jose,
as guardian of Zacarias Lichauco, objected to said petition and moved that the case be
considered together with the one of the nullity of the lease (Record on appeal, G. R. No.
19511, pp. 25-42). This petition for anunc pro tunc order was impliedly granted in the same
decision rendered in the case which now is G. R. No. 19512. And Amparo N. Jose appealed
to this court from that judgment.chanroblesvirtualawlibrary chanrobles virtual law library
Case G. R. No. 19595 was similarly initiated in the original proceedings of the guardianship of
the minors Luis and Julita Lichauco, the said Tan Pho having presented in those proceedings
a petition for a nunc pro tuncorder as of December 1, 1913, approving the same contract of
lease, the annulment of which is sought in case G. R. No. 19512. Amparo N. Jose, as
guardian of the minors Luis and Julita, objected to said petition and likewise moved for its
consideration with the one on the annullment of the lease (Record on appeal, G. R. No.
19595, pp. 19 to 30). The case was also impliedly decided favorably in the judgment referred
to rendered in the case which is now G. R. No. 19512, for which reason Amparo N. Jose also
appealed from said judgment.chanroblesvirtualawlibrary chanrobles virtual law library
The many errors assigned by the appellants in these three cases raise two fundamental
questions, to wit: (a) The validity of the contract of lease and (b) whether or not the
registration of said lease in the registry is final and conclusive between the
parties.chanroblesvirtualawlibrary chanrobles virtual law library
We shall examine these questions separately.chanroblesvirtualawlibrary chanrobles virtual
law library
( a) THE VALIDITY OF THE CONTRACT OF LEASE chanrobles virtual law library
This contract is assailed as being void for three reasons: First, because the guardians of the
incapacitated person and of the minors could not execute it second, because it was not, and
could not have been, authorized by the court; and third, because Tan Pho had no proper to
enter into it.chanroblesvirtualawlibrary chanrobles virtual law library
Power of the guardians. - The land which is the subject matter of this contract, located in
Manila, contains about 1,812 square meters (pp. 49-51, Bill of Exceptions, G. R. No. 19512).
At the time the contract of case was executed, the owners of this and were: Galo Lichauco, of
one-thirdpro indiviso; Zacarias Lichauco, at that time incapacitated, of another one-third pro
indiviso; and Luis Lichauco then a minor and Julita Lichauco also at that time and still a minor
coowners of the remaining one-third part pro indiviso.chanroblesvirtualawlibrary chanrobles
virtual law library
On October 14, 1913, Galo Lichauco and the respective guardians of the incapacitated
person, and the said minors, executed a deed of lease of this land in favor of Tan Pho, in
which the conditions relevant to the questions herein raised are given in the following
clauses:
First: The lessors transfer and lease to the lessee a piece of land for the erection of buildings,
belonging to the persons represented by the parties of the first part, located on Santo Cristo,
Comercio, and Estero de Binondo Streets, of the District of Tondo of the City of Manila, for
the erection thereon of a building of strong materials, for the period of twenty years, from the
date of the execution of this instrument, for the price or rent of one thousand five hundred
sixty pesos, Philippine currency, (P1,560) monthly, payable in advance and within the first ten
days of each respective month, without the necessity of making an express demand thereof,
and without the right to retain or delay it for any reason or pretext whatsoever; with the
understanding that this monthly rental of one thousand five hundred sixty pesos, Philippine
currency, shall begin to take effect upon March 1, 1914, the lessee being bound to pay as
rent for the land leased up to that date, the rent which he has hitherto been paying, or nine
hundred pesos, Philippine currency, (P900) monthly.chanroblesvirtualawlibrary chanrobles
virtual law library
Second: It is a special condition of this contract that the lessee shall erect or cause to be
erected upon said land a building of concrete and wood of the first and second groups of the
approximate value of fifty-two thousand pesos, Philippine currency, (P52,000) in accordance
with the plan and specifications presented and deposited in the Court of First Instance of this
city in proceeding No. 4923, the lessor' architector or person appointed therefor to have direct
supervision of the construction of said building, without any right on the part of the lessee to
object, under any circumstances, to the decisions of said architect or appointed person
whenever they relate to materials employed or the labor which may both be in accordance
with the approved plan and specifications.
xxx xxx x x xchanrobles virtual law library
Ninth: Upon the termination of the period of this lease, all the improvements or buildings
constructed on the leased land shall become the property of the owners of the land, without
the lessee being entitled to payment or compensation of any kind, either by reason of said
building or by the improvements on the and.
xxx xxx xxx
As the lease was for a period greater than six years, the appellants maintain that the
respective guardians of the incapacitated Zacarias Lichauco and the minors Luis and Julita
Lichauco could not, without special power, make such a contract, according to the prohibition
contained in article 1548 of the Civil Code, which reads:
No lease for a term of more than six years shall be made by the husband with respect to the
property of his wife, by the father with respect to that of his children, by the guardian with
respect to that of his ward, or by a manager in default of special power with respect to the
property entrusted to him for management.
And they allege that not only did said guardians lack the special power required by this legal
provision, but that no one could grant them such power on the date when the contract was
entered into (October 14, 1913), because such power could only come from the family
council (article 269, paragraph 5 of said Code) which had already been abolished by section
552 of the Code of Civil Procedure which went into effect on October 1, 1901; that our courts
lacked authority to grant such special power until Act No. 2640 was promulgated, which was
in 1916, years after the lease in question had been executed; that, while it is true that,
according to this court's holding in the case of Enriquez vs. A. S. Watson & Co. (22 Phil.,
623), the Courts of First Instance of the Philippines are empowered to authorize guardians to
execute, in the name of their wards, leases for more than six years, yet, such a decision of
this court is erroneous, because the Spanish jurisprudence upon which it is based, was
revoked by the Supreme Court of Spain.chanroblesvirtualawlibrary chanrobles virtual law
library
It is true that the guardians needed, and still need, special power to execute leases for more
than six years; it is also true that the family council that could grant such special power had
already been abolished when the present contract of lease was entered into. But it is not true
that at that time the Courts of First Instance of the Philippines lacked the power to grant
authorization to that effect. The doctrine laid down in the said case of Enriquez vs. A. S.
Watson & Co. must be respected in this jurisdiction. In said case two points were raised
before this court and decided, to wit: Whether the lease was valid, one of the lessors being a
minor, and whether the defendant therein or the intervener could, according to the contract,
demolish a wall upon which the building on the property
rested.chanroblesvirtualawlibrary chanrobles virtual law library
Of these two points, the first was decided by this court declaring that lease for twelve years
valid for two reasons: First, because the minor lessor, who owned one-eight of the leased
property, was represented when the lease was executed by his legal guardian with
authorization therefor from the court which approved the contract. In basing itself upon the
first reason, this court did so recognizing in the Courts of First Instance the power to
authorize and approve leases of this land, and hence the following is found in the syllabus:
The minor in the case at bar having been represented by his legally appointed guardian and
the action of the latter is signing the lease having been formally upon the minor.
This is the doctrine applicable to the present case, and no Spanish decision is cited therein to
support it, nor do the appellants in the instant cases invoke any decision of the Supreme
Court of Spain contrary to this ruling.chanroblesvirtualawlibrary chanrobles virtual law library
Where this court did invoke Spanish jurisprudence in its support is in connection with the
second reason for holding the lease in the case of Enriquez vs. A. S. Watson & Co. to be
valid, in holding that in cases of that nature "the interests of the majority govern the minor, the
latter having the right to appeal to the courts when the decision of the majority is gravely
prejudicial to him." And the latter doctrine is not in point in the cases now before us, inasmuch
as there is no question here between the rights of a majority and those of any minor of the
lessors the herein litigants.chanroblesvirtualawlibrary chanrobles virtual law library
Furthermore, in this connection, it may not be out of place to state, that Spanish
jurisprudence promulgated after the withdrawal of the Spanish sovereignty in the Philippines,
always worthy of consideration by our courts, is no longer binding.
Decisions of the courts of Spain rendered after 1898, construing spanish law applicable to
possessions ceded to the United States, although entitled to great consideration, do not
preclude the local court from reaching an independent judgment. (Cordova vs. Folgueras,
227 U. S., 375.)
There is no sufficient reason why we should diverge in any way from the ruling laid down in
the aforesaid case of Enriquez vs. A. S. Watson & Co., or for ignoring the important rule
of stare decisis, in this case without a strong reason
therefor.chanroblesvirtualawlibrary chanrobles virtual law library
Could the lease in question be, and was it actually, authorized by the court? This is the
second proposition into which we have condensed the various reasons adduced by the
appellants for attacking the validity of the lease in
question.chanroblesvirtualawlibrary chanrobles virtual law library
In deciding the preceding question, we have held that the lease in question could legally have
been authorized and approved by the court. We are now going to determine whether said
contract was in fact and in law, judicially approved.chanroblesvirtualawlibrary chanrobles
virtual law library
In the first place, the question raised by the parties touching the evidence which should be
admitted, presents itself for our consideration; that is, whether or not the parties must be held
down to the second amended stipulation of facts, or may the appellant avail themselves of
the additional evidence which comprises; A letter of Zacarias Lichauco, copied in the
amended answer and found on page which is the same Exhibit A attached to the nunc pro
tunc motion presented in the case No. 4928, now G. R. No. 19511; a sworn statement of
Honorable A. S. Crossfield, the Exhibit B attached to a similar motion presented in the case
No. 10812, now G. R. No. 19595, and other affidavits concerning the question of whether or
not the controverted lease was approved by the court.chanroblesvirtualawlibrary chanrobles
virtual law library
In our opinion this additional evidence contradicts none of the facts agreed upon by the
parties in the aforementioned stipulation of facts; but are only suppletory data which amplify
some of the stipulated facts. The trial court admitted it, and we find no error in said ruing.
Trial courts have the power, however, and a very wide discretion, to permit parties to
withdraw from written stipulations waiving a jury trial and submitting the case upon an agreed
statement of facts to the court, and such power is properly exercised where the application is
made before the court has decided the cause under the written submission, and the party
applying has discovered other pertinent facts since the submission was entered into, which
the other party declines to embrace in the agreed statement; and the fact that, by the
exercise of due diligence, the omitted facts might have been discovered before the
submission was entered into, does not deprive the court of the power to grant the application
to withdraw. (1 R. C. L., 779.)
After examining all the evidence presented, we find that Zacarias Lichauco, according to his
letter of July 7, 1913, on which date he was not yet subject to guardianship, showed his
acquiescence in a ease of the land in question under identical conditions, in so far as regards
its duration of twenty years, with those give in the contract here in question, and which was
executed more than three months after that date. This letter seems to indicate that what his
guardian later did, had already been consented to by him. But it is certain that it was not
Zacarias Lichauco who executed the contract, for he had already been declared
incapacitated for such a transaction, but his guardian, and the latter needed judicial
authorization to execute it. It cannot be said that in making the lease, his guardian did so by
such authorization from his ward. His guardian needed another more legitimate authorization
- a judicial one - to render the lease valid so far as its duration exceeded six years. At all
events, the question with regard to his sons, the minors Luis and Julita, would have
remained, for even if their guardian had been Zacarias Lichauco himself, he likewise should
have needed the court's approval just as much. That there was no written judicial order
approving the contract of lease in the records of the case, is a fact both proved and admitted
by the parties.chanroblesvirtualawlibrary chanrobles virtual law library
The question is whether such adjudicial approval was given even verbally, and if so, if such
fact constitutes a sufficient ground for a nunc pro
tuncorder.chanroblesvirtualawlibrary chanrobles virtual law library
The facts contained in the evidence upon the point of whether or not there was such a judicial
approval, are as follows: chanrobles virtual law library
After the contract of lease, which we are examining, had been executed on October 14, 1913,
Geronimo Jose, as guardian of Zacarias Lichauco, on the following day, October 15, 1913,
presented to the court in the civil case No. 4923, now G. R. No. 19511, a motion praying that
he be authorized to employ an attorney and to approved said contract of lease. With respect
to the petition to employ an attorney, it appears that it was only granted. But with regard to
the petition for approval of the contract of lease, no written order, either favorable or
unfavorable, was issued and there is nothing in any of the corresponding records to show, or
even to indicate that the court granted said petition.chanroblesvirtualawlibrary chanrobles
virtual law library
Honorable A. S. Crossfield, who was then presiding over the trial court, and tried these
guardianship cases, is no longer judge, and resigned years before this action for annullment
of the much debated contract of lease was instituted. And also to what he would have
declared and also Amparo N. Jose, the parties stipulated as follows:
It is further agreed that Mr. A. S. Crossfield formerly Judge of the Court of First Instance of
Manila, would testify if called as witness on behalf of the defendant, and if permitted so to
testify over the objection of the plaintiff as to its relevancy and competency, that to the best of
his recollection Amparo Nable Jose, the guardian of said minors, requested and obtained the
verbal permission of him, the said Crossfield, while setting as said Judge, to execute said
lease on behalf of said minors, and that this stipulation shall be accepted by the court in lieu
of such testimony; but plaintiff contends that such alleged verbal permission was not a judicial
act, is wholly inadmissible and incompetent to and the minors or their estate, the record of the
guardianship proceedings being the best and only competent evidence of any judicial
authorization conferred upon said guardian.chanroblesvirtualawlibrary chanrobles virtual law
library
It is further stipulated that the said Amparo Nable Jose, if called as a witness, and in the
event of the testimony of the said Crossfield being admitted as to the alleged verbal request
and permission to execute said lease, would positively deny that she ever requested or
obtained permission from the said Crossfield to execute said lease.
In his affidavit, the Honorable A. S. says:
I, A. S. Crossfield, after having been duly sworn, do depose and say: chanrobles virtual law
library
1. That I am a resident of the City of Manila, a practicing lawyer by profession, and that
during the entire year of 1913 I was a Judge of the Court of First Instance of the City of
Manila, duly commissioned and qualified, and as such judge had in my charge all probate
and guardianship matters arising within the City of
Manila.chanroblesvirtualawlibrary chanrobles virtual law library
2. That among the guardianship matters under my control as such judge in that year, was the
matter of the guardianship of the minors Luis and Julita Lichauco, case No. 10812, and
included in the property of the said minors was an undivided one-third in a parcel of land
situated in Calle Santo Cristo, Calle Comercio and the Estero Binondo in the City of Manila,
the remainder thereof being owned in equal undivided thirds by their father Zacarias
Lichauco, and one Galo Lichauco, the brother of said Zacarias Lichauco,
respectively.chanroblesvirtualawlibrary chanrobles virtual law library
3. The prior to June of 1913, said property had been leased to one Chua Piengco, and to his
estate after his death, at monthly rental of P900, the lease running from month to
month.chanroblesvirtualawlibrary chanrobles virtual law library
4. That in June of 1913, a fire destroyed a large part of the improvements placed upon said
by said Chua Piengco, and gave rise to the necessity of financing the reconstruction of the
building destroyed thereby.chanroblesvirtualawlibrary chanrobles virtual law library
5. That on or about June 25th, 1913, a propositions was communicated to the court by
Lichauco & Co, through Francisco Dominguez, whereby the said Lichauco & Company
undertook to lease said property at a monthly rental of P1,000 for a period of twenty years,
and to place improvements thereon at a cost of P40,000, said improvements to become the
property of the owners at the expiration of the period.chanroblesvirtualawlibrary chanrobles
virtual law library
6. That on or about July 3rd, 1913, the above named Zacarias Lichauco presented to the
court a proposition made by Tan Pho, as the administrator of the estate of Chua Piengco,
and in representation of the widow and heirs of the said Chua Piengco, whereby the latter
undertook to lease said property for twenty years at a monthly rental of P1,200, and to place
improvements thereon costing not less than P40,000, the title to which should pass to the
owners upon the expiration of the lease.chanroblesvirtualawlibrary chanrobles virtual law
library
7. That one of the coowners, Galo Lichauco, did not agree to either of these propositions, as
a result of which there were various negotiations in the course of which I required that the
said Tan Pho should submit plans and specifications of the building to be placed on the
leased. This was done, and I had the plans and specifications passed upon by an expert to
determine whether or not in reality the proposed building would cost the amount stipulated in
the lease, as finally approved, These negotiations among all the parties interested culminated
in the execution, in October, 1913, of two leases, one for the undivided third owned by the aid
Zacarias Lichauco, a copy of which, marked Exhibit B, is attached to the motion of the said
Tan Pho, presented in case No. 4923 on January 23rd, 1922, and one for the undivided two
thirds owned by the said Galo Lichauco, by their mother and guardian, the said Amparo
Nable Jose, so the said Tan Pho, as attorney in fact of the widow of the said Chua Piengco,
for twenty years, at a monthly rental of P1,560 said lessees undertaking to place
improvements said property at a cost of not less than P52,000, the title to which should pass
to the owners of the land upon the expiration of the
lease.chanroblesvirtualawlibrary chanrobles virtual law library
8. That all the interested parties having agreed to these eases, I as Judge of the Court of
First Instance, approved of the same, in the presence and with complete approval of all the
parties interested, and I ordered the clerk to prepare orders for entry in the record in the
above entitled, and in the record of the cause of the Guardianship of Zacarias Lichauco, case
No. 4923, approving of the said leases in all the parts thereof.
(SGD.) "A. S. CROSSFIELD" chanrobles virtual law library
But attorney F. Canillas, who at the time referred to in the above quoted document, was the
deputy clerk, in turn, says the following in his affidavit:
Felipe Canillas being first duly sworn deposes and says: chanrobles virtual law library
That he is an attorney-at-law practicing his profession and residing in the City of Manila; that
he was the assistant clerk of the Court of First Instance of Manila in charge of the Probate
Division of said court during the entire period from about the middle of the year 1910 until the
month of May, 1917, during a considerable portion of which time the Honorable A. S.
Crossfield presided over the said probate Division as Judge; that affiant has read the affidavit
of the said A. S. Crossfield of the 13th of February, 1922 presented by counsel for Tan Pho in
the above entitled proceedings and also in the guardianship of Zacarias Lichauco No. 4923 of
the Court of First Instance of Manila; that the said A. S. Crossfield presided over said Probate
Division during the year 1913 excepting the months of May and June to the best of affiant's
recollection, during which months the Honorable Charles S. Lobingier presided as Judge; that
during the period of affiant's incumbency there was a book known as a "libro de actas" kept in
said Probate Division, in which an official record was prepared by affiant and signed by the
presiding Judge at each session of the Court of all the orders and judgments of the said
Probate Division of said Court; that affiant has examined the said "libro de actas" for the year
1913 and that there is no entry therein of any authorization or approval of the leases
mentioned in the affidavit of the said A. S. Crossfield nor of the orders mentioned in leases;
that affiant remembers the pendency in said Probate Division of the above entitled
guardianship proceedings of the minors Luis and Julita Lichauco and of the guardianship
proceedings of Zacarias Lichauco, civil cause No. 4923 of the Probate Division of said Court
of First Instance of Manila, but the said A. S. Crossfield while presiding over said Probate
Division at no time ordered affiant to prepare orders for entry in the record in the above
entitled proceedings, nor in the record of the guardianship proceedings of the said Zacarias
Lichauco, case No. 4923, approving the said leases, nor did the said A. S. Crossfield give
affiant any orders or instructions whatever with reference to the approval of said lease; that if
any such instructions or orders had been given to affiant by the said judge he would
immediately have made a note thereon and prepared the
same.chanroblesvirtualawlibrary chanrobles virtual law library
That there were a number of seals of the Probate Division of said Court which were
accessible to attorneys and litigants and which could be used by them or by the Judge
himself without the necessity of applying therefor to affiant as assistant clerk in charge of said
Probate Division.chanroblesvirtualawlibrary chanrobles virtual law library
Manila, P. I., February 17th, 1922.
(Sgd.) F. CANILLAS chanrobles virtual law library
Subscribed and sworn to before me, this 7th day of February, 1922, affiant exhibiting cedula
No. F-10948 issued at the City of Manila, P. I., on the 13th day of January, 1921.
(Sgd.) CHAS A. MCDONOUGH
Notary Public chanrobles virtual law library
My commission expires December 31, 1922
Doc. No. 21
Page No. 88
Not Reg. for 1922
The last paragraph of this affidavit tells how easy it was at that time to use the seal of the
probate division of the court, and seems to detract from the value of the seal stamped upon
one of the copies of the contract of lease, where said Honorable A. S. Crossfield approved
the same over his signature. This particular point is the subject matter of the agreed
statement of fact which is expressed a follows:
The said petition was presented to the Honorable A. S. Crossfield, then one of the Judges of
the Court of First Instance of Manila, sitting in the branch of said court having jurisdiction over
the said guardianship proceedings such presentation beingex parte, without notice to the said
Zacarias Lichauco or any other person. No order was entered of record upon the said
petition, but some time after the execution of the said lease by the said Geronimo Jose as
such guardian on behalf of the said Zacarias Lichauco, the lessee's duplicate of the lease,
signed by the said Tan Pho and Geronimo Jose, heretofore referred to as having been
acknowledged before a notary public on October 23rd, 1913, was by the said Judge
endorsed as follows:chanrobles virtual law library
Approved.
(Sgd.) A. S. CROSSFIELD
Judge chanrobles virtual law library
(And sealed with the seal of the Court of First Instance of Manila.)
It is also stipulated that the said Crossfield would, if permitted over the objection of counsel
for plaintiff, testify that while he does not remember positively when he endorsed his approval
on the said lessee's duplicate of said lease, to the best of his recollection the said Geronimo
Jose requested and obtained it from him for the purpose of registering the lease, but that he
is unable to recall the great lapse of time; but counsel for the plaintiff objects to the
consideration of said testimony as to the date of said endorsement for the reason that said
endorsement was not a judicial act and both it and its alleged date are wholly inadmissible,
irrelevant and incompetent to bind the estate of the
prodigal.chanroblesvirtualawlibrary chanrobles virtual law library
No such endorsement was place upon the lessor's copies of said lease nor upon the copies
retained by the notaries public before whom it was acknowledged, and the guardian of said
minors had no notice or knowledge of such endorsement. No order of approval of said lease
was entered in the guardianship proceedings, the only record thereof being the endorsement
set forth above.
This copy of the lease, at the bottom of which appears said approval signed by Judge
Crossfield, was not attached to the court records of the case, nor did it ever form a part
thereof.chanroblesvirtualawlibrarychanrobles virtual law library
With these facts and on these premises, the judgment appealed from impliedly granted
the nunc pro tunc motion filed by Tan Pho on the said guardianship proceedings Nos. 4923
and 10812, now G. R. Nos. 19511 and 19595, respectively. This judgment is now contested,
and the fact that said petition was granted is assigned as
error.chanroblesvirtualawlibrary chanrobles virtual law library
As evidence of record that the lease was judicially approved are cited, first, the motion
presented by Zacarias Lichauco on August 1, 1913, which says: "It having been decided by
this court that the land be leased to the administration of the testamentary estate of Chua
Piengco," etc.; and second, the guardian's accounts from 1913 to 1919, approved by the
court, wherein appear the payments of the rents stipulated in the contract of
lease.chanroblesvirtualawlibrary chanrobles virtual law library
As to the motion of August 1, 1913, presented by Zacarias Lichauco, it is no proof of the
judicial approval of the lease. Supposing them to be true, the allegations therein would only
indicate that the court had decided that the land should be leased, but not that in fact and
beforehand the contract to be later executed to that effect was
approved.chanroblesvirtualawlibrary chanrobles virtual law library
As to the guardian's accounts from 1913 to 1919, they comprise the period of only years, and
their approval does not in any way indicate that the court in approving them, likewise
approved the lease for more than six years, which is the lease requiring judicial approval, and
not that for less than six years. It does not appear in these accounts that the rents therein
spoken of were the result of a contract of lease for over six years. Furthermore, the approval
of an administrator's accounts does not imply the approval of the contracts by virtue whereof
the rents noted therein were received. The law, in requiring a guardian to render a statement
of his accounts, demands that said guardian give detailed information to the court of the
property, both real and in cash, belonging to the ward, as well as of all proceeds and interests
belonging thereto and of the management and disposal thereof. (Sec. 555, No. 3, code Civ.
Proc.) And such accounts are submitted to the court in order that the latter may ascertain
whether or not all of the property and all the income during the period include therein are duly
made to appear, and whether or not accounts are correctly kept, but the question of the
legality and legitimacy of each entry is not necessarily submitted to the court. The approval of
such accounts implies neither the adjudication of the property therein mentioned, nor the
declaration of the legality of the income expressed
therein.chanroblesvirtualawlibrary chanrobles virtual law library
The legal provision we have in this jurisdiction dealing with the subsequent writing and
signing of interlocutory orders and judgments, is contained only in sections 12 and 13 of Act
No. 867. We have no positive statute governing nunc pro tuncorders. There is something in
our jurisprudence which does not, however, positively decide the question. We refer to the
case of Lino Luna vs. Rodriguez and De los Angeles (37 Phil.,
186).chanroblesvirtualawlibrary chanrobles virtual law library
What is established in our laws and jurisprudence is, that our courts of First Instance, being
courts of record, the orders and judgments rendered by them must appear in writing in the
records of the court. In the present case it does not appear that there was any written order in
the records of the Court of First Instance approving the lease in question. As we have pointed
out, neither is there any entry in the records of these cases that might serve as a basis for the
conclusion that the court in due time approved such a
contract.chanroblesvirtualawlibrary chanrobles virtual law library
Turning now to the jurisprudence upon this point, we find the following:
The office of a judgment nunc pro tunc is to record some act of the court done at a former
time which was not then carried into the record, and the power of a court to make such
entries is restricted to placing upon the record evidence of judicial action which has been
actually taken. It may be used to make the record speak the truth, but not to make it speak
what it did not speak but ought to have spoken. If the court has not rendered a judgment that
it might or should have rendered, or if it has rendered an imperfect or improper judgment, it
has no power to remedy these errors or omissions by ordering the entry nunc pro tunc of a
proper judgment. Hence a court in entering a judgment nunc tunc has no power to construe
what the judgment means, but only to enter of record such judgment as had been formerly
rendered, but which had not been entered of record as rendered. In all cases the exercise of
the power to enter judgmentsnunc pro tunc presupposes the actual rendition of a judgment,
and a mere right to a judgment will not furnish the basis for such an entry. (15 R. C. L., pp.
622-623.) chanrobles virtual law library
There can be no doubt that such entry may operate so as to have proceedings which have
been had before it is made, but where no proceedings have been had and the jurisdiction of
the court over the subject has been withdrawn in the meantime, a court has no power to
make a nunc pro tunc order. If the court has omitted to make an order, which it might or ought
to have made, it cannot, at a subsequent term, be made nunc pro tunc. According to some
authorities, in all cases in which an entry nunc pro tunc is made, the record should show the
facts which authorize the entry, but other courts hold that in entering an order nunc pro
tunc the court is not confined to an examination of the judge's minutes, or written evidence,
but may proceed on any satisfactory evidence, including parol testimony. In the absence of a
statute or rule of court requiring it, the failure of the judge to sign the journal entries or the
record does not effect the force of the order granted. (20 R. C. L., p. 513.) chanrobles virtual
law library
The phrase nunc pro tunc signifies "now for then," or that a thing is done now that shall have
the same legal force and effect as if one at the time it ought to have been done. A court may
order an act done nunc pro tunc when it, or some one of its immediate ministerial officers,
has done some act which for some reason has not been entered of record or otherwise noted
at the time the order or judgment was made or should have been made to appear on the
papers or proceedings by the ministerial officer. (Secou vs.Leroux, 1 N. M., 383,
389.) chanrobles virtual law library
The object of a judgment nunc pro tunc is not the rendering of a new judgment and the
ascertainment and determination of new rights, but is one placing in proper form on the
record, the judgment that had been previously rendered, to make it speak the truth, so as to
make it show what the judicial action really was, not to correct judicial errors, such as to
render a judgment which the court ought to have rendered, in place of the one it did
erroneously render, nor to supply nonaction by the court, however erroneous the judgment
may have been. (Wilmerding vs. Corbin Banking Co., 28 South., 640, 641; 126 Ala.,
268.) chanrobles virtual law library
A nunc pro tunc entry in practice is an entry made now of something which was actually
previously done, to have effect as of the former date, Its office is not to supply omitted action
by the court, but to supply an omission in the record of action really had, but omitted through
madvertence or mistake. (Perkins vs.Haywood, 31 N. E., 670, 672.) chanrobles virtual law
library
Except as to the rights of third parties a judgmentnunc pro tunc is retrospective, and has the
same force and effect, to all intents and purposes, as if it had been entered at the time when
the judgment was originally rendered. (Burns vs. Skelton 68 S. 527; 29 Tex., City App.,
453.) chanrobles virtual law library
It is competent for the court to make an entry nunc pro tunc after the term at which the
transaction occurred, even though the rights of third persons may be affected. But
entries nunc pro tunc will not be ordered except where this can be done without injustice to
either party, and as a nunc pro tunc order is to supply on the record something which had
actually occurred, it cannot supply omitted action by the court. Record entries nunc pro
tunc can properly be made only when based on some writing in a cause which directly or by
fair inference indicates the purpose of the entry so sought to be made, or on the personal
knowledge and recollection of the court; but in a case where a statement of facts was filed
after adjourment of the court for the term, but within the time allowed by an order not entered
in the minutes on an oral motion made therefore at the trial, the court at a subsequent term
was held to have jurisdiction to permit the filing of such order nunc pro nunc on the
recollection of the judge and other parol testimony that the order had been applied for and
granted during the previous term, without any memorandum or other written evidence
thereof. Anunc pro tunc entry will be treated as a verity where not appealed from. (15 C. J.,
pp. 972-973.)
The question is whether or not a nunc pro tunc order may be entered when nothing appears
from the files forming a part of the record, upon which such an order may be based. In the
case of Gagnon vs. United States (193 U. S., 451; 48 Law. ed., 745), the following was said:
It may be gathered from these cases that, if a memorandum be entered upon the calendar
that a certain document has been filed, such document, if lost, may be supplied by a copy in
the hands of counsel; or where a judgment or order has been entered upon the calendar,
which does not appeal upon the journal, the court may order a new one to be entered nunc
pro tunc. In such cases, there is often a memorandum of some kind entered upon the
calendar, or found in the files, and there is no impropriety in ascertaining the fact even parol
evidence and supplying the missing portion of the records. But the exercise of a power to
recreate a record where no memorandum whatever exists of such record is evidently a
dangerous one, and, although such power may have been occasionally given by the
legislature is cases of overwhelming necessity, as, for instance, by the "lost record act"
passed by the general assembly of Illinois after the great fire in Chicago in 1870 (Laws of
Illinois, 1871-2, p. 650), such power has not been hitherto supposed to be inherent in courts
of general jurisdiction. As the evidence upon which such restoration is made cannot be
inquired into, if the jurisdiction to recreate the record exists, it might well happen that, upon
the testimony of a single interested witness, the court would order a new record to be entered
after a lapse, as in this case, of over thirty years, and when the judge and clerk have both
died, and there was no possibility of contradicting the testimony of such single witness.
The appellee maintains that in case of Wight-Nicholson (134 U. S., 136; 33 Law. ed., 865), it
was held that it is a sufficient basis for a nunc pro tunc order to resort to parol evidence to
supply the part omitted from the record, and that said case is cited in the case of
Gagnon vs. United States, and consequently, has not been reversed in said case. We
understand, however, that the parol evidence admitted in the case of Wight-Nicholson
referred to, is not to supply the whole of a proceeding of which not a trace is to be found in
the record, but to supply, as is said in one of the paragraphs of said case, the part omitted
from the record; for said case dealt with a nunc pro tunc order issued by the Circuit Court for
the District of Michigan, remanding said case to the Court of the District of Michigan. This
order of remission was not an integral, independent and isolated order from the Circuit Court,
but a necessary consequence in the course of the ordinary procedure of the order of said
court denying the motions for a new trial and for arrest of judgment. Naturally after the case
had been sent by the District Court wherein a verdict of guilty was rendered, to the Circuit
Court to which the aforesaid motions for a new trial and for arrest of judgment were
submitted, the ordinary procedure possible under the circumstances that the Circuit Court
could follow was, either to grant or deny said motions. If it denied them, the necessary and
logical consequence of such denial would be to return the case to the court of origin for
further proceedings.chanroblesvirtualawlibrary chanrobles virtual law library
Now then, it appears from the record of the case that the said motions for a new trial and for
arrest of judgment were denied, but it was not made to appear in the same order that the
case was returned to the District Court. The action of the Circuit Court in deciding said
motions included the principal order of denial, and the necessary consequence of remanding
the case to the trial court. Of this complete action in denying the motions and remanding the
case to the court origin, only the principal part (the denial) appeared in the record, without a
trace therein of the accessory part (the remanding). As there appeared in writing in the record
data concerning the principal part of the action taken by that court, such evidence reversed
as a sufficient ground for a nunc pro tunc order for the purpose of supplying the written order
not referring to the principal act that was already in writing, but only to the accessory part,
which was the part left unwritten.chanroblesvirtualawlibrary chanrobles virtual law library
It cannot be said that the order to remand the case which was the only that was the subject of
the nunc pro tunc order was an independent act of said Circuit Court. Such order to remand
must be based on some reason in order that it might be a judicial act, and the reason, the
basis, the principal point of the order had been recorded in
writing.chanroblesvirtualawlibrary chanrobles virtual law library
In consequence, we see no conflict between this case of Wight-Nicholson and that of
Gagnon vs. United States. And, indeed, no such conflict exists, otherwise the United States
Supreme Court would not have cited the ruling given in the case of Wight-Nicholson, in
support of the conclusions laid down in the case of Gagnon vs. United States. Therefore, we
take it that the doctrine on this point as enunciated in the cases is that for the entry of a nunc
pro tunc order, it is required that the record present some visible data of the order which it is
sought to be supplied by said nunc pro tunc order, whether it is the data referring to the whole
of the order or merely limited to such portion thereof, that the part lacking from the record
constitutes a necessary part, an inevitable and ordinary consequence of the portion
appearing in the record.chanroblesvirtualawlibrary chanrobles virtual law library
In the present case, there exists no data, partial or integral, in the record regarding the
judicial act of approving the lease in question.chanroblesvirtualawlibrary chanrobles virtual
law library
The conclusion we have arrived at is that, although the lease in question could be approved
by the court, nevertheless, such approval was neither obtained in due time, nor subsequently,
inasmuch as the approbatory nunc pro tunc order impliedly entered in the judgment appealed
from, is invalid on account of having been entered without a sufficient legal basis
therefor.chanroblesvirtualawlibrarychanrobles virtual law library
We now pass to the third reason given by the appellants for the annulment of the lease, to
wit: Tan Pho's authority to enter into such a contract.chanroblesvirtualawlibrary chanrobles
virtual law library
According to the instrument Exhibit A, Tan Pho took part in said contract as lease in the
capacity "as general attorney-in-fact of Tan-U, widow of the late Chua Piengco, and
administrator of all of the property of the latter's heirs." chanrobles virtual law library
There are two points to determine: Tan Pho's powers as general attorney-in-fact of Tan-U
and his powers as administrator of all the property of the heirs of the decedent Chua
Piengco.chanroblesvirtualawlibrary chanrobles virtual law library
It has been proven that at the time of the execution of the contract of lease Tan Pho was the
general attorney-in-fact of Tan-U (Exhibit B) and that said contract was later expressly
approved and ratified by Tan-U herself (Exhibit C). We find that Tan Pho's authority as
attorney-in-fact for Tan-U has been sufficiently proven.chanroblesvirtualawlibrary chanrobles
virtual law library
With regard to his authority in relation to the heirs of Chua Piengco, the parties have admitted
in paragraph I of the agreed statement of facts those alleged in paragraph VII of the
complaint, wherein among other things, the following is alleged:
That on the date of the execution of the said contract of lease, said Tan Pho was the
administrator of the estate of the deceased Chua Piengco, which was not as yet partitioned
among the heirs, etc.
The same thing was stipulated in the last part of paragraph 9 of the stipulation on facts (p. 9,
Bill of Exceptions G. R. No. 19512).chanroblesvirtualawlibrary chanrobles virtual law library
If Tan Pho was the administrator of the estate of Chua Piengco, then he had the power to
manage to manage the property of said estate. The employment of funds of the latter for the
construction of a building on leased land, for the purpose of obtaining rents from such
building is an investment of capital which may be considered as included in the powers of an
administrator of a decedent's estate. We cannot force ourselves to believe that, in view of the
facts of the case, Tan Pho took part in this lease as direct attorney-in-fact of the heirs of the
deceased Chua Piengco. If at the time, the estate had not been partitioned, as it appears in
the case, such heirs had as yet no hereditary property to dispose of, nor to answer for their
acts, seeing that the estate was legally in the hands of the
administrator.chanroblesvirtualawlibrary chanrobles virtual law library
Furthermore, these heirs who are some of the defendants in the case G. R. No. 19512, have
no more interest in the lease than is granted to them by Tan-U (paragraph 15, stipulation of
facts). As the share of such heirs in this lease depends on the will of Tan-U and as Tan-U has
agreed to and ratified said contract, we find, that with respect to such interest of the said heirs
in the lease, the lack of authority to execute it on the part of Tan Pho cannot be invoked to
annul said contract.chanroblesvirtualawlibrary chanrobles virtual law library
Summarizing our conclusions with respect to the fundamental question touching the validity
of the lease, we find that the lease in question must be held null in so far as it exceeds six
years and effects the plaintiffs, for the reason that it lacked judicial
approval.chanroblesvirtualawlibrary chanrobles virtual law library
( b) EFFICACY OF REGISTRATIONchanrobles virtual law library
If the contract in question suffers from the vital defect above pointed out, was this cured by its
registration in the certificate of title? This is the second principal question to
decide.chanroblesvirtualawlibrary chanrobles virtual law library
This registration was obtained by the following proceedings: chanrobles virtual law library
Some time after execution of the said contract of lease Galo Lichauco petitioned the Court of
Land Registration for the registration of the leased land, the petition being signed at the
bottom by Amparo N. Jose in behalf of Luis and Julita Lichauco and by Geronimo Jose in
behalf of Zacarias Lichauco agreeing thereto.chanroblesvirtualawlibrary chanrobles virtual
law library
In the body of this petition it is alleged that the property was free of all encumbrances
(paragraph 3) and that it was occupied by Tan Pho as attorney-in-fact for Tan-U (par.
5).chanroblesvirtualawlibrary chanrobles virtual law library
The advertisement of the petition was published, with the date of January 29, 1914, assigned
for hearing, and upon the latter date, trial was had whereat the applicant Galo Lichauco, and
attorney Catalino Sevilla, in behalf of the trial an agreement was entered into by and between
Galo Lichauco, who appeared, and counsel for Tan Pho, in the following terms:
The parties agree that the Chinaman Tan Pho, general attorney-in-fact for Tan-U, widow of
Chua Piengco, and administrator of the property of the heirs of Chua Piengco, and the
applicants have, on October 14, 1913, entered into a contract of lease for twenty years from
that date, the conditions of which are mentioned in the contract of
lease.chanroblesvirtualawlibrary chanrobles virtual law library
The rental is P1,560 a month. (Bill of Exceptions, G. R. No. 19512, pp. 46-47.)
On April 3, 1914, the Court of Land Registration rendered judgment, the dispositive part of
which is as follows:
. . . after the declaration of general default, the registration and adjudication of the land in
question in this proceeding is hereby ordered in the name of the petitioners, in the following
propositions: To Galo Lichauco, �/3 part pro indiviso; to Zacarias Lichauco, 1/3 part pro
indiviso, and to the minors Luis and Julita Lichauco, in equal parts, 1/3 part pro indiviso; it
being understood that the land is subject to a contract of lease for twenty years in favor of
Tan-U, administratix of the property of the heirs of Chua Piengco, counting from October 14,
1913, at the rate of P1,560 monthly in advance, and upon the other conditions mentioned in
the said contract.
In pursuance of this judgment, the proper decree was issued on July 21, 1914. It so appears,
furthermore, from paragraph 14 of the stipulation of facts, it having likewise been agreed in
said stipulation that said contract of lease was not registered in accordance with section 50,
51, or 52 of Act No. 496 (page 12 Bill of Exceptions, G. R. No.
19512).chanroblesvirtualawlibrary chanrobles virtual law library
The non-registration of said instrument of lease does not detract from the legal efficacy of the
decree and title, inasmuch as sections 50 et seq. above cited refer to the voluntary disposal
of the propertyafter the original registration of the land, and the lease in question was
executed before said original registration.chanroblesvirtualawlibrary chanrobles virtual law
library
Although it might be disputable whether or not those represented by the plaintiff were bound
by the agreement made at the trial with respect to this lease, if this point had been raised in
time, yet the fact is that, after the judgment became final and the one year fixed by section 38
of Act No. 496 for the revision of the decree has elapsed, the title thus issued is valid and has
the legal force given to it by Act No. 496, unless, according to this Act itself, it be amended or
altered by the proper legal proceeding.chanroblesvirtualawlibrary chanrobles virtual law
library
Such amendment and alteration taken place in those cases to which section 112 of Act No.
496 refers, which reads as follows:
No erasure, alteration, or amendment shall be made upon the registration book after the
entry of a certificate of title or of a memorandum thereon and the attestation of the same by
the clerk or any register of deed, except by order of the court. Any registered owner or other
person in interest may at any time apply by petition to the court, upon the ground that
registered interests of any description, whether vested, contingent, expectant, or inchoate,
have terminate and ceased; or that new interests have arisen or been created which do not
appear upon the certificate; or that any error, omission, or mistake was made in entering a
certificate or any memorandum thereon, or on any duplicate certificate; or that the name of
any person on the certificate has been changed; or that the registered owner has been
married; or, if registered as married, that the marriage has been terminated; or that a
corporation which owned registered land and has been dissolved has not conveyed the same
within three years after its dissolution; or upon any other reasonable ground; and the court
shall have jurisdiction to hear and determine the petition after notice to all parties in interest,
and may order the entry of a new certificate, the entry or cancellation of a memorandum upon
a certificate, or grant any other relief upon such terms and conditions, requiring security if
necessary, as it may deem proper: Provided, however, That this section shall not be
construed to give the court authority to open the original decree of registration, and that
nothing which shall be done or ordered by the court which shall impair the title or other
interest of a purchaser holding a certificate for value and in good faith, or his heirs or assigns,
without his or their written consent.chanroblesvirtualawlibrary chanrobles virtual law library
Any petition file under this section and all petitions and motions filed under the provisions of
this Act after original registration shall be filed an entitled in the original case in which the
decree of registration was entered.
As may be seen, this provision authorizes the amendment and alteration of the certificate of
title, among other cases, in those of the "extinguishment or lapse of registered real
rights." chanrobles virtual law library
If the registered real right arising from the lease in question is, as it should be, declared
invalid and without effect in so far as it effects the plaintiffs being in excess of six years
counted from the execution of said contract, such a declaration of nullity extinguishes said
real right, as to the plaintiffs, which, without it, should have continued legally to exists, since
such a contract is not void per se, but only voidable.chanroblesvirtualawlibrary chanrobles
virtual law library
The instant petition for annulment, in effect, involves the petition that the right arising from the
lease and registered in the registry, be declared extinguished with respect to the petitioners,
which extinction is the inevitable effect of the declaration of nullity. This petition, therefore,
enters the domain of Act No. 496, whereunder it has the effect of a petition for amending a
certificate of title by virtue of the partial extinguishment of a right which occurred after its
registration.chanroblesvirtualawlibrary chanrobles virtual law library
And there is no difficulty in so considering it, or in deciding the question so put, as all the
interested parties have taken part in the present
proceeding.chanroblesvirtualawlibrary chanrobles virtual law library
And the amendment of the certificate of title that may now be affected by virtue of the partial
extinguishment of the registered right, will not constitutes a revision of the original decree
inasmuch as the amendment is based upon the extinguishment of a right, subsequent to its
registration.chanroblesvirtualawlibrary chanrobles virtual law library
It must not be lost sight of that the contract of lease in question, as we have pointed out, is
not voidab initio nor with respect to all the lessors, but only voidable, and only with respect to
the plaintiffs. It is not void ab initio because, in regard to the plaintiffs it contains the
indispensable requisites for its existence. And it is voidable as to them because it lacks
judicial approval, which defect invalidates it according to the law. Article 1300 of the Civil
Code provides that:
Contracts entered into with all the requisites mentioned in article 1261 may be annulled, even
if there be no lesion to the contracting parties, whenever they are subject to any of the vices
which invalidate them in accordance with law.
By analogy, we cite the following rule:
The word void, as used in the statute authorizing the sale of infants, real estate, and
providing that, unless bounds shall be given, the sale shall be void, should be construed to
mean voidable. (Thornton vs. McGrath, 62 Ky., 350, 352.)
Since it is a contract that is merely voidable it has all the effects of being valid and
efficacious, even with respect to the plaintiffs, so long as it is not declared void. For this
reason, even though six years have elapsed since its execution, the contract has been in
effect in regard to the rights and obligations of the contracting parties between themselves,
including the plaintiffs, demandable up to the date of the commencement of this action, to
which the effects of the declaration of the partial nullity of the said contract shall retroact,
because the reason for such nullity already existed before the commencement of this action,
the present judgment being limited to declaring it judicially. And the fact that the registration
of the lease remains unaltered even after the commencement of this action, does not prevent
the present declaration of nullity from being retroactive in its effects, as it does not appear
from the record that there is any third part right, based on said
registration.chanroblesvirtualawlibrary chanrobles virtual law library
This declaration of partial nullity of the contract of lease carries with it the necessity of
declaring what are the rights of the several parties resulting from said declaration, chanrobles
virtual law library
In the first place the contract in question remains unimpaired and valid with respect to Galo
Lichauco, who did not join with the plaintiffs, but rather with the defendant Tan Pho, and to
whom the reason for the annulment of the contract with respect to his colessors the plaintiffs,
does not apply. And the contract is null only in so far as it affects the incapacitated Zacarias
Lichauco and the minors Luis and Julita Lichauco.chanroblesvirtualawlibrary chanrobles
virtual law library
The effect of this declaration of partial nullity is that with respect to the plaintiffs, the
stipulation contained in the contract with regard to the period of twenty years agreed upon, is
void and without effect, as is that which provides that, upon the termination of said period, all
the improvements or buildings errected on the land shall become the property of the owners
of the land. Nevetheless, these stipulations, as well as the others contained in the contract,
shall remain valid with respect to Galo Lichauco.chanroblesvirtualawlibrary chanrobles virtual
law library
Another of its effects is, that in view of the circumstances of the case, all of which are
compatible with the defendant's good faith and in view of the character of the contract being
merely voidable, the lessee's possession of the property to date even so far as it affects the
herein plaintiffs, has been, and still is, in good faith, as was also the construction of the
buildings and improvements on said property. As a consequence of this conclusion, the
lessees are the owners of said buildings and improvements erected upon the leased land by
said lessee or by their order and at their expense, and consequently, said lessee is entitled to
the accrued income of said buildings and improvements as the owner
thereof.chanroblesvirtualawlibrary chanrobles virtual law library
In virtue of those considerations, the judgment appealed from is reversed and it is hereby
declared and ordered:
1. That the contract of lease here in question, executed on October 14, 1913 by Galo
Lichauco and the respective guardians of Zacarias Lichauco and the minors Luis and Julita
Lichauco on the one side, and by Tan Pho on the other, is void as regards the plaintiffs, and
the effects of this declaration of partial nullity retroacts to September 17, 1920, the date on
which the complaint for nullity was presented.chanroblesvirtualawlibrary chanrobles virtual
law library
2. Without prejudice to any contract or contracts which the interested parties herein may
desire to execute in accordance with the law and in harmony with this opinion, the plaintiffs,
from the time Tan Pho is notified of this decision, shall be entitled to appropriate two-thirds
part pro indiviso of the buildings and improvements constructed by the party represented by
said Tan Pho on the property in question, upon payment of the proper indemnity, according
to the provisions of articles 361, 453, and 454 of the Civil Code in force or said plaintiffs shall
have the right to compel the party represented by the defendant Tan Pho to pay to the
plaintiffs the value of two-thirdspro indiviso of the land.chanroblesvirtualawlibrary chanrobles
virtual law library
3. The plaintiffs shall be entitled to demand and to receive from the party represented by the
defendant Tan Pho a rental for the occupation of two-thirds part pro indiviso of the land, from
September 17, 1920, until said two-thirds part pro indiviso of the buildings and improvements
constructed by said Tan Pho becomes the property of the plaintiffs, as aforesaid, or until the
two-thirds part pro indiviso of the land belonging to the plaintiffs becomes the property of the
party represented by said Tan Pho in the manner specified in the preceding paragraph. The
amount of this rental mentioned in this paragraph shall be fixed by the interested parties,
reserving them the right to resort to the courts for its determination, in case they cannot reach
an agreement; provide that the rents, which by virtue of the lease in question the plaintiffs
may have received or may receive from Tan Pho from September 17, 1920, shall be applied
upon said rent to be agreed upon by the interested parties or judicially
fixed.chanroblesvirtualawlibrary chanrobles virtual law library
4. The registrar of deeds of Manila is hereby ordered to amend the certificate of title to the
land in question issued under decree No. 17729 in registration proceeding No. 9667, as also
the corresponding books of registry, as well as the copies of said certificate of title, to the
effect that said lease therein registered, as far as the plaintiffs are concerned, has been
extinguished and rendered void and of no effect by virtue of this
decision.chanroblesvirtualawlibrary chanrobles virtual law library

5. Let certified copies of the complaint and the answers filed in this case for the annulment of
said lease, as well as a copy of the present decision be attached to said registration
proceeding No. 9667, and certified copies of said decision be attached to each of the records
of the three cases which are the subject matter of the present decision, chanrobles virtual law
library

6. In all other respects the plaintiffs' petition is denied, without express pronouncement as to
costs. So ordered.

Araullo, C.J., Street, Malcolm, Avanceña, Villamor and Johns, JJ., concur.
 [G.R. No. 144882. February 04, 2005]
LUISA BRIONES-VASQUEZ, petitioner, vs. COURT OF APPEALS and HEIRS OF MARIA
MENDOZA VDA. DE OCAMPO, respondents.
DECISION
AZCUNA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Civil Procedure, assailing the
Resolution of the Court of Appeals in CA-G.R. CV No. 39025, dated June 9, 2000, which denied
petitioners motion for clarificatory judgment and the Resolution of the Court of Appeals, dated
August 3, 2000, which denied the motion for reconsideration.
Under an agreement denominated as a pacto de retro sale, Maria Mendoza Vda. De
Ocampo acquired a parcel of land from Luisa Briones. The latter thereunder reserved the right
to repurchase the parcel of land up to December 31, 1970.[1]
Maria Mendoza Vda. De Ocampo passed away on May 27, 1979. [2] On June 14, 1990,
Hipolita Ocampo Paulite and Eusebio Mendoza Ocampo, the heirs of Maria Mendoza Vda. De
Ocampo, filed a petition for consolidation of ownership, alleging that the seller was not able to
exercise her privilege to redeem the property on or before December 31, 1970.[3]
The Regional Trial Court (RTC) of Pili, Camarines Sur, Branch 32 rendered a
Decision[4] on January 30, 1992 as follows:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. declaring that exh. A is a true pacto de retro sale;
2. declaring that the defendant can still redeem the property within 30 days
from the finality of this judgment, subject to the provisions of Art. 1616 of the
New Civil Code;
3. No costs.
SO ORDERED.[5]
Plaintiffs therein -- herein private respondents -- appealed the RTC Decision to the Court
of Appeals.[6] On June 29, 1995, the Court of Appeals promulgated a Decision[7] and disposed
of the case in the following manner:
THE FOREGOING CONSIDERED, the contested decision is hereby set aside; and declaring
the 1970 sale with right of repurchase, Exhibit A, as one of an equitable mortgage.
SO ORDERED.[8]
Respondents filed a motion for reconsideration which the Court of Appeals denied through
a Resolution,[9] dated December 15, 1995. The Court of Appeals Decision became final and
executory and entry of judgment was made on July 17, 1996.[10]
Subsequently, at the RTC, both petitioner and respondents filed their respective motions
for a writ of execution. The RTC issued a writ of execution. However, the writ was returned
unserved per sheriffs return which reads as follows:
Respectfully returned to this Court thru the Clerk of Court VI, RTC, Pili, Camarines Sur the
herein attached original copy of the Writ of Execution issued in the above-entitled case with
the following information, to wit:
That the plaintiffs [herein private respondents] were informed that the writ of execution was
already issued for implementation and that they should pay the necessary sheriffs and
kilometrage fees;
That [one of] the plaintiff[s] came to the Office of the Clerk of Court VI but did not deposit any
amount for the kilometrage fee and for the expenses in the implementation of the said writ,
but instead plaintiff said that he is not interested to implement such writ;
That the 60-day period within which the said writ should be implemented has already expired.
WHEREFORE, the original copy of the Writ of Execution is hereby returned unserved.
Cadlan, Pili, Camarines Sur July 8, 1997
For the Clerk of Court VI and
Ex-Officio Provincial Sheriff
by:
(signed)
EDDIE M. ROSERO
Sheriff IV[11]
Petitioner thereafter filed a motion for an alias writ of execution. This was granted by the
RTC:[12]
 ALIAS WRIT OF EXECUTION WHEREAS, on July 10, 1997, Sheriff Eddie M. Rosero submitted his return:

T O : THE SHERIFF or any person authorized WHEREFORE, the original copy of the Writ of execution is hereby returned unserved.
to serve process, RTC, Br. 32, Pili, C.s.
WHEREAS, on July 18, 1997, the Hon. Nilo A. Malanyaon issued an Order:
THRU : THE CLERK OF COURT VI and EX-OFFICIO
PROVINCIAL SHERIFF The motion for issuance of alias writ of execution filed by counsel for the defendant, Atty.
Regional Trial Court Lucille Fe R. Maggay-Principe, is hereby granted.
Pili, Camarines Sur
Consequently, the Clerk of Court of this Court is directed to issue alias writ of execution.
GREETINGS:
WHEREFORE, you the Provincial Sheriff of Camarines Sur or his lawful deputy is hereby
WHEREAS, on January 20, 1992, a decision was rendered by this Court, the commanded to effect the satisfaction of the above-quoted decision of the Honorable Court of
dispositive portion of which reads as follows: Appeals, Manila. Return this writ to this Court within sixty (60) days from your receipt hereof.

WHEREFORE, premises considered, judgment is hereby rendered as WITNESS THE HON. NILO A. MALANYAON, Judge of this Court, this 21st day of July, 1997,
follows: at Cadlan, Pili, Camarines Sur.

1. declaring that Exh. A is a true pacto de retro sale; (Sgd.) LALAINE P. MONSERATE
2. declaring that the defendant can still redeem the property within 30 Officer-In-Charge
days from the finality of this judgment, subject to the provisions of Art. Legal Researcher II
1616 of the New Civil Code. The Sheriff was unable to effect the satisfaction of the alias writ as stated in the sheriffs
3. No costs. report, which is worded thus:

WHEREAS, in an order of this Court dated June 16, 1992, the notice of appeal filed by
counsel for the defendant has been granted and the Clerk of Court V of this Court transmitted
the entire records of the case to the Court of Appeals, Manila;
WHEREAS, on June 29, 1995, a decision was rendered by the Court of Appeals, Manila, the
dispositive portion of which reads as follows:
THE FOREGOING CONSIDERED, the contested decision is hereby set aside; and declaring
the 1970 sale with right of repurchase, Exh. A as one of an equitable mortgage.
WHEREAS, on March 5, 1997, the Hon. Nilo A. Malanyaon, Presiding Judge of this Court
issued an order granting the issuance of a writ of execution, hereunder quoted as follows:
This is to report on the status of the implementation of the Alias Writ of Execution issued in
the above-entitled case, to wit:
That on August 6, 1997 the plaintiff[s] represented by Sps. Policarpio Paulite and Hipolita
Ocampo and Eusebio M. Ocampo personally received copy of the Alias Writ of Execution but
they refused to sign on the original copy of the said writ, together with the letter of advise
informing them to withdraw at any time the amount deposited to the Office of the Clerk of
Court VI, RTC, Pili, Camarines Sur by defendant Luisa Briones so that the mortgage may
now be deemed released or cancelled.
That until this time the said plaintiff[s] failed and or did not bother to withdraw the said amount
deposited by defendant Luisa Briones despite letter of advice and the alias writ of execution
having been personally received by them.

It appearing that the decision of the Court of Appeals had become final and executory, and Cadlan, Pili, Camarines Sur September 9, 1997.
an entry of final judgment had already been issued by the Honorable Court of Appeals, let a
writ of execution issue.
 For the Clerk of Court and
Ex-Officio Sheriff
by:
(signed)
EDDIE M. ROSERO
Sheriff IV[13]
Unable to effect the execution of the Court of Appeals decision, petitioner filed with the
RTC an omnibus motion, dated May 25, 1999, praying:
WHEREFORE, it is respectfully prayed that an order issue:
a) Declaring the equitable mortgage, Exhibit A, discharged;
b) Directing the issuance of a Writ of Possession against the plaintiffs for the delivery of
possession of the land in question to the defendant. [14]
The RTC denied the omnibus motion in an Order dated November 16, 1999, which states:
Acting on the omnibus motion of plaintiff dated 25 May 1999 and the opposition thereto of
defendant, and considering that the decision of the Court of Appeals referring the decision of
this Court has become final and executory, hence, this Court can no longer alter, modify or
add anything thereto, the prayers set forth in the omnibus motion is, as it is, hereby denied.
SO ORDERED.[15]
Petitioner filed a motion for reconsideration[16] of the above Order, which was denied by
the RTC in an Order dated February 23, 2000.[17]
Petitioner then filed a motion for clarificatory judgment, dated April 5, 2000, with the Court
of Appeals.[18] The motion was denied in a Resolution, dated June 9, 2000, which reads as
follows:
The only issues that reached Us, through an appeal, was whether the 1970 Sale with Right of
Repurchase was actually an equitable mortgage. We ruled, it was, necessarily there is
nothing to clarify.
If it is a matter however whether the prevailing party should be entitled to a right to repossess
the property, then the remedy is not with Us, but with the Court below.
For lack of merit, the Motion for Clarificatory Judgment is hereby DENIED.
SO ORDERED.[19]
Petitioner filed a motion for reconsideration of the above Resolution. The Court of Appeals
denied the same in a Resolution dated August 3, 2000.[20]
Petitioner now comes to this Court raising the following issues:
PETITIONER SUBMITS THAT THE PUBLIC RESPONDENT ACTED ARBITRARILY, WITH
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN ISSUING
THE FOLLOWING RESOLUTIONS:
A) RESOLUTION DATED JUNE 9, 2000, DENYING PETITIONERS MOTION FOR
CLARIFICATORY JUDGMENT.
B) RESOLUTION DATED AUGUST 3, 2000, DENYING PETITIONERS MOTION FOR
RECONSIDERATION.[21]
The sole issue is whether or not the Court of Appeals acted with grave abuse of discretion
amounting to lack of jurisdiction in refusing to grant petitioners motion for clarificatory judgment.
It must be noted, as narrated above, that the Decision of the Court of Appeals had already
become final and executory at the time that the motion for clarificatory judgment was filed. With
regards to final judgments, this Court has pronounced that:
nothing is more settled in the law than that when a final judgment becomes executory, it
thereby becomes immutable and unalterable. The judgment may no longer be modified in
any respect, even if the modification is meant to correct what is perceived to be an erroneous
conclusion of fact or law, and regardless of whether the modification is attempted to be made
by the Court rendering it or by the highest Court of the land. The only recognized exceptions
are the correction of clerical errors or the making of so-called nunc pro tunc entries which
cause no prejudice to any party, and, of course, where the judgment is void.[22]
As a general rule, therefore, final and executory judgments are immutable and unalterable
except under the three exceptions named above: a) clerical errors; b) nunc pro tunc entries
which cause no prejudice to any party; and c) void judgments.
In the present case, petitioner claims the second exception, i.e., that her motion for
clarificatory judgment is for the purpose of obtaining a nunc pro tunc amendment of the final
and executory Decision of the Court of Appeals.
Nunc pro tunc judgments have been defined and characterized by this Court in the
following manner:
The office of a judgment nunc pro tunc is to record some act of the court done at a former
time which was not then carried into the record, and the power of a court to make such
entries is restricted to placing upon the record evidence of judicial action which has been
actually taken. It may be used to make the record speak the truth, but not to make it
speak what it did not speak but ought to have spoken. If the court has not rendered a
judgment that it might or should have rendered, or if it has rendered an imperfect or
improper judgment, it has no power to remedy these errors or omissions by ordering
the entry nunc pro tunc of a proper judgment. Hence a court in entering a
judgment nunc pro tunc has no power to construe what the judgment means, but only
to enter of record such judgment as had been formerly rendered, but which had not
been entered of record as rendered. In all cases the exercise of the power to enter
judgments nunc pro tunc presupposes the actual rendition of a judgment, and a mere right to
a judgment will not furnish the basis for such an entry. (15 R. C. L., pp. 622-623.)
The object of a judgment nunc pro tunc is not the rendering of a new judgment and the
ascertainment and determination of new rights, but is one placing in proper form on
the record, the judgment that had been previously rendered, to make it speak the truth,
so as to make it show what the judicial action really was, not to correct judicial errors,
such as to render a judgment which the court ought to have rendered, in place of the
one it did erroneously render, nor to supply nonaction by the court, however
erroneous the judgment may have been. (Wilmerding vs. Corbin Banking Co., 28 South.,
640, 641; 126 Ala., 268.)
A nunc pro tunc entry in practice is an entry made now of something which was actually
previously done, to have effect as of the former date. Its office is not to supply omitted
action by the court, but to supply an omission in the record of action really had, but
omitted through inadvertence or mistake. (Perkins vs. Haywood, 31 N. E., 670, 672.)
It is competent for the court to make an entry nunc pro tunc after the term at which the
transaction occurred, even though the rights of third persons may be affected. But
entries nunc pro tunc will not be ordered except where this can be done without injustice to
either party, and as a nunc pro tunc order is to supply on the record something which
has actually occurred, it cannot supply omitted action by the court . . . (15 C. J., pp.
972-973.)[23]
From the above characterization of a nunc pro tunc judgment it is clear that the judgment
petitioner sought through the motion for clarificatory judgment is outside its scope. Petitioners
did not allege that the Court of Appeals actually took judicial action and that such action was
not included in the Court of Appeals Decision by inadvertence. A nunc pro tunc judgment
cannot correct judicial error nor supply nonaction by the court. [24]
Since the judgment sought through the motion for clarificatory judgment is not a nunc pro
tunc one, the general rule regarding final and executory decisions applies. In this case, no
motion for reconsideration having been filed after the Court of Appeals rendered its decision
on June 29, 1995 and an entry of judgment having been made on July 17, 1996, the same
became final and executory and, hence, is no longer susceptible to amendment. It, therefore,
follows that the Court of Appeals did not act arbitrarily nor with grave abuse of discretion
amounting to lack of jurisdiction when it issued the aforementioned Resolution denying
petitioners motion for clarificatory judgment and the Resolution denying petitioners motion for
reconsideration.
Nevertheless, for purposes of guiding the parties in the execution of the aforesaid Decision
of the CA, without altering the same, the following should be noted:
The Court of Appeals pronounced in its Decision that the contract between the parties is
an equitable mortgage. Since the contract is characterized as a mortgage, the provisions of the
Civil Code governing mortgages apply. Article 2088 of the Civil Code states:
The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of
them. Any stipulation to the contrary is null and void.
This Court has interpreted this provision in the following manner:
The essence of pacto commissorio, which is prohibited by Article 2088 of the Civil Code, is
that ownership of the security will pass to the creditor by the mere default of the debtor
(Guerrero v. Yigo, et al., 96 Phil. 37, 41-42; Puig v. Sellner, et al., 45 Phil. 286, 287 88) [25]
The only right of a mortgagee in case of non-payment of a debt secured by mortgage would
be to foreclose the mortgage and have the encumbered property sold to satisfy the
outstanding indebtedness. The mortgagors default does not operate to vest in the mortgagee
the ownership of the encumbered property, for any such effect is against public policy, as
enunciated by the Civil Code [26]
Applying the principle of pactum commissorium specifically to equitable mortgages,
in Montevergin v. CA,[27] the Court enunciated that the consolidation of ownership in the person
of the mortgagee in equity, merely upon failure of the mortgagor in equity to pay the obligation,
would amount to a pactum commissorium. The Court further articulated that an action for
consolidation of ownership is an inappropriate remedy on the part of the mortgagee in equity.
The only proper remedy is to cause the foreclosure of the mortgage in equity. And if the
mortgagee in equity desires to obtain title to the mortgaged property, the mortgagee in equity
may buy it at the foreclosure sale.
The private respondents do not appear to have caused the foreclosure of the mortgage
much less have they purchased the property at a foreclosure sale. Petitioner, therefore, retains
ownership of the subject property. The right of ownership necessarily includes the right to
possess, particularly where, as in this case, there appears to have been no availment of the
remedy of foreclosure of the mortgage on the ground of default or non-payment of the obligation
in question.
WHEREFORE, the petition for certiorari is DISMISSED. The parties are directed to
proceed upon the basis of the final Decision of the Court of Appeals, dated June 29, 1995, in
CA-G.R. CV No. 39025, that the contract in question was an equitable mortgage and not a
sale.
No costs.
SO ORDERED.
 [G.R. No. 143721. August 31, 2005]
TERESITA E. VILLALUZ, petitioner, vs. ROLANDO R. LIGON, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review seeking the reversal of the Decision [1] of the Court of
Appeals (CA) promulgated on October 1, 1999 and the Resolution[2] dated June 6, 2000 which
denied petitioners motion for reconsideration.
The facts are as follows:
Petitioner Teresita E. Villaluz (Villaluz) and respondent Rolando R. Ligon (Ligon) were
engaged in several businesses. Sometime in 1987, Villaluz borrowed sums of money from
Ligon secured by postdated checks amounting to P1,543,586.00 which later bounced for the
reasons Drawn Against Insufficient Funds/Account Closed. Demands were made on Villaluz
but she failed to pay her debt prompting Ligon to institute criminal proceedings for violation of
Batas Pambansa Blg. 22 before the Regional Trial Court (RTC) of Manila. During the hearing
of said cases, Villaluz asked for the settlement of their controversy[3] and Ligon, as the First
Party, and Villaluz, as the Second Party, executed a Memorandum of Agreement with the
following terms:
WHEREAS, the SECOND PARTY is indebted to the FIRST PARTY in the amount of THREE
MILLION FOUR HUNDRED EIGHTY NINE THOUSAND AND TWO HUNDRED FIFTY TWO
PESOS (P3,489,252.00) inclusive of interests, which indebtedness is now the subject of
criminal cases now pending with the Regional Trial Court of Manila, Branch 40, and docketed
as Criminal Cases Nos. 89-73195 to 213 for Violation of Batas Pambansa Blg. 22;
WHEREAS, out of the aforesaid obligation the SECOND PARTY has made a total payment
of ONE HUNDRED SIXTY FIVE THOUSAND PESOS (P165,000.00) thereby leaving a
balance of THREE MILLION THREE HUNDRED TWENTY FOUR THOUSAND AND TWO
HUNDRED FIFTY TWO PESOS (P3,324,252.00);
WHEREAS, on account of the desire of the parties to settle the aforementioned cases
amicably, the FIRST PARTY, by way of liberality, has agreed to condone the amount of ONE
MILLION TWO HUNDRED TWENTY FOUR THOUSAND TWO HUNDRED FIFTY TWO
PESOS (P1,324,252.00) (sic) thereby reducing the indebtedness of the SECOND PARTY to
the FIRST PARTY in the amount of TWO MILLION PESOS (P2,000,000.00);
WHEREAS, the SECOND PARTY has on the date of this instrument, paid the amount of
ONE HUNDRED THOUSAND PESOS (P100,000.00) thereby further reducing the SECOND
PARTYS obligation to ONE MILLION NINE HUNDRED THOUSAND PESOS
(P1,900,000.00);
WHEREAS, the SECOND PARTY has acknowledged her aforesaid total outstanding
obligation of ONE MILLION NINE HUNDRED THOUSAND PESOS (P1,900,000.00) in favor
of the FIRST PARTY and has committed to pay the same on or before 31 December 1990;
WHEREAS, on account of the aforesaid settlement agreement, the FIRST PARTY has
agreed to effect or cause the dismissal of the aforementioned criminal cases against the
SECOND PARTY;
NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. The FIRST PARTY hereby condones the amount of P1,324,252.00 from the total
obligation of the SECOND PARTY;
2. The SECOND PARTY hereby promises to pay her total outstanding obligation
of P1,900,000.00 to the FIRST PARTY on or before 31 December 1990;
3. In the event the SECOND PARTY is unable to pay her aforesaid obligation to the FIRST
PARTY on or before the date above stipulated, then the amount as condoned in paragraph
one (1) hereof shall be added back to the said obligation as stipulated in paragraph two (2)
hereof, and the FIRST PARTY shall have the right to enforce collection of the entire amounts
due and owing from the SECOND PARTY without need of further demand;
4. The FIRST PARTY shall effect or cause the dismissal of the afore-mentioned criminal
cases against the SECOND PARTY as soon as practicable, preferably on or before the next
scheduled hearing of said cases.[4]
In accordance with said agreement, Villaluz issued a check dated December 31, 1990 in
the amount of P1,900,000.00 which again bounced upon presentment for the reason that it
was drawn against a closed account. Ligon made several demands on Villaluz but to no avail.
Thus, Ligon, through his lawyer, sent Villaluz demand letters dated March 5, 1991 and July 1,
1991 which were allegedly duly received by her.[5]
Since no payment was made, Ligon instituted on April 2, 1992 a complaint against Villaluz
with the RTC of Makati, Branch 134, for the recovery of P3,224,252.00[6] plus legal interest and
attorneys fees.[7]
 Upon failure of Villaluz and her counsel to appear at the pre-trial conference, the RTC
declared Villaluz as in default and received Ligons evidence ex-parte. The RTC rendered a
decision on October 16, 1992, ordering Villaluz to pay the amount prayed for plus
interest, P30,000.00 as attorneys fees, plus costs.[8] On November 23, 1992, Villaluz through
counsel, filed a Motion for New Trial and a Motion to Admit Answer which were both granted
by the court.[9]
Villaluz in her Answer alleged that: she is an illiterate and could not engage in any
business alone; on several occasions Ligon offered imported goods in exchange for postdated
checks to be encashed upon delivery; there were occasions when the imported goods were
not delivered and yet her checks were not returned; she requested for an accounting but none
was made; the B.P. Blg. 22 cases filed against her involving the total amount of P1,543,586.00
were provisionally dismissed because there was a need for accounting; efforts were then made
to settle the case amicably until November 1990, when Ligons lawyer succeeded in persuading
her to sign a Memorandum of Agreement and to issue a check in the amount of P1,900,000.00;
said Memorandum of Agreement does not express the true intent and agreement of the parties
and the check for P1.9 M is null and void; she did not receive any demand for the enforcement
of the Memorandum of Agreement nor for the payment of the check, thus the instant action is
premature and plaintiff has no cause of action. Villaluz prayed that the complaint be dismissed
and the Memorandum of Agreement and the check be declared null and void.[10]
Ligon presented evidence to support his complaint and, on March 9, 1994, filed a Motion
for Issuance of Writ of Preliminary Attachment which Villaluz opposed. On May 5, 1994, Villaluz
filed a Motion to Dismiss Case on the Ground of Forum Shopping and a Motion to Cite Atty.
Paulino E. Cases, Jr. in Contempt of Court. The trial court denied the said motions. [11]
On May 25, 1995, Villaluz filed before the RTC a Motion to Cancel Hearings pending the
resolution of this Court of the issue in G.R. No. L-119865 entitled Teresita Villaluz vs. Court of
Appeals where Villaluz questioned the validity of the reinstatement of the criminal cases against
her which were provisionally dismissed. The trial court denied the motion to cancel hearings as
well as her motion for reconsideration of the same.[12]
After the trial court ruled on Ligons offer of exhibits, the case was set for hearing on August
29 and 31, 1995 which were reset to September 25 and 28, 1995 upon Villaluzs request. The
September 25, 1995 hearing was also reset in view of the manifestation of the parties that they
will settle the case amicably. On September 28, 1995, the parties agreed to reset the hearing
to October 11 and 24, 1995. On October 11, 1995 the hearing was cancelled anew upon
agreement of the parties. On October 24, 1995, the hearing was cancelled and reset to
November 16, 23 and December 14, 1995 in view of the absence of Villaluz and her counsel.
On November 10, 1995, Villaluzs counsel asked for the cancellation of the November and
December settings and prayed that they be moved to January 1996. The hearings were reset
to January 9 and 11, 1996, but Villaluz failed to appear on said dates. The husband of Villaluz
asked for a resetting and the case was set anew to March 11, 14 and 19, 1996. Petitioner
Villaluz and her counsel failed to appear on March 11, 1996 which prompted plaintiff Ligons
counsel to move that Villaluz be considered to have waived the presentation of her evidence
and that the case be deemed submitted for decision. The motion was granted and on March
11, 1996, the trial court issued an order submitting the case for decision which order was
received by counsel for Villaluz on March 15, 1996.[13]
On May 7, 1996, the RTC of Makati, Branch 134, rendered its decision, the dispositive
portion of which reads:
WHEREFORE, in the light of the foregoing, judgment is hereby rendered in favor of the
plaintiff and against the defendant, ordering the latter to pay to the former the sum
of P3,224,252.00 (sic) plus legal interest at the rate of 12% per annum from April 2, 1992
(date of filing of the complaint) until the full amount is paid; the sum of P50,000.00 as
attorneys fees, and the costs of suit.[14]
Villaluz filed a motion for reconsideration dated May 23, 1996, stating that given the
opportunity to testify, she will re-affirm the contents of her affidavit that was submitted in support
of her Motion for New Trial, or in the alternative, she will formally offer the same. [15] This was
denied by the RTC in its Order dated July 22, 1996.[16]
Villaluz went to the CA and claimed that the trial court erred: in not dismissing the case on
the ground of forum shopping; in not granting the defendant the opportunity to present evidence
in her behalf thereby depriving her of her fundamental right to due process; and in not
considering the evidence already on record showing that the subject checks had no valid
consideration.[17]
The CA denied the petition in its Decision dated October 1, 1999, ruling that the motion to
dismiss on the ground of forum shopping should have been filed within the time for but before
filing of an answer to the complaint or pleading asserting a claim, pursuant to Section 1(e),
Rule 16 of the Rules of Court; that Supreme Court Administrative Circular No. 04-94 on Anti-
Forum Shopping Rule was not yet existing at the time the instant case was filed; that Villaluz
cannot claim denial of due process as she and her counsel failed to appear in the scheduled
hearings and the fact that Villaluz failed to file a motion for reconsideration when the RTC
considered the case submitted for decision is an indication that she slept on her right; and that
the Sinumpaang Salaysay which she submitted in support of her motion for new trial cannot be
taken into consideration as the same was not formally offered in evidence during trial. [18] The
dispositive portion of the decision reads:
WHEREFORE, premises considered, the appealed decision (dated May 7, 1996) of the
Regional Trial Court (Branch 134) in Makati City in Civil Case No. 92-914 is hereby
AFFIRMED, with costs against the appellant.
SO ORDERED.[19]
 Villaluz filed a motion for reconsideration which was denied by the appellate court in its
Resolution dated June 6, 2000.[20]
Hence, the present petition raising the following issues:
I. WHETHER OR NOT HEREIN RESPONDENT COMMITTED FORUM SHOPPING IN THIS
CASE;
II. IN THE ALTERNATIVE, ASSUMING THAT THERE WAS NO FORUM SHOPPING,
WHETHER OR NOT PETITIONER WAS DEPRIVED OF HER FUNDAMENTAL RIGHT TO
DUE PROCESS;
III. IN THE FURTHER ALTERNATIVE, ASSUMING THAT THERE WAS NO FORUM
SHOPPING AND THAT PETITIONER WAS NOT DEPRIVED OF DUE PROCESS,
WHETHER OR NOT AN ERROR WAS COMMITTED IN NOT CONSIDERING THE
EVIDENCE ALREADY ON RECORD SHOWING THAT THE SUBJECT MEMORANDUM OF
AGREEMENT AND THE CHECKS HAD NO VALID CONSIDERATION AND ARE,
THEREFORE, NULL AND VOID.[21]
As to the first issue raised, petitioner argues that: the respondent and the CA were not
correct in stating that there is no forum shopping in this case since the prohibition against forum
shopping only started with the issuance of Circular No. 28-91 as modified by Admin. Circular
No. 04-94; forum shopping has already been prohibited in Buan vs. Lopez, 145 SCRA 34,
which was promulgated on October 13, 1986 and in Limpin vs. Intermediate Appellate
Court, 161 SCRA 83, promulgated on May 5, 1988;[22] petitioner did not immediately raise the
defense of forum shopping since it was a matter of trial strategy; the defense of forum shopping
may also be raised at any time because it is a matter of judicial policy intended to unclog the
court dockets and to prevent litigants from abusing the courts processes; all the elements of litis
pendentia which are also the elements of forum shopping, are present herein, i.e., the parties,
the subject matter and the reliefs sought are the same; and the considerations for the execution
of the Memorandum of Agreement were the same checks subject matter of the criminal cases;
without said checks the Memorandum of Agreement would be null and void for want of
consideration.[23]
Respondent in his Comment contends that: there is no forum shopping in the case at bar
since the present case was filed with the trial court on April 2, 1992, before Revised Circular
No. 28-91 and Admin. Circular No. 04-94 took effect; the instant case is a collection of sum of
money which sprung from the violation of the Memorandum of Agreement between the
petitioner and respondent, while Criminal Case Nos. 98-73195-213 entitled People vs. Teresita
Villaluz pertain to violation of B.P. Blg. 22 which is a penal law; the said cases have different
nature; there is also no identity of causes of action since the first case involves a personal civil
action for collection of a sum of money whereas the second case is a criminal action wherein
the State has interest.[24]
As to the second issue, petitioner claims that the CA should have been more lenient in
allowing petitioner the opportunity to present her evidence especially considering that the delay
in petitioners presentation of evidence in court was due to the need for accounting and the
efforts of the parties in trying to reach a settlement of the controversy.[25]
Respondent argues that: there were numerous postponements made by petitioner and
her counsel and respondent did not object thereto to accommodate herein petitioner; it was
only on March 11, 1996 that the counsel for the respondent moved that the petitioner be
considered to have waived the presentation of her evidence which the trial court granted;
despite receipt of the Order on March 15, 1996, granting respondents motion, petitioner did not
move to remedy said Order until it became final and executory; the failure of petitioner to file a
Motion for Reconsideration of the Order dated March 11, 1996 closed the door for a possible
reconsideration in her favor; and petitioner ultimately waived her right to present evidence on
her behalf.[26]
As to the third issue, petitioner claims that the CA erred in rejecting petitioners plea to
have her Sinumpaang Salaysay admitted which was favorably considered by the trial court and
given evidentiary weight when petitioners motion for new trial was granted; respondent never
disputed the contents of the statement which is already part of the records of the case; and
since the trial court considered some portions of the record, there is no valid reason not to
appreciate the entire records including the statement since it would absolve her from any
liability in this case.[27]
On the other hand, respondent contends that: the trial court did not commit any mistake
in not taking into consideration said Sinumpaang Salaysay on the ground that said affidavit
was only in support of the Motion for New Trial; and said affidavit cannot be considered by the
trial court since the trial court may only consider what was formally offered to it. [28]
Ruling of the Court
Anent the first issue: Whether there is forum shopping in this case.
We agree with petitioner that the CA and respondent were mistaken in stating that there
could be no forum shopping in this case since the case was filed prior to the effectivity of Admin.
Circular No. 04-94 which required a certification of non-forum shopping.
Ligon filed the complaint for sum of money on April 2, 1992. While it is true that Admin.
Circular No. 04-94, entitled, Additional Requisites for Civil Complaints, Petitions and Other
Initiatory Pleadings Filed in All Courts and Agencies, Other Than The Supreme Court and the
Court of Appeals, to Prevent Forum Shopping on Multiple Filing of Such Pleadings, took effect
on April 1, 1994, or about two years after the complaint of Ligon was filed with the RTC, Makati,
the Court has condemned forum shopping even before the issuance of said Admin. Circular
No. 04-94. The splitting of causes of action was proscribed[29] in the Limpin case cited by
petitioner which was promulgated in 1988.
While petitioner is correct in stating that the rule against forum shopping existed even prior
to the issuance of Admin. Circular No. 04-94, we find that, in the present case, respondent did
not commit forum shopping.
There is forum shopping when, as a result of an adverse opinion in one forum, a party
seeks a favorable opinion, other than by appeal or certiorari in another.[30] There can also be
forum shopping when a party institutes two or more suits in different courts, either
simultaneously or successively, in order to ask the courts to rule on the same or related causes
and/or to grant the same or substantially the same reliefs on the supposition that one or the
other court would make a favorable disposition or increase a partys chances of obtaining a
favorable decision or action.[31] It is an act of malpractice because it trifles with the courts,
abuses their processes, degrades the administration of justice and adds to the already
congested court dockets.[32]
To determine whether a party violated the rule against forum shopping, the most important
question to ask is whether the elements of litis pendentia are present or whether a final
judgment in one case will result to res judicata in another.[33] Otherwise stated, to determine
forum shopping, the test is to see whether in the two or more cases pending, there is identity
of parties, rights or causes of action, and reliefs sought. [34]
Here, the two cases involved are the instant civil case for collection of sum of money
where petitioner is the defendant, and the B.P. Blg. 22 cases where petitioner is the accused.
Clearly, there is no identity of parties for in the criminal case, the plaintiff is the State with Ligon
only as a complaining witness. In the case at bar, Ligon himself is the plaintiff.
There is also a difference in the causes of action. In the instant case, the cause of action
is petitioners breach of contract as embodied in the Memorandum of Agreement, while in the
criminal case, it is the violation of B.P. Blg. 22.
There is also a difference in reliefs sought because in the civil case, what is sought is the
enforcement of the terms in their Memorandum of Agreement, while in the criminal case, it is
the punishment of the offense committed against a public law.
As we explained in Go vs. Dimagiba[35] civil liability differs from criminal liability. What is
punished in the latter is not the failure to pay an obligation but the issuance of checks that
subsequently bounced or were dishonored for insufficiency or lack of funds. The issuance of
worthless checks is prohibited because of its deleterious effects on public interest and its
effects transcend the private interest of the parties directly involved in the transaction and
touches the interest of the community at large.[36] In the present civil case, no such
transcendental public interest exists.
Finally, petitioners argument on forum shopping must fail since she did not raise it at the
first opportunity in the trial court. As noted by the respondent, petitioner only raised the issue
of forum shopping two years after the institution of the civil case. If only for her failure to invoke
such ground at the first opportunity in her motion to dismiss in the trial court, her appeal should
have been given short shrift and denied outright.[37] Petitioners claim that her failure to raise it
in her motion to dismiss was a matter of trial strategy has no persuasive effect for it is well
ensconced that defenses and objections not pleaded in a motion to dismiss or in an answer
are deemed waived except the failure to state a cause of action or that the court has no
jurisdiction.[38] Herein case does not fall within said exceptions.
Anent the second issue: Whether petitioner was denied due process by the trial court.
We have held that due process is satisfied as long as the party is accorded an opportunity
to be heard.[39] The essence of due process is that a party is given a reasonable opportunity to
be heard and submit any evidence one may have in support of ones defense. [40] Where the
opportunity to be heard, either through verbal arguments or pleadings, is accorded and the
party can present its side or defend its interest in due course, there is no denial of due
process.[41] Indeed, where a party was afforded an opportunity to participate in the proceedings
but failed to do so, he cannot complain of deprivation of due process.[42] If said opportunity is
not availed of, it is deemed waived or forfeited without violating the constitutional guarantee. [43]
It cannot be said that petitioner Villaluz was not given her day in court. A judgment on
default was set aside and her motion for new trial and motion to admit answer were granted by
the trial court. After respondent Ligons presentation of evidence, the case was set for the
presentation of petitioner Villaluzs evidence. On three occasions, petitioner asked for the
postponement of the hearings and was allowed by the court. [44] The hearings for October 24,
1995, January 9 and 11, 1996 were reset because of the absence of Villaluz and her counsel.
It was only on March 11, 1996, after several postponements, that the trial court, upon motion
of Ligon, finally resolved to submit the case for decision. While the Court notes that the hearing
was also set for March 14 and 19, 1996, the fact that despite receipt by Villaluz on March 15,
1996 of the Order of the RTC dated March 11, 1996, submitting the case for decision, she did
not file any motion for reconsideration thereof, such that the RTC issued its judgment against
her on May 7, 1996. Thus, based on all the foregoing, petitioner is barred from claiming that
she was denied due process of law.
Anent the third issue: Whether the trial court erred in not considering the affidavit of
petitioner earlier submitted in the motion for new trial.
Petitioner submitted a Sinumpaang Salaysay stating that she is an illiterate and that
sometime in 1990, Ligons lawyer deceived her into signing a Memorandum of Agreement and
in issuing a check for P1.9 M.[45] Petitioner argues that the Sinumpaang Salaysay which she
submitted as an affidavit of merit in support of her motion for new trial should be considered as
part of the records of the case even without formal offer of the same.
We do not agree. There is a need to formally offer affidavits before the courts to afford the
opposing party the opportunity to ascertain or refute the veracity of the contents of such
statements. Courts will only consider as evidence that which has not been formally offered. If
an affidavit was never formally offered, it cannot be considered as evidence. If petitioner
neglected to offer her affidavit in evidence, however vital it may be, she only has herself to
blame.[46]
The rule is that a document, or any article for that matter, is not evidence when it is simply
marked for identification; it must be formally offered and the opposing counsel given an
opportunity to object to it or cross-examine the witness called upon to prove or identify it. It is
necessary that a formal offer is made since judges are required to base their findings of fact
and judgment only, and strictly, upon the evidence offered by the parties at the trial. To allow
a party to attach any document to his pleading and expect the court to consider it as evidence
may draw unwarranted consequences. The opposing party will be deprived of a chance to
examine the document and object to its admissibility. The appellate court will also have difficulty
reviewing the documents not previously scrutinized by the court below. Indeed, the pertinent
provisions of the Revised Rules of Court on the inclusion on appeal of documentary evidence
or exhibits in the records cannot be stretched as to include such pleadings or documents not
offered at the hearing of the case.[47]
In this case, while the motion for new trial was granted, it cannot be said that the contents
of the affidavit attached thereto should be treated by the trial court as evidence for the petitioner
as it was not formally offered during the trial on the merits.
We now come to the determination of the amount of money that is due respondent.
The trial court in its decision, as affirmed by the CA, explained that:
From the evidence adduced, there can be no doubt that the plaintiff has established the
material allegations of the complaint by clear, convincing and competent evidence.
The terms and conditions of the Memorandum of Agreement are clear and
unmistakable. The parties agreed that in case defendant failed to pay the sum
of P1,900,000.00 on or before December 31, 1990, then the amount of P1,324,252.00
would be added to the principal account (P1,900,000.00) and the plaintiff shall have the
right to enforce collection of the entire amounts due and owing from the SECOND
PARTY (defendant) without need of further demand. (Emphasis supplied)
The Memorandum of Agreement has the force of law between the parties. From the moment
the contract is perfected, the parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all consequences which according to their nature, may be in
keeping with good faith, usage and law
Defendants claim that she was merely persuaded to sign the Memorandum of Agreement
and to issue the check in the amount of P1,900,000.00 is unavailing. It is presumed that a
party, who signs a contract, had acted with due care and have signed the said contract with
full knowledge of the import and the obligation she was assuming thereby. This presumption
may not be overcome by the mere testimony of the obligor. To permit a party, when sued
upon a contract, to admit that she signed it but to deny it expresses the agreement she had
made, or to allow her to admit that she signed it solely on the verbal assurance that she
would not be liable thereon, would destroy the value of all contracts. Indeed, it would be
disastrous to give more weight and reliability to the self-serving testimony of a party bound by
the contract than to the contents thereof.[48] (citations omitted)
Harsh as its effects may be on petitioner, we cannot but agree with the findings of the trial
court and the CA.
The Memorandum of Agreement between petitioner and respondent, while termed as
such, is actually a compromise agreement which is defined as an agreement whereby the
parties, by making reciprocal concessions, avoid a litigation or put an end to one already
commenced.[49]
As in any other contract, it is perfected by mere consent, the latter being manifested by
the meeting of the offer and the acceptance upon the thing and the cause which constitutes
the contract.[50] It is perfected upon the meeting of the minds and does not need a judicial
approval for its perfection.[51]
Here, petitioner claims that the Memorandum of Agreement is void since she is an illiterate
who was taken advantage of by respondents counsel.
Indeed, there exists a presumption of mistake or error to those who have not had the
benefit of a good education under Art. 1332 of the Civil Code. [52] However, one who alleges
such mistake or fraud must show that her personal circumstances warrant the application
thereof.[53] Apart from claiming in her affidavit that she is illiterate, petitioner did not make any
effort to prove in court the truthfulness of such claim, despite the many opportunities given her
to do so. We therefore cannot give credence to her allegation.
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.
G.R. No. 104818 September 17, 1993
ROBERTO DOMINGO, petitioner,
vs.
COURT OF APPEALS and DELIA SOLEDAD AVERA represented by her Attorney-in-
Fact MOISES R. AVERA, respondents.
Jose P.O. Aliling IV for petitioner.
De Guzman, Meneses & Associates for private respondent.
ROMERO, J.:
The instant petition seeks the reversal of respondent court's ruling finding no grave abuse of
discretion in the lower court's order denying petitioner's motion to dismiss the petition for
declaration of nullity of marriage and separation of property.
On May 29, 1991, private respondent Delia Soledad A. Domingo filed a petition before the
Regional Trial Court of Pasig entitled "Declaration of Nullity of Marriage and Separation of
Property" against petitioner Roberto Domingo. The petition which was docketed as Special
Proceedings No. 1989-J alleged among others that: they were married on November 29,
1976 at the YMCA Youth Center Bldg., as evidenced by a Marriage Contract Registry No.
1277K-76 with Marriage License No. 4999036 issued at Carmona, Cavite; unknown to her,
he had a previous marriage with one Emerlina dela Paz on April 25, 1969 which marriage is
valid and still existing; she came to know of the prior marriage only sometime in 1983 when
Emerlina dela Paz sued them for bigamy; from January 23 1979 up to the present, she has
been working in Saudi Arabia and she used to come to the Philippines only when she would
avail of the one-month annual vacation leave granted by her foreign employer since 1983 up
to the present, he has been unemployed and completely dependent upon her for support and
subsistence; out of her personal earnings, she purchased real and personal properties with a
total amount of approximately P350,000.00, which are under the possession and
administration of Roberto; sometime in June 1989, while on her one-month vacation, she
discovered that he was cohabiting with another woman; she further discovered that he had
been disposing of some of her properties without her knowledge or consent; she confronted
him about this and thereafter appointed her brother Moises R. Avera as her attorney-in-fact to
take care of her properties; he failed and refused to turn over the possession and
administration of said properties to her brother/attorney-in-fact; and he is not authorized to
administer and possess the same on account of the nullity of their marriage. The petition
prayed that a temporary restraining order or a writ of preliminary injunction be issued
enjoining Roberto from exercising any act of administration and ownership over said
properties; their marriage be declared null and void and of no force and effect; and Delia
Soledad be declared the sole and exclusive owner of all properties acquired at the time of
their void marriage and such properties be placed under the proper management and
administration of the attorney-in-fact.
Petitioner filed a Motion to Dismiss on the ground that the petition stated no cause of action.
The marriage being void ab initio, the petition for the declaration of its nullity is, therefore,
superfluous and unnecessary. It added that private respondent has no property which is in
his possession.
On August 20, 1991, Judge Maria Alicia M. Austria issued an Order denying the motion to
dismiss for lack of merit. She explained:
Movant argues that a second marriage contracted after a first marriage by a
man with another woman is illegal and void (citing the case of Yap v. Court of
Appeals, 145 SCRA 229) and no judicial decree is necessary to establish the
invalidity of a void marriage (citing the cases of People v. Aragon, 100 Phil.
1033; People v. Mendoza, 95 Phil. 845). Indeed, under the Yap case there is
no dispute that the second marriage contracted by respondent with herein
petitioner after a first marriage with another woman is illegal and void.
However, as to whether or not the second marriage should first be judicially
declared a nullity is not an issue in said case. In the case of Vda. de
Consuegra v. GSIS, the Supreme Court ruled in explicit terms, thus:
And with respect to the right of the second wife, this Court
observed that although the second marriage can be
presumed to be void ab initio as it was celebrated while the
first marriage was still subsisting, still there is need for
judicial declaration of its nullity. (37 SCRA 316, 326)
The above ruling which is of later vintage deviated from the
previous rulings of the Supreme Court in the aforecited
cases of Aragon and Mendoza.
Finally, the contention of respondent movant that petitioner
has no property in his possession is an issue that may be
determined only after trial on the merits.1
A motion for reconsideration was filed stressing the erroneous application of Vda. de
Consuegra v. GSIS2 and the absence of justiciable controversy as to the nullity of the
marriage. On September 11, 1991, Judge Austria denied the motion for reconsideration and
gave petitioner fifteen (15) days from receipt within which to file his answer.
Instead of filing the required answer, petitioner filed a special civil action
of certiorari and mandamus on the ground that the lower court acted with grave abuse of
discretion amounting to lack of jurisdiction in denying the motion to dismiss.
On February 7, 1992, the Court of Appeals3 dismissed the petition. It explained that the case
of Yap v. CA4 cited by petitioner and that of Consuegra v. GSIS relied upon by the lower court
do not have relevance in the case at bar, there being no identity of facts because these cases
dealt with the successional rights of the second wife while the instant case prays for
separation of property corollary with the declaration of nullity of marriage. It observed that the
separation and subsequent distribution of the properties acquired during the union can be
had only upon proper determination of the status of the marital relationship between said
parties, whether or not the validity of the first marriage is denied by petitioner. Furthermore, in
order to avoid duplication and multiplicity of suits, the declaration of nullity of marriage may
be invoked in this proceeding together with the partition and distribution of the properties
involved. Citing Articles 48, 50 and 52 of the Family Code, it held that private respondent's
prayer for declaration of absolute nullity of their marriage may be raised together with other
incidents of their marriage such as the separation of their properties. Lastly, it noted that
since the Court has jurisdiction, the alleged error in refusing to grant the motion to dismiss is
merely one of law for which the remedy ordinarily would have been to file an answer, proceed
with the trial and in case of an adverse decision, reiterate the issue on appeal. The motion for
reconsideration was subsequently denied for lack of merit. 5
Hence, this petition.
The two basic issues confronting the Court in the instant case are the following.
First, whether or not a petition for judicial declaration of a void marriage is necessary. If in the
affirmative, whether the same should be filed only for purposes of remarriage.
Second, whether or not SP No. 1989-J is the proper remedy of private respondent to recover
certain real and personal properties allegedly belonging to her exclusively.
Petitioner, invoking the ruling in People v. Aragon6 and People v. Mendoza,7 contends that
SP. No. 1989-J for Declaration of Nullity of Marriage and Separation of Property filed by
private respondent must be dismissed for being unnecessary and superfluous. Furthermore,
under his own interpretation of Article 40 of the Family Code, he submits that a petition for
declaration of absolute nullity of marriage is required only for purposes of remarriage. Since
the petition in SP No. 1989-J contains no allegation of private respondent's intention to
remarry, said petition should therefore, be dismissed.
On the other hand, private respondent insists on the necessity of a judicial declaration of the
nullity of their marriage, not for purposes of remarriage, but in order to provide a basis for the
separation and distribution of the properties acquired during coverture.
There is no question that the marriage of petitioner and private respondent celebrated while
the former's previous marriage with one Emerlina de la Paz was still subsisting, is bigamous.
As such, it is from the beginning.8 Petitioner himself does not dispute the absolute nullity of
their marriage.9
The cases of People v. Aragon and People v. Mendoza relied upon by petitioner are cases
where the Court had earlier ruled that no judicial decree is necessary to establish the
invalidity of a void, bigamous marriage. It is noteworthy to observe that Justice Alex Reyes,
however, dissented on these occasions stating that:
Though the logician may say that where the former marriage was void there
would be nothing to dissolve, still it is not for the spouses to judge whether
that marriage was void or not. That judgment is reserved to the courts. . . . 10
This dissenting opinion was adopted as the majority position in subsequent cases involving
the same issue. Thus, in Gomez v. Lipana, 11 the Court abandoned its earlier ruling in
the Aragon and Mendoza cases. In reversing the lower court's order forfeiting the husband's
share of the disputed property acquired during the second marriage, the Court stated that "if
the nullity, or annulment of the marriage is the basis for the application of Article 1417, there
is need for a judicial declaration thereof, which of course contemplates an action for that
purpose."
Citing Gomez v. Lipana, the Court subsequently held in Vda. de Consuegra v. Government
Service Insurance System, that "although the second marriage can be presumed to be
void ab initio as it was celebrated while the first marriage was still subsisting, still there is
need for judicial declaration of such nullity."
In Tolentino v. Paras,12 however, the Court turned around and applied
the Aragon and Mendoza ruling once again. In granting the prayer of the first wife asking for a
declaration as the lawful surviving spouse and the correction of the death certificate of her
deceased husband, it explained that "(t)he second marriage that he contracted with private
respondent during the lifetime of his first spouse is null and void from the beginning and of no
force and effect. No judicial decree is necessary to establish the invalidity of a void marriage."
However, in the more recent case of Wiegel v. Sempio-Diy 13 the Court reverted to
the Consuegra case and held that there was "no need of introducing evidence about the
existing prior marriage of her first husband at the time they married each other, for then such
a marriage though void still needs according to this Court a judicial declaration of such fact
and for all legal intents and purposes she would still be regarded as a married woman at the
time she contracted her marriage with respondent Karl Heinz Wiegel."
Came the Family Code which settled once and for all the conflicting jurisprudence on the
matter. A declaration of the absolute nullity of a marriage is now explicitly required either as a
cause of action or a ground for defense. 14 Where the absolute nullity of a previous marriage
is sought to be invoked for purposes of contracting a second marriage, the sole basis
acceptable in law for said projected marriage be free from legal infirmity is a final judgment
declaring the previous marriage void. 15
The Family Law Revision Committee and the Civil Code Revision Committee 16 which drafted
what is now the Family Code of the Philippines took the position that parties to a marriage
should not be allowed to assume that their marriage is void even if such be the fact but must
first secure a judicial declaration of the nullity of their marriage before they can be allowed to
marry again. This is borne out by the following minutes of the 152nd Joint Meeting of the Civil
Code and Family Law Committees where the present Article 40, then Art. 39, was discussed.
B. Article 39. —
The absolute nullity of a marriage may be invoked only on
the basis of a final judgment declaring the marriage void,
except as provided in Article 41.
Justice Caguioa remarked that the above provision should include not only
void but also voidable marriages. He then suggested that the above provision
be modified as follows:
The validity of a marriage may be invoked only . . .
Justice Reyes (J.B.L. Reyes), however, proposed that they say:
The validity or invalidity of a marriage may be invoked
only . . .
On the other hand, Justice Puno suggested that they say:
The invalidity of a marriage may be invoked only . . .
Justice Caguioa explained that his idea is that one cannot determine for
himself whether or not his marriage is valid and that a court action is needed.
Justice Puno accordingly proposed that the provision be modified to read:
The invalidity of a marriage may be invoked only on the
basis of a final judgment annulling the marriage or declaring
the marriage void, except as provided in Article 41.
Justice Caguioa remarked that in annulment, there is no question. Justice
Puno, however, pointed out that, even if it is a judgment of annulment, they
still have to produce the judgment.
Justice Caguioa suggested that they say:
The invalidity of a marriage may be invoked only on the
basis of a final judgment declaring the marriage invalid,
except as provided in Article 41.
Justice Puno raised the question: When a marriage is declared invalid, does
it include the annulment of a marriage and the declaration that the marriage
is void? Justice Caguioa replied in the affirmative. Dean Gupit added that in
some judgments, even if the marriage is annulled, it is declared void. Justice
Puno suggested that this matter be made clear in the provision.
Prof. Baviera remarked that the original idea in the provision is to require first
a judicial declaration of a void marriage and not annullable marriages, with
which the other members concurred. Judge Diy added that annullable
marriages are presumed valid until a direct action is filed to annul it, which
the other members affirmed. Justice Puno remarked that if this is so, then the
phrase "absolute nullity" can stand since it might result in confusion if they
change the phrase to "invalidity" if what they are referring to in the provision
is the declaration that the marriage is void.
Prof. Bautista commented that they will be doing away with collateral defense
as well as collateral attack. Justice Caguioa explained that the idea in the
provision is that there should be a final judgment declaring the marriage void
and a party should not declare for himself whether or not the marriage is
void, while the other members affirmed. Justice Caguioa added that they are,
therefore, trying to avoid a collateral attack on that point. Prof. Bautista stated
that there are actions which are brought on the assumption that the marriage
is valid. He then asked: Are they depriving one of the right to raise the
defense that he has no liability because the basis of the liability is void? Prof.
Bautista added that they cannot say that there will be no judgment on the
validity or invalidity of the marriage because it will be taken up in the same
proceeding. It will not be a unilateral declaration that, it is a void
marriage. Justice Caguioa saw the point of Prof. Bautista and suggested that
they limit the provision to remarriage. He then proposed that Article 39 be
reworded as follows:
The absolute nullity of a marriage for purposes of remarriage
may be invoked only on the basis of final judgment . . .
Justice Puno suggested that the above be modified as follows:
The absolute nullity of a previous marriage may be invoked
for purposes of establishing the validity of a subsequent
marriage only on the basis of a final judgment declaring such
previous marriage void, except as provided in Article 41.
Justice Puno later modified the above as follows:
For the purpose of establishing the validity of a subsequent
marriage, the absolute nullity of a previous marriage may
only be invoked on the basis of a final judgment declaring
such nullity, except as provided in Article 41.
Justice Caguioa commented that the above provision is too broad and will
not solve the objection of Prof. Bautista. He proposed that they say:
For the purpose of entering into a subsequent marriage, the
absolute nullity of a previous marriage may only be invoked
on the basis of a final judgment declaring such nullity, except
as provided in Article 41.
Justice Caguioa explained that the idea in the above provision is that if one
enters into a subsequent marriage without obtaining a final judgment
declaring the nullity of a previous marriage, said subsequent marriage is
void ab initio.
After further deliberation, Justice Puno suggested that they go back to the
original wording of the provision as follows:
The absolute nullity of a previous marriage may be invoked
for purposes of remarriage only on the basis of a final
judgment declaring such previous marriage void, except as
provided in Article 41. 17
In fact, the requirement for a declaration of absolute nullity of a marriage is also for the
protection of the spouse who, believing that his or her marriage is illegal and void, marries
again. With the judicial declaration of the nullity of his or her first marriage, the person who
marries again cannot be charged with bigamy. 18
Just over a year ago, the Court made the pronouncement that there is a necessity for a
declaration of absolute nullity of a prior subsisting marriage before contracting another in the
recent case of Terre v. Terre. 19 The Court, in turning down the defense of respondent Terre
who was charged with grossly immoral conduct consisting of contracting a second marriage
and living with another woman other than complainant while his prior marriage with the latter
remained subsisting, said that "for purposes of determining whether a person is legally free to
contract a second marriage, a judicial declaration that the first marriage was null and void ab
initio is essential."
As regards the necessity for a judicial declaration of absolute nullity of marriage, petitioner
submits that the same can be maintained only if it is for the purpose of remarriage. Failure to
allege this purpose, according to petitioner's theory, will warrant dismissal of the same.
Article 40 of the Family Code provides:
Art. 40. The absolute nullity of a previous marriage may be invoked for
purposes of remarriage on the basis solely of a final judgment declaring such
previous marriage void. (n)
Crucial to the proper interpretation of Article 40 is the position in the provision of the word
"solely." As it is placed, the same shows that it is meant to qualify "final judgment declaring
such previous marriage void." Realizing the need for careful craftsmanship in conveying the
precise intent of the Committee members, the provision in question, as it finally emerged, did
not state "The absolute nullity of a previous marriage may be invoked solely for purposes of
remarriage . . .," in which case "solely" would clearly qualify the phrase "for purposes of
remarriage." Had the phraseology been such, the interpretation of petitioner would have been
correct and, that is, that the absolute nullity of a previous marriage may be invoked solely for
purposes of remarriage, thus rendering irrelevant the clause "on the basis solely of a final
judgment declaring such previous marriage void."
That Article 40 as finally formulated included the significant clause denotes that such final
judgment declaring the previous marriage void need not be obtained only for purposes of
remarriage. Undoubtedly, one can conceive of other instances where a party might well
invoke the absolute nullity of a previous marriage for purposes other than remarriage, such
as in case of an action for liquidation, partition, distribution and separation of property
between the erstwhile spouses, as well as an action for the custody and support of their
common children and the delivery of the latters' presumptive legitimes. In such cases,
evidence needs must be adduced, testimonial or documentary, to prove the existence of
grounds rendering such a previous marriage an absolute nullity. These need not be limited
solely to an earlier final judgment of a court declaring such previous marriage void. Hence, in
the instance where a party who has previously contracted a marriage which remains
subsisting desires to enter into another marriage which is legally unassailable, he is required
by law to prove that the previous one was an absolute nullity. But this he may do on the
basis solely of a final judgment declaring such previous marriage void.
This leads us to the question: Why the distinction? In other words, for purposes of
remarriage, why should the only legally acceptable basis for declaring a previous marriage an
absolute nullity be a final judgment declaring such previous marriage void? Whereas, for
purposes other than remarriage, other evidence is acceptable?
Marriage, a sacrosanct institution, declared by the Constitution as an "inviolable social
institution, is the foundation of the family;" as such, it "shall be protected by the State." 20 In
more explicit terms, the Family Code characterizes it as "a special contract of permanent
union between a man and a woman entered into in accordance with law for the establishment
of conjugal, and family life." 21 So crucial are marriage and the family to the stability and
peace of the nation that their "nature, consequences, and incidents are governed by law and
not subject to stipulation . . ." 22 As a matter of policy, therefore, the nullification of a marriage
for the purpose of contracting another cannot be accomplished merely on the basis of the
perception of both parties or of one that their union is so defective with respect to the
essential requisites of a contract of marriage as to render it void ipso jure and with no legal
effect — and nothing more. Were this so, this inviolable social institution would be reduced to
a mockery and would rest on very shaky foundations indeed. And the grounds for nullifying
marriage would be as diverse and far-ranging as human ingenuity and fancy could conceive.
For such a social significant institution, an official state pronouncement through the courts,
and nothing less, will satisfy the exacting norms of society. Not only would such an open and
public declaration by the courts definitively confirm the nullity of the contract of marriage, but
the same would be easily verifiable through records accessible to everyone.
That the law seeks to ensure that a prior marriage is no impediment to a second sought to be
contracted by one of the parties may be gleaned from new information required in the Family
Code to be included in the application for a marriage license, viz, "If previously married, how,
when and where the previous marriage was dissolved and annulled." 23
Reverting to the case before us, petitioner's interpretation of Art. 40 of the Family Code is,
undoubtedly, quite restrictive. Thus, his position that private respondent's failure to state in
the petition that the same is filed to enable her to remarry will result in the dismissal of SP No.
1989-J is untenable. His misconstruction of Art. 40 resulting from the misplaced emphasis on
the term "solely" was in fact anticipated by the members of the Committee.
Dean Gupit commented the word "only" may be misconstrued to refer to "for
purposes of remarriage." Judge Diy stated that "only" refers to "final
judgment." Justice Puno suggested that they say "on the basis only of a final
judgment." Prof. Baviera suggested that they use the legal term "solely"
instead of "only," which the Committee approved. 24 (Emphasis supplied)
Pursuing his previous argument that the declaration for absolute nullity of marriage is
unnecessary, petitioner suggests that private respondent should have filed an ordinary civil
action for the recovery of the properties alleged to have been acquired during their union. In
such an eventuality, the lower court would not be acting as a mere special court but would be
clothed with jurisdiction to rule on the issues of possession and ownership. In addition, he
pointed out that there is actually nothing to separate or partition as the petition admits that all
the properties were acquired with private respondent's money.
The Court of Appeals disregarded this argument and concluded that "the prayer for
declaration of absolute nullity of marriage may be raised together with the other incident of
their marriage such as the separation of their properties."
When a marriage is declared void ab initio, the law states that the final judgment therein shall
provide for "the liquidation, partition and distribution of the properties of the spouses, the
custody and support of the common children, and the delivery of their presumptive legitimes,
unless such matters had been adjudicated in previous judicial proceedings." 25 Other specific
effects flowing therefrom, in proper cases, are the following:
Art. 43. xxx xxx xxx
(2) The absolute community of property or the conjugal partnership, as the
case may be, shall be dissolved and liquidated, but if either spouse
contracted said marriage in bad faith, his or her share of the net profits of the
community property or conjugal partnership property shall be forfeited in
favor of the common children or, if there are none, the children of the guilty
spouse by a previous marriage or, in default of children, the innocent spouse;
(3) Donations by reason of marriage shall remain valid, except that if the
donee contracted the marriage in bad faith, such donations made to said
donee are revoked by operation of law;
(4) The innocent spouse may revoke the designation of the other spouse
who acted in bad faith as a beneficiary in any insurance policy, even if such
designation be stipulated as irrevocable; and
 (5) The spouse who contracted the subsequent marriage in bad faith shall be
disqualified to inherit from the innocent spouse by testate and intestate
succession. (n)

Art. 44. If both spouses of the subsequent marriage acted in bad faith, said
marriage shall be void ab initio and all donations by reason of marriage and
testamentary disposition made by one in favor of the other are revoked by
operation of law. (n) 26

Based on the foregoing provisions, private respondent's ultimate prayer for separation of
property will simply be one of the necessary consequences of the judicial declaration of
absolute nullity of their marriage. Thus, petitioner's suggestion that in order for their
properties to be separated, an ordinary civil action has to be instituted for that purpose is
baseless. The Family Code has clearly provided the effects of the declaration of nullity of
marriage, one of which is the separation of property according to the regime of property
relations governing them. It stands to reason that the lower court before whom the issue of
nullity of a first marriage is brought is likewise clothed with jurisdiction to decide the incidental
questions regarding the couple's properties. Accordingly, the respondent court committed no
reversible error in finding that the lower court committed no grave abuse of discretion in
denying petitioner's motion to dismiss SP No. 1989-J.

WHEREFORE, the instant petition is hereby DENIED. The decision of respondent Court
dated February 7, 1992 and the Resolution dated March 20, 1992 are AFFIRMED.

SO ORDERED.
 FIRST DIVISION
G.R. No. 166421 September 5, 2006
PHILIPPINE JOURNALISTS, INC., BOBBY DELA CRUZ, ARNOLD BANARES and ATTY.
RUBY RUIZ BRUNO,petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. COMMS. LOURDES JAVIER, TITO
GENILO and ERNESTO VERCELES, JOURNAL EMPLOYEES UNION, and THE COURT
OF APPEALS, respondents.
DECISION
CALLEJO, SR., J.:
This is a Petition for Certiorari under Rule 651 of the Rules of Court of the Decision2 of the
Court of Appeals (CA) in CA-G.R. SP No. 81544, as well as the Resolution3 dated November
23, 2004 denying the motion for reconsideration thereof.
The Antecedents
The Philippine Journalists, Inc. (PJI) is a domestic corporation engaged in the publication and
sale of newspapers and magazines. The exclusive bargaining agent of all the rank-and-file
employees in the company is the Journal Employees Union (Union for brevity).
Sometime in April 2005, the Union filed a notice of strike before the National Conciliation and
Mediation Board (NCMB), claiming that PJI was guilty of unfair labor practice. PJI was then
going to implement a retrenchment program due to "over-staffing or bloated work force and
continuing actual losses sustained by the company for the past three years resulting in
negative stockholders equity of P127.0 million." The Secretary of the Department of Labor
and Employment (DOLE) certified4 the labor dispute to the National Labor Relations
Commission (NLRC) for compulsory arbitration pursuant to Article 263 (g) of the Labor Code.
The case was docketed as NCMB-NCR-NS-03-087-00.
The parties were required to submit their respective position papers. PJI filed a motion to
dismiss, contending that the Secretary of Labor had no jurisdiction to assume over the case
and thus erred in certifying it to the Commission. The NLRC denied the motion. PJI,
thereafter, filed a Motion to Defer Further Proceedings, alleging, among others, that the filing
of its position paper might jeopardize attempts to settle the matter extrajudicially, which the
NLRC also denied. The case was, thereafter, submitted for decision.5
In its Resolution6 dated May 31, 2001, the NLRC declared that the 31 complainants were
illegally dismissed and that there was no basis for the implementation of petitioner's
retrenchment program. The NLRC noted that the following circumstances belied PJI's claim
that it had incurred losses: (1) office renovations were made as evidenced by numerous
purchase orders; (2) certain employees were granted merit increases; and (3) a Christmas
party for employees was held at a plush hotel. It also observed that PJI's executives refused
to forego their quarterly bonuses if the Union members refused to forego theirs.
Thus, the NLRC declared that the retrenchment of 31 employees was illegal and ordered
their reinstatement "to their former position without loss of seniority rights and other benefits,
with payment of unpaid salaries, bonuses and backwages from the date of dismissal up to
the actual date of reinstatement plus 10% of the total monetary award as attorney's fees." PJI
was adjudged liable in the total amount of P6,447,008.57.7
Thereafter, the parties executed a Compromise Agreement8 dated July 9, 2001, where PJI
undertook to reinstate the 31 complainant-employees effective July 1, 2001 without loss of
seniority rights and benefits; 17 of them who were previously retrenched were agreed to be
given full and complete payment of their respective monetary claims, while 14 others would
be paid their monetary claims minus what they received by way of separation pay. The
agreement stated that the parties entered the agreement "[i]n a sincere effort at peace and
reconciliation as well as to jointly establish a new era in labor management relations marked
by mutual trust, cooperation and assistance, enhanced by open, constant and sincere
communication with a view of advancing the interest of both the company and its employees."
The compromise agreement was submitted to the NLRC for approval. All the employees
mentioned in the agreement and in the NLRC Resolution affixed their signatures thereon.
They likewise signed the Joint Manifesto and Declaration of Mutual Support and
Cooperation9 which had also been submitted for the consideration of the labor tribunal.
The NLRC forthwith issued another Resolution10 on July 25, 2002, declaring that the
Clarificatory Motion of complainants Floro Andrin, Jr. and Jazen M. Jilhani had been mooted
by the compromise agreement as they appeared to be included in paragraph 2.c and
paragraph 2.d, respectively thereof. As to the seven others who had filed a motion for
clarification, the NLRC held that they should have filed individual affidavits to establish their
claims or moved to consolidate their cases with the certified case. Thus, the NLRC granted
the computation of their benefits as shown in the individual affidavits of the complainants.
However, as to the prayer to declare the Union guilty of unfair labor practice, to continue with
the CBA negotiation and to pay moral and exemplary damages, the NLRC ruled that there
was no sufficient factual and legal basis to modify its resolution. Thus, the compromise
agreement was approved and NCMB-NCR-NS-03-087-00 was deemed closed and
terminated.11
In the meantime, however, the Union filed another Notice of Strike on July 1, 2002, premised
on the following claims:
1. OUTRIGHT DISMISSAL OF 29 EMPLOYEES
2. VIOLATION OF CBA BENEFITS
3. NON-PAYMENT OF ALLOWANCES, MEAL, RICE, TRANSPORTATION,
QUARTERLY BONUS, X-MAS BONUS, ANNIVERSARY BONUS, HEALTH
INSURANCE, DENTAL TO 29 EMPLOYEES
4. NON-PAYMENT OF BACKWAGES OF 38 REINSTATED EMPLOYEES [JUNE
2001 SALARY AND ALLOWANCES, DIFFERENCE (sic) OF ALLOWANCES AND
BONUSES AWARDED BY NLRC]
5. TRANSPORTATION ALLOWANCE OF 5 UNION MEMBERS
6. NON-PAYMENT OF P1000 INCREASE PER CBA
7. DIMINUTION OF SALARY OF 200 EMPLOYEES TO 50%12
In an Order13 dated September 16, 2002, the DOLE Secretary certified the case to the
Commission for compulsory arbitration. The case was docketed as NCMB-NCR-NS-07-251-
02.
The Union claimed that 29 employees were illegally dismissed from employment, and that the
salaries and benefits14 of 50 others had been illegally reduced.15 After the retrenchment
program was implemented, 200 Union members-employees who continued working for
petitioner had been made to sign five-month contracts. The Union also alleged that the
company, through its legal officer, threatened to dismiss some 200 union members from
employment if they refused to conform to a 40% to 50% salary reduction; indeed, the 29
employees who refused to accede to these demands were dismissed on June 28, 2002. The
Union prayed that the dismissed employees be reinstated with payment of full backwages
and all other benefits or their monetary equivalent from the date of their dismissal on July 3,
2002 up to the actual date of reinstatement; and that the CBA benefits (as of November
2002) of the 29 employees and 50 others be restored.
In its Resolution16 dated July 31, 2003, the NLRC ruled that the complainants were not
illegally dismissed. The May 31, 2001 Resolution declaring the retrenchment program illegal
did not attain finality as "it had been academically mooted by the compromise agreement
entered into between both parties on July 9, 2001." According to the Commission, it was on
the basis of this agreement that the July 25, 2002 Resolution which declared the case closed
and terminated was issued. Pursuant to Article 223 of the Labor Code, this later resolution
attained finality upon the expiration of ten days from both parties' receipt thereof. Thus, the
May 31, 2001 Resolution could not be made the basis to justify the alleged continued
employment regularity of the 29 complainants subsequent to their retrenchment. The NLRC
further declared that the two cases involved different sets of facts, hence, the inapplicability of
the doctrine of stare decisis. In the first action, the issue was whether the complainants as
regular employees were illegally retrenched; in this case, whether the 29 complainants,
contractual employees, were illegally dismissed on separate dates long after their
retrenchment.
The NLRC also declared that by their separate acts of entering into fixed-term employment
contracts with petitioner after their separation from employment by virtue of retrenchment,
they are deemed to have admitted the validity of their separation from employment and are
thus estopped from questioning it. Moreover, there was no showing that the complainants
were forced or pressured into signing the fixed-term employment contracts which they
entered into. Consequently, their claims for CBA benefits and increases from January to
November 2002 should be dismissed. The NLRC pointed out that since they were mere
contractual employees, the complainants were necessarily excluded from the collective
bargaining unit. The NLRC stressed that the complainants had refused to be regularized and
ceased to be employees of petitioner upon the expiration of their last fixed-term employment
contracts. Thus, the NLRC dismissed the case for lack of merit, but directed the company to
"give preference to the separated 29 complainants should they apply for re-employment."
On the other issues raised by the complainants, the NLRC held:
We, furthermore find that JEU has no personality to represent the 29 Complainants
for, as prudently discussed above, they were contractual employees, not regular
employees, from the time they entered into fixed-term employment contracts after
being retrenched up to the time they ceased being employees of PJI due to the non-
renewal of their last fixed-term employment contracts. As contractual employees,
they were excluded from the Collective Bargaining Unit (Section 2, CBA) and hence,
not union members.
Complainants contend that PJI admitted that the 29 Complainants were union
members because PJI deducted union dues from their monthly wages.
We, however, do not subscribe to this view.
Firstly, although PJI deducted union dues from the monthly wages of the 29
employees, it erroneously did so due to the distracting misrepresentation of JEU that
they were union members. Thus, if there is any legal effect of these acts of
 misrepresentation and erroneous deduction, it is certainly the liability of JEU for
restitution of the erroneously deducted amounts to PJI.
Secondly, the union membership admission due to erroneous union dues deduction
is incompatible with the fixed-term employment contracts Complainants entered into
with PJI.
We finally rule that JEU is not guilty of unfair labor practice. Although it admitted the
29 contractual employees as its members and represented them in the instant case
and circulated derogatory letters and made accusations against Respondents, it is,
nevertheless, deemed to have acted in good faith, there being no substantial
evidence on record showing that they did so in bad faith and with malice.
Much as we empathize with Complainants in their period of depressing economic
plight and hence, sincerely yearn to extricate them from them such a situation, [w]e
cannot do anything, for our hands are shackled by the hard but true merits of the
instant case. As an exception to this incapacity, however, [w]e can request
Respondents to give preference to the 29 Complainants should they apply for re-
employment.17
The Union assailed the ruling of the NLRC before the CA via petition for certiorari under Rule
65.
In its Decision dated August 17, 2004, the appellate court held that the NLRC gravely abused
its discretion in ruling for PJI. The compromise agreement referred only to the award given by
the NLRC to the complainants in the said case, that is, the obligation of the employer to the
complainants. The CA pointed out that the NLRC Resolution nevertheless declared that
respondent failed to prove the validity of its retrenchment program, which according to it,
stands even after the compromise agreement was executed; it was the reason why the
agreement was reached in the first place.
The CA further held that the act of respondent in hiring the retrenched employees as
contractual workers was a ploy to circumvent the latter's security of tenure. This is evidenced
by the admission of PJI, that it hired contractual employees (majority of whom were those
retrenched) because of increased, albeit uncertain, demand for its publications. The CA
pointed out that this was done almost immediately after implementing the retrenchment
program. Another "telling feature" is the fact that the said employees were re-hired for five-
month contracts only, and were later offered regular employment with salaries lower than
what they were previously receiving. The CA also ruled that the dismissed employees were
not barred from pursuing their monetary claims despite the fact that they had accepted their
separation pay and signed their quitclaims. The dispositive portion of the decision reads:
WHEREFORE, the petition is GRANTED. Respondent is ordered to reinstate the 29
dismissed employees to their previous positions without loss of seniority rights and
payment of their full backwages from the time of their dismissal up to their actual
reinstatement. Respondent is likewise ordered to pay the 29 and 50 employees,
respectively, their rightful benefits under the CBA, less whatever amount they have
already received. The records of this case are remanded to the NLRC for the
computation of the monetary awards.
SO ORDERED.18
The Present Petition
PJI, its President Bobby Dela Cruz, its Executive Vice-President Arnold Banares, and its
Chief Legal Officer Ruby Ruiz Bruno, the petitioners, now come before this Court and submit
that the CA erred as follows:
I
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT ADOPTED THE RESOLUTION DATED 31 MAY 2001 IN
CERT. CASE NO. 000181-00 AND APPLIED THE SAME TO THE INSTANT CASE
DOCKETED AS CERT. CASE NO. 000229-02, DESPITE THE SAID RESOLUTION
BEING ABANDONED AND ACADEMICALLY MOOTED BY THE RESOLUTION
DATED 25 JULY 2001, WHICH APPROVED THE
COMPROMISE AGREEMENT BETWEEN THE PARTIES IN CERT. CASE NO.
000181-00. IN FINE; THE HONORABLE COURT OF APPEALS APPLIED TO THE
INSTANT CASE THE LOGIC AND LAW OF AN ABANDONED RESOLUTION
WHICH NEVER ATTAINED FINALITY.
II
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT TRIED FACTS AND EVIDENCES WHICH WERE NOT
PRESENTED AND CONSIDERED BY THE COURT A QUO. IN FINE, THE
HONORABLE COURT OF APPEALS WENT BEYOND ITS MANDATE AND
AUTHORITY WHEN IT BECAME A TRIER OF FACTS.
III
 THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT GRANTED TO AWARD 50 OTHER PERSONS WHO ARE
NOT PARTIES OR PRIVIES TO THE INSTANT CASE. IN FINE, THE HONORABLE
COURT OF APPEALS GRANTED AWARDS TO THOSE WITH WHOM IT NEVER
HAD JURISDICTION.19
At the outset, we note that this case was brought before us via petition for certiorari under
Rule 65 of the Revised Rules of Civil Procedure. The proper remedy, however, was to file a
petition under Rule 45. It must be stressed that certiorari under Rule 65 is "a remedy narrow
in scope and inflexible in character. It is not a general utility tool in the legal
workshop."20 Moreover, the special civil action for certiorari will lie only when a court has
acted without or in excess of jurisdiction or with grave abuse of discretion. 21
Be that as it may, a petition for certiorari may be treated as a petition for review under Rule
45. Such move is in accordance with the liberal spirit pervading the Rules of Court and in the
interest of substantial justice.22 As the instant petition was filed within the prescribed fifteen-
day period, and in view of the substantial issues raised, the Court resolves to give due course
to the petition and treat the same as a petition for review on certiorari. 23
The primary issue before the Court is whether an NLRC Resolution, which includes a
pronouncement that the members of a union had been illegally dismissed, is abandoned or
rendered "moot and academic" by a compromise agreement subsequently entered into
between the dismissed employees and the employer; this, in turn, raises the question of
whether such a compromise agreement constitutes res judicata to a new complaint later filed
by other union members-employees, not parties to the agreement, who likewise claim to have
been illegally dismissed.
Petitioners point out that a compromise agreement is the product of free will and consent of
the parties and that such agreement can be entered into during any stage of the case. They
insist that its terms are not dictated or dependent on the court's findings of facts; it is valid as
long as not contrary to law, public order, public policy, morals or good customs. According to
petitioners, the execution of the compromise agreement embodied and approved by the
NLRC Resolution dated July 25, 2001 effectively closed and terminated Certified Case No.
000181-00. Citing Golden Donuts, Inc., v. National Labor Relations Commission.24 Thus, a
judgment on a compromise agreement has the force and effect of any other judgment.
Petitioners also point out that as correctly observed by the NLRC, the resolution declaring
respondents' retrenchment was promulgated on May 31, 2001. Petitioners' side was never
presented in Certified Case No. 000181-00, and if it were not for the filing of the compromise
agreement, they would have moved to reconsider or at least filed the appropriate pleadings to
rectify the findings adverse to them. They insist that the compromise agreement effectively
abandoned all findings of facts and its necessary consequences in favor of the amicable
settlement. The compromise agreement was thereafter approved on July 25, 2001 by the
NLRC. As clearly stated in Article 223 of the Labor Code, it is the Resolution dated July 25,
2001 that attained finality after the expiration of the ten-day period, and not the abandoned
and mooted Resolution dated May 31, 2001.
Petitioners claim that the letter of Atty. Adolfo Romero dated March 20, 2000 was never
presented as evidence. Moreover, since the CA is not a trier of facts, it was error on its part to
"admit material evidence that was never presented in the instant case (or to lift findings of
facts from the abandoned and mooted resolution dated 31 May 2001)." Thus, the NLRC did
not act with grave abuse of discretion when it found that the retrenchment was legal as stated
in the appealed decision dated July 31, 2003. Such use of the admissions contained in the
said letter dated March 20, 2000 denied them due process as they were not given the
opportunity to contest or deny its validity or existence.
Petitioners further point out that while the instant petition was filed only by 29 complainants,
the dispositive portion of the assailed decision was extended to cover 50 other persons. They
insist that the said letter, as well as the findings of a "mooted decision," were used as
evidence to support the erroneous decision of the CA; in so doing, the appellate court acted
with grave abuse of discretion amounting to lack or excess of jurisdiction.
For their part, private respondents claim that the appellate court did not commit any
reversible error, and that the assailed decision is borne out by the evidence on record. Since
the dismissal of the retrenched employees has been declared illegal, the 29 dismissed
employees enjoy the status of regular and permanent employees who cannot be dismissed
except for cause; hence, the CA correctly ordered their reinstatement.
They further point out that the fixing of five-month contracts of employment entered into by
the individual union members was intentionally employed by petitioners to circumvent the
provisions of the Labor Code on security of tenure, hence, illegal. They also allege that
petitioners did not comply with the 30-day notice rule required by law to render any dismissal
from employment valid. The letter of dismissal was dated June 27, 2002, and took effect a
week after, or on July 3, 2002, a violation of the 30-day notice rule. The Union members'
salaries and benefits were obtained through CBA negotiations and were included in the
existing CBA. Thus, petitioners' act of unilaterally removing such benefits and wage increases
constitutes gross violations of its economic provisions, and unfair labor practice as defined by
the Labor Code. Private respondents cite Philippine Carpet Employees Association v.
Philippine Carpet Manufacturing Corporation25 to support their arguments. They insist that the
illegally retrenched employees were made to believe that their retrenchment was valid, and
thus, through mistake or fraud accepted their separation pay, which, however, does not
militate against their claims.
The Ruling of the Court
The petition is denied.
The nature of a compromise is spelled out in Article 2028 of the New Civil Code: it is "a
contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end
to one already commenced." Parties to a compromise are motivated by "the hope of gaining,
balanced by the dangers of losing."26 It contemplates mutual concessions and mutual gains
to avoid the expenses of litigation, or, when litigation has already begun, to end it because of
the uncertainty of the result.27 Article 227 of the Labor Code of the Philippines authorizes
compromise agreements voluntarily agreed upon by the parties, in conformity with the basic
policy of the State "to promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling
labor or industrial disputes."28 As the Court
held in Reformist Union of R.B. Liner, Inc. v. NLRC,29 the provision "bestows finality to
unvitiated compromise agreements," particularly if there is no allegation that either party did
not comply with what was incumbent upon them under the agreement. The provision reads:
ART. 227 Compromise Agreements. – Any compromise settlement, including those
involving labor standard laws, voluntarily agreed upon by the parties with the
assistance of the Bureau or the regional office of the Department of Labor, shall be
final and binding upon the parties. The National Labor Relations Commission or any
court shall not assume jurisdiction over issues involved therein except in case of
noncompliance thereof or if there is prima facie evidence that the settlement was
obtained through fraud, misrepresentation, or coercion.
Thus, a judgment rendered in accordance with a compromise agreement is not appealable,
and is immediately executory unless a motion is filed to set aside the agreement on the
ground of fraud, mistake, or duress, in which case an appeal may be taken against the order
denying the motion.30 Under Article 2037 of the Civil Code, "a compromise has upon the
parties the effect and authority of res judicata," even when effected without judicial approval;
and under the principle of res judicata, an issue which had already been laid to rest by the
parties themselves can no longer be relitigated.31
In AFP Mutual Benefit Association, Inc. v. Court of Appeals,32 the Court spelled out the
distinguishing features of a compromise agreement that is basically intended to resolve a
matter already in litigation, or what is normally termed as a judicial compromise. The Court
held that once approved, the agreement becomes more than a mere contract binding upon
the parties, considering that it has been entered as the court's determination of the
controversy and has the force and effect of any other judgment. The Court went on to state:
Adjective law governing judicial compromises annunciate that once approved by the
court, a judicial compromise is not appealable and it thereby becomes immediately
executory but this rule must be understood to refer and apply only to those who are
bound by the compromise and, on the assumption that they are the only parties to
the case, the litigation comes to an end except only as regards to its compliance and
the fulfillment by the parties of their respective obligations thereunder. The reason for
the rule, said the Court in Domingo v. Court of Appeals [325 Phil. 469], is that when
both parties so enter into the agreement to put a close to a pending litigation
between them and ask that a decision be rendered in conformity therewith, it
would only be "natural to presume that such action constitutes an implicit
waiver of the right to appeal" against that decision. The order approving the
compromise agreement thus becomes a final act, and it forms part and parcel
of the judgment that can be enforced by a writ of execution unless otherwise
enjoined by a restraining order.33
Thus, contrary to the allegation of petitioners, the execution and subsequent approval by the
NLRC of the agreement forged between it and the respondent Union did not render the
NLRC resolution ineffectual, nor rendered it "moot and academic." The agreement becomes
part of the judgment of the court or tribunal, and as a logical consequence, there is an implicit
waiver of the right to appeal.
In any event, the compromise agreement cannot bind a party who did not voluntarily take part
in the settlement itself and gave specific individual consent.34 It must be remembered that a
compromise agreement is also a contract; it requires the consent of the parties, and it is only
then that the agreement may be considered as voluntarily entered into.
The case of Golden Donuts, Inc. v. National Labor Relations Commission,35 which petitioners
erroneously rely upon, is instructive on this point. The Court therein was confronted with the
following questions:
x x x (1) whether or not a union may compromise or waive the rights to security of
tenure and money claims of its minority members, without the latter's consent, and
(2) whether or not the compromise agreement entered into by the union with
petitioner company, which has not been consented to nor ratified by respondents
minority members has the effect of res judicata upon them."36
Speaking through Justice Reynato C. Puno, the Court held that pursuant to Section 23, Rule
13837 of the then 1964 Revised Rules of Court, a special authority is required before a lawyer
may compromise his client's litigation; thus, the union has no authority to compromise the
individual claims of members who did not consent to the settlement. 38The Court also stated
that "the authority to compromise cannot lightly be presumed and should be duly established
by evidence,"39 and that "a compromise agreement is not valid when a party in the case has
not signed the same or when someone signs for and in behalf of such party without authority
to do so;" consequently, the affected employees may still pursue their individual claims
against their employer.40 The Court went on to state that a judgment approving a compromise
agreement cannot have the effect of res judicata upon non-signatories since the requirement
of identity of parties is not satisfied. A judgment upon a compromise agreement has all the
force and effect of any other judgment, and, conclusive only upon parties thereto and their
privies, hence, not binding on third persons who are not parties to it. 41
A careful perusal of the wordings of the compromise agreement will show that the parties
agreed that the only issue to be resolved was the question of the monetary claim of several
employees. The prayer of the parties in the compromise agreement which was submitted to
the NLRC reads:
WHEREFORE, premises considered, it is respectfully prayed that the Compromise
Settlement be noted and considered; that the instant case [be] deemed close[d] and
terminated and that the Decision dated May 31, 2001 rendered herein by this
Honorable Commission be deemed to be fully implemented insofar as concerns the
thirty-one (31) employees mentioned in paragraphs 2c and 2d hereof; and, that the
only issue remaining to be resolved be limited to the question of the monetary claim
raised in the motion for clarification by the seven employees mentioned in paragraph
2e hereof.42
The agreement was later approved by the NLRC. The case was considered closed and
terminated and the Resolution dated May 31, 2001 fully implemented insofar as the
employees "mentioned in paragraphs 2c and 2d of the compromise agreement" were
concerned. Hence, the CA was correct in holding that the compromise agreement pertained
only to the "monetary obligation" of the employer to the dismissed employees, and in no way
affected the Resolution in NCMB-NCR-NS-03-087-00 dated May 31, 2001 where the NLRC
made the pronouncement that there was no basis for the implementation of petitioners'
retrenchment program.
To reiterate, the rule is that when judgment is rendered based on a compromise agreement,
the judgment becomes immediately executory, there being an implied waiver of the parties'
right to appeal from the decision.43 The judgment having become final, the Court can no
longer reverse, much less modify it.
Petitioners' argument that the CA is not a trier of facts is likewise erroneous. In the exercise
of its power to review decisions by the NLRC, the CA can review the factual findings or legal
conclusions of the labor tribunal.44 Thus, the CA is not proscribed from "examining evidence
anew to determine whether the factual findings of the NLRC are supported by the evidence
presented and the conclusions derived therefrom accurately ascertained."45
The findings of the appellate court are in accord with the evidence on record, and we note
with approval the following pronouncement:
Respondents alleged that it hired contractual employees majority of whom were
those retrenched because of the increased but uncertain demand for its publications.
Respondent did this almost immediately after its alleged retrenchment program.
Another telling feature in the scheme of respondent is the fact that these contractual
employees were given contracts of five (5) month durations and thereafter, were
offered regular employment with salaries lower than their previous salaries. The
Labor Code explicitly prohibits the diminution of employee's benefits. Clearly, the
situation in the case at bar is one of the things the provision on security of tenure
seeks to prevent.
Lastly, it could not be said that the employees in this case are barred from pursuing
their claims because of their acceptance of separation pay and their signing of
quitclaims. It is settled that "quitclaims, waivers and/or complete releases executed
by employees do not stop them from pursuing their claims – if there is a showing of
undue pressure or duress. The basic reason for this is that such quitclaims, waivers
and/or complete releases being figuratively exacted through the barrel of a gun, are
against public policy and therefore null and void ab initio (ACD Investigation Security
Agency, Inc. v. Pablo D. Daquera, G.R. No. 147473, March 30, 2004)." In the case at
bar, the employees were faced with impending termination. As such, it was but
natural for them to accept whatever monetary benefits that they could get.46
CONSIDERING THE FOREGOING, the petition is DENIED and the assailed Decision and
Resolution AFFIRMED. Costs against the petitioners.
SO ORDERED.
Panganiban, C.J., Chairperson, Ynares-Santiago, Austria-Martinez, Chico-Nazario,
J.J., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-34998 January 11, 1973
CONCHITA CADANO, accompanied by her husband TITO LOPEZ and GERARDO
CADANO, plaintiffs-appellees,
vs.
JUAN CADANO, defendant-appellant.
Felisberto P. Avestruz for plaintiffs-appellees.
Serafin P. Romero for defendant-appellant.
ANTONIO, J.:
The only issue submitted for judicial review is the jurisdictional authority of the Court of First
Instance of Leyte in Civil Case No. 3417 to revive its judgment rendered in an earlier case
(Civil Case No. 856) approving a compromise agreement dividing the conjugal partnership
properties, between the plaintiffs as heirs of their deceased mother and the defendant as
surviving spouse, which agreement although formally submitted by the parties to the court
does not bear the signature of either defendant Juan Cadano or his counsel.
The present case has its inception, in the action instituted with the Court of First Instance of
Leyte (Civil case No. 856) by Conchita Cadano and Gerardo Cadano, against their father
Juan Cadano, Sr. for the liquidation and partition of the properties of the conjugal partnership,
in view of the death of their mother. On September 22, 1955, the Court rendered judgment in
the aforesaid civil case on the basis of the agreement of the parties, as follows:
The parties in the above-entitled case, duly represented by their respective
counsel, submitted to the Court a PARTITION AGREEMENT in the following
tenor:
"Come now the plaintiffs and defendant in the above-entitled
case accompanied by their respective attorneys and to this
Honorable Court respectfully move that judgment be
rendered in accordance with the herein-below mutual
agreement of partition, to wit:
1. That parties hereto agree that the following properties be adjudicated to
the plaintiffs:
a.) One-half (1/2) portion of the land described as follows:
Parcel of land situated at Canbato Bito, Jaguikhik,
Babatngon, Leyte. Bounded on the NORTH by Seashore; on
the EAST by Bonifacio Daria; on the WEST by Clemente
Dunari and on the SOUTH by Catalino Codilan. Tax No. 877
and valued at P6,900.00.
b.) The whole of the residential house situated in Calle Real,
Malibago, Babatngon, Leyte. Bounded on the North by or
described in Tax Dec. No. 876 and valued at P750.00.
c.) The whole of that residential land situated at Real St.
Malibago, Babatngon, Leyte. Bounded on the NORTH by
Seashore; on the EAST by Municipal land; on the SOUTH by
Real St., and on the WEST by San Jose St. Tax Dec. 879
and valued at P490.00.
d.) One-half (1/2) of the remaining portion after excluding the
entire area the parcel described under Tax Dec. No. 4409 to
which latter property defendant renounces and waives any
and all claims or interest. This 1/2 share is the property
described in Tax Dec. No. 879 and valued at P2,600.00.
e.) A parcel of land situated at Jaguikhik, Babatngon Leyte.
Bounded on the NORTH by Jose Eblamo; on the SOUTH by
Aguido Eblamo and on the EAST by Victorino Danilo and on
the WEST by Roman Cafranca. Tax Dec. No. 1460 and
valued at P200.00.
2. The following properties to be adjudicated to the DEFENDANT:
a. One-half (1/2) portion of the land situated at Canbato Bito, Jaguikhik,
Babatngon Leyte. Bounded on the NORTH by Seashore; on the EAST by
Bonifacio Daria; on the WEST by Clemente Dunari and on the SOUTH by With my
Catalino Dodilan. Tax Dec. No. 877 and valued at P6,900.00. consent:
TITO
b. The one-half (1/2) of the remaining portion mentioned in item (d). LOPEZ

c. 4 heads of cows and 4 heads of goats. J

U
d. One-half of P414.40 or P207.20; A
N
C
e. One-half of P5,232.30 or P2,616.15; A
D
f. A parcel of land situated at Malibago, Babatngon, Leyte. Bounded on the A
NORTH by Clemente Dimaro; on the EAST by Tomas Dianito; on the N
SOUTH by Catalino Tejones and on the WEST by Clemente Dimaro. Tax O
Dec. No. 876 and valued at P270.00. D
e
3. That the defendant renounces and waives any and all claims to the f
following properties: . e
n
a. The property described in Tax Dec. No. 4409 situated at Jaguikhik, d
Babatngon, Leyte. This property belongs to the deceased mother of plaintiffs a
and her paraphernal property. Valued at P960.00. This property was placed n
under Tax Dec. No. 897. t

b. A parcel of land situated on Real St. Babatngon Leyte. Described in Tax (SGD.)
Dec. No. 3629 and valued at P3,420.00. This is also the paraphernal ANTONIO
property of the deceased wife. V.
BENEDICT
O
4. That defendant likewise renounces his usufruct having benefited already
Atty. for
from the products of the properties since 1947.
Plaintiffs

Tacloban, Leyte, September 4, 1951.

F
.
(SGD.) M
GERARDO O
CADANO N
T
(SGD.) E
CONCHITA J
CADANO O
,
 S 1955 or its value which amounted to P12,000.00 together with the copra harvested from said
R properties valued at P2,500 which defendant was about to dispose of to the prejudice of the
. plaintiffs and thereto prayed that after due hearing (a) the previous judgment "be enforced
A against the defendant" (b) said defendant "be made to pay the plaintiffs the sum of
t P12,000.00" representing the value of plaintiffs' share of the produce since September 22,
t 1963 and (c) that pending hearing writ of preliminary attachment be issued. The trial court
y upon bond issued on November 29, 1963 a writ of attachment against defendant. This was
. dissolved on December 24, 1963, upon the filing by defendant of the requisite counterbond.
f
o In his answer defendant-appellant Juan Cadano admitted that he and the plaintiffs-appellees
r are co-owners of the properties, adverted to in the complaint and that prior to 1961 they
t shared all the proceeds from the products thereof, but because of a pre-existing
h indebtedness plaintiffs-appellees with defendant-appellant, consisting on the unpaid price of
e a Fordson Diesel TPU truck purchased from him by plaintiffs-appellees sometime on July 12,
d 1960, and cash and merchandise received by plaintiffs-appellees which would aggregate in
e all to P3,250.00 "more or less," defendant-appellant since 1961 was allowed by the plaintiffs-
f appellees to receive all of the products of the aforesaid properties and as affirmative
e defenses allege that:
n
d 6. Defendant or his former counsel Atty. Felomino Motejo, Sr. did not sign
a any agreement with plaintiffs whatsoever on Civil Case No. 856, and if ever
n
any decision was ever rendered on the preceding mentioned case, based on
t
any agreement, the same is without the knowledge of herein defendant;
"
.
7. That whatever properties were acquired during the lifetime of the conjugal
partnership of defendant and plaintiffs' mother (deceased), the former will
IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, the Court hereby
have, in the succession on the same share as that of each of the children
renders judgment, enjoining the parties to divide and take possession of the
(plaintiffs herein); — Art. 996 — New Civil Code — and therefore defendant
properties above-described and contained in their agreement in accordance
has still to share in the properties which might be adjudicated in favor of his
therewith, without pronouncement as to costs. deceased spouse;

SO ORDERED.
8. Defendant may agree to partition proceedings on the properties acquired
by defendant and plaintiffs' mother (deceased) provided the amount of
Tacloban City, September 22, 1955. P3,250.00 more or less, will be paid to defendant; ... .

Copy of this judgment was received personally, on September 26, 1955 by Atty. Filomeno
Montejo, Sr., Counsel of defendant Juan Cadano. No motion was ever filed by defendant
challenging the validity of the agreement or the judgment rendered thereon. On November
22, 1963, or about eight (8) years later, due to the failure of Juan Cadano to deliver the
produce of the properties adjudicated to them in the aforesaid judgment, Conchita and
Gerardo Cadano filed the present suit in the same court (Civil Case No. 3419) to compel their
father Juan Cadano to deliver to them their share in the produce of said properties since
On March 4, 1965, and after the parties had submitted the case for judgment on the
pleadings, the court rendered judgment in favor of plaintiffs, thus:
There is no dispute that the parties in the present case are the same parties
in Civil Case No. 856 alluded to above. In this latter case the parties
submitted a petitioner agreement on September 8, 1951. The said
agreement was not signed by the defendant Juan Cadano and his lawyer,
 Atty. Filomeno Montejo, Sr. On September 15, 1955, the parties agreed that
the hearing of the case be postponed until the following morning at eight
o'clock on the ground that the agreed statement of facts (Partition
Agreement) had not yet been signed by the then defendant Juan Cadano
and that they needed at least the following day to get his signature affixed on
the stipulation referred to above. The petition was granted by the Court with
the understanding that if the defendant would fail to appear, the case would
be submitted for decision on the basis of the partition agreement.
When the decision of the case was rendered on September 22, 1955, the
said partition agreement remained unsigned by the oft-repeated defendant
Juan Cadano (Civil Case No. 856). In that decision the Court enjoined the
parties to divide and take possession of the properties respectively allotted to
them per the oft-stated partition agreement.
Then, noting that the decision was not appealed, although copy thereof was personally
received by counsel for defendant on September 26, 1955, the court declared plaintiffs'
petition to be justified and ordered the revival of the judgment in Civil Case No. 856.
Defendant, thereupon, brought the case on appeal to the Court of Appeals, but the same was
forwarded to Us by said appellate tribunal on the ground that the issue involved in the appeal
is purely a question of law.
In assailing the correctness and validity of the decision of the court below reviving the
decision abovequoted, defendant-appellant lays emphasis on the absence of his and his
counsel's signatures in the "partition agreement" adverted to in the judgment of September
22, 1955 in Civil Case No. 856. It is appellant's theory that since the supposed agreement
was not signed by him, then it was made without his knowledge or consent and, therefore
"ineffective and not binding" on defendant; and the decision the lower court based thereon a
nullity.
We find no merit to this appeal.
It must be noted that defendant-appellant not only concedes that plaintiffs-appellees are the
legal heirs of his deceased wife and therefore entitled to inherit her properties but said party
has not categorically denied that he together with his children had submitted the "partition
agreement" which was approved by the trial court in Civil Case No. 856 on September 8,
1951. As a matter of fact the court in said case clearly stated in its decision that the aforesaid
agreement was submitted by the parties with the assistance of their respective counsel and
said agreement was even embodied in toto in its judgment. Certainly under such
circumstances defendant-appellant cannot claim lack of knowledge of the aforesaid
agreement. In the absence of proof to the contrary, it must be assumed that the trial court
acted in the regular performance of its official duty, and therefore must have ascertained a
priori the consent or conformity of all the parties to the agreement before approving it and
rendering judgment thereon.
While it is true that on account of its consensual character a compromise, such as that
involved in the case a bar, to be valid and effective requires the consent and express
authorization of all of the parties — such consent and authorization by defendant-appellant is
shown not only by the fact that the "partition agreement" was submitted to the trial court for
Approval on September 8, 1951 by "the parties (the plaintiffs Conchita and Gerardo Cadano
and their father, defendant Juan Cadano), ... duly represented by their respective counsel ...,"
but also by the circumstance that the hearing for its approval on September 16, 1955 was
precisely set upon petition of both the plaintiffs and defendant in said Civil Case No. 856 "with
the understanding that if the defendant would fail to appear, the case would be submitted for
decision on the basis of the partition agreement."1 Certainly knowing of the nature of the
hearing, Juan Cadano could have on said date, objected to the approval of the "partition
agreement" by the court if it was true that the same did not bear his approval or conformity.
That he chose not to interpose any objection to its approval is a patent indication of his
conformity to the agreement. Again even after said defendant-appellant received through his
counsel on September 26, 1955 a copy of the decision in Civil Case No. 856 containing in
toto the "partition agreement," he never bothered to have it reconsidered or to appeal from
such judgment, within the reglementary period or to have the same set aside under Rule 38
of the Rules of Court.
Defendant-appellant not only failed to avail himself of those procedural remedies but has
remained silent. His inaction for over a period of nearly eight years, after becoming aware of
the "partition agreement" and of the judgment based thereon, amounts to a ratification on his
part of the said agreement. For laches may operate to validate an agreement otherwise
invalid at its inception as when the party on becoming aware of the compromise fails to
repudiate it promptly. Such ratification is presumed from his
inaction.2
Moreover, if indeed there was any defect in the decision in Civil Case No. 856, which was
revived by the court a quoin the case at bar, it was not on a matter affecting the jurisdiction of
the court or of the validity of the judgment. It has been said that the only elements necessary
to a valid agreement of compromise are the reality of the claim made and the bona fides of
the compromise.3 The general rule is that in the absence of statutory requirement, no
particular form of agreement is essential to validity of a compromise.4 If a binding oral
compromise agreement has been entered into, the mere fact that written agreement is
subsequently drawn to evidence the oral agreement does not detract from the validity of the
oral agreement, though the written evidence thereof is not signed.5 It must be noted, that
defendant-appellant has not in his pleadings denied that the "partition agreement" was
submitted by the parties to the Court for approval or that the aforesaid agreement embodied
the terms and conditions of the partition that must have been previously agreed upon by
them. All that he alleges in his answer dated November 8, 1963 in Civil Case No. 3417, is
that he "without knowledge or information sufficient to form a belief as to the truth" of the fact
that a judgment had already been rendered by the Court in Civil Case No. 856, on September
22, 1955, which of course is clearly contrary to the facts, since according to the records of
said Civil Case No. 856, he received a copy of the decision, thru his counsel Atty. Filemon
Montejo, Sr. on September 26, 1955. Considering the environmental facts of the case the
absence of his signature on the agreement would therefore be merely a defect of form, and
not of substance, and does not vitiate the jural validity and efficacy of their agreement.

Finally, the validity of a judgment or order of a court cannot be assailed collaterally unless the
ground of attack is lack of jurisdiction or irregularity in their entry apparent on the face of the
record or because it is vitiated by fraud. If the purported nullity of the judgment lies on the
party's lack of consent to the compromise agreement, the remedy of the aggrieved party is to
have it reconsidered, and if denied to appeal from such judgment, or if final to apply for relief
under Rule 38.6 It is well settled that a judgment on a compromise is not appealable and is
immediately executory, unless a motion is filed to set aside the compromise on the ground of
fraud, mistake or duress in which case an appeal may be taken from the order denying the
motion.7

WHEREFORE, in view of the foregoing, the decision of the lower court in Civil Case No. 3417
dated March 1, 1965 is hereby affirmed, with costs against the appellant.

So ordered.
 FIRST DIVISION Civil Case No. B-3574. RCPI moved to dismiss[4] the complaint on the ground of lack of
jurisdiction over the subject matter of the claim, considering that the complaint involved a
RADIO COMMUNICATIONS G.R. No. 139762 money claim arising from an employer-employee relationship which properly belongs to the
OF THE PHILIPPINES, INC.,
Petitioner, Present: jurisdiction of the labor arbiter.
Panganiban, C.J. (Chairperson),
- versus - Ynares-Santiago,
On September 3, 1991, the trial court denied[5] the motion to dismiss and ruled that,
Austria-Martinez,
Callejo, Sr., and based on the allegations in the complaint, there was no employer-employee relationship
Chico-Nazario, JJ. between Villalon and RCPI; that Villalon was a contractual messenger and was paid
COURT OF APPEALS and
ROBERTO VILLALON, Promulgated: depending on the number of deliveries he made; that there was no agreement with respect to
Respondents. payment of wages and duration of time of work; and that RCPI did not control the means by
April 26, 2006
x ---------------------------------------------------------------------------------------- x which Villalon made his deliveries and merely paid him by the result of his work. Thus, the trial
court ruled that the relationship between Villalon and RCPI was in the nature of an independent
DECISION contractor and that it had jurisdiction over the case. It further declared RCPI in default because
YNARES-SANTIAGO, J.: the motion to dismiss did not contain a notice of hearing addressed to the parties and, thus,
the motion did not toll the running of the reglementary period to file a responsive pleading which
resulted to RCPIs default. RCPIs motion for reconsideration[6] was denied in a
This petition for review on certiorari assails the May 10, 1999 Decision [1] of the Court Resolution[7] dated November 15, 1991.
of Appeals in CA-G.R. CV No. 38815, which affirmed the March 6, 1992 Decision [2] of the
Regional Trial Court of Bińan, Laguna in Civil Case No. B-3574, as well as the August 9, On December 13, 1991, RCPI filed a petition for certiorari, prohibition and mandamus,
1999 Resolution[3] which denied petitioners motion for reconsideration. which was docketed as G.R. No. 102959, alleging that the trial court committed grave abuse
of discretion when it denied the motion to dismiss. In a Resolution[8] dated February 28, 1994,
From 1983 to 1991, respondent Roberto Villalon (Villalon) we dismissed the petition and remanded the case for further proceedings after noting
provided messengerial services to petitioner Radio Communications of the Philippines, Inc. that Villalon was a contractual messenger paid by the number of deliveries he made and that
(RCPI) at its branch office in Bińan, Laguna. Under the arrangement, Villalon delivered there was no employer-employee relationship between him and RCPI. Thus, the trial court
telegraphic messages to RCPIs clientele for which he was paid based on the number of validly assumed jurisdiction over the case.
deliveries he made using the following payment scheme: 69% of the entire collections went
to Villalon, 30% went to RCPI, and the remaining 1% was applied to taxes. However, sometime Previously or on September 30, 1991, the trial court allowed Villalon to present his
in April 1991, RCPI stopped paying Villalon pursuant to this arrangement. evidence ex parte before a duly appointed commissioner pursuant to its Resolution
dated September 3, 1991 which denied RCPIs motion to dismiss and declared the latter in
Consequently, on June 26, 1991, Villalon filed a complaint for collection of a sum of
money against RCPI with the Regional Trial Court of Bińan, Laguna which was docketed as
default. On March 6, 1992, the trial court rendered a Decision, the decretal portion of which general principles or not, so long as the facts on which such decision was
predicated continue to be the facts of the case before the court. As a general
reads: rule, a decision on a prior appeal of the same case is held to be the law of
the case whether that question is right or wrong, the remedy of the party
WHEREFORE, in view of the foregoing considerations, judgment is deeming himself aggrieved being to seek a rehearing.
hereby rendered in favor of the plaintiff, directing the defendant to pay the
former: The concept of Law of the Case was further elucidated in the 1919
(a) P67,979.77- representing the unpaid wages and case of Zarate v. Director of Lands, thus:
commission as of June 10, 1991 with 12% interest until
fully paid; A well-known legal principle is that when an appellate
(b) plus costs of suit. court has once declared the law in a case, such declaration
continues to be the law of that case even on a subsequent
SO ORDERED.[9] appeal. The rule made by an appellate court, while it may be
reversed in other cases, cannot be departed from in
subsequent proceedings in the same case. The Law of the
Aggrieved, RCPI filed an appeal with the Court of Appeals which dismissed the same Case, as applied to a former decision of an appellate court,
in the Decision dated May 10, 1999. Its motion for reconsideration having been denied, RCPI merely expresses the practice of the courts in refusing to
reopen what has been decided. Such a rule is necessary to
filed the instant petition raising the following issues: (1) whether the trial court has jurisdiction
enable an appellate court to perform its duties satisfactorily
over the complaint, and (2) whether the trial court correctly imposed a 12% interest rate on the and efficiently, which would be impossible if a question, once
amount awarded to Villalon. considered and decided by it, were to be litigated anew in the
same case upon any and every subsequent appeal. Again,
the rule is necessary as a matter of policy to end litigation.
RCPI contends that the trial court has no jurisdiction over the complaint because it There would be no end to a suit if every obstinate litigant
could, by repeated appeals, compel a court to listen to
involves a money claim arising from an employer-employee relationship so that jurisdiction criticisms on their opinions, or speculate of chances from
properly belongs with the labor arbiter under Article 217(a) [10] of the Labor Code. It further changes in its members. xxx[12]
claims that Villalon as messenger was engaged to perform an essential task
in RCPIs business; was under the control and supervision of a superior; and was required to In the instant case, RCPI filed a motion to dismiss before the trial court raising the
strictly follow company rules and regulations. same issue that it is now raising in the instant petition, i.e. the complaint involves a money claim
arising from an employer-employee relationship which properly belongs to the jurisdiction of
The contention lacks merit. the labor arbiter. However, it will be recalled that when its motion to dismiss was denied, RCPI
had previously gone to this Court through a petition for certiorari, prohibition
RCPI is barred from raising the above issue under the principle of the law of the case. and mandamus raising this issue of lack of jurisdiction.
In Padillo v. Court of Appeals,[11] we had occasion to explain this principle thus:
In G.R. No. 102959, we dismissed the petition and remanded the case for further
Law of the case has been defined as the opinion delivered on a former proceedings ruling that the trial court did not commit grave abuse of discretion
appeal. More specifically, it means that whatever is once irrevocably
established as the controlling legal rule or decision between the same parties because Villalons complaint was not based on an employer-employee relationship inasmuch
in the same case continues to be the law of the case, whether correct on
as he was a contractual messenger who was paid depending on the number of deliveries he ascertained). The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged.
made to RCPIs clientele. Thus, the trial court and not the labor arbiter had jurisdiction over the
case. Our ruling in G.R. No. 102959 with respect to the valid assumption of jurisdiction by the 3. When the judgment of the court awarding a sum of money becomes
final and executory, the rate of legal interest, whether the case falls under
trial court over the instant case became the law of the case between the parties which cannot paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality
be modified, disturbed or reviewed. It follows then that RCPI cannot raise this issue again in until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit.[14]
the instant petition because we have already resolved the same with finality in G.R. No. 102959
in consonance with the principle of the law of the case.
Applying the foregoing rules, the proper interest rate is 6% per annum because the
complaint in the case at bar involves a breach of contract of services and not a loan or
RCPI next contends that the trial court erred in imposing a 12% per annum interest
forbearance of money. The interest should be computed from the date of the trial courts
rate on the amount awarded to Villalon. It claims that pursuant to the ruling in Eastern Shipping
decision on March 6, 1992.[15] The reason is that although there was an initial amount claimed
Lines, Inc. v. Court of Appeals,[13] the proper interest rate is 6% per annum because the money
by Villalon in his complaint, he further alleged that this amount continued to balloon as the
judgment in the instant case does not involve a loan or forbearance of money.
months went by[16] so much so that the total amount demanded was not yet established with
reasonable certainty until the trial court rendered its judgment[17] as in fact the amount adjudged
We agree.
by the trial court was significantly higher than the amount initially alleged by Villalon. Moreover,
Indeed, in Eastern Shipping Lines Inc. v. Court of Appeals, we summarized the rules
pursuant to the above rules, in case the judgment remains unsatisfied after it becomes final
of thumb with respect to the imposition of legal interest:
and executory, the interest rate shall be 12% per annum from the finality of the judgment until
1. When the obligation is breached, and it consists in the payment of the amount awarded is fully paid. The base for computation of the 6% and 12% rates of interest
a sum of money, i.e., a loan or forbearance of money, the interest due should shall be P67,979.77 since this is the amount finally adjudged.[18]
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 WHEREFORE, the petition is PARTLY GRANTED. The May 10, 1999 Decision of the
computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code. Court of Appeals in CA-G.R. CV No. 38815 is AFFIRMED with MODIFICATION as to the
interest rate imposed. Petitioner is ordered to pay Villalon P67,979.77 representing his unpaid
2. When an obligation, not constituting a loan or forbearance of wages with 6% interest per annum computed from the date of the trial courts decision on March
money, is breached, an interest on the amount of damages awarded may be
imposed at the discretion of the court at the rate of 6% per annum. No interest, 6, 1992 until its full payment before the finality of the judgment. If the judgment remains
however, shall be adjudged on unliquidated claims or damages except when unsatisfied after it becomes final and executory, the interest rate shall be 12% per annum
or until the demand can be established with reasonable certainty. Accordingly,
where the demand can be established with reasonable certainty, the interest computed from the finality of the judgment until the amount awarded is fully paid.
shall begin to run from the time the claim is made judicially
or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so
SO ORDERED.
reasonably established at the time the demand is made, the interest shall
begin to run only from the date the judgment of the court is made (at which
time the quantification of damages may be deemed to have been reasonably
 FIRST DIVISION

EDGARDO V. GUEVARA, Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, as
G.R. No. 159786
Petitioner, amended, seeking the reversal of the Decision of the Court of Appeals in CA-G.R. SP No.
Present:
53379, dated 21 March 2003,[1] dismissing Civil Case No. 95-624, filed by herein petitioner,

PANGANIBAN, C.J. Edgardo V. Guevara, against herein respondent, BPI Securities Corporation.Likewise assailed
Chairperson, is the Resolution[2] dated 26 August 2003 of the Court of Appeals denying Guevaras Motion for
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ, Reconsideration of the foregoing decision.

CALLEJO, SR., and

Culled from the records of the case are the following factual and procedural antecedents:
- versus - CHICO-NAZARIO, JJ.

Guevara was hired by Ayala Securities Corporation in 1958. He was later detailed to the
Promulgated: Philippine Investment Corporation (PHILSEC, later named as BPI Securities Corporation),
where he acted as its president from 1 September 1980 to 31 December 1983. He thereafter
served as vice-president of Ayala Corporation until his voluntary retirement on 31 August
August 15, 2006
1997.[3]
BPI SECURITIES CORPORATION,

Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
Meanwhile, a certain Ventura O. Ducat obtained separate loans from Ayala International
Finance Limited (AIFL) and PHILSEC in the amount of US$2,500,000.00[4] as of 15 January
1983. The same was secured by shares of stocks in different Philippine corporations, with
market value of P14,088,995.00.

DECISION

To satisfy the indebtedness, Ducat made arrangements with 1488, Inc. (1488), a
United States (U.S.)-based corporation, through its president, Drago Daic, to transfer by way
CHICO-NAZARIO, J.: of dacion en pago, a 72.21-acre tract of land in Harris County, Texas, U.S.A. (subject property),
in favor of PHILSEC and AIFL. Ducat, in turn, was to convey to 1488 the same shares of stocks
used as security for his loans with PHILSEC and AIFL. The latter, however, had no desire to
purchase the land; but they were willing to extend a loan to Athona Holdings, N.V. (ATHONA),
a corporation based in Netherlands, with the subject property as mortgage.[5]
In an agreement[6] executed in Makati City on 27 January 1983 (the Agreement), 1488
sold the subject property to ATHONA at US$2,807,209.02. PHILSEC and AIFL loaned
US$2,500,000.00 to ATHONA to subsidize the purchase price of the subject property. The
balance of US$307,209.02 was to be paid by means of a promissory note executed by
ATHONA in favor of 1488. Subsequently, PHILSEC and AIFL released Ducat from his
indebtedness and delivered to 1488 all the shares of stocks in their possession used before by
Ducat as security.[7]
Sometime thereafter, ATHONA failed to pay the interest on the balance of
US$307,209.02, hence, the entire amount covered by the promissory note became due and
demandable. Consequently, 1488 filed a collection suit in the U.S. against PHILSEC, AIFL and
ATHONA for payment of the balance of US$307,209.02, and damages for breach of contract
and for fraud in misrepresenting the marketability of the shares of stocks delivered to 1488
under the Agreement.[8] The case was originally filed with the U.S. District Court of Texas,
165th Judicial District, where it was docketed as Civil Case No. 85-57746, but the venue of the
action was later transferred to the U.S. District Court for the Southern District of Texas as Civil
Case No. H-86-440. ATHONA filed an Answer with counterclaim, impleading Guevara as
counter-defendant for allegedly conspiring with Daic, Ducat and the appraiser, Michael Craig,
in selling the subject property at an overvalued price.[9]
While the case was pending before the U.S. courts, PHILSEC, AIFL and ATHONA filed, on 10
April 1987, a civil suit against 1488, Daic, Ducat and Craig for the annulment of the Agreement
due to fraud. The case was docketed as Civil Case No. 16563 at the Regional Trial Court
(RTC) of Makati City, Branch 61. They demanded payment of Ducats indebtedness of
US$2,500,000.00 and for the other defendants to pay the amount of P8,000,000.00
representing the value of stocks liquidated and remitted to 1488, plus litigation expenses and
attorneys fees. Ducat filed a Motion to Dismiss on the grounds of litis pendentia and forum
non conveniens[10] due to the pendency of Civil Action No. H-86-440 before the U.S. District
Court.
The trial court, on 26 January 1988, dismissed the Complaint against Ducat on the ground
of forum non conveniens and likewise dismissed, on 9 March 1988, the case against 1488
and Daic based on litis pendentia, forum non conveniens and lack of jurisdiction over the
person of the defendants. Plaintiffs elevated the case to the Court of Appeals, docketed as CA-
G.R. CV No. 26761.[11] The Court of Appeals, in 6 January 1992, affirmed the decision of the
lower court dismissing the case. Consequently, a Petition for Review on Certiorari was filed by
the aggrieved parties before this Court in G.R. No. 103493 entitled, Philsec Investment
Corporation v. Court of Appeals.[12]
On 13 March 1990, the U.S. District Court ruled in favor of 1488,
and motu proprio dismissed the counter-complaint against Guevara on the ground that he
was impleadedsimply to humiliate and embarrass him.[13] The U.S. District Court also imposed
jointly and severally against PHILSEC and AIFL a penalty of US$49,450.00 in favor of Guevara
in accordance with Rule 11 of the Federal Rules of Court. [14] PHILSEC and AIFL elevated the
matter to the U.S. Court of Appeals for the Fifth Circuit which remanded the case to the U.S.
District Court for further proceedings, but finally affirmed, on 30 December 1991, the order of
the U.S. District Court imposing the penalty, and the same became final and executory. [15]
On 8 April 1992, PHILSEC, AIFL and ATHONA, filed with the Makati City RTC, Branch 61, an
amended Complaint in Civil Case No. 16563, impleading Guevara as one of the party-
defendants. The plaintiff corporations alleged that Guevara together with Ducat On 24 April 1995, Guevara filed another Complaint against BPI Securities Corp.
and Daic conspired and agreed to overvalue the subject property in excess of 400 percent of seeking the recovery of actual, moral and exemplary damages, and attorneys fees in the
its actual price. To induce the sale of the subject property at an overvalued amount, Guevara aggregate amount of P11,900,000.00 as indemnity for the expenses and annoyance of
made representations to the plaintiff corporations that the appraisal was obtained from a litigation, arising from his being wrongly impleaded as a party-defendant in the U.S. case.
reliable and independent source, and the plaintiffs, relying on Guevaras loyalty and Guevara banked on the ruling of the U.S. District Court that the counter-complaint filed by
representation, accepted the appraisal and entered into the Agreement. It was later found out, PHILSEC, AIFL and ATHONA was frivolous and dilatory.[21] This case was docketed as Civil
however, that the appraiser, Craig, was neither an independent nor a reliable appraiser but Case No. 95-624 with the Makati City RTC, Branch 135.[22] A Motion to Dismiss was filed by
rather a close associate of Daic, whose interest Guevara knew were adverse to that of the BPI Securities Corp. alleging forum shopping for Civil Case No. 16563 was still pending before
plaintiff corporations.[16] the Makati City RTC, Branch 61.[23] The Motion was denied by the trial court in its Order
dated 17 November 1995[24] and the Motion for Reconsideration was likewise denied by the
same court on 22 February 1996.[25] On certiorari under Rule 65 to the Court of Appeals,

A Motion to Dismiss the amended Complaint was later filed by 1488, Ducat and Daic. docketed as CA-G.R. SP No. 40303, the appellate court affirmed, in a Decision dated 26

The Resolution of the said Motion was, however, deferred pending the resolution by the
January 1998, the ruling of the trial court.[26] The said Decision thereafter became final
Supreme Court of G.R. No. 103493[17] which involved Ducats earlier Motion to Dismiss the
and executory.
original complaint in Civil Case No. 16563.

Subsequently, BPI Securities Corp. filed another Motion to Dismiss Civil Case No. 95-
On 22 April 1992, while G.R. No. 103493[18] was still pending with this Court, 1488
624 based on prescription. It alleged that the summons from the U.S. District Court was
and Daic filed a Petition for the enforcement of the judgment of the U.S. District Court with
received by Guevara on 22 September 1988. Although he learned of the tortuous act when the
the Makati City RTC, Branch 134, docketed as Civil Case No. 92-1070.[19]
summons was served on him in 1988, Guevara filed the case only on 24 April 1995, so the
case had already prescribed.

On 28 May 1992, Guevara filed a case against BPI Securities Corp. (PHILSEC was
already renamed), for enforcement of the judgment of the U.S. District Court ordering PHILSEC
In the meantime, G.R. No. 103493,[27] which involved Ducats Motion to Dismiss the
and AIFL to pay him US$49,450.00 as penalty in accordance with Rule 11 of the Federal Rules
original complaint in Civil Case No. 16563, was finally resolved. In a Decision dated 19 June
of Court. The case was docketed as Civil Case No. 92-1445 with the Makati City RTC, Branch
1997,[28] this Court reversed the Court of Appeals and remanded the case to the trial court for
137.[20]
continuance and consolidation of Civil Case No. 16563 with Civil Case No. 92-1070, then
pending with the Makati City RTC, Branch 134. In the same Decision, this Court also allowed
Civil Case No. 92-1445, pending with the Makati City RTC, Branch 137, to proceed as the
judgment sought to be enforced therein is severable from the main judgment under
consideration in Civil Case No. 16563.
Consequently, in a Resolution of the Makati City RTC, Branch 134, dated 1 July 1998,
Civil Cases No. 16563 and No. 92-1070 were consolidated and the pending Motion to Dismiss
the amended Complaint in Civil Case No. 16563 filed by 1488, Daic and Ducat was denied. [29]
As to the second Motion to Dismiss filed by BPI Securities Corp. in Civil Case No. 95-624,
the Makati RTC, Branch 135, found the action as having prescribed and granted the said
Motion in an Order dated 12 October
1998.[30] In a Motion for Reconsideration of the foregoing order filed by Guevara, he argued
that the prescriptive period of the action should be counted from the date of finality of the
Decision of the U.S. District Court, following the ruling in Drilon v. Court of Appeals.[31] Acting
favorably on Guevaras Motion, the trial court in an Order dated 18 February 1999,[32] set aside
its earlier Order dated 12 October 1998 and calendared Civil Case No. 95-624 for pre-trial.[33]
BPI Securities Corp. filed a Motion for Reconsideration of the Order, dated 18 February 1999,
of the Makati RTC, Branch 135, again raising the arguments of res judicata and forum
shopping. The said Motion was denied by the trial court in another Order dated 3 June
1999.[34] Thus, BPI Securities Corp. filed before the Court of Appeals a Petition
for Certiorari under Rule 65, with a prayer for temporary restraining order, docketed as CA-
G.R. SP No. 53379.[35] In its Petition, BPI Securities Corp. not only questioned the propriety of
the ruling of the trial court on prescription, but again raised the issue of litis pendentia and forum
shopping. The legal issues that BPI Securities Corp. submitted for the resolution of the Court
of Appeals were as follows:
4.01. Whether or not the pendency of the [Civil Case No. 95-624]
before respondent court is barred by the principles of litis pendentia or forum
shopping due to the pendency of the [Civil Case No. 16563] and the [Civil Case
No. 92-1445]?
4.02. Whether or not the [Civil Case No. 95-624] is barred by
prescription? Stated in a slightly different matter the issue is: Whether or not
the public respondent erred in ruling that the complaint in the [Civil Case No.
95-624] was for malicious prosecution (not quasi-delict as contended by
petitioner) so that the prescriptive period for such action started to run only
after the judgment in the Houston Case became final (and because of this the
action was filed on a timely basis)?
BPI Securities Corp. submitted that Civil Case. No. 16563 bars the filing of Civil Case No. 95-
624 under the principle of litis pendentia. It is noteworthy, BPI Securities Corp. asserted, that
the consolidated Cases No. 16563 and No. 90-1070 would determine whether the judgment
rendered by the U.S. District Court is enforceable in the Philippines.Since the allegations in
Civil Case No. 95-624 are anchored on the U.S. Court Decision, then consequently, the
pendency of the consolidated Civil Cases No. 16563 and No. 90-1070 bars Civil Case No. 95-
624.[36] Furthermore, BPI Securities Corp. reiterated that the continuance of Civil Case No. 95-
624 was proscribed by the principle of forum shopping as Guevaras counterclaim in Civil Case
No. 16563 involved the very same issues he pleaded in Civil Case No. 95-624.
Although the Court of Appeals, in its Decision dated 21 March 2003, denied the Petition
of BPI Securities Corp. in CA-G.R. SP No. 53379, it still ruled to dismiss Guevaras claim for
damages in Civil Case No. 95-624. The dispositive portion of the said Decision reads:
WHEREFORE, the instant petition is hereby denied and the assailed
Order of the Regional Trial Court of Makati City, Branch 135, is hereby
 affirmed with the modification that the claim for damages due to the suit filed
against Guevara in the United States is DISMISSED due to the existence of
another action pending between the same parties involving the same cause of
action in Civil Case No. 92-1445. Costs against petitioner.[37]
Aggrieved by the Decision of the Court of Appeals in CA-G.R. SP No. 53379, Guevara filed a
partial motion for reconsideration and in a Resolution,[38] issued on 26 August 2003, the Court
of Appeals denied his Motion.
Guevara, thus, filed before this Court the instant Petition for Review on Certiorari [39] under Rule
45 of the Rules of Court, based on the following assignment of errors:
I.
THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE
PETITION CONSIDERING THAT THE ISSUE RAISED THEREIN WAS
ALREADY PASSED UPON IN CA-G.R. NO. 40303
II.
THE COURT OF APPEALS ERRED IN RULING THAT CIVIL CASE
NO. 624 (SIC) SHOULD BE DISMISSED BASED ON THE GROUND
OF LITIS PENDENTIA.
On one hand, petitioner Guevara argues that the Court of Appeals should have
dismissed the Petition of BPI Securities Corp. in CA-G.R. SP No. 53379 as the issue of litis
pendentia and forum shopping was already passed upon by the same court in CA-G.R. SP No.
40303. In its Decision in the latter case, the Court of Appeals made the following
pronouncements:
8. And, finally, Civil Case 95-624 is not similar to Civil Case 16563,
and forum-shopping does not exist, in line with International Container
Terminal Services, Inc. vs. Court of Appeals, 249 SCRA 389, holding that
forum-shopping exists when both actions involve the same parties, the same
subject matter, the same essential facts and circumstances, and the same
identical issues. Civil Case 16563 and Civil Case 95-264 do not have the same
parties as Edgardo V. Guevara is not a party in Civil Case 16563 and that the
two cases do not have the same facts nor do they raise the same identical
causes of action.[40]
According to Guevara, since the Court of Appeals had ruled before on the issue of litis
pendentia and forum shopping in a decision that had become final and executory, the judgment
therein constitutes the law of the case between the parties. Also, the cause of action in Civil
Case No. 95-624 is not the same as that in Civil Case No. 92-1445 and therefore, there can be
no litis pendentia. Civil Case No. 95-624 involves claims for actual, moral and exemplary
damages arising out of the malicious inclusion by BPI Securities Corp. of Guevara in a counter-
complaint filed in the U.S. District Court; while Civil Case No. 92-1445 involves the enforcement
of a Decision of the U.S. District Court awarding in his favor penalty in accordance with Rule
11 of the Federal Rules of Procedure. The former is based on the Civil Code of the Philippines,
while the latter one is based on a U.S.decision. The causes of action of these two cases are
thus separate and distinct from each other.[41]
 On the other hand, respondent BPI Securities Corp., in its Comment,[42] contends that
when the Makati City RTC, Branch 61, admitted the amended Complaint in Civil Case No.
16563, which impleaded Guevara as an additional defendant, and Guevara filed his Answer
thereto, there became legal ground for BPI Securities Corp. to raise the issue of litis
pendentia in Civil Case No. 95-624. The ruling in CA-G.R. SP No. 40303 could not be applied
as the law of the case herein because when that case was decided, Guevara was not yet a
party in Civil Case No. 16563. The ruling in CA-G.R. SP No. 40303,[43] thus, relied on a different
factual premise from the case presently before this Court.[44]
BPI Securities Corp. further argues that the filing by Guevara of Civil Case No. 92-
1445 also barred him from filing Civil Case No. 95-624, again on the principle of litis
pendentia.[45] Both cases are based on the single fact that Guevara was wrongly impleaded as
a defendant in the U.S. case. BPI also argues that Guevaras claim had already prescribed,
having been filed only on 24 April 1995, almost seven years after he learned of the tortuous
act.[46]
In sum, the issues raised before this Court for resolution are as follows: (1) whether or
not the final and executory ruling in CA-G.R. SP No. 40303 serves as the law of the case
herein; (b) whether or not Civil Case No. 95-624 should be dismissed on the ground of litis
pendentia; and (c) whether or not Guevaras cause of action in Civil Case No. 95-624 has
already prescribed.
We rule to dismiss the Petition.
Petitioner Guevara argues that the decision of the Court of Appeals in CA-G.R. SP No.
40303 constitutes the law of the case between the parties herein and cannot anymore be
altered by any court as the same had already attained finality. [47] Let it be recalled that in the
said decision, the Court of Appeals ruled that the elements of litis pendentia are not present in
Civil Case No. 16563 and Civil Case No. 95-624. Therefore, the two cases can co-exist.
It is a basic legal principle that whatever is once irrevocably established as the
controlling legal rule or decision between the same parties in the case continues to be the law
of the case, whether correct on general principles or not, so long as the facts on which such
decision was predicated continue to be the facts of the case before the court. [48] This
principle generally finds application in cases where an appellate court passes on a question
and remands the case to the lower court for further proceedings. The question there settled
becomes the law of the case upon subsequent appeal. Consequently, the court reviewing the
succeeding appeal will not re-litigate the case but instead apply the ruling in the previous
appeal. This enables the appellate court to perform its duties satisfactorily and efficiently which
would be impossible if a question, once considered and decided by it, were to be litigated anew
in the same case and upon any and subsequent appeal.[49]
Clearly, the principle of law of the case cannot be applied herein. The facts from which
the ruling in CA-G.R. SP No. 40303 was predicated no longer holds true in this case.
When Civil Case No. 95-624 was filed by Guevara on 24 April 1995, respondent BPI
Securities Corp.s amended Complaint, impleading him as party-defendant in Civil Case No.
16563, was not yet acted upon by the trial court as proceedings therein were suspended
pending resolution by this Court of G.R. No. 103493 involving the Motion to Dismiss the original
complaint in Civil Case No. 16563. When BPI Securities Corp. then filed its first Motion to
Dismiss Civil Case No. 95-624, on 2 June 1995, alleging the pendency of Civil Case No. 16563,
Guevara was not yet impleaded as party-defendant in the latter case. Similarly, when the trial
court denied BPI Securities Corp.s first Motion to Dismiss Civil Case No. 95-624 and its
resolution to do so was assailed on certiorari before the Court of Appeals in CA-G.R. SP No.
40303, Guevara was still not yet a party in Civil Case No. 16563.
Guevara only became a party in Civil Case No. 16563 on 1 July 1998 when Civil
Cases No. 16563 and No. 92-1070 were consolidated by the Makati City RTC, Branch
134 (pursuant to this courts ruling in G.R. No. 103493), and the Motion to Dismiss the
amended Complaint was denied.
When respondent BPI Securities Corp. therefore filed its second Motion to Dismiss Civil Case
No. 95-624 based again on litis pendentia, Guevara has already become a party in Civil Case
No. 16563. With this significant change in the factual scenario, the ruling in CA-G.R. SP No.
40303 cannot serve as the law of the case in CA-G.R. SP No. 53379, subject of the instant
appeal.
Will the pendency then of Civil Case No. 16563, where Guevara is now one of the defendants,
bar him from filing Civil Case No. 95-624?
We rule in the negative.
There is litis pendentia or another action pendente lite if the following requisites are
present: (a) identity of parties, or at least such parties as represent the same interests in both
actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same
facts; and (c) the identity of the two preceding particulars is such that any judgment rendered
in the other action, will, regardless of which party is successful, amount to res judicata in the
action under consideration.[50]
Civil Case No. 16563 is for the annulment of the 27 January 1983 Agreement of
PHILSEC, AIFL, ATHONA, 1488, Daic and Ducat. The complainants therein (which includes
BPI Securities Corp.) also demanded for the payment of Ducats indebtedness of
US$2,500,000.00 and for the other defendants to pay the amount of P8,000,000.00
representing the value of stocks liquidated and remitted to 1488, plus litigation expenses and
attorneys fees. Meanwhile, Civil Case No. 95-624 is for Guevaras recovery of actual, moral
and exemplary damages and attorneys fees in the aggregate amount of P11,900,000.00 as
indemnity for the expenses and annoyance of litigation, arising from Guevaras being
maliciously and wrongly impleaded as a party-defendant in the U.S. case.
Consequently, Guevaras compulsory counterclaim in Civil Case No. 16563 could not
be the same as his cause of action in Civil Case No. 95-624. The wrongful acts committed by
the BPI Securities Corp. which gave rise to Guevaras cause of action were different in the two
cases. A compulsory counterclaim is one which arises out of or is connected with the
transaction or occurrence constituting the subject matter of the opposing partys
claim.[51] Guevaras compulsory counterclaim in Civil Case No. 16563 arises out of his
being impleaded in the annulment of contract case. In comparison, Guevaras cause of action
in Civil Case No. 95-624 springs from his being maliciously and erroneously impleaded as a
defendant in the U.S. case. There being no similarity of interests, nor identity of rights asserted
or reliefs prayed for by Guevara in his compulsory counterclaim in Civil Case No. 16563 and in
his cause of action in Civil Case No. 95-624, litis pendentia cannot effectively preclude him
from filing the latter case.
 Although the pendency of Civil Case No. 16563 does not constitute litis pendentia and
cannot preclude the filing by Guevara of Civil Case No. 95-624; nevertheless, this Court states
and so rules that Civil Case No. 95-624 is barred by Civil Case No. 92-1445 on the ground
of litis pendentia.
Guevara tried to convince this Court that the causes of action in Civil Cases No. 92-1445 and
95-624 are different and distinct from each other. While the former was for the enforcement of
a foreign judgment, the latter was a suit purely for damages. A perusal, however, of the records
reveals that the award by the U.S. District Court based on Rule 11 of the Federal Rules on Civil
Procedure sought to be enforced in the Philippine courts by Guevara in Civil Case No. 92-
1445, was founded on the same set of facts that were alleged as the basis for the prayer for
damages in Civil Case No. 95-624. They are both founded on the U.S. Courts determination
that BPI Securities Corp. erroneously and maliciously impleaded Guevara as a party-defendant
in the U.S. case.
A reading of the allegations of the respective complaints in both actions shows that the
asserted rights are founded on an identical set of facts which gave rise to one basic issue in
both cases, that is, whether or not Guevara may recover damages out of his involvement in
U.S. case.
In Civil Case No. 92-1445, Guevara averred in his Complaint that the judgment of the
U.S. court based on his erroneous and malicious prosecution in the U.S. case be enforced and
prayed that damages be awarded in his favor, in this wise:
3. Prior to the said merger on December 14, 1987, Philsec was one of
the defendants in Civil Action No. H-86-440 entitled 1488, Inc.
vs. Philsec Investment Corporation, Ayala International Finance Limited
and Athona Holdings, Inc. in the United States District Court of Texas,
Houston Division in the U.S.A. On August 29,
1988, Philsec impleaded plaintiff, a resident of the Philippines, by filing
together with Ayala International, a counter-complaint in said Action No. H-86-
440 against plaintiff and other persons, alleging that plaintiff and the other
persons had committed improper or illegal acts, including conspiracy in
overvaluing the land involved in Action No. H-86-440 in order to
induce Athona Holdings, Inc. to purchase the land to its damage and
prejudice.
4. Plaintiff filed his Answer in the above case, specifically denying all
the allegations in the counter-complaint, assailing them as deliberate
falsehoods, and stating the true facts. Plaintiff further alleged
that Philsec clearly had no cause of action against him as it should have been
only Athona Holdings, Inc., which purchased the land, that could properly
allege the cause of action against him.
5. After due hearing before the District Court, the said Court dropped
the plaintiff as counter-defendant and dismissed the case against him.
Plaintiff then made an oral motion in open court and filed the proper
affidavit of expenses under Rule 11 of the Federal Rules of Civil
Procedure. After some thirty (30) days from the date of the oral motion
by plaintiff, the said court imposed sanction on Philsec Investment
Corporation a.k.a BPI Securities Corporation and Ayala International
Finance Ltd. in its Order dated March 13, 1990, ordering the latter to pay
herein plaintiff, jointly and severally, the sum of US$49,450 as sanction
or penalty. A photocopy of a certified true copy of the said Order is hereto
attached and made an integral part hereof as Annex A.
6. Rule 11 of the US Federal Rules of Civil Procedure provides:
Rule 11. Signing of Pleadings, Motions and Other Papers, Sanctions:
Every pleading, motion, and other paper of a party represented by an
attorney shall be signed by at least one attorney of record in the attorneys
individual name, whose address shall be stated. A party who is not
represented by an attorney shall sign the partys pleading, motion or other
paper and state the partys address. Except when otherwise specifically
provided by rule or statute, pleadings need not be verified or accompanied by 9. Philsec/BPI Securities Corporation did not appeal the said Order
affidavit. The rule in equity that the averments of an answer under oath must (Annex B) dated December 30, 1991, and the same has become final
be overcome by the testimony of two witnesses or of one witness sustained and executory.
by corroborating circumstances is abolished. The signature of an attorney or
party, constitutes a certificate by the signer that the signer has read the
pleadings, motion, or other paper; that to the best of the signers knowledge,
10. Plaintiff made written demands upon defendant for the latter
information, and belief formed after reasonable inquiry it is well grounded in
to comply with the above judgment by paying to the plaintiff the amount
fact and is warranted by existing law or a good faith argument for the
of US$49,450.00 or its equivalent in Philippine pesos. However,
extension, modification, or reversal of existing law, and that it is not interposed
defendant failed and refused and continues to fail and refuse to pay said
for any improper purpose, such as to harass or to cause unnecessary delay or
amount without any valid reason whatsoever. A photocopy of a demand
needless increase in the cost of litigation. If a pleading, motion, or other paper
letter sent by the plaintiff is attached hereto and made an integral part
is not signed, it shall be stricken unless it is signed promptly after the omission
hereof as Annex C.
is called to the attention of the pleader or movant. If a pleading, motion or other
paper is signed in violation of this rule, the court, upon motion or upon its own 11. Plaintiff is therefore constrained to file the instant case thru
initiative, shall impose upon the person who signed it, a represented party or counsel and to incur attorneys fees and expenses of litigation of
both, an appropriate sanction, which may include an order to pay to the other some P250,000.00. That for its refusal to pay its just and clear obligation,
party or parties the amount of the reasonable expenses incurred because of defendant should be ordered to pay plaintiff exemplary damages
the filing of the pleading, motion or other paper, including a reasonable of P200,000.00[52] (Emphases supplied.)
attorneys fee.
In the same vein, Guevara, in Civil Case No. 95-624 claimed actual, moral and
exemplary damages as indemnity on the account of his frivolous and malicious inclusion as a
7. Philsec/BPI Securities Corporation appealed said Order of March party-defendant in the U.S. case, and particularly asserted the following causes of action:
13, 1990 (Annex A) to the United States Court of Appeals for the Fifth Circuit,
which after due hearing remanded the issue to the District Court to give the
latter another opportunity to respond to herein plaintiffs motion for the Rule 11
sanction. 14. Plaintiff repleads and incorporates herein all the foregoing allegations.

15. Because of the malicious filing of the baseless counter-

8. After proper proceedings with due notice by the District Court,
where Philsec/BPI Securities Corporation was given full opportunity to be
heard and submit its brief, as directed by the Court of Appeals, the District
Court issued an Order dated December 30, 1991 concluding that the judgment
previously entered was appropriate and reinstating the judgment of March 13,
1990. A photocopy of a certified true copy of the said Order is hereto attached
and made an integral part hereof as Annex B.
complaint in Houston-Texas by Philsec, plaintiff was compelled to spend
time, effort and money to prepare for and pursue his defense.
16. In April, 1989, plaintiff had to go to Honolulu, Hawaii to give his deposition
in connection with the Houston court case and his wife had to accompany him
because he was essentially hypertensive and he found it risky to travel alone.
17. Plaintiff then proceeded with his wife to Houston, Texas to examine the
records of the court case and meet with people who could help him prepare
for his defense. And because he was hypersensitive and very much depressed
because of the case, he underwent a medical check-up, he was found to have
a mass in his pancreas which forced him to undergo an emergency operation
and hospitalized for almost one month.
18. Thereafter, plaintiff was compelled to go to Houston, Texas to
protect his interest and handle his defense in the court case, which was heard
continuously from January 29 to February 14, 1990. In his trip, his wife and
son had to accompany him because he was still weak and had not fully
recovered from his operation.
19. For all his above travel to Hawaii and Houston, Texas and for preparing
his case and handling his defense, plaintiff incurred expenses of at
least P300,000.00, which defendant should reimburse to him.
20. Plaintiff repleads and incorporates herein all the above allegations.
21. Plaintiff is a member of the Philippine Bar, he has a good reputation in the
community, and is respected by his colleagues as a lawyer and businessman.
22. Plaintiff served Ayala Corporation and its subsidiaries, including
defendant, from 1958 until his voluntarily retirement on August 30, 1987. He
served the Ayala Group faithfully and well; and as above alleged, for his
satisfactory performance in the settlement of the account of Ventura Ducat, he
was give[n] a letter commendation by the chairman of the Ayala Group, Mr.
Enrique Zobel.
23. After his retirement from Ayala Corporation, he organized Intra-Invest
Securities, Inc., which is engaged in stock brokerage. He became a member
and Governor of the Manila Stock Exchange, and he enjoys a high reputation
in the stock brokerage industry.
24. Despite his physical weakness, as a result of his operation (which were
known by defendant and its lawyer) he was forced to travel
to Hawaii and Texas because of the court case there, and was exposed to the
unaccustomed wet and cold winter weather in Texas. These could have been
avoided if defendant was not included as a defendant in the counter-complaint
or had plaintiff dropped the case after the taking of plaintiffs deposition and
that of Mr. Gomez in Honolulu, Hawaii.
25. In filing and presenting its counter-complaint in Houston, Texas against
plaintiff and including him in Civil Case 16563 (RTC-Makati) as above alleged,
and in forcing him to defend himself and protect his rights and interest,
defendant caused plaintiff and his family great embarrassment, mental and
physical suffering, anxiety and anguish, besmirched reputation, wounded
feelings, moral shock and social humiliation, for which defendant should pay
him moral damages of at least P10,000,000.00.
26. Plaintiff repleads and incorporates herein all the foregoing allegations.
27. Defendant has acted against plaintiff viciously and maliciously in utter
disregard of the true facts obvious and known to it and of the past services
rendered by the plaintiff to Philsec and the Ayala Group of which defendant is
a member.
 28. For recklessly trifling with the good name, honor and feelings of plaintiff,
and as an example for the public good, defendant should be ordered to pay
plaintiff exemplary damages of at least P1,000,000.00. Guevara is even guilty of forum shopping by filing these two cases successively. The
facts reveal that on 28 May 1992, Guevara filed Civil Case No. 92-1445 against BPI Securities
Corp. for the enforcement of the Rule 11 award. Around three years later or on 24 April 1995,
In the handling of this case, plaintiff has been forced to engage the services of
Guevara filed another complaint against BPI Securities Corp. seeking for the recovery of actual,
counsel and to pay them P400,000,00 as attorneys fees.[53]
moral and exemplary damages.

Considering that two actions are rooted in the same transgression committed by BPI
Securities Corp. against Guevara, to allow these two cases to proceed separately could give Forum shopping is a deplorable practice of litigants of resorting to two different fora for

rise to a situation where there would be two conflicting decisions on one cause of action arising the purpose of obtaining the same relief, to increase his or her chances of obtaining a favorable

from the same set of facts. Thus, should the Makati City, RTC Branch 137 in Civil Case No. judgment. What is pivotal to consider in determining whether forum shopping exists or not is

92-1445, allow the enforcement of the foreign judgment based on malicious inclusion of the vexation caused to the courts and the parties-litigants by a person who asks appellate

Guevara in the U.S. case, then a finding by the Makati City, RTC Branch 135, in Civil Case No. courts and/or administrative entities to rule on the same related causes and/or to grant the

95-624 that Guevara should not be entitled to an award for damages because he was not same or substantially the same relief, in the process creating the possibility of conflicting

maliciously prosecuted in the U.S. case, would undoubtedly be conflicting and irreconcilable. decisions by the different courts or fora upon the same issues. There is forum shopping where

Conversely, should the Makati City, RTC Branch 137, repel the foreign judgment sought to be the elements of litis pendentia are present and where a final judgment in one case will amount

enforced herein by evidence of clear mistake of law or fact [54] committed by the U.S. courts, to res judicata in the other.[56]

and instead find that Guevara was not maliciously impleaded as a party-defendant in the U.S.
case; then it would necessarily be inconsistent with a decision by the Makati City, RTC Branch
135, finding malice and bad faith in the inclusion of Guevara in the same U.S. case. 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

Litis pendentia as a ground for the dismissal of a civil action refers to that situation several different fora until a favorable result is reached. To avoid the resultant confusion, this

wherein another action is pending between the same parties for the same cause of action, such Court adhere strictly to the rules against forum shopping, and any violation of these rules results

that the second action becomes unnecessary and vexatious. [55] Indeed, the elements of litis in the dismissal of a case.[57]

pendentia are obviously present in Civil Cases No. 92-1445 and 95-624.The parties are the
same; the reliefs prayed for by Guevara are likewise the same; and the award or non-award in
the first case will bar by res judicata the award in the second case. Considering that Civil Case No. 95-624 has already been dismissed on the ground
of litis pendentia, this Court no longer finds it necessary to rule on the issue of prescription.
WHEREFORE, premises considered, the instant Petition is hereby DENIED, and the Decision
of the Court of Appeals in CA-G.R. SP No. 53379, dated 21 March 2003, dismissing Civil Case
No. 95-624 is hereby AFFIRMED. Costs against the petitioner.

SO ORDERED.

DECISION
VELASCO, JR., J.:
Diligence is the mother of good fortune.
Miguel De Cervantes
Parties should not leave the entire business of litigation solely to their counsels. Basic
diligence requires that parties themselves should closely monitor the developments in their
cases. They should provide full support to their lawyers and even work hand in hand with them
to ensure the diligent pursuit and effective prosecution of their cases. Inevitably, their failure to
do so could result in prejudicial consequences.
The Case
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to reverse and
set aside the May 11, 1999 Decision[1] of the Court of Appeals (CA), dismissing petitioners
appeal based on a compromise agreement and considering their appeal as abandoned in CA-
G.R. CV No. 54136 and CA-G.R. SP No. 48475; and the January 31, 2000 Resolution[2] of the
CA, denying petitioners Motion for Reconsideration.[3] The CA appeal stemmed from the
Kalibo, Aklan Regional Trial Court (RTC), Branch VI April 29, 1996 Decision[4] in Civil Case No.
3683, declaring intervenors Jesus delos Santos and Rosita delos Santos-Flores as lawful
owners of two-thirds (2/3) of the disputed land, and Fred and Joan Elizalde as owners of the
remaining one-third (1/3) of the land.
The Facts
On December 15, 1986, petitioners filed a Complaint for Quieting of Title, Damages and
Attorneys Fees before the Kalibo, Aklan RTC, involving four (4) adjoining lots designated as
Lots 393-A, 393-B, 394-D, and 394-E, with areas of 1,515 square meters (sqm), 1,010 sqm,
5,764 sqm, and 6,482 sqm, respectively, for a total land area of 14,771 sqm, located in Boracay
Island, Malay, Aklan.[5] An amended complaint was thereafter filed on May 8, 1991.
Petitioners claimed the aforementioned lots as their inheritance from the late Mariano
delos Santos, their common ascendant, either by their own right or by right of representation.
Petitioners alleged that the late Mariano delos Santos was the original owner of the lots. On
the other hand, respondents spouses Fred and Joan Elizalde, the first set of intervenors before
the trial court, claimed that they purchased the lots on June 18, 1974 from the heirs of Leonardo
delos Santos, he being the rightful and exclusive owner of the said lots. Respondents Gloria
Martin, Domingo Casimero, Sergio Casimero, Abundio Casimero, and Teodoro Casimero, the
second set of intervenors before the trial court, claimed ownership over Lots 393-B and 394-E,
as heirs of Tomasa Prado, who also allegedly owned said lots. Respondents Rosita delos
Santos-Flores and Jesus delos Santos, the third set of intervenors and two of the three
legitimate children of the late Leonardo delos Santos, claimed 2/3 of the disputed lots as their
rightful inheritance. Respondents delos Santos alleged that they did not sell nor assign their
share in the property to anyone, including respondent Fred Elizalde.
After due hearing of the case, the trial court issued the April 29, 1996 Decision, the dispositive
portion of which reads:
WHEREFORE, in view of the foregoing considerations, judgment is
hereby rendered as follows:
(1.) Dismissing the complaint filed by the plaintiffs as well as the
complaint in intervention filed by the second set of intervenors
Casimeros, et al. for lack of merit;
(2.) Declaring the two deeds of sale (Exhibits 29 and 30) as null and
void insofar as they affect the two-thirds (2/3) share of intervenors Jesus
and Rosita;
(3.) Declaring intervenors Jesus delos Santos and Rosita delos Santos
Flores as the lawful owners of the two-thirds portion of the land in
question or 9,915 square meters on the northwest portion, representing
as their shares in the intestate estate of Leonardo delos Santos;
 In the meantime, respondents Fred Elizalde, Jesus delos Santos, and Rosita delos Santos-
(4.) Declaring defendant Fred Elizalde as the rightful owner of one-third
of the land in question or 4,957 square meters on the southeast portion, Flores filed an October 6, 1998 Joint Manifestation and Motion,[12] whereby respondent Elizalde
segregated by a boundary line running from the seashore to the inland abandoned his appeal by virtue of an amicable settlement between the parties through the May
or from the southwest to northeast;
27, 1997 Agreement.[13] They agreed to swap and re-adjust the areas adjudged by the trial
(5.) Ordering the cancellation or revision of Tax Declaration No. 4422 in court in their favor, without prejudice to a final judgment by the CA. In addition, Elizalde moved
the name of Fred Elizalde (Exhibit 26) and all tax declarations issued
that his appeal be considered as withdrawn and that he be excused from filing an appellants
subsequent thereto to conform to paragraphs 3 and 4 hereof as well as
the issuance of a new tax declaration to intervenors Jesus delos Santos brief.
and Rosita Flores covering their two-thirds (2/3) share;

(6.) Ordering the plaintiffs or any persons claiming interest therein to On October 27, 1998, petitioners filed an Ex-Parte Motion for Final Extension of Period to File
deliver complete possession of the land to defendants and first set Brief for Plaintiffs-Appellants,[14] seeking an extension of thirty (30) days, or until November 27,
intervenors.
1998, within which to file their brief. On November 27, 1998, petitioners filed another motion
No pronouncement as to costs. for extension,[15] asking for another thirty (30)-day extension. And yet again, on December 28,
1998, petitioners filed another motion for extension,[16] asking for another thirty (30)-day
SO ORDERED.[6]
extension to file their brief, such that the period sought to file appellants brief would be
Thus, petitioners and respondent Fred Elizalde filed their separate Notices of Appeal until January 27, 1999. In sum, petitioners had a total extension of one hundred eighty (180)
dated June 6, 1996[7] and May 16, 1996,[8] respectively. The cases were docketed as CA-G.R. days from July 27, 1998, when they filed a motion for extension before the CA for the first time.
SP No. 48475 for respondent Elizalde and CA-G.R. CV No. 54136 for
petitioners. Subsequently, the CA issued the June 2, 1998 Notice to File Brief, [9] requiring Respondents delos Santos opposed the foregoing motions for extension and moved for the
petitioners and respondent Elizalde to file their briefs within forty-five (45) days from receipt of dismissal of the appeal for petitioners failure to file the required appellants brief.
said notice.
However, on April 8, 1999, petitioners, through their former counsel Atty. Napoleon M.
On July 27, 1998, petitioners filed by registered mail a July 27, 1998 Motion for Extension of Victoriano, filed an Ex-Parte Motion to Withdraw Appeal.[17] Said motion sought the withdrawal
Time to File Brief for Plaintiffs-Appellants.[10] In their motion, petitioners admitted having of the appeal on the ground that petitioners and respondents delos Santos entered into an
received a copy of the Notice to File Brief on June 15, 1998; thus, they had until July 30, 1998 to amicable settlement, denominated as an Undertaking executed on September 19,
file their brief, and prayed for an extension of forty-five (45) days from July 30, 1998,[18] whereby petitioners would be paid the amount of Four Million Pesos (PhP
1998 to September 13, 1998. On September 10, 1998, petitioners filed another motion for 4,000,000.00), in consideration of their leaving the disputed lots peacefully. Notably, the
extension,[11] seeking another forty five (45)-day extension, or until October 27, 1998, within Undertaking was signed by 39 of the 46 petitioners, [19] and notarized by Atty. Edgar S.
which to file their brief. Calizo. More so, it was alleged in said motion that the counsel for respondents delos Santos,
Atty. Romeo R. Robiso, executed a promissory note on October 15, 1998[20] on behalf of
petitioners, for the amount of Four Million Pesos (PhP 4,000,000.00).

On May 11, 1999, the CA issued the assailed Decision dismissing CA-G.R. CV No. 54136 and
SP No. 48475 and considering them withdrawn. It justified its Decision in this wise: For failure
to file their respective appellants briefs, and in accordance with the prayer in the Joint
Manifestation and Motion, and in the Ex-Parte Motion to Withdraw Appeal, the appeal should
be dismissed, and considered as withdrawn.[21]
Thereafter, an Entry of Appearance[22] was filed on June 17, 1999 by Atty. Cesar T. Verano,
allegedly in representation of petitioners. The entry contained the solitary conformity of
petitioner Vicente delos Santos. On the same day, petitioners filed a Motion for
Reconsideration of Decision with Prayer for Reinstatement of Appeal, [23] which was verified
solely by petitioner Vicente delos Santos. In their Motion for Reconsideration, petitioners
alleged that: (1) they did not have any knowledge of the promulgation of the assailed Decision
of the CA; (2) they never entered into any amicable settlement with respondents delos Santos;
(3) their alleged signatures in the May 27, 1997 Agreement were forged; and (4) they never
authorized their former counsel, Atty. Victoriano, to withdraw their appeal. Thus, petitioners
prayed that: (1) their Motion for Reconsideration be considered as filed on time; (2) the said
Agreement allegedly entered into by petitioners and respondents delos Santos be considered
as invalid; (3) the portion of the assailed Decision dismissing their appeal be reconsidered; (4)
their appeal be reinstated; and (5) they be granted a period of ninety (90) days within which to
file their appellants brief.
On July 16, 1999, respondents delos Santos then filed an Opposition to Motion for
Reconsideration.[24] The opposition was based on the following: (1) that petitioners motion
should be considered as mere scrap of paper for not containing any notice of hearing; (2) that
the appeal was validly dismissed for petitioners failure to file their appellants brief; and (3) that
the Agreement was valid.
Petitioners subsequently filed a Reply (To Opposition) on July 30, 1999, [25] refuting the
allegations made by respondents delos Santos; and attached to the reply a handwritten note
in Filipino,[26] stating that: (1) the signatories did not sign the alleged Agreement; (2) they did
not receive a single centavo of the money alleged in the Agreement; (3) they did not authorize
Atty. Victoriano to withdraw their appeal; and (4) Atty. Victoriano did not furnish them a copy of
the Decision of the CA. The note was purportedly signed by Vicente delos Santos, Constancia
delos Santos, Terry Ann S. Carnacete, Greta delos Santos, Daisy delos Santos, Jose delos
Santos, Herminigildo delos Santos, Peter delos Santos, Vivar delos Santos, Ibarra delos
Santos, Rosemarie Tuazon, Natividad Prado, Lito Prado, Felisa Casidsid, Ricardo Fernando,
Jesus Fernando, Rogelio Lacandula, Mergie C. Nieves, Anita C. Baltazar, and Claire S.
Lacandula. Of the signatories, only eight (8) are among the forty-six (46) petitioners before the
appellate court.
On January 31, 2000, the CA issued the assailed Resolution, wherein it was ruled that:
The Motion for Reconsideration With Prayer for the Reinstatement of
Appeal filed on June 17, 1999 by the said new counsel for plaintiffs-
appellants, to which an Opposition has been filed by the first set of
intervenors-appellees, is DENIED admission for being late by nine (9)
days. The records show that plaintiffs-appellants counsel of record, Atty.
Napoleon M. Victoriano, who has not filed any notice of withdrawal as
counsel as per report of the Judicial Records Division, received copy of
the Courts Decision dated May 11, 1998, on May 24, 1999. Thus,
appellants had only until June 8, 1999 to file their Motion for
Reconsideration.[27]
Hence, this petition is before us.
The Issues
Petitioners raise the following issues:
I.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
DENYING ADMISSION TO PETITIONERS MOTION FOR
RECONSIDERATION WITH PRAYER FOR THE REINSTATEMENT
OF APPEAL FILED BY THEIR NEW COUNSEL FOR HAVING BEEN
FILED NINE (9) DAYS LATE, OVERLOOKING AND DISREGARDING
THE FACT:

A. THAT PETITIONERS LEARNED OF THE DECISION OF THE The Ruling of the Court
COURT OF APPEALS DATED MAY 11, 1999 ONLY ON JUNE 2, 1999,
AND ON JUNE 17, 1999, OR WITHIN THE FIFTEEN (15)-DAY
REGLEMENTARY PERIOD THEY FILED THEIR AFORESAID
MOTION FOR RECONSIDERATION; The petition must be denied.
Petitioners argue that their Motion for Reconsideration was filed on time as the reglementary
B. THAT PETITIONERS FORMER COUNSEL, ATTY. NAPOLEON M.
VICTORIANO, DID NOT FILE A MOTION FOR RECONSIDERATION period for the filing of it should be counted from the time when petitioners themselves obtained
WITHIN THE FIFTEEN [15]-DAY REGLEMENTARY PERIOD FROM a copy of the assailed Decision of the CA on June 2, 1999, and not from the time that their
HIS RECEIPT OF A COPY OF THE COURT OF APPEALS DECISION
former counsel, Atty. Victoriano, received a copy of said Decision on May 24, 1999.
ON MAY 24, 1999, SAID COUNSEL WAS CLEARLY AT FAULT
AND/OR GROSSLY NEGLIGENT IN THE PERFORMANCE OF HIS
DUTIES TO HIS CLIENTS. MOREOVER, THE COUNTING OF THE However, petitioners allegation is incorrect.
15-DAY PERIOD TO FILE MOTION FOR RECONSIDERATION
SHOULD BE COUNTED FROM PETITIONERS KNOWLEDGE OF
THE DECISION ON JUNE 2, 1999, AND NOT ON ATTY.
VICTORIANOS RECEIPT OF A COPY THEREOF; AND
Reglementary period for filing a Motion for Reconsideration
C. THAT THE NON-ADMISSION OF PETITIONERS MOTION FOR
RECONSIDERATION FOR HAVING BEEN FILED NINE (9) DAYS
LATE IS MANIFESTLY UNJUST AND INEQUITABLE BECAUSE IT Section 1 of Rule 37, in conjunction with Section 3 of Rule 41 of the Rules of Court, provides
GIVES PREMIUM TO TECHNICALITIES RATHER ON SUBSTANTIAL for the period within which a Motion for Reconsideration may be filed, to wit:
JUSTICE.
Section 1. Grounds of and period for filing motion for new trial or
II. reconsideration.Within the period for taking an appeal, the aggrieved
party may move the trial court to set aside the judgment or final order
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN and grant a new trial for one or more of the following causes materially
DISMISSING PETITIONERS APPEAL FROM THE TRIAL COURTS affecting the substantial rights of said party:
DECISION AND CONSIDERING THE APPEAL WITHDRAWN AS
PRAYED FOR BY COUNSEL FOR PETITIONERS CONSIDERING xxxx
THAT THE ALLEGED AGREEMENT BETWEEN PETITIONERS AND
FIRST SET [OF] INTERVENORS THROUGH THEIR COUNSEL IS Within the same period, the aggrieved party may also move for
NULL AND VOID AND WITHOUT FORCE AND EFFECT BECAUSE reconsideration upon the grounds that the damages awarded are
THEIR ALLEGED SIGNATURES THEREIN WERE FORGED, [AND excessive, that the evidence is insufficient to justify the decision
BESIDES,] THEY NEVER RECEIVED A SINGLE CENTAVO OF THE or final order, or that the decision or final order is contrary to law.
ALLEGED CONSIDERATION OF THE AGREEMENT. MOREOVER,
PETITIONERS APPEAL FROM THE TRIAL COURTS DECISION IS Section 3. Period of ordinary appeal.The appeal shall be taken within
MERITORIOUS AS THEIR CLAIM THAT THEY ARE OWNERS OF fifteen (15) days from notice of the judgment or final order
THE DISPUTED PROPERTIES ARE SUPPORTED BY SUSBTANTIAL appealed from. Where a record on appeal is required, the appellant
AND COMPETENT EVIDENCE.[28]
 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. (Emphasis supplied.)
The abovementioned fifteen (15)-day period begins to run upon receipt of notice of the decision
or final order appealed from. Such period has been considered to begin upon receipt of notice
by the counsel of record, which is considered notice to the parties.[29] Service of judgment on
the party is prohibited and is not considered the official receipt of the judgment. [30]
Thus, the fifteen (15)-day period should run from May 24, 1999, when Atty. Victoriano received
a copy of the assailed Decision of the CA, and not from June 2, 1999, when petitioners claimed
to have been informed of the CA decision.[31]
To reiterate, service upon the parties counsels of record is tantamount to service upon the
parties themselves, but service upon the parties themselves is not considered service upon
their lawyers. The reason is simplethe parties, generally, have no formal education or
knowledge of the rules of procedure, specifically, the mechanics of an appeal or availment of
legal remedies; thus, they may also be unaware of the rights and duties of a litigant relative to
the receipt of a decision. More importantly, it is best for the courts to deal only with one person
in the interest of orderly procedureeither the lawyer retained by the party or the party
him/herself if s/he does not intend to hire a lawyer.
Even assuming that petitioners had replaced Atty. Victoriano prior to his receipt of the assailed
Decision, the reglementary period for filing a Motion for Reconsideration would still be reckoned
from his receipt of the Decision.
Section 26 of Rule 138 of the Rules of Court requires that [i]n case of substitution, the name of
the attorney newly employed shall be entered on the docket of the court in place of the former
one, and written notice of the change shall be given to the adverse party.
In GCP-Manny Transport Services, Inc. v. Principe, the Court ruled that unless the change of
attorneys is carried out properly, the counsel of record shall still be considered as the partys
counsel, and the notice sent to such counsel shall be considered as notice to the party
represented.[32]
In the present case, the assailed CA Decision was rendered on May 11, 1999, and the notice
of it was received by Atty. Victoriano on May 24, 1999. Petitioners current counsel, Atty.
Verano, filed his appearance only on June 17, 1999, with the sole conformity of Vicente
delos Santos. The CA correctly served a copy of the Decision on Atty. Victoriano, which is
considered notice to petitioners themselves. Therefore, May 24, 1999 is the correct reckoning
point for the reglementary period of filing a Motion for Reconsideration to the assailed Decision
which ended on June 8, 1999. Hence, petitioners Motion for Reconsideration filed on June 17,
1999 was belatedly filed and correctly rejected by the CA.
Liberal application of the period for filing a Motion for Reconsideration
Even assuming that, indeed, their Motion for Reconsideration was filed out of time,
petitioners further allege that a delay of nine (9) days in the filing of their Motion for
Reconsideration cannot justify why the CA did not admit it. In support of such contention,
petitioners cite Republic v. Court of Appeals,[33] and Ramos v. Bagasao,[34] where this Court
allowed the filing of an appeal six (6) and four (4) days beyond the reglementary period,
respectively.
In Neypes v. Court of Appeals, the Court stressed that [s]eldom have we condoned late filing
of notices of appeal, and only in very exceptional instances to better serve the ends of justice;
and also emphasized that the liberal application of the rules is confined to situations where
technicalities were dispensed with, our decisions were not meant to undermine the force and
effectivity of the periods set by law. But we hasten to add that in those rare cases where
procedural rules were not stringently applied, there always existed a clear need to prevent the
commission of a grave injustice (emphasis supplied).[35]
In Republic,[36] cited by petitioners, We ruled that the CA should have admitted the Motion for
Reconsideration filed by petitioners to prevent gross miscarriage of justice, as the government
stood to lose close to three hundred (300) hectares of prime sugar land already titled in its
name and devoted to educational purposes; while in Ramos, it was enunciated that a four (4)-
day delay in filing a notice of appeal and a motion of extension of time to file a record on appeal
can be excused on the basis of equity and considering that the record on appeal is now with
the respondent judge.[37]
In the instant case, there is no exceptional circumstance to justify the disregard of the
reglementary period for filing a motion for reconsideration. Hence, petitioners position is devoid
of merit.
Furthermore, petitioners contend that despite their Motion for Reconsideration had
been filed out of time, this should have been admitted on the ground of equity. However,
equitable grounds cannot be sought when the party is guilty of negligence. Thus, We ruled
in Mesina v. Meer that this Court will not allow petitioners, in guise of equity, to benefit from
their own negligence.[38]
Petitioners are guilty of inexcusable negligence
Petitioners attribute the dismissal of their appeal and their failure to file a motion for
reconsideration within the reglementary period to their former counsels negligence, Atty.
Victoriano. Thus, petitioners seek the liberal application of the rules, citing Ginete v. Court of
Appeals, wherein the counsel of record did not file an appellants brief within the prescribed
period and continued with the case for fear of reprisal from respondents who were judges. In
said case, We ruled that the negligence of the clients counsel does not bind them. The
departure from the rule was explained, thus:
[T]he lawyers negligence without any participatory negligence on
the part of petitioners is a sufficient reason to set aside the
resolutions of the Court of Appeals. Aside from matters of life, liberty,
honor or property which would warrant the suspension of the rules of
the most mandatory character and an examination and review by the
appellate court of the lower courts findings of fact, the other elements
that should be considered are the following: (1) the existence of special
or compelling circumstances, (2) the merits of the case, (3) a cause not
entirely attributable to the fault or negligence of the party favored by the
suspension of the rules, (4) a lack of any showing that the review sought
is merely frivolous and dilatory, (5) the other party will not be unjustly
prejudiced thereby.[39] (Emphasis supplied.)
However, the Ginete case is not a precedent to the case at bar because in said case, the party
had no participatory negligence, while in the case at bar, petitioners were negligent in not
monitoring the developments in their case. Petitioners acts are considered inexcusable
negligence in line with our ruling in Bernardo v. Court of Appeals (Special Sixth Division), where
we explicated the vital participation of the parties in the effective handling of the case by their
lawyers, thus:
Worth mentioning is the fact that petitioner was likewise not entirely
blameless in his alleged deprivation of his day in court. In a recent case,
this Court enunciated:
Litigants, represented by counsel, should not expect
that all they need to do is sit back, relax and await the
outcome of their case. They should give the necessary
assistance to their counsel for what is at stake is their
interest in the case.
In his concurring opinion in Republic vs. Sandiganbayan, Mr. Justice
Teodoro R. Padilla emphasized the value and significance of the partys
presence and diligence in the advancement of his cause, thus:
x x x An almost lifetime of experience in litigation is the
best witness to the indispensability of partys presence
(aside from his lawyer, in case he has the assistance of
counsel) in order to litigate with any reasonable
opportunity of success. x x x especially during the
cross-examination of adverse partys witnesseswhere
the truth must be determinedevery counsel worth his
salt must have the assistance and presence of his client
on the spot, for the client invariably knows the facts far
 better than his counsel.In short, even in civil cases, the
presence of party (as distinguished from his lawyer
alone) is essential to due process.
True enough, the party-litigant should not rely totally on his counsel to
litigate his case even if the latter expressly assures that the formers
presence in court will no longer be needed. No prudent party will leave
the fate of his case entirely to his lawyer. Absence in one or two
hearings may be negligible but want of inquiry or update on the status
of his case for several months (four, in this case) is inexcusable. It is the
duty of a party-litigant to be in contact with his counsel from time to time
in order to be informed of the progress of his case. Petitioner simply
claims that he was busy with his gravel and sand and trading
businesses which involved frequent traveling from Manila to outlying
provinces. But this was not a justifiable excuse for him to fail to ask
about the developments in his case or to ask somebody to make the
query for him. Petitioner failed to act with prudence and diligence;
hence, his plea that he was not accorded the right to due process cannot
elicit this Courts approval or even sympathy. [40] (Emphasis supplied.)
Concurrently, petitioners did not even know that Atty. Victoriano failed to file an appellants brief
on their behalf during the more than one hundred eighty (180)-day extension that he sought
from the CA, aside from their failure to learn of the Decision of the appellate court. Ordinary
prudence would dictate that petitioners must give utmost importance to the case considering
that it involves their residences, presumably their most valued material possession, and
considering further that they had already lost at the trial court.Petitioners failure to apprise
themselves of the status of the case from the time that Atty. Victoriano received a copy of the
notice to file brief on June 15, 1998 up to June 2, 1999, when petitioners allegedly obtained a
copy of the assailed Decision from the CA, is unjustified. Petitioners cannot be shielded from
the repercussions of their counsels and their own negligence. Petitioners themselves are as
much to blame in losing their appeal.
The Supreme Court is not a trier of facts
Finally, petitioners claim that the Undertaking or Agreement allegedly entered into by
them and respondents delos Santos is invalid considering that their purported signatures in it
were forged. They argue that the motion to withdraw is likewise invalid; therefore, there is no
basis for the withdrawal of the appeal. In other words, petitioners question the authenticity of
said documents, raising a question of fact.
There is a question of fact when the doubt or controversy arises as to the truth or falsity of the
alleged facts.[41] This is distinguished from a question of law when the doubt or difference arises
as to what the law is on a certain state of facts, and which does not call for an examination of
the probative value of the evidence presented by the parties-litigants.
Furthermore, in Sampayan v. Court of Appeals, this Court ruled, thus:
[S]ettled is the rule that this Court is not a trier of facts and does not
normally embark on a re-examination of the evidence adduced by the
parties during trial. Of course, the rule admits of exceptions. So it is that
in Insular Life Assurance Company, Ltd. vs. CA, we wrote:
[i]t is a settled rule that in the exercise of the Supreme
Court's power of review, the Court is not a trier of facts
and does not normally undertake the re-examination of
the evidence presented by the contending parties'
during the trial of the case considering that the findings
of facts of the CA are conclusive and binding on the
Court. However, the Court had recognized several
exceptions to this rule, to wit: (1) when the findings are
grounded entirely on speculation, surmises or
conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on
a misapprehension of facts; (5) when the findings of
facts are conflicting; (6) when in making its findings the
Court of Appeals went beyond the issues of the case,
or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are
contrary to the trial court; (8) when the findings are
conclusions without citation of specific evidence on
which they are based; (9) when the facts set forth in the
petition as well as in the petitioner's main and reply
 briefs are not disputed by the respondent; (10) when
the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence No meritorious cause
on record; and (11) when the Court of Appeals
manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly considered, With the loss of their right of appeal to the CA, we see no need to resolve the issue of
would justify a different conclusion.[42] ownership. Such issue should have been first resolved by the CA, but it was not able to do so
because of the dismissal of the appeal. Thus, the claim of ownership is a non-issue before this
A perusal of the exceptions enumerated above reveals that the instant case does not fall under
Court.
any of them. Thus, this Court cannot entertain the factual issues raised in the petition, which
include the issue of authenticity of the Undertaking or Agreement, as well as the issue of non-
WHEREFORE, We DENY the petition and AFFIRM the May 11, 1999 Decision and
payment of the amount mentioned, particularly, in the Undertaking.
the January 31, 2000 Resolution of the CA in CA-G.R. CV No. 54136 and SP No. 48475, with
no costs.
Failure to file appellants brief SO ORDERED.

Assuming arguendo that the withdrawal of the appeal was groundless, the CA still did not
commit a reversible error in dismissing the appeal for petitioners failure to file an appellants
brief.

Contrary to petitioners allegation, the assailed Decision did not dismiss the case solely on the
basis of the motion to withdraw filed by their former counsel. To reiterate, the Decision stated
that [f]or failure to file their respective appellants briefs, and in accordance with the prayer
in the Joint Manifestation and Motion, and in the Ex-Parte Motion to Withdraw Appeal, the
appeal should be dismissed, and considered as withdrawn (emphasis supplied). [43]

Section 7 of Rule 44 of the Rules of Court provides forty-five (45) days from receipt of notice
within which to file an appellants brief, while Section 12 declares that an extension of time for
filing of briefs shall not be allowed except for a good and sufficient cause.
The general rule is that motions for extension of time to file an appellants brief shall not be
granted except for a good cause. No such justification is present in this case.Petitioners failure
to apprise themselves of the status of their case during its pendency before the CA is
inexcusable. Moreover, their former counsels failure or neglect to file the required appellants
brief shall bind them.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 110801 December 8, 1995
MARIKINA VALLEY DEVELOPMENT CORPORATION, ISIDORO LIAMZON, JR., SPS.
BERNARDO AND DELIA ROSARIO, SPS. MANUEL AND NORMA SANCHEZ, SPS.
RUFINO AND MILAGROS JAVIER, SPS. RODOLFO AND SONIA OCAMPO, SPS.
LAZARO AND JULIETA SANTOS, SPS. TEODORO AND ZENAIDA BAUTISTA, SPS.
CHARLES AND MA. CORAZON MILLER, SPS. EDGARDO AND CRISTINA
VALENZUELA, FRANCISCO LIAMZON, MARIETTA LIAMZON, ROMEO THADEUS
LIAMZON, MICHAEL RAYMOND LIAMZON, ROBERTO ANTONIO LIAMZON,
ROSABELLE THERESA LIAMZON, RONALDO ISIDORO LIAMZON and RODRIGO
JESUS LIAMZON, petitioners,
vs.
HON. NAPOLEON R. FLOJO, Presiding Judge of Branch 2, RTC Manila; BASILIO
SYTANGCO, as representative of the heirs of JOSE REYES SYTANGCO; and THE HON.
COURT OF APPEALS, respondents.
FELICIANO, J.:
Jose Reyes Sytangco instituted a complaint for reconveyance of a piece of land situated
along España Street, Manila, against petitioner Marikina Valley Development Corporation
("Marikina Valley") and Milagros Liamzon. In his complaint, Jose Reyes Sytangco alleged that
he and his wife, Aurelia Liamzon-Sytangco had entrusted some funds to Milagros Liamzon,
sister-in-law of Aurelia, in order to purchase the España Street property from its former
owners. The Sytangco spouses had years ago built their house on that parcel of land then
leased from the original owners with whom they negotiated for purchase of that land.
Milagros Liamzon, however, in alleged violation of the trust reposed upon her, purchased the
España Street property in her own name and had title to the same registered in her name.
Thereafter, she transferred title over that property to petitioner Marikina Valley, a closed
corporation owned by the Liamzon family.
In their answer, petitioner denied the allegations of Jose Reyes Sytangco and claimed that
Milagros Liamzon had purchased the España Street property by and for herself, with funds
coming from petitioner Marikina Valley. For her part, Milagros Liamzon insisted, among other
things, that the Reyes Sytangco spouses had waived in her favor their right to buy the
property in question.
During the trial in the court below, Jose Reyes Sytangco died and he was substituted by his
heirs, who are private respondents herein. After trial, the trial court ruled in favor of private
respondent heirs in a decision dated 11 October 1991. The trial court directed petitioner
Marikina Valley to execute a Deed of Conveyance covering the property involved in favor of
private respondents.
On 28 October 1991, Marikina Valley and the other petitioners — heirs of Milagros Liamzon
(Milagros having, in the meantime, passed away) — received a copy of the decision of the
trial court. Petitioners moved for reconsideration on 7 November 1991.
The Reyes Sytangco heirs opposed petitioners' motion for reconsideration upon the ground
that it was a pro forma one. The heirs contended that the allegations of insufficiency of
evidence were couched in very general terms, contrary to the requirements of Section 2, Rule
37 of the Rules of Court.
On 21 November 1991, the trial court denied petitioners' motion for reconsideration for lack of
merit. The trial court said:
The defendant anchors his motion on the assertion that:
1. There is no sufficient evidence to show that the down payment for the
property came from the plaintiff;
2. That the money used for the property did not come from the plaintiff,
hence, no implied trust could have been created between Milagros Liamzon
and Aurelia Liamson;
3. That piercing the veil of corporate entity is not applicable to this case.
After a perusal of the arguments posed in support of these grounds, the court
finds that these arguments had been discussed and resolved in the decision.
There being [no] other matter of consequences asserted which has not been
considered in the decision, the Court resolves to deny the same.
WHEREFORE, the Motion for Reconsideration is DENIED for lack of
merit.1 (Emphasis supplied)
 Petitioners received a copy of the above order on 22 November 1991. On 25
November 1991, they filed a notice of appeal with the trial court.
In the meantime, private respondent heirs moved for execution of the decision of 11 October
1991. They insisted that petitioners had failed to perfect an appeal within the reglementary
period.
In its order dated 25 November 1991, the trial court dismissed the notice of appeal filed by
petitioners for having been filed beyond the reglementary period to perfect an appeal. The
trial judge reasoned that petitioners' motion for reconsideration was pro forma and hence did
not stop the running of the reglementary period. Thereupon, the trial judge granted private
respondents' motions for execution.
Petitioners went to the Court of Appeals on certiorari and injunction. They denied that their
motion for reconsideration was merely pro forma and claimed that they had filed their notice
of appeal seasonably. They also challenged the validity of subsequent orders of the trial court
directing execution.
The Court of Appeals dismissed the petition, declaring that petitioners' motion for
reconsideration was indeed pro forma and, "therefore, clearly without merit." The appellate
court went on to say that:
[w]here a motion for reconsideration merely submits, reiterates, repleads,
repeats, or reaffirms the same arguments that had been previously
considered and resolved in the decision, it is pro forma.
The Court of Appeals concluded that petitioners' pro forma motion for reconsideration
had not stopped the running of the period to perfect an appeal and that, accordingly,
the judgment had become final and private respondents were entitled to execution as
a matter of right. Petitioners sought reconsideration of the Court of Appeals' decision,
without success.
In their present Petition for Review on Certiorari, petitioners aver once more that their motion
for reconsideration filed before the trial court was sufficient in form and substance and was
not pro forma. They reiterate that their motion had effectively suspended the running of the
reglementary period, and that their notice of appeal filed three (3) days from receipt of the
order denying their motion for reconsideration had been filed well within the remaining period
to perfect an appeal.
The rule in our jurisdiction is that a party aggrieved by a decision of a trial court may move to
set aside the decision and reconsideration thereof may be granted when (a) the judgment
had awarded "excessive damages;" (b) there was "insufficiency of the evidence to justify the
decision;" or (c) "the decision was against the law."2
A motion for reconsideration based on ground (b) or (c) above must
point out specifically the findings and conclusions of the judgment which are
not supported by the evidence or which are contrary to law, making express
reference to the testimonial or documentary evidence or to the provisions of
law alleged to be contrary to such findings and conclusions. 3
A motion for reconsideration, when sufficient in form and substance — that is, when it
satisfies the requirements of Rule 37 of the Rules of Court — interrupts the cunning of the
period to perfect an appeal.4 A motion for reconsideration that does not comply with those
requirements will, upon the other hand, be treated as pro forma intended merely to delay the
proceedings and as such, the motion will not stay or suspend the reglementary period. 5The
net result will be dismissal of the appeal for having been unseasonably filed.
The question in every case is, therefore, whether a motion for reconsideration is properly
regarded as having satisfied the requirements, noted above, of Rule 37 of the Rules of Court.
As already pointed out, the Court of Appeals took the position that where a motion for
reconsideration merely "reiterates" or "repleads" the same arguments which had been
previously considered and resolved in the decision sought to be reconsidered, the motion is
a pro forma one. In taking this position, the appellate court quoted at some length from a prior
decision of this Court:
. . . Said the Supreme Court in "Dacanay v. Alvendia, et al.," 30 SCRA 31, to
wit:
In Estrada v. Sto. Domingo, recently decided by this Court, we once again
called the attention of the bar and litigants to the "principle already forged by
this Court . . . that a motion for reconsideration which has no other purpose
than to gain time is pro forma and does not stop the period of appeal from
slipping away." Mr. Justice Dizon pointed out in his concurring opinion that
"The motion aforesaid is pro forma on yet another ground, in substance it
was but a reiteration of reasons and arguments previously set forth in
respondent Sto. Domingo's memorandum submitted to the trial court and
which the latter had already considered, weighed and resolved adversely to
him when it rendered its decision on the merits." And earlier in Lonaria v. De
Guzman, we held that "[T]he filing of the second motion on January 22, 1963
did not suspend the running of the period, first, because it was " pro
forma based on grounds already existing at the time of the first
motion."6 (Emphasis partly in the original and partly supplied)
It should, however, be noted that the circumstance that a motion for reconsideration deals
with the same issues and arguments posed and resolved by the trial court in its decision does
not necessarily mean that the motion must be characterized as merely pro forma. More than
two (2) decades ago, Mr. Justice J.B.L. Reyes had occasion, in Guerra Enterprises
Company, Inc. v. Court of First Instance of Lanao del Sur,7 to point out that a pleader
preparing a motion for reconsideration must of necessity address the arguments made or
accepted by the trial court in its decision:
. . . . Among the ends to which a motion for reconsideration is
addressed, one is precisely to convince the court that its ruling is erroneous
and improper, contrary to the law or the evidence (Rule 37, Section 1,
subsection [c]); and in doing so, the movant has to dwell of necessity upon
the issues passed upon by the court. If a motion for reconsideration may not
discuss these issues, the consequence would be that after a decision is
rendered, the losing party would be confined to filing only motions for
reopening and new trial. We find in the Rules of Court no warrant for ruling to
that effect, a ruling that would, in effect eliminate subsection (c) of Section 1
of Rule 37.8 (Emphases supplied)
The movant is very often confined to the amplification or further discussion of the
same issues already passed upon by the trial court. Otherwise, his remedy would not
be a reconsideration of the decision, but a new trial or some other remedy. 9
The kinds of motions for reconsideration which have been regarded as merely pro forma are
illustrated by Crisostomo v. Court of Appeals,10 where a one sentence motion for
reconsideration, which read thus:
COMES NOW the petitioners-appellants in the above-entitled case and to
this Honorable Court respectfully move for reconsideration of the decision
promulgated on November 8, 1966, copy of which was received by the
undersigned on November 9, 1966, on the ground that the same is contrary
to law and evidence. (Emphasis supplied)
was considered a pro forma motion for total failure to specify the findings or
conclusions in the trial court's decision which were supposedly not supported by
evidence or were contrary to law. Similarly, in Villarica v. Court of
Appeals, 11 a motion for reconsideration which no more than alleged the following:
1. that the order is contrary to law; and
2. that the order is contrary to the facts of the case,
did not suspend the running of the period for appeal, being a pro forma motion
merely. These kinds of motion present no difficulty at all.
A motion for reconsideration which is not as starkly bare as in Crisostomo and in Villarica, but
which, as it were, has some flesh on its bones, may nevertheless be rendered pro
forma where the movant fails to make reference to the testimonial and documentary evidence
on record or the provisions of law said to be contrary to the trial court's conclusions. In other
words, the movant is also required to point out succinctly why reconsideration is warranted.
In Luzon Stevedoring Company v. Court of Industrial Relations, 12 the Supreme Court
declared that:
it is not enough that a motion for reconsideration should state what part of
the decision is contrary to law or the evidence; it should also point out why it
is so. Failure to explain why will render the motion for reconsideration pro
forma. (Emphasis supplied)
Where a substantial bonafide effort is made to explain where and why the trial court
should be regarded as having erred in its main decision, the fact that the trial court
thereafter found such argument unmeritorious or as inadequate to warrant
modification or reversal of the main decision, does not, of course, mean that the
motion for reconsideration should have been regarded, or was properly regarded, as
merely pro forma.
It is important to note that the above case law rests upon the principle that a motion for
reconsideration which fails to comply with the requirements of Sections 1 (c) and 2 of Rule 37
of the Rules of Court, and is therefore pro forma merely, has no other purpose than to gain
time. It is intended to delay or impede the progress of proceedings and the rule that such
motion for reconsideration does not stop the period of appeal from "slipping away" reflects
both poetic and substantial justice. In Estrada, et al. v. Sto. Domingo, et al., 13 the Court
underlined.
[T]he principle [previously] forged by this Court — that a motion for
reconsideration which has no other purpose than to gain time is pro
forma and does not stop the period of appeal from slipping away. It is in
recognition of this doctrine that we hold that where a motion for
reconsideration in an election case is taken advantage of for purposes of
delay to the prejudice of the adverse party or where such motion forms part
of a matrix delay, that motion does not stop running of the five-day period for
appeal. 14(Emphasis supplied)
Where the circumstances of a case do not show an intent on the part of the movant merely to
delay the proceedings, our Court has refused to characterize the motion as simply pro forma.
Thus, in the Guerra Enterprises case, the Court took note of the fact that the motion for
reconsideration had been filed within barely twelve (12) days (the reglementary period was
then thirty [30] days) after receipt by the counsel for the movant party, which fact negated the
suggestion that the motion had been used as "a mere delaying tactic." 15 Dacanay v.
Alvendia, 16 on which the Court of Appeals had relied, is not in fact in conflict with the cases
we have above referred to. In Dacanay, the motion for reconsideration was in effect a fourth
motion for reconsideration: the "reasons and arguments" set out in the motion for
reconsideration had on three previous occasions been presented to the trial court and each
time considered and rejected by the trial court. In Lonario v. De Guzman, 17 the motion for
reconsideration which the Court characterized as pro forma was in fact a second motion for
reconsideration based on grounds already existing at the time the first motion for
reconsideration was filed. Further, at the time of the filing of the second motion, the period to
appeal had already lapsed. This Court dismissed the case for having been appealed beyond
the reglementary period. In Samudio v. Municipality of Gainza, Camarines Sur, 18 the Court
had before it a "so-called motion for new trial based exactly on the very ground alleged in
[defendant's] first motion for reconsideration dated October 17, 1952" and accordingly, held
that the motion for new trial did not suspend the period for perfecting an appeal "because it
[was] mere repetition of the [first] motion for reconsideration of October 17,
1952." 19 (Emphasis supplied)
We turn then to the application of the above standards to the motion for reconsideration in the
case at bar. The text of petitioners' motion for reconsideration dated 7 November 1991 is
quoted below:
(a) There [was] no sufficient evidence introduced to prove the alleged fact
that the down-payment for the property in question came from Jose
Sytangco. Private transactions are presumed to be fair and regular (citations
omitted). The regularity of defendant Liamzon's transaction with the Prietos
for the sale of the property implies that the consideration came from her and
not from plaintiff. This presumption cannot be rebutted by the bare testimony
of abiased witness;
(b) The money used to pay for the property not belonging to the plaintiff,
there could never be a trust between him and defendant Liamzon. Even then,
plaintiff merely claimed that what belong to him was only the down-payment,
not the total amount used to purchase the property, that the defendant
Liamzon was the one paying the installments can be gleaned from the fact
that while plaintiff allegedly authorized defendant Liamzon to purchase the
property sometime in 1968, it was only in 1981 that he came to know that the
property was titled in the name of defendant corporation. Plaintiff's (Jose
Reyes Sytangco) total lack of knowledge about the transactions regarding
the property for 13 long years, meant that he had no contract with the
Prietos, the seller during this period. Assuming without admitting that the
down-payment belonged to plaintiff, he is only entitled to reimbursement but
not title to the property;
(c) Piercing the veil of corporate fiction applies only to cases where the
corporation was created for purposes of fraud, usually in tax cases; fraud,
however, being the exception rather than the rule should be proven by
convincing evidences. That defendant Liamzon is a director of defendant
Corporation is not indicative of fraud. The money used to buy the property
being advances from defendant corporation, there is nothing wrong to have
said property be titled in the name of the corporation to offset said advances;
(d) It may be mentioned that the ejectment counterpart of this case had
already been decided with finality in favor of defendant corporation. 20
In paragraph (a) of their motion, petitioners claimed that the evidence submitted was
insufficient to show that the downpayment for the purchase of the España Street property had
in fact come from private respondents' predecessor-in-interest Jose Reyes Sytangco. In
effect, petitioners here aver that the presumption of regularity of private transactions carried
out in the ordinary course of business had not been overturned by the testimony of Jose
Reyes Sytangco himself. This reflected petitioners' appraisal of the trial court's conclusion
that Jose and Aurelia Reyes Sytangco had handed over to Milagros Liamzon the amount of
P41,000.00 to complete the downpayment of the Reyes Sytangco spouses on the España
lot. The trial court had not discussed the presumption of regularity of private transactions
invoked by petitioners.
In paragraph (b) of their motion, petitioners, building upon their paragraph (a), argued that
since the money used to pay the property did not belong to the plaintiff, no constructive trust
arose between Jose Reyes Sytangco and Milagros Liamzon. Petitioners further argue that
assuming that the money for the downpayment had really come from the Reyes Sytangco
spouses, the rest of the payments on the España property had been made by Milagros
Liamzon. Accordingly, they argue that the Reyes Sytangco spouses would be entitled only to
reimbursement of the downpayment and not to reconveyance of the property itself. The trial
court had not addressed this argument in its decision; the trial judge had found Milagros
Liamzon's testimony concerning whose money had been used in the purchase of the lot as
"filled with contradictions" which seriously impaired her credibility. 21
The third argument of petitioners in their motion assailed the reliance of the trial court upon
the doctrine of piercing the corporate veil by asserting that that doctrine was available only in
cases where the corporation itself had been created for purposes of fraud. Implicitly,
petitioners argue that no evidence had been submitted to show that Marikina Valley had been
created precisely "for purposes of fraud." The trial court had not touched on this argument. In
paragraph (d) of their motion, petitioners aver that the ejectment suit instituted by them had
been decided in their favor. The trial court's decision had not mentioned such an ejectment
suit.

We are, therefore, unable to characterize the motion for reconsideration filed by petitioners as
simply pro forma. That motion for reconsideration, it may be noted, had been filed no more
than ten (10) days after receipt of the trial court's decision by petitioner Marikina Valley.

It is scarcely necessary to add that our conclusion that petitioners' motion was not pro forma,
should not be regarded as implying however indirectly that that motion was meritorious.

We note finally that because the doctrine relating to pro forma motions for reconsideration
impacts upon the reality and substance of the statutory right of appeal, that doctrine should
be applied reasonably, rather than literally. The right to appeal, where it exists, is an
important and valuable right. Public policy would be better served by according the appellate
court an effective opportunity to review the decision of the trial court on the merits, rather than
by aborting the right to appeal by a literal application of the procedural rule relating to pro
forma motions for reconsideration.

WHEREFORE, for all the foregoing, (a) the Orders of the trial court dated 27 November
1991, 12 December 1991 and 22 January 1992 and (b) the Decision of the Court of Appeals
dated 8 December 1992, are hereby REVERSED and SET ASIDE. The case is REMANDED
to the trial court which is hereby DIRECTED to GIVE DUE COURSE to petitioners' notice of
appeal. No pronouncement as to costs.

SO ORDERED.
 Republic of t he Philippines RE N E, M AR IT E S , M ARI C AR ,

Sup r em e Cou rt RI C AR DO , JR ., and R O L AN DO ,

M anila al l su rn am ed D E V E R A, Pr om ul ga t ed :

Res p on d en ts . Fe bru ar y 1 4, 20 0 7

THIRD DIVISION x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

PH IL I P PI NE N AT IO N AL G .R . No. 14 9 23 6
D E C I S I O N
B AN K ,

P et it i o ner ,

AU ST R I A- M A RT IN EZ , J .:
- vers us -

Pr es e n t:

HO N . JO S E G . P AN E D A, in
B ef or e t he Co ur t is a P et it i o n f or R e v i e w on C ert i or ar i un d er R u le 45
his ca pa cit y a s P r e si ding YN A R E S- S ANT I AG O , J ., of t h e Ru l es of Co u rt qu es t io n in g t he D ec is i o n [ 1 ] d at e d A pr i l 20 , 2 00 1 ,

Judg e of t he RT C , Br . 67 , Ch a ir pers o n, prom u lg a te d b y t h e C our t of A p pe a ls ( CA ) i n C A - G .R . S P No . 5 1 82 0 , w h ic h

af f irm ed i n to t o th e O r der d at ed F e bru ar y 1 8 , 1 9 99 of t h e R eg i o na l T ria l C our t
CO N SO L AC IO N CH AN , AU ST R I A- M A RT IN EZ ,
(RT C), Br a nc h 67 , B a ua n g, L a U n io n, doc k et e d as C i vi l C as e N o. 5 9 4 - BG ;
EL IZ AB ET H C AP U LL A, CA L L EJ O , SR ., an d t h e C A Res o l ut i on [ 2 ] d a te d J u l y 3 1 , 2 00 1 wh ic h de n i ed pe t it i on ers M ot i o n
f or R ec ons i d era t io n .
C AR O LI N E R EY E S, CH ICO - N AZ AR IO , an d

BE RN AR DO D E VE R A, * N AC HU R A, JJ.

JUL IT A, LO RN A, E D N A, T he an t ec e d en ts of th e c as e, as f o un d b y t h e RT C an d u p he l d b y th e
CA , ar e as f o ll o ws :

x x x [O ]n O c t o ber 9 , 19 8 5, pr i v at e r es po n d en t B ern ar d o
de V er a, bo u gh t a pa r c e l of l a nd c o ve re d b y T ax D ec lar a ti o n N o.
16 8 5 f rom p et i ti o ner P h il i p pi n e N at i o na l Ba n k (PN B f or br e vi t y)
an d t he f or m er s i g ne d a C o ntr ac t of Sa l e wi th O pt i on t o R es el l
pre p ar ed b y t h e l at te r .
S hor t l y af ter t he s a le , pe t it i on er P NB p lac e d in
pos s es s i on r es p o nd e nt d e Ver a who s t art e d to in tr od uc e
im pro v em ents th er eo n s uc h as th e c o ns tr u c ti o n of r o ads an d
pu tt i n g u p of c o nc r e t e f enc e. H o we v er, r es po nd e nt d e Ver a was
e v ic t ed by r es p o nd e nt s C ons o l ac i o n C ha n,
E l i za b et h C ap u l la a n d Car o l in e R e yes .
T hus , a n ac t i on f or qu i et i ng of t i t le an d d am a ges was f i l e d
b y p la i nt if f s - r es po n de nts C ha n , et a l . a ga i ns t B ern ar do de Ver a
an d h is s p ous e, t he l at ter f i l ed a t h ird - p art y c om pl a in t a ga i ns t
th ir d - par t y def en d an t ( no w pe t it i on er) P N B. Bo th the
de Ve ras a n d P N B di d n ot c o nt es t p la i nt if f s - res p o n de nts c la im
of pos s es s i on a nd o wn er s h i p o ver th e qu es ti o ne d pro p ert y, t h us ,
th e r es p o n de nt j u dg e ga v e h is im prim at ur t o p la i nt if f s c l a im of
th e r i gh ts of p os s es s i on , un d er c la im of o wn ers h ip o v er t h e
d is p ut e d p ar c el of la n d d e s c r i be d in t h e c om p l ai n t. Af t er tr i a l o n
th e m eri ts , r es po n de n t J u d ge r e nd er ed h is dec is i on ,
th e d ec re t a lp or t i o n of wh ic h r e ads :
W HEREFO R E, t h e Co ur t h er e b y r e nd ers j u d gm ent :
a) Dec l ar i ng t he p l a i nt if f s [C h an , et a l. ] to b e
l a wf u l pos s es s or s a n d o wn ers o v er t h e l i t ig at ed l ot
des c r i b ed i n t h ei r C o m pla i nt in t he a bo v e - e nt i tl e d
c as e .
b) O rd er in g t he t h ir d p art y d ef e n da nt ( PN B) t o pa y
th e v a l ue of t he lo t s o l d to t h e th ir d p ar t y p la i nt if f s
(D E V ER A S) u n der t he C o ntr ac t of S a le W ith
O pt i o n t o R es e l l d at e d O c t o ber 9 , 1 98 5 ( Ex h . 1) i n
th e am ou nt of P 1, 0 00 . 00 p er s q u are m eter f or th e
en t ire 33 , 87 3 s q u ar e m et ers p l us t he s um
of P2 0, 0 00 . 00 s p e nt f or doc um en ta t io n or
reg is tr at i on of t he c on tr ac t of s a l e, wit h l e ga l
i nt eres t t h ere o n a t t he r at e of 1 2% p er m ont h f r om
th e da t e of t h is j ud gm ent u nt i l f u l l pa ym en t th ere of
to t h e DE V ER A S .
c) C o n dem ni n g th e t hir d p art y d ef e nd a nt
(P NB ) t o p a y t he th ir d par t y p l a i nt if f s (D E V E RA S)
th e s um of P2 0 0, 00 0 .0 0 (s ic ) re pr es e n ti n g th e
v a lu e of t h e l a bor a nd c ons truc t i o n m at er ia l s an d
im pro v em ents t he l at te r i ntr o duc e d i n th e d is pu t ed
l ot f rom O c t o ber 1 0, 1 98 5 u p to O c t o be r 2 7 , 19 8 5.
d) O r der i n g t he t h ird p ar t y def e nd a nt
(P NB ) t o p a y t he th ir d par t y p l a i nt if f s (D E V E RA S)
th e am ou nt of P5 0 ,0 0 0 .0 0 as r eas o na b l e a tt o rne ys
f ees i n a d d it i on t o t h e s um of P1 0 ,0 0 0. 00 as ac t u al
an d l it i g at i on ex p ens e s a nd , t o p a y t h e c os ts of
th is s u i t.
e) D is m is s i n g all ot he r c la im s a nd
c ou n terc l a im s wh ic h t he p ar t ies m a y h a ve a ga i ns t
eac h i n t h is c as e f or i ns uf f ic i enc y of e v i de n c e.

SO O R D ER E D.
P et it i o ner P N B
Rec o ns i d er at i on x x x .
x x x x
Rec o ns i d er at i on d at e d Dec em ber 2 , 1 9 9 8, a s pr o
f orm a an d , as s uc h , d i d no t to l l t he ru n n in g of t he
per i o d of a p pe a l, t h e s am e is he re b y D E NI ED ;
c ons e qu e nt l y, t h e De c is io n of t h is Co ur t da t ed
A ug us t 20 , 1 99 8 , is n o w f i n a l an d ex ec ut or y.
f i le d a M ot i o n f or New T ri a l and
Le t t he c o rres p on d i ng W rit of Ex ec ut i o n f or
th e e nf orc em ent a nd s a t is f ac t i o n of th e s a i d
dec is i on of Au g us t 2 0, 1 9 98 b e is s u ed .

[T he RT C] r e nd er e d t he as s a i le d O r d er of Fe bru ar y 1 8, B e it n o te d a ls o h ere i n t he N ot ic e of
19 9 9, t he p er t in e nt p or ti o ns of wh ic h ar e h er e un d er r e pro d uc e d , At t orn e ys L i en f i l e d b y A tt y. B e ni g no P un o,
as f o l l o ws : c ou ns e l f or t h e th ir d - par t y p l a in t if f , B er n ar do de
V era , wh ic h c o nt a i ns h is c o nf orm it y t he re to .

V ie we d f r om al l t he f ore go i n g, th e Co ur t
f in ds m er it in t h e p la i nt if f s m oti o n f or ex e c ut i on SO O R D ER E D.
em bod i e d i n t h ei r op p os it i on a n d, th e t hi rd - par t y
p la i nt if f s D e Ver as M o t io n f or Ex ec ut i on ,
m erit or i o us , i t ap p e ar in g th at t he t h ird - pa rt y T hus , th e i ns t a nt p et i t i on [ un d er R u l e 6 5 of th e Ru l es of
def en d an t P N Bs M ot i o n f or N e w T ri a l an d f or Co urt ] wi th pra ye r f o r t h e is s u anc e of t e m porar y res tr a in i ng
Rec o ns i d er at i on , is pr o f or m a, a n d, as s uc h , it d id ord er a nd /or wr it of p re lim i na r y i nj unc t io n was f i l e d [ wi t h t he
no t s us pe n d th e r u n ni ng of t he p er i od of a pp ea l , it CA ].
ha v i n g ex p ir ed , or no a p pe a l ha v i n g be e n
perf ec t ed b y P N B wi t h in th e re g l em ent ar y p er io d, P et it i o ner P N B ra is e d th e f o l lo wi n g gr ou n d i n s u p por t of
th is C our t f in ds n o a l t er n a ti v e b u t t o c o m p l y wit h its pe t it i on :
its m i nis t er ia l du t y t o i s s ue t he c orr es p o n di n g W rit
of Ex ec ut i o n f or t h e e nf or c em ent of i ts d ec i s i on of
A ug us t 20 , 1 99 8 .
RE S PO ND E NT CO U RT CO M M IT ED G RA V E
A BU S E OF D I SC R ET IO N OR A UT HO RIT Y,
A MO U NT ING T O W ANT O F J UR I SD ICT IO N, I N
W HEREFO R E, th e C o urt , f i nd i n g t he th ir d - DE C L AR ING IT S D EC I SI O N O F AU G U ST 2 0, 1 99 8
par t y d ef en d a nt P N Bs Mo t io n f or Ne w T ri a l a nd f or AS H A VI NG BEEN B E CO M E F IN A L A ND
 EX ECUT O RY NO T W IT HST ANDING PET IT IO N E R S
T IME L Y FI L ING O F N O T ICE O F A P P E A L O N T H E
G RO U ND T H AT P ET IT IO N E R S MO T IO N FO R N EW
T RIA L AN D R ECO N SI DE R AT IO N I S P RO F O RM A ,
T HER E B Y D E PR I VI N G P ET IT IO N ER O F IT S
V A LU A B LE R IG HT T O A P P E A L.
Mo t io n , a l l eg e d l y n e wl y d i s c o v er ed e v i de nc e , ar e t h e s am e as t h os e m ark ed
an d pres e nt e d b y t h e pe t it i on er in i ts Pr e - T r i al Br i ef da t ed J u l y 1, 19 9 4; an d
th at t he Mo t io n f a i l ed to c om pl y wi t h S ec ti o n 5 of R u le 1 5 of t h e 1 99 7 R ul es
of Ci v i l Pr oc e d ur e wh i c h re q u ires th a t t he n o tic e of he ar i ng b e d ir e c te d t o t h e
par t ies c onc er ne d .

O n M ar c h 2 3, 1 99 9 , [ t he C A] is s ue d a T em por ar y
Res tra i n i ng O r d er enj o i ni n g t h e r es p on d en ts f rom enf orc i n g t h e He nc e, t he ins t an t P et it i o n on t h e f o l l o wi n g gro u n ds :
wri t of ex ec ut i on , a n d th er eaf t er a wr it of pr e l im in ar y i nj unc t io n
was is s u ed o n M a y 18 , 1 99 9. T h e R es ol u ti o n s of [ th e C A] d at ed
Ma rc h 2 3 a nd M a y 1 8, 1 99 9 wer e t h e s ubj ec ts of a p et it i o n f or I.
c ert i or ar i/m an dam us bef or e t h e H on or a bl e Su pr em e C o urt i n
G .R . N o . 1 3 86 8 1, wh i c h was d is m is s e d in t he S u pr em e Co ur ts
Res o lu t io n of No v em b er 1 5, 1 9 99 . [ 3 ]
T HE CO U RT O F A P P E AL S H A S D E P A RT ED FR O M T HE
AC C E PT ED A ND U S U AL C O U RS E OF J U DI CI A L
PR O C E ED IN G S O R H A S S A NCT IO NE D S UC H D E P A R T UR E B Y
T HE T RI A L CO URT W HE N IT AFF IR M ED T HE T RI A L CO U RT S
O n A pr i l 20 , 2 00 1, t h e CA r en d er e d i ts De c is io n , t h e d is p os it i v e p ort i o n of
AW ARD O F EX C E S S IV E A ND U NFO U N D ED D A M AG E S O F
wh ic h s ta t es : P 33 .8 M IL L IO N AG A IN S T T H E P ET IT IO N ER B Y W A Y O F
SU M M AR Y J U DG M EN T .

W HEREFO R E, t h e p et i ti o n is her e b y D I S MI S S E D f o r
ha v i n g f a i l ed to s ho w t ha t gr a v e a bus e of d is c ret i on an d /or l ac k
II.
of j ur is d ic ti o n h a d b e e n c om m itte d b y t h e r es po n de n t c o urt , a n d
th e as s a il e d O r d er of Fe br u ar y 1 8 , 19 9 9 is AFF IR M E D.

T HE CO U RT O F A P P E AL S H A S D E P A RT ED FR O M T HE
AC C E PT ED A ND U S U AL C O U RS E OF J U DI CI A L
SO O R D ER E D. [ 4 ]
PR O C E ED IN G S O R H A S S A NCT IO NE D S UC H D E P A R T UR E B Y
T HE T RI A L CO URT W HE N IT A FFI R M ED T HE LOW ER CO U RT S
In af f irm i ng t h e RT C O r de r , t he C A h el d t h at pe t it i on ers Mo t io n f or Ne w DE NI A L O F T H E N O T ICE O F A P P E A L O F P ET IT I O N ER W HILE
T r ia l a n d R ec ons i d er a ti o n ( Mo t io n) is pr o for ma , an d , c o ns eq u en t l y, t he s a i d G R ANT IN G T HE B E L AT E D W IT HDR AW AL O F AP P E A L B Y
Mo t io n d i d n ot to l l t he r un n i ng of t h e p er io d f or a pp e a l a nd t h e d ec i s i on t h us RE S PO ND E NT S I N S U P PO RT O F T H E L AT T ER S MO T IO N FO R
at ta i n ed f i na l i t y; t h at th e d oc um e nts pr of f er ed b y th e p et i t io n er i n th e s a i d EX EC UT IO N .
 T HE PRO V I SIO N S O F T H E C O NT R ACT O F S A L E W IT H O PT IO N
T O RE S E L L I S T H E L AW BETW EEN T HE P A RT IE S AN D
III . SH O U LD T HU S

B E R E S P ECT E D. [ 6 ]

T HE CO URT O F A P P E A L S IN AFF IR MI NG T HE T R I A L CO URT S

DE CI S IO N H A S D E CI DE D A Q UE ST I O N O F S U B ST AN C E I N A
W AY P RO B A BL Y NO T IN A CCO RD W IT H THE L AW S O F T HE
T he pe t it i o n has m eri t.
NEW CIV IL C O D E O N S A LE S A ND W ARR ANT Y A G A IN ST
E VI CT IO N . [ 5 ]
T he m a in q u es t i o n is wh et her pe t it i on ers Mo t io n f or N e w T ri a l an d
Rec o ns i d er at i on is pr o f or ma a n d, h e nc e , i t d id n o t s us p e n d t h e r un n i ng of
th e p er io d f or a pp e a l.
In its M em or a n d um , p et i ti o ner r a is es t h e f o l l o wi ng is s u es :

In l ig ht of Ru l e 4 5 of th e R u les of C o urt , t h e o th er is s u es c a n no t b e
I.
pas s e d u po n b y t h is C our t s i nc e th e y re q ui r e a c a l ib ra t io n of th e f i nd i ngs of
f ac t, a f u nc t i on r es er v ed t o t he c our ts a q u o.

W HET HER O R NO T T HE D E C IS IO N O F T H E T RI AL CO U RT H A S
AT T AIN E D FI NA L IT Y
In h o ld i ng t ha t pe t it i o ners M o ti o n f or Ne w T ria l an d Rec o ns i d er a ti o n
is pr o fo rm a, t h e C A r eas o ne d t ha t t her e w as n ot h in g n e w in (p et i ti o ner s )
II.
Mo t io n t h at wo u ld s ho w a n y t es t im on i a l or d oc um en t ar y e v i de nc e, or
pro v is i o ns of l a w to b e c on tra r y t o s uc h f i n d in gs or c onc l us io ns o f the lo wer
c our t. T o s u p po rt t h i s po i nt , t he c o urts a qu o f ou n d t ha t t he doc um en ts
W HET HER O R NO T T H E R E S PO N D ENT S D E V ER A S A R E
des ir e d t o b e pr es en t e d, al l e ge d b y t he pe t it i on er t o be ne wl y d is c o v ere d , ar e
ENT IT L E D T O T H E P A YM E NT O F P3 3 ,8 7 3, 0 00 . 0 0 .
th e ver y s am e d oc um ents m ark ed a nd pr es e n te d b y t h e p et i ti o ne r a s Ex h i b its
1 t o 24- A i n its P re - T r i al Br i ef d at e d J ul y 1 , 19 9 4; a nd t ha t t o g o o v er ag a in
III . th e s am e doc um en ts wo u ld be a n ex erc is e of f ut i l it y.
T he s ubj ec t Motion ac tuall y c ons is ts of two m otions , a Motion f or New T ria l
an d a Mo t io n f or R ec o ns id er at i on . W hile t he Co urt a gr ees t ha t t h e Mo t io n f o r
Ne w T ri a l l ac k s m er i t f or t he r eas o n th at t he d oc um ents s o u g ht t o b e
pr es e nt e d are n o t n e w l y d is c o v er ed e v i d enc e, t he C ou rt d oes n ot agr e e th at
th e M ot i on f or R ec ons i der a ti o n is pr o f or ma .
T he C our t is g ui d ed b y t h e r ul i n gs i n C oq u i l la v . Co m m is s i o n o n
E lec t io ns , [ 7 ] t o wi t:
x x x The m er e r e it e r ati on in a mo tio n fo r
re co ns id er at ion of t he is su e s r a is ed b y the p a rt ie s and
pa ss ed up on b y t h e co urt d oe s not ma ke a mot ion pr o
for ma ; ot h er wis e, t h e m o va nts r em ed y w ou l d n ot be a
rec o ns i der a ti o n of t he d ec is io n bu t a n e w t ri al or s om e o th er
rem ed y. Bu t, as we h a v e h e l d i n a n ot he r c as e:
Am on g t h e end s t o w hich a m oti on fo r
re co ns id er at ion is a ddr e ss ed , on e i s p r e ci s el y
to conv in ce t he c ourt t hat it s r ul in g is
er ro ne ou s an d im pr o pe r, cont r a r y to t he l aw o r
the ev id en c e; a nd in doin g s o, t he m ov an t h as
to dw e ll of n e c e s sit y upon t he is su e s p as s ed
upon b y t he cou rt . If a m ot i o n f or r ec o ns i d e rat i on
m a y n ot d is c us s th es e is s u es , th e c o ns e q ue nc e
wo u ld b e t h at af te r a dec is i on is r e nd er e d , t he
l os i n g p ar t y wo ul d be c o nf i ne d to f i li n g on l y
m otio ns f or r e o pe n in g an d n e w tr i a l.
Ind ee d, in t he c a se s w her e a mot ion fo r re con si de r ati on
w as h el d t o b e p ro f o rm a, t h e mot ion w a s so he ld be c au se ( 1)
it w a s a s eco nd mot i on f o r r e con si de r ati on, or ( 2) it did not
com pl y w it h t h e ru le t hat t he m otio n mu st s pe cif y t he fi ndi ng s
and con cl us ion s al leg ed t o be con tr a r y t o l aw o r not
supp or ted b y the ev i den c e, o r ( 3) it fa il ed to su bst ant i ate th e
al le ge d e rr or s , or ( 4 ) it me r el y a ll eg ed t hat th e de c is ion i n
que sti on w a s c ont ra r y to law , or (5) the a d v er s e p art y w a s no t
giv en n oti c e t he r eof . T h e 1 6- pa g e m ot i on f or r ec o ns id er at i o n
f il e d b y p et i t io n er in t he CO M E LE C e n ba nc s uf f ers f rom n on e of
th e f or e go i n g def ec ts , a n d it was err or f o r t he CO M E LE C e n
ba nc t o r u l e th a t p et it i on ers m oti o n f or r ec ons i d era t io n was pr o
for m a b ec a us e th e a l l eg a ti o ns r a is ed t h ere i n ar e a m er e r e has h
of h is e ar l ier p l ea d i ng s or d i d n o t ra is e n e w m att ers . H enc e , t he
f il i ng of th e m ot io n s us pe n de d t h e ru n n in g of th e 3 0 - da y p e r io d t o
f il e t he p et it i o n i n t h is c as e , wh ic h , as e ar l i er s h o wn , was d on e
wi t hi n th e re g lem e nt a r y p er i od pr o v id e d b y l a w. [ 8 ] ( Em ph as is
s up p l ie d)
an d i n Mar i na Pro p ert i es Cor p or at i on v . C o ur t of Ap p ea ls , [ 9 ] t hus :
Un d er o ur ru l es of pr o c ed ur e, a p art y a d v ers e l y af f ec t ed
b y a dec is i on of a tr i al c o urt m a y m o ve f or rec o ns id er at i on
th er eof on t he f o ll o wi n g gro u nds : ( a) t he da mag e s aw ard ed a r e
ex c es s iv e; (b) th e e v iden c e is i ns uffi c ie nt to j ust if y th e
de ci si on; o r ( c) th e d ec i sio n is cont r a r y t o l aw . A m ot io n f or
rec o ns i der a ti o n in t err up ts t h e r un n i ng of t h e p er i od t o ap p ea l ,
un l es s t he m ot io n is p ro f orm a . T h is is no w ex pr es s l y s e t f ort h
i n t he l as t p ar ag ra p h of S ec t i o n 2 , R u l e 3 7 , 19 9 7 R u l es of C i v i l
Pr oc e d ur e.
A m ot ion fo r r e con si de rat ion b a se d on th e fo reg oin g
grou nd s i s d ee m ed p ro fo r ma if t he s am e doe s not sp e cif y
the fi ndi ngs o r con cl usi on s in th e ju dgm ent w hic h a re n ot
supp or ted b y the e v iden c e o r c ont r ar y to l aw , ma k ing
ex pr e ss r ef er en c e to t he p e rt ine nt e v iden c e o r l eg al
prov i s ion s. It i s s ettl ed th at alth oug h a mot ion fo r
 reconsider at ion may merely reit erate issues already pass e d
upon b y t h e c ou rt , t h at b y it s elf do e s not m ak e it p ro
for ma a n d is im m ater i a l b ec aus e wh at is es s en t ia l is c om pl i anc e
wi t h th e r e q uis i tes of t he R u l es . x x x .
x x x x
W he re t h e c ir cu ms t a nc es of a ca s e d o n ot show a n
int ent on t he p a rt of t h e pl ea de r to me r el y d e la y th e
pro c ee din gs , a nd hi s mot ion r ev e al s a b ona f id e effo rt to
pr es ent a ddit ion a l m at t er s o r t o r eit e rat e his a rg um ent s i n a
diff er ent li ght , t he co urt s shou ld b e slow t o de cl a r e th e s am e
outr ight as p ro f orm a . T h e d oc tr i ne re l at i n g to pr o
for m a m ot i ons h as a d ir ec t b e ar in g u po n t he m ov an ts v a l ua b le
ri gh t t o a pp e al . It wo u l d b e i n th e in te res t o f j us t ic e to ac c o rd
th e a p pe l l at e c o ur t th e o p po r t un i t y t o r e v i e w th e d ec is io n of t he
tri a l c o ur t o n t he m er i ts th a n t o a bor t t h e a pp e a l b y d ec l ar in g
th e m ot io n pr o for m a , s uc h t ha t th e pe ri o d to a pp e a l was n ot
i nt err up te d and h a d c o ns e q ue n tl y l a p s ed . [ 1 0 ] (Em p has is
s up p l ie d)
T he a v erm en ts f o un d i n t h e M o ti o n f or R ec ons i d era t io n of h er ei n pe t it i o ner
po i nt ou t s p ec if ic a l l y t he f i n d in gs or c onc l us i ons in th e j u d gm ent o f th e RT C
wh ic h are n ot s u p por t ed b y t he e v i de nc e o r wh ic h are c o nt rar y t o l a w, a n d,
m or eo v er, t h e m ot io n s ta tes ad d it i on a l s p ec i f ic r eas o ns f or t h os e g rou n ds .
In br i ef , t ak en in i ts en t ir e t y, t h e Mo t io n f or Rec o ns i d er at i on c l ear l y
at tem pts t o s ub s t an t ia t e th e a l le g ed er r or s of th e RT C: F irs t , th e M ot i on a v ers
th at t he p et i t io n er s c o uns e l was n ot a b le t o at te n d a s in g l e h e ar in g bec a us e
th e p et i t io n er wa s n o t i nf orm ed , v i a a s u b po e na or o th er n o t ic e, b y th e
RT C; s ec on d, th a t d ue t o Ph i l i pp i n e N at i on a l B ank s ( P N Bs ) l ac k of k no wl e d ge
o ver t h e f or e g oi n g pr o c ee d i ngs , i ts c ou ns e l f a il e d to inc l u de in t h e s um m ar y
j ud gm en t pr oc e e d in g m ater ia l e vi d enc e t o p ro ve i ts c l a im s ; t h ird , as a r es u l t,
th e h e ar in gs c o n duc t e d i n c o n nec t io n wi th t he p la i nt if f s c om pl ai n t wer e h e ld
be t we en pl a i nt if f s a n d r es po n de nt D e V e ra o nl y; f our th , t ha t s i nc e t he
pe t it i on er wa s n o t a p art y t o t h e o ri g i na l c o m pla i nt, t he tr i a l c o ur t m us t h a ve
tak e n it to m ea n th at it was u p to r es p o n de nt De Ver a t o pr es en t e v i de nc e as
s uc c es s or - i n- in t eres t of t h e p et it i o ner ; f if th , th at pe t it i on er , wh ic h was u n a bl e
to par t ic ip at e in th e p r oc e e d in gs , s h ou l d n ot b e bl am ed f or D e V er as f ai l ur e
to pres e nt e v id e nc e ; s ix t h , th e pe t it i on er p r ec is e l y e n ter e d i n to a s um m ar y
j ud gm en t wi t h t hir d p ar t y p l a i nt if f on t h e h on e s t b el i ef th at it c onc er ne d s o l e l y
th e c on tr o vers y b et w ee n th e t wo t h ir d p a rti es ; in ot h er wor ds , ha d th e
pe t it i on er b ee n g i v en th e op p ort u n it y to pr e s en t its s i d e of t he c o ntr o v ers y
wi t h t he p l a in t if f s , th e dec is i on c o u ld h a v e b ee n ot h er wis e; s ev e nt h, th a t t h e
RT C, in vi e w of th e f ore go i n g, h ad b ee n l ed t o m ak e an e nt ir e l y wr o ng
c onc l us io n in its d ec is i on wh en it as s um ed t ha t P N B h ad no t i t le t o, or r i gh t
i n t he l ot un d er c o n tr o vers y; e i gh t h , t he p et it i o ner n e ver im pl i e d, un d er t h e
term s of t h e C on tr ac t to S el l wi t h O p t io n t o Res e l l, t h at it h ad no ti t le to , or
ri gh t i n t h e lo t i n c on t ro ve rs y; o n t h e c on tr a r y, it h ad a n a bs o l ut e an d v a l id
c l aim o ver th e s a id pr op er t y; n i nt h, it was a dm itt e d i n r es p o nd e nt D e V e ras
pos i t io n pa p er d a te d O c to b er 10 , 1 9 95 t ha t t h e D e V er as c o n duc t ed a n
i n ves t ig at i o n of o wn e rs h ip o ver t h e l ot an d we re pres e nt e d wi t h v ar i ous
doc um en ts e v i de nc i ng o wne rs h i p of t h e p et i ti o ner , an d t h at r es po nd e nt De
V era f urt h er in v es ti g at ed t he rec or ds of th e B ure a u of L an ds an d v er if i ed t o
be c orrec t; he nc e, re s po n de n t De Ver a h a d th e o p por t un i t y to k no w t he
c on d it i o n of t he pr op e rt y a t t he tim e of t h e of f er a nd h ad th e o p p ort u ni t y t o
res e l l t h e pr op er t y, bu t De V era c hos e t o wa i v e th e s am e; t e nt h, r e s po n de n t
De V era was in n o w a y d ec e i v e d b y t h e p et i ti o ner as t o t he c o nd i t io n of
th e pr op er t y i n q ues t io n, s i nc e t he i nn oc en t n on - d is c l os ur e of a f ac t do es no t
af f ec t the f orm ation of the c ontr ac t or operate to dis c harge the parties f rom to pr es e nt a dd i t io n a l m att ers or t o r e it er at e its ar gum en ts in a d if f er en t
th e ir a gre em en t un d e r th e m ax im c av e a t e m pt or: wh ere the m eans of l ig h t. H enc e , th e c o ur ts a qu o s er i o us l y err ed in d ec l ar in g t he Mo t io n f or
k no wle d ge ar e at h an d a nd eq u a l l y a v ai l a b l e t o b ot h p art i es , on e wi l l n o t b e Rec o ns i d er at i on as pr o for m a .
he ar d t o s a y t ha t h e has be e n d ec e i v ed ; e l ev e n th , th e f ac t t h at r es p o nd e nt
De V er a was no t ab l e to tak e im m edia t e p o s s es s io n of th e l ot i n qu es ti o n
c an n ot c ons t it ut e dec e it , b ec a us e D e Ver a ha d t h e o pp or tu n it y, if s he s o T he c our ts a q u o a ls o s tre s s t ha t t he s a i d M ot i on f a i le d t o c om pl y wi t h
des ir e d, to ex am in e t h e la n d; t we l ft h, s inc e t her e is no ac tu a l c on tr o vers y i n S ec t i ons 5 an d 7 of R u le 1 5 , Ru l es of C o urt , t o wi t:
th e lo t in v o l ve d i n C i v i l C as e N os . 59 5 an d 60 2 , i t b e i ng n ot a p a rt s o l d t o
r es p o n de nt D e Ver a b y t h e pe t it i on er a nd c l a im ed b y t he f orm er, r es u l t in g i n S ec t i on 5 . N ot ic e of h ear i n g. T he n o tic e of he ar i ng s h a l l
th e d is m is s al of t he s a m e c as es b y a g r e em e nt of a l l t he p art i es , th e a wa rd of be a d dres s e d t o a l l p ar ti es c o nc er n ed , an d s h a ll s p ec if y t he t im e
an d d at e of t he he ar i ng wh ic h m us t n o t be l a ter t h an t e n ( 1 0)
dam ag es , th er ef or e, h ad no b as is i n f ac t an d i n l a w; th ir t ee nt h , th e a war d is
da ys af ter t h e f i l i n g of t he m ot io n.
pa t en t l y a nd en t ir el y unc o ns c io n ab l e s i nc e th e p et i t io n er s o l d t h e pr o per t y
f or P3 5 ,0 0 0. 00 a n d n o w, n o t o n l y was i t d i v es t ed of its o wn ers h ip of t he S ec t i on 7 . Mo t i o n da y . Ex c ep t f or m ot io n s re q ui ri n g
im m ed ia te ac t i on , a l l m otio ns s h a l l be s c he du l e d f or h e ar in g o n
pr o p ert y, i t is a ls o or d er e d t o pa y t h e a ll e g e d v a lu e t o D e V er a i n t he am o un t
Fri d a y af t er no o n, or if F ri d a y i s a no n - w ork in g da y, i n th e
of P3 3, 8 73 , 00 0 .0 0 p l u s o t her ex p e ns es of m ore th a n P 28 0 ,0 0 0. 00 wh ic h ar e af ter n oo n t h e nex t wo r k ing d a y.
c l ear l y n o t im put a bl e t o PN B ; fo ur te e nt h, t hus , wh ere De V er a f a i le d t o
ex er c is e or wa i ve d its op t io n t o r es e l l , a nd , at th e s am e t im e m a in ta i ns t ha t
th e c o ntr ac t is n o t v al i d bec a us e h e f ai l e d t o tak e p os s es s i o n of t h e pro p ert y
T he RT C h e ld t ha t p et it i o ners M ot i on wh ic h was f i l e d o n D ec em be r 3,
i n qu es ti o n, s uc h a s it u at i on wi l l b e t an t a m ount t o l e a v in g t he b u ye r th e
19 9 8, a nd was s et f o r h ear i n g o n D ec em ber 21 , 19 9 8, e i gh t da ys b e yo n d
un i l at er a l p o wer to d e ter m i ne wh e th er s uc h c on tr ac t s h ou l d c on t in ue or n ot ,
th e r e g lem en t ar y p er io d p res c r i b ed u nd er S ec t i on 5 , R u le 1 5, a n d t h at th e
wh ic h is pr o h ib i te d b y A r t ic le 13 0 8 of t h e C i vi l C o de ; a nd f i ft ee n th , th e
Mo t io n s et t h e h e ar i n g on a M on d a y an d n ot o n a Fr i da y. T h e C A he l d th a t
pe t it i on er is a m or t g ag e e in g o od f a it h, s i nc e a t t h e t im e t h e m ortg ag e
th e n ot ic e of h e ari n g of s a i d M ot i o n was n o t a ddr es s ed to t h e p art i es
c o ver i n g s ai d pr op er t y h ad b ee n c o ns t i tu te d , th e p et it i o ner was no t a war e of
c onc er n ed .
an y f l a w, if a n y, of t he ti t le of t he m or t ga g or, an d , as s uc h, t h e p et it i on er t h en
ha d t he le g a l r i gh t t o t r ans f er o wn er s hi p t o D e V er a. [ 1 1 ]

T he f or e go i n g c onc l us i ons are inc orr ec t .

Im port a nt to n ot e is t h at th e c ir c um s tanc es o f the c as e as s h o wn i n th e

Mo t io n f or R ec o ns i der at i on d o no t s h o w a n i nt e nt on t he p art of t h e p l e ad er
to m ere l y de l a y th e pr oc e e d i n gs , a n d s a id Mo t io n re v e a ls a bo n a f id e ef f ort T he Co ur t i n Ma t ura n v . Ar au l a [ 1 2 ] he l d:
 T he m ot i on f or r ec o ns i der a ti o n of h ere i n p et i ti o ner , wh il e
s ubs t an t ia l l y b as ed o n th e s am e gr ou n ds he in v ok ed i n h is
As e nj o i n ed b y th e R u les of C ou rt a n d th e c o nt ro l l in g m em oran d um af t er t h e c as e was s u bm itt e d f or dec is i on , is
j uris pr u de nc e, a l i b e r a l c ons tr uc t i on of t he r ul es a n d t h e not p ro fo rm a a s it point s out sp ec if ic al l y th e fi ndi ng s o r
p le a di n gs is t he c o ntr o l li n g pr i nc i p l e t o ef f ec t s u bs t a nt i a l con cl us ion s i n th e judg me nt w hich h e c l aim s a re not
j us t ic e. supp or ted b y th e ev i den c e o r w hic h a r e c ontr a r y to law ( Ci t y
of C e bu v. Me n do za , L - 2 6 3 21 , Fe b. 2 5, 1 9 75 , 6 2 SC R A 4 40 ,
44 6) , as id e fr om stat ing a ddit ion a l sp e cif ic re a son s fo r th e
T he ru le r equ i rin g noti c e to h e r ein pr iv at e sa id g roun ds . [ 1 3 ] ( Em ph as is s u pp l i e d)
re sp ond ent s as def e nd a nt a nd in t er ve n ors i n th e l o wer c our t
wi t h r es pec t to th e he ar i ng of t he m ot i o n f il e d b y h er e in
pe t it i on er f or t he r ec o ns id er at i on of t he d ec i s i on of res p on d en t
J ud g e, h as be en su bst ant ia ll y com pl ied w ith. W hi le th e T hus , e v en if t he M o ti on m a y b e def ec t i v e f o r f ai l ur e to a d dres s t h e no t ic e of
noti ce w a s add re s s e d o nl y t o t h e cl e rk o f cou rt , a cop y of he ar i ng of s a i d m ot i o n t o th e p ar t ies c o nc er n ed , t he def ec t wa s c ur ed b y th e
the s aid m ot io n f o r r ec on sid e rat ion w as f urn is he d coun s el c our ts t ak i ng c og n i za nc e th er e of an d t h e f ac t th at th e ad v ers e par t y wa s
of h e r ein p r iv at e r e s pond ent s, w hi ch fa ct i s not d en i ed b y
ot h er wis e no t if i ed of t he ex is te nc e of s a id p le a di n g. [ 1 4 ] T h er e is s ubs t an t ia l
priv at e r esp ond ent . A s a m at t e r of f act , p riv ate re spo nd ent s
fil ed t he i r op po s it io n to th e sa id moti on f or c om pl i anc e wi t h th e f ore g o in g r u l es if a c op y of th e s a i d m otio n f or
re co ns id er at ion d a te d J a nu ar y 1 4 , 1 9 81 a f ter t he h ear i n g of rec o ns i der a ti o n was f urn is h ed to th e c o uns e l of he re i n pr i va t e
th e s a id m oti o n was d e f er r e d an d r e - s et t wic e f rom Dec em ber 8, res p o n de nts . [15]

19 8 0, wh ic h was t h e f i r s t da t e s et f or its h e a r i ng as s pec if ie d i n

th e n o tic e . Hen c e, p r i v at e re sp ond ent s w er e not d eni ed t he ir
da y in cou rt w it h r e spe ct to the sa id mot ion fo r
re co ns id er at ion . T h e f ac t t h at t h e r es p o nd e nt J u dg e is s u e d his In th e pr es e nt c as e, re c ords re v e a l t ha t t h e n ot ic es in t he M ot i on w ere
ord er o n J a n u ar y 1 5, 19 8 1 d en yi n g th e m oti o n f or
ad dr es s ed to th e r es pec t i ve c o uns e ls of t he pr i v at e r es p o nd e nt s an d t h e y
rec o ns i der a ti o n f or l ac k of m er it as i t m ere l y rep e at e d t h e s am e
gro u n ds r a is ed i n t h e m em or an dum of h ere i n pe t it i on er as wer e d u l y f ur n is he d wi t h c o p i es of t he s am e as s h o wn b y th e rec e i pts s i g n ed
p la i nt if f i n t h e c o ur t b e lo w, o ne d a y af ter t h e o p po s i t io n to t he b y th e ir s t af f or a ge n t s .
m otio n f or r ec o ns i d er at i on was f i l ed o n J a nu ar y 1 4 , 19 8 1 b y
her e i n pr i v at e r es p on d en ts , dem o ns tr at es t ha t th e s ai d
op p os it i on of h er e i n r es p o nd e nts was c ons i d ere d b y t he
res p o n de nt J ud g e. Co ns eq u en t l y, t h e C o u rt f in ds t h at th e p e ti t io ner s u bs t a nt i al l y c om pl ie d
wi t h t h e p ert i ne n t pro v is io ns of th e R ul es of Co urt an d ex is t i n g j uri s pru d e nc e
on t h e r e qu ir em en ts of m oti o ns an d p l e ad i ng s .
x x x x
 P et it i o ners Mo t io n f or Rec o ns i d er at i on is de em ed to h a v e b ee n t i m el y
f il e d wi t hi n t he pr es c r i be d p er i od , v i z:
Co ns eq u en t l y, p e ti t io ners No t ic e of A p pe a l s h ou l d h a v e be e n g i ve n d ue
1. Pe t it i on er r ec e i ve d on N o v em ber 1 9, 1 9 98 t h e Dec is i on of th e RT C c ours e .
prom u lg a te d on Au g u s t 2 0, 1 99 8 . Fr om rec e i pt t her e o f , the
pe t it i on er t im el y f i l e d a M ot i on f or Ne w T r ia l a n d Rec o ns id er at i o n
on D ec em ber 3 , 19 9 8. In f in e , t h e C A err e d i n af f irm i ng t he RT C O rd er da te d F ebr u ar y 18 ,
19 9 9 a nd t h e W rit of E x ec u t io n d at e d M arc h 9, 1 9 99 .

2. T he tr i al c o ur t de n ie d th e m ot i on in i ts O rd er da t ed Fe br u ar y 18 ,
19 9 9, a c op y of wh ic h was r ec e i ve d b y p e t it i on er o n M arc h 2 , 1 9 99 .
W HE R EFO R E , t h e p et i ti o n is G R ANT ED . T h e c h a l l en g ed Dec is i on a nd
Res o lu t io n of th e C our t of A p p ea ls ar e h er eb y S E T AS I DE . A n ot h er j u dgm en t
is e nt er e d wh er e b y t he O r der d at e d Fe br uar y 18 , 1 9 99 is s ue d b y t he R e g io n al
3. Fr om r ec e i pt of t he ad v er s e or d er, p e ti t io n er f i le d a N o tic e of
T ria l C o urt , Bra nc h 6 7 , B au a ng , La Un i o n, i n C i v i l C as e N o. 5 94 - BG is S ET
A pp e a l on Mar c h 3 , 1 9 99 .
AS I D E; s ai d R e g io n a l T ria l C our t is or der e d to gi v e du e c o urs e t o t he ap p e al
of p e t it i on er; an d r es p on d en ts a n d th e ir a g en ts ar e p erm ane n t l y e nj o in e d f rom
enf orc i n g th e O r d er d a te d F e br uar y 1 8, 1 9 99 an d th e W rit of Ex ec ut i on d at e d
4. W itho u t ac ti n g o n th e N ot ic e of Ap p e al , th e RT C is s u e d a W rit of
Ma rc h 9 , 1 99 9 .
Ex ec u t io n o n M ar c h 9, 1 9 99 .

No pr o n ou nc em ent as to c os ts .
5. T he pe t it i o ner th e n f i le d a P e ti t io n f or Cer t ior ar i wit h Pr a yer f or
T em por ar y R es t r a i n in g O r d er an d /or Pr e l im i nar y I nj u nc t i on b ef or e SO O R D ER E D .
th e C A o n M ar c h 19 , 1 99 9 .

6. O n Ma y 3 1 , 20 0 0, t he C A is s u ed a wri t of pre l im in ar y i nj unc t i on

enj o in i n g t h e r es po n de nts a n d t h e ir ag e nts f rom enf orc i n g t h e O r d er
da t ed F ebr u ar y 18 , 19 99 an d t h e W rit of Ex e c ut i on d at e d M arc h 9 ,
19 9 9. EN BANC
DOMINGO NEYPES, LUZ G.R. No. 141524 namely: FE, CORAZON, JOSEFA,

FAUSTINO, ROGELIO FAUSTINO, SALVADOR and CARMEN, all

LOLITO VICTORIANO, JACOB surnamed DEL MUNDO, LAND BANK

OBANIA AND DOMINGO Present : OF THE PHILIPPINES AND HON.

CABACUNGAN, ANTONIO N. ROSALES, Presiding

Petitioners, DAVIDE, JR., C.J. Judge, Branch 43, Regional Trial

PUNO, Court, Roxas, Oriental Mindoro,

PANGANIBAN, Respondents. Promulgated :

QUISUMBING, September 14, 2005

YNARES-SANTIAGO, x-----------------------------------------x

SANDOVAL-GUTIERREZ,

CARPIO, DECISION

- v e r s u s - AUSTRIA-MARTINEZ,

CORONA, CORONA, J.:

CARPIO MORALES,

CALLEJO, SR.,
Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito Victoriano,
AZCUNA,
Jacob Obania and Domingo Cabacungan filed an action for annulment of judgment and
TINGA,
titles of land and/or reconveyance and/or reversion with preliminary injunction before the
CHICO-NAZARIO and

GARCIA, JJ. Regional Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the Bureau of Forest

HON. COURT OF APPEALS, HEIRS Development, Bureau of Lands, Land Bank of the Philippines and the heirs of Bernardo

OF BERNARDO DEL MUNDO, del Mundo, namely, Fe, Corazon, Josefa, Salvador and Carmen.
 In an order[2] dated February 12, 1998, the trial court dismissed petitioners complaint

In the course of the proceedings, the parties (both petitioners and respondents) filed on the ground that the action had already prescribed. Petitioners allegedly received a copy of

various motions with the trial court. Among these were: (1) the motion filed by petitioners to the order of dismissal on March 3, 1998 and, on the 15 th day thereafter or on March 18, 1998,

declare the respondent heirs, the Bureau of Lands and the Bureau of Forest Development in filed a motion for reconsideration. On July 1, 1998, the trial court issued another order

default and (2) the motions to dismiss filed by the respondent heirs and the Land Bank of the dismissing the motion for reconsideration[3] which petitioners received on July 22, 1998. Five

Philippines, respectively. days later, on July 27, 1998, petitioners filed a notice of appeal[4] and paid the appeal fees on

August 3, 1998.

In an order dated May 16, 1997, the trial court, presided by public respondent Judge

Antonio N. Rosales, resolved the foregoing motions as follows: (1) the petitioners motion to On August 4, 1998, the court a quo denied the notice of appeal, holding that it was filed

declare respondents Bureau of Lands and Bureau of Forest Development in default was eight days late.[5] This was received by petitioners on July 31, 1998. Petitioners filed a motion

granted for their failure to file an answer, but denied as against the respondent heirs of del for reconsideration but this too was denied in an order dated September 3, 1998.[6]

Mundo because the substituted service of summons on them was improper; (2) the Land Banks

motion to dismiss for lack of cause of action was denied because there were hypothetical
Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil
admissions and matters that could be determined only after trial, and (3) the motion to dismiss
Procedure, petitioners assailed the dismissal of the notice of appeal before the Court of
filed by respondent heirs of del Mundo, based on prescription, was also denied because there
Appeals.
were factual matters that could be determined only after trial.[1]

In the appellate court, petitioners claimed that they had seasonably filed their notice of
The respondent heirs filed a motion for reconsideration of the order denying their
appeal. They argued that the 15-day reglementary period to appeal started to run only on July
motion to dismiss on the ground that the trial court could very well resolve the issue of
22, 1998 since this was the day they received the final order of the trial court denying their
prescription from the bare allegations of the complaint itself without waiting for the trial proper.
motion for reconsideration. When they filed their notice of appeal on July 27, 1998, only five

days had elapsed and they were well within the reglementary period for appeal. [7]

On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruled that
the 15-day period to appeal should have been reckoned from March 3, 1998 or the day they
received the February 12, 1998 order dismissing their complaint. According to the appellate
court, the order was the final order appealable under the Rules. It held further:
Perforce the petitioners tardy appeal was correctly dismissed for the
(P)erfection of an appeal within the reglementary period and in the manner
prescribed by law is jurisdictional and non-compliance with such legal
requirement is fatal and effectively renders the judgment final and executory. [8]
Petitioners filed a motion for reconsideration of the aforementioned decision. This was denied
by the Court of Appeals on January 6, 2000.
In this present petition for review under Rule 45 of the Rules, petitioners ascribe the following
errors allegedly committed by the appellate court:
I
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE
PETITIONERS PETITION FOR CERTIORARI AND MANDAMUS AND IN
AFFIRMING THE ORDER OF THE HON. JUDGE ANTONIO N. ROSALES
WHICH DISMISSED THE PETITIONERS APPEAL IN CIVIL CASE NO. C-36
OF THE REGIONAL TRIAL COURT, BRANCH 43, ROXAS, ORIENTAL
MINDORO, EVEN AFTER THE PETITIONERS HAD PAID THE APPEAL
DOCKET FEES.
II
THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING
AND AFFIRMING THE DECISION OR ORDER OF THE RESPONDENT
HON. ANTONIO M. ROSALES THAT PETITIONERS APPEAL WAS FILED
OUT OF TIME WHEN PETITIONERS RECEIVED THE LAST OR FINAL
ORDER OF THE COURT ON JULY 22, 1998 AND FILED THEIR NOTICE OF
APPEAL ON JULY 27, 1998 AND PAID THE APPEAL DOCKET FEE ON
AUGUST 3, 1998.
III
THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING
THAT THE WORDS FINAL ORDER IN SECTION 3, RULE 41, OF THE 1997
RULES OF CIVIL PROCEDURE WILL REFER TO THE [FIRST] ORDER OF
RESPONDENT JUDGE HON. ANTONIO M. MORALES DATED FEBRUARY
12, 1998 INSTEAD OF THE LAST AND FINAL ORDER DATED JULY 1, 1998
COPY OF WHICH WAS RECEIVED BY PETITIONERS THROUGH
COUNSEL ON JULY 22, 1998.
 IV.
THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING
THAT THE DECISION IN THE CASE OF DENSO, INC. V. IAC, 148 SCRA
280, IS APPLICABLE IN THE INSTANT CASE THEREBY IGNORING THE
PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE AND THE FACT
THAT THE SAID DECISION WAS RENDERED PRIOR TO THE
ENACTMENT OF THE 1997 RULES OF CIVIL PROCEDURE.[9]
The foregoing issues essentially revolve around the period within which petitioners should have
filed their notice of appeal.
First and foremost, the right to appeal is neither a natural right nor a part of due process. It is
merely a statutory privilege and may be exercised only in the manner and in accordance with
the provisions of law. Thus, one who seeks to avail of the right to appeal must comply with the
requirements of the Rules. Failure to do so often leads to the loss of the right to appeal. [10] The
period to appeal is fixed by both statute and procedural rules. BP 129,[11] as amended,
provides:
Sec. 39. Appeals. The period for appeal from final orders, resolutions, awards,
judgments, or decisions of any court in all these cases shall be fifteen (15)
days counted from the notice of the final order, resolution, award, judgment,
or decision appealed from. Provided, however, that in habeas corpus cases,
the period for appeal shall be (48) forty-eight hours from the notice of judgment
appealed from. x x x
Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:
SEC. 3. Period of ordinary appeal. ― The appeal shall be taken within
fifteen (15) days from the 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 the notice of
judgment or final order.
The period to 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. (emphasis supplied)
Based on the foregoing, an appeal should be taken within 15 days from the notice of judgment
or final order appealed from. A final judgment or order is one that finally disposes of a case,
leaving nothing more for the court to do with respect to it. It is an adjudication on the merits
which, considering the evidence presented at the trial, declares categorically what the rights
and obligations of the parties are; or it may be an order or judgment that dismisses an action. [12]
As already mentioned, petitioners argue that the order of July 1, 1998 denying their motion for
reconsideration should be construed as the final order, not the February 12, 1998 order which
dismissed their complaint. Since they received their copy of the denial of their motion for
reconsideration only on July 22, 1998, the 15-day reglementary period to appeal had not yet
lapsed when they filed their notice of appeal on July 27, 1998.
 Based on the aforementioned cases, we sustain petitioners view that the order dated July 1,

What therefore should be deemed as the final order, receipt of which triggers the start 1998 denying their motion for reconsideration was the final order contemplated in the Rules.

of the 15-day reglementary period to appeal the February 12, 1998 order dismissing the
We now come to the next question: if July 1, 1998 was the start of the 15-day
complaint or the July 1, 1998 order dismissing the MR?
reglementary period to appeal, did petitioners in fact file their notice of appeal on time?

In the recent case of Quelnan v. VHF Philippines, Inc.,[13] the trial court declared

petitioner Quelnan non-suited and accordingly dismissed his complaint. Upon receipt of the
Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or final
order of dismissal, he filed an omnibus motion to set it aside. When the omnibus motion was
order to appeal the decision of the trial court. On the 15thday of the original appeal period
filed, 12 days of the 15-day period to appeal the order had lapsed. He later on received another
(March 18, 1998), petitioners did not file a notice of appeal but instead opted to file a motion
order, this time dismissing his omnibus motion. He then filed his notice of appeal. But this was
for reconsideration. According to the trial court, the MR only interrupted the running of the 15-
likewise dismissed ― for having been filed out of time.
day appeal period.[15] It ruled that petitioners, having filed their MR on the last day of the 15-

The court a quo ruled that petitioner should have appealed within 15 days after the day reglementary period to appeal, had only one (1) day left to file the notice of appeal upon

dismissal of his complaint since this was the final order that was appealable under the Rules. receipt of the notice of denial of their MR. Petitioners, however, argue that they were entitled

We reversed the trial court and declared that it was the denial of the motion for under the Rules to a fresh period of 15 days from receipt of the final order or the order

reconsideration of an order of dismissal of a complaint which constituted the final order as it dismissing their motion for reconsideration.

was what ended the issues raised there.

In Quelnan and Apuyan, both petitioners filed a motion for reconsideration of the

decision of the trial court. We ruled there that they only had the remaining time of the 15-day

This pronouncement was reiterated in the more recent case of Apuyan v. Haldeman et appeal period to file the notice of appeal. We consistently applied this rule in similar

al.[14] where we again considered the order denying petitioner Apuyans motion for cases,[16] premised on the long-settled doctrine that the perfection of an appeal in the manner

reconsideration as the final order which finally disposed of the issues involved in the case. and within the period permitted by law is not only mandatory but also jurisdictional. [17] The rule

is also founded on deep-seated considerations of public policy and sound practice that, at risk
of occasional error, the judgments and awards of courts must become final at some definite condoned late filing of notices of appeal,[22] and only in very exceptional instances to better

time fixed by law.[18] serve the ends of justice.

Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised Rules of Court In National Waterworks and Sewerage Authority and Authority v. Municipality of

read: Libmanan,[23] however, we declared that appeal is an essential part of our judicial system and

the rules of procedure should not be applied rigidly. This Court has on occasion advised the

Sec. 3. How appeal is taken. Appeal maybe taken by serving upon lower courts to be cautious about not depriving a party of the right to appeal and that every
the adverse party and filing with the trial court within thirty (30) days from
party litigant should be afforded the amplest opportunity for the proper and just disposition of
notice of order or judgment, a notice of appeal, an appeal bond, and a
record on appeal. The time during which a motion to set aside the judgment his cause, free from the constraint of technicalities.
or order or for new trial has been pending shall be deducted, unless such
motion fails to satisfy the requirements of Rule 37.

In de la Rosa v. Court of Appeals,[24] we stated that, as a rule, periods which require

But where such motion has been filed during office hours of the last
litigants to do certain acts must be followed unless, under exceptional circumstances, a delay
day of the period herein provided, the appeal must be perfected within the day
following that in which the party appealing received notice of the denial of said in the filing of an appeal may be excused on grounds of substantial justice. There, we condoned
motion.[19] (emphasis supplied)
the delay incurred by the appealing party due to strong considerations of fairness and justice.

In setting aside technical infirmities and thereby giving due course to tardy appeals,

we have not been oblivious to or unmindful of the extraordinary situations that merit liberal
According to the foregoing provision, the appeal period previously consisted of 30 days. BP
application of the Rules. In those situations where technicalities were dispensed with, our
129, however, reduced this appeal period to 15 days. In the deliberations of the Committee on
decisions were not meant to undermine the force and effectivity of the periods set by law. But
Judicial Reorganization[20] that drafted BP 129, the raison d etre behind the amendment was to
we hasten to add that in those rare cases where procedural rules were not stringently applied,
shorten the period of appeal[21] and enhance the efficiency and dispensation of justice. We
there always existed a clear need to prevent the commission of a grave injustice. Our judicial
have since required strict observance of this reglementary period of appeal. Seldom have we
system and the courts have always tried to maintain a healthy balance between the strict
enforcement of procedural laws and the guarantee that every litigant be given the full We thus hold that petitioners seasonably filed their notice of appeal within the fresh

opportunity for the just and proper disposition of his cause.[25] period of 15 days, counted from July 22, 1998 (the date of receipt of notice denying their motion

for reconsideration). This pronouncement is not inconsistent with Rule 41, Section 3 of the
The Supreme Court may promulgate procedural rules in all courts.[26] It has the sole
Rules which states that the appeal shall be taken within 15 days from notice of judgment or final
prerogative to amend, repeal or even establish new rules for a more simplified and inexpensive
order appealed from. The use of the disjunctive word or signifies disassociation and
process, and the speedy disposition of cases. In the rules governing appeals to it and to the
independence of one thing from another. It should, as a rule, be construed in the sense in which
Court of Appeals, particularly Rules 42,[27] 43[28] and 45,[29] the Court allows extensions of time,
it ordinarily implies.[33] Hence, the use of or in the above provision supposes that the notice of
based on justifiable and compelling reasons, for parties to file their appeals. These extensions
appeal may be filed within 15 days from the notice of judgment or within 15 days from notice
may consist of 15 days or more.
of the final order, which we already determined to refer to the July 1, 1998 order denying the

motion for a new trial or reconsideration.

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
Neither does this new rule run counter to the spirit of Section 39 of BP 129 which
within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the
shortened the appeal period from 30 days to 15 days to hasten the disposition of cases. The
order dismissing a motion for a new trial or motion for reconsideration. [30]
original period of appeal (in this case March 3-18, 1998) remains and the requirement for strict

compliance still applies. The fresh period of 15 days becomes significant only when a party opts

Henceforth, this fresh period rule shall also apply to Rule 40 governing appeals from to file a motion for new trial or motion for reconsideration. In this manner, the trial court which

the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review from the rendered the assailed decision is given another opportunity to review the case and, in the

Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial process, minimize and/or rectify any error of judgment. While we aim to resolve cases with

agencies[31] to the Court of Appeals and Rule 45 governing appeals by certiorari to the dispatch and to have judgments of courts become final at some definite time, we likewise aspire

Supreme Court.[32] The new rule aims to regiment or make the appeal period uniform, to be to deliver justice fairly.

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.

 In this case, the new period of 15 days eradicates the confusion as to when the 15-day No costs.

appeal period should be counted from receipt of notice of judgment (March 3, 1998) or from

receipt of notice of final order appealed from (July 22, 1998).

SO ORDERED.

To recapitulate, a party litigant may either file his notice of appeal within 15 days from

receipt of the Regional Trial Courts decision or file it within 15 days from receipt of the order

(the final order) denying his motion for new trial or motion for reconsideration. Obviously, the

new 15-day period may be availed of only if either motion is filed; otherwise, the decision

becomes final and executory after the lapse of the original appeal period provided in Rule 41,

Section 3.

Petitioners here filed their notice of appeal on July 27, 1998 or five days from receipt

of the order denying their motion for reconsideration on July 22, 1998. Hence, the notice of

appeal was well within the fresh appeal period of 15 days, as already discussed.[34]

We deem it unnecessary to discuss the applicability of Denso (Philippines), Inc. v. IAC[35] since

the Court of Appeals never even referred to it in its assailed decision.

WHEREFORE, the petition is hereby GRANTED and the assailed decision of the

Court of Appeals REVERSED and SET ASIDE. Accordingly, let the records of this case be

remanded to the Court of Appeals for further proceedings.