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PACIFIC ACE FINANCE LTD. (PAFIN), G.R. No.

175303
- versus -
EIJI* YANAGISAWA,
Respondent.

DECISION

An undertaking not to dispose of a property pending litigation, made in open court and embodied in a court order, and
duly annotated on the title of the said property, creates a right in favor of the person relying thereon. The latter may seek
the annulment of actions that are done in violation of such undertaking.

Before us is a Petition for Review[1] of the August 1, 2006 Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 78944,
which held:

WHEREFORE, the Decision dated April 20, 2003 of the RTC, Branch 258, Paraaque City, is
hereby ANNULLED and SET ASIDE and a new one entered annulling the Real Estate Mortgage executed
on August 25, 1998 in favor of defendant Pacific Ace Finance Ltd.

SO ORDERED.[3]

Factual Antecedents

Respondent Eiji Yanagisawa (Eiji), a Japanese national, and Evelyn F. Castaeda (Evelyn), a Filipina, contracted marriage on
July 12, 1989 in the City Hall of Manila.[4]

On August 23, 1995, Evelyn purchased a 152 square-meter townhouse unit located at Bo. Sto. Nio, Paraaque,
Metro Manila (Paraaque townhouse unit).[5] The Registry of Deeds for Paraaque issued Transfer Certificate of Title (TCT)
No. 99791 to Evelyn P. Castaeda, Filipino, married to Ejie Yanagisawa, Japanese citizen[,] both of legal age.[6]

In 1996, Eiji filed a complaint for the declaration of nullity of his marriage with Evelyn on the ground of bigamy (nullity of
marriage case). The complaint, docketed as Civil Case No. 96-776, was raffled to Branch 149 of the Regional Trial Court of
Makati (Makati RTC). During the pendency of the case, Eiji filed a Motion for the Issuance of a Restraining Order against
Evelyn and an Application for a Writ of a Preliminary Injunction. He asked that Evelyn be enjoined from disposing or
encumbering all of the properties registered in her name.

At the hearing on the said motion, Evelyn and her lawyer voluntarily undertook not to dispose of the properties registered
in her name during the pendency of the case, thus rendering Eijis application and motion moot. On the basis of said
commitment, the Makati RTC rendered the following Order dated October 2, 1996:

ORDER
In view of the commitment made in open court by Atty. Lupo Leyva, counsel for the defendant
[Evelyn], together with his client, the defendant in this case, that the properties registered in the name
of the defendant would not be disposed of, alienated or encumbered in any manner during the
pendency of this petition, the Motion for the Issuance of a Restraining Order and Application for a Writ
of a Preliminary Injunction scheduled today is hereby considered moot and academic.

SO ORDERED.[7] (Emphasis supplied.)

The above Order was annotated on the title of the Paraaque townhouse unit or TCT No. 99791, thus:

Entry No. 8729 Order issued by Hon. Josefina Guevara Salonga, Judge, RTC, Branch 149, Makati
City, ordering the defendant in Civil Case No. 96-776 entitled Eiji Yanagisawa, Plaintiff-versus-Evelyn
Castaeda Yanagisawa, that the properties registered in the name of the defendant would not be
disposed of, alienated or encumbered in any manner during the pendency of the petition, the Motion for
the Issuance of a Restraining Order and Application for a Writ of Preliminary Injunction is hereby
considered moot and academic.

Date of Instrument October 2, 1996


Date of Inscription March 17, 1997 11:21 a.m.[8] (Emphasis supplied.)

Sometime in March 1997, Evelyn obtained a loan of P500,000.00 from petitioner Pacific Ace Finance Ltd. (PAFIN).[9] To
secure the loan, Evelyn executed on August 25, 1998 a real estate mortgage (REM)[10] in favor of PAFIN over the Paraaque
townhouse unit covered by TCT No. 99791. The instrument was submitted to the Register of Deeds of Paraaque City for
annotation on the same date.[11]

At the time of the mortgage, Eijis appeal in the nullity of marriage case was pending before the CA.[12] The Makati RTC had
dissolved Eiji and Evelyns marriage,[13] and had ordered the liquidation of their registered properties, including the
Paraaque townhouse unit, with its proceeds to be divided between the parties.[14] The Decision of the Makati RTC did not
lift or dissolve its October 2, 1996 Order on Evelyns commitment not to dispose of or encumber the properties registered
in her name.

Eiji learned of the REM upon its annotation on TCT No. 99791. Deeming the mortgage as a violation of the Makati RTCs
October 2, 1996 Order, Eiji filed a complaint for the annulment of REM (annulment of mortgage case) against Evelyn and
PAFIN.[15] The complaint, docketed as Civil Case No. 98-0431, was raffled to Branch 258 of the Regional Trial Court of
Paraaque City (Paraaque RTC).

For its defense, PAFIN denied prior knowledge of the October 2, 1996 Order against Evelyn. It admitted, however, that it
did not conduct any verification of the title with the Registry of Deeds of Paraaque City because x x x Evelyn was a good,
friendly and trusted neighbor.[16] PAFIN maintained that Eiji has no personality to seek the annulment of the REM because
a foreign national cannot own real properties located within the Philippines.[17]
Evelyn also denied having knowledge of the October 2, 1996 Order.[18] Evelyn asserted that she paid for the property with
her own funds[19] and that she has exclusive ownership thereof. [20]

Paraaque Regional Trial Court Decision[21]

The Paraaque RTC determined that the only issue before it is whether x x x [Eiji] has a cause of action against the
defendants and x x x is entitled to the reliefs prayed for despite the fact that he is not the registered owner of the property
being a Japanese national.[22]

The Paraaque RTC explained that Eiji, as a foreign national, cannot possibly own the mortgaged property. Without
ownership, or any other law or contract binding the defendants to him, Eiji has no cause of action that may be asserted
against them.[23] Thus, the Paraaque RTC dismissed Eijis complaint:

WHEREFORE, premises considered, for failure of the plaintiff to state a cause of action against
defendants, EVELYN CASTAEDA YANAGISAWA and Pacific Ace Finance Ltd. (PAFIN), this case
is DISMISSED.

The counterclaim and cross-claim are likewise DISMISSED.

SO ORDERED.[24]

Eiji appealed the trial courts decision arguing that the trial court erred in holding that his inability to own real estate
property in the Philippines deprives him of all interest in the mortgaged property, which was bought with his money. He
added that the Makati RTC has even recognized his contribution in the purchase of the property by its declaration that
he is entitled to half of the proceeds that would be obtained from its sale.

Eiji also emphasized that Evelyn had made a commitment to him and to the Makati RTC that she would not dispose of,
alienate, or encumber the properties registered in her name while the case was pending. This commitment incapacitates
Evelyn from entering into the REM contract.

Court of Appeals Decision[25]

The CA found merit in Eijis appeal.

The CA noted that the Makati RTC ruled on Eijis and Evelyns ownership rights over the properties that were acquired
during their marriage, including the Paraaque townhouse unit. It was determined therein that the registered properties
should be sold at public auction and the proceeds thereof to be divided between Eiji and Evelyn.[26]
Contrary to this ruling, the Paraaque RTC ruled that Eiji has no ownership rights over the Paraaque townhouse unit in light
of the constitutional prohibition on foreign ownership of lands and that the subject property is Evelyns exclusive
property.[27]

The appellate court determined that the Paraaque RTCs Decision was improper because it violated the doctrine of non-
interference. Courts of equal jurisdiction, such as regional trial courts, have no appellate jurisdiction over each
other.[28] For this reason, the CA annulled and set aside the Paraaque RTCs
decision to dismiss Eijis complaint.[29]

The CA then proceeded to resolve Eijis complaint.[30] The CA noted that Eiji anchored his complaint upon Evelyns violation
of her commitment to the Makati RTC and to Eiji that she would not dispose of, alienate, or encumber the properties
registered in her name, including the Paraaque townhouse unit. This commitment created a right in favor of Eiji to rely
thereon and a correlative obligation on Evelyns part not to encumber the Paraaque townhouse unit. Since Evelyns
commitment was annotated on TCT No. 99791, all those who deal with the said property are charged with notice of the
burdens on the property and its registered owner.[31]

On the basis of Evelyns commitment and its annotation on TCT No. 99791, the CA determined that Eiji has a cause of
action to annul the REM contract. Evelyn was aware of her legal impediment to encumber and dispose of the Paraaque
townhouse unit. Meanwhile, PAFIN displayed a wanton disregard of ordinary prudence when it admitted not conducting
any verification of the title whatsoever. The CA determined that PAFIN was a mortgagee in bad faith.[32]

Thus, the CA annulled the REM executed by Evelyn in favor of PAFIN.

The parties to the annulled mortgage filed separate motions for reconsideration on August 22, 2006,[33] which were both
denied for lack of merit by the appellate court in its November 7, 2006 Resolution.[34]

PAFIN filed this petition for review.

Petitioners Arguments

Petitioner seeks a reversal of the CA Decision, which allegedly affirmed the


Makati RTC ruling that Eiji is a co-owner of the mortgaged property. PAFIN insists that the CA sustained a violation of the
constitution with its declaration that an alien can have an interest in real property located in the Philippines.[35]

Petitioner also seeks the reinstatement of the Paraaque RTCs Decision dated April 20, 2003[36] and prays that this Court
render a decision that Eiji cannot have ownership rights over the mortgaged property and that Evelyn enjoys exclusive
ownership thereof. As the sole owner, Evelyn can validly mortgage the same to PAFIN without need of Eijis
consent. Corollarily, Eiji has no cause of action to seek the REMs annulment.[37]

Respondents Arguments

Respondent argues that he has an interest to have the REM annulled on two grounds: First, Evelyn made a commitment
in open court that she will not encumber the Paraaque townhouse unit during the pendency of the case. Second, the
Makati RTCs decision declared that he is entitled to share in the proceeds of the Paraaque townhouse unit.[38]

Respondent also insists that petitioner is in bad faith for entering into the mortgage contract with Evelyn despite the
annotation on TCT No. 99791 that Evelyn committed herself not to encumber the same.[39]

Issues

Petitioner raises the following issues:[40]

1. Whether a real property in the Philippines can be part of the community property of a Filipina and her foreigner spouse;

2. Whether a real property registered solely in the name of the Filipina wife is paraphernal or conjugal;

3. Who is entitled to the real property mentioned above when the marriage is declared void?

4. Whether the Paraaque RTC can rule on the issue of ownership, even as the same issue was already ruled upon by the
Makati RTC and is pending appeal in the CA.

Our Ruling

The petition has no merit.

Contrary to petitioners stance, the CA did not make any disposition as to who between Eiji and Evelyn owns the Paraaque
townhouse unit. It simply ruled that the Makati RTC had acquired jurisdiction over the said question and should not have
been interfered with by the Paraaque RTC. The CA only clarified that it was improper for the Paraaque RTC to have
reviewed the ruling of a co-equal court.

The Court agrees with the CA. The issue of ownership and liquidation of properties acquired during the cohabitation of
Eiji and Evelyn has been submitted for the resolution of the Makati RTC, and is pending[41]appeal before the CA. The
doctrine of judicial stability or non-interference dictates that the assumption by the Makati RTC over the issue operates
as an insurmountable barrier to the subsequent assumption by the Paraaque RTC.[42] By insisting on ruling on the same
issue, the Paraaque RTC effectively interfered with the Makati RTCs resolution of the issue and created the possibility of
conflicting decisions. Cojuangco v. Villegas[43] states: The various branches of the [regional trial courts] of a province or
city, having as they have the same or equal authority and exercising as they do concurrent and coordinate jurisdiction,
should not, cannot and are not permitted to interfere with their respective cases, much less with their orders or
judgments. A contrary rule would obviously lead to confusion and seriously hamper the administration of justice. The
matter is further explained thus:

It has been held that "even in cases of concurrent jurisdiction, it is, also, axiomatic that the court first
acquiring jurisdiction excludes the other courts."

In addition, it is a familiar principle that when a court of competent jurisdiction acquires jurisdiction over
the subject matter of a case, its authority continues, subject only to the appellate authority, until the
matter is finally and completely disposed of, and that no court of co-ordinate authority is at liberty to
interfere with its action. This doctrine is applicable to civil cases, to criminal prosecutions, and to courts-
martial. The principle is essential to the proper and orderly administration of the laws; and while its
observance might be required on the grounds of judicial comity and courtesy, it does not rest upon
such considerations exclusively, but is enforced to prevent unseemly, expensive, and dangerous
conflicts of jurisdiction and of the process.[44]

Petitioner maintains that it was imperative for the Paraaque RTC to rule on the ownership issue because it was essential
for the determination of the validity of the REM.[45]

The Court disagrees. A review of the complaint shows that Eiji did not claim ownership of the Paraaque townhouse unit
or his right to consent to the REM as his bases for seeking its annulment. Instead, Eiji invoked his right to rely on Evelyns
commitment not to dispose of or encumber the property (as confirmed in the October 2, 1996 Order of the Makati RTC),
and the annotation of the said commitment on TCT No. 99791.

It was Evelyn and PAFIN that raised Eijis incapacity to own real property as their defense to the suit. They maintained that
Eiji, as an alien incapacitated to own real estate in the Philippines, need not consent to the REM contract for its validity. But
this argument is beside the point and is not a proper defense to the right asserted by Eiji. This defense does not negate
Eijis right to rely on the October 2, 1996 Order of the Makati RTC and to hold third persons, who deal with the registered
property, to the annotations entered on the title. Thus, the RTC erred in dismissing the complaint based on this defense.

Petitioner did not question the rest of the appellate courts ruling, which held that Evelyn and PAFIN executed the REM in
complete disregard and violation of the October 2, 1996 Order of the Makati RTC and the annotation on TCT No. 99791. It
did not dispute the legal effect of the October 2, 1996 Order on Evelyns capacity to encumber the Paraaque townhouse
unit nor the CAs finding that petitioner is a mortgagee in bad faith.

The October 2, 1996 Order, embodying Evelyns commitment not to dispose of or encumber the property, is akin to an
injunction order against the disposition or encumbrance of the property. Jurisprudence holds that all acts done in violation
of a standing injunction order are voidable as to the party enjoined and third parties who are not in good faith.[46] The
party, in whose favor the injunction is issued, has a cause of action to seek the annulment of the offending actions.[47] The
following is instructive:

An injunction or restraining order must be obeyed while it remains in full force and effect until the
injunction or restraining order has been set aside, vacated, or modified by the court which granted it,
or until the order or decree awarding it has been reversed on appeal. The injuction must be obeyed
irrespective of the ultimate validity of the order, and no matter how unreasonable and unjust the
injunction may be in its terms.[48]

In view of the foregoing discussion, we find no need to discuss the other issues raised by the petitioner.

WHEREFORE, premises considered, the Petition is DENIED for lack of merit. The August 1, 2006 Decision of the Court of
Appeals in CA-G.R. CV No. 78944 is AFFIRMED.

SO ORDERED.
KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., G.R. No.
149177
Petitioners,

- versus -

MINORU KITAMURA,

Respondent.

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18,
2001 Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001
Resolution[2] denying the motion for reconsideration thereof.

On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm
providing technical and management support in the infrastructure projects of foreign governments,[3] entered
into an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national
permanently residing in the Philippines.[4] The agreement provides that respondent was to extend professional
services to Nippon for a year starting on April 1, 1999.[5] Nippon then assigned respondent to work as the
project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines, following the
company's consultancy contract with the Philippine Government.[6]

When the STAR Project was near completion, the Department of Public Works and Highways (DPWH) engaged
the consultancy services of Nippon, on January 28, 2000, this time for the detailed engineering and
construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project.[7] Respondent was named
as the project manager in the contract's Appendix 3.1.[8]

On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division,
informed respondent that the company had no more intention of automatically renewing his ICA. His services
would be engaged by the company only up to the substantial completion of the STAR Project on March 31,
2000, just in time for the ICA's expiry.[9]

Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation
conference and demanded that he be assigned to the BBRI project. Nippon insisted that respondents contract
was for a fixed term that had already expired, and refused to negotiate for the renewal of the ICA.[10]
As he was not able to generate a positive response from the petitioners, respondent consequently initiated
on June 1, 2000 Civil Case No. 00-0264 for specific performance and damages with
the Regional Trial Court of Lipa City.[11]

For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and between
Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They asserted that the claim for
improper pre-termination of respondent's ICA could only be heard and ventilated in the proper courts
of Japan following the principles of lex loci celebrationis and lex contractus.[12]

In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of Kitamura by
a certain Y. Kotake as project manager of the BBRI Project.[13]

On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank[14] that matters connected with
the performance of contracts are regulated by the law prevailing at the place of performance, [15] denied the
motion to dismiss.[16] The trial court subsequently denied petitioners' motion for reconsideration,[17] prompting
them to file with the appellate court, on August 14, 2000, their first Petition for Certiorari under Rule 65
[docketed as CA-G.R. SP No. 60205].[18] On August 23, 2000, the CA resolved to dismiss the petition on
procedural groundsfor lack of statement of material dates and for insufficient verification and certification
against forum shopping.[19] An Entry of Judgment was later issued by the appellate court on September 20,
2000.[20]

Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the
reglementary period, a second Petition for Certiorari under Rule 65 already stating therein the material dates
and attaching thereto the proper verification and certification. This second petition, which substantially raised
the same issues as those in the first, was docketed as CA-G.R. SP No. 60827.[21]

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18,
2001 Decision[22] finding no grave abuse of discretion in the trial court's denial of the motion to dismiss. The
CA ruled, among others, that the principle of lex loci celebrationis was not applicable to the case, because
nowhere in the pleadings was the validity of the written agreement put in issue. The CA thus declared that the
trial court was correct in applying instead the principle of lex loci solutionis.[23]
Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25,
2001 Resolution.[24]

Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for
Review on Certiorari[25] imputing the following errors to the appellate court:

A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE TRIAL COURT
VALIDLY EXERCISED JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE THE FACT
THAT THE CONTRACT SUBJECT MATTER OF THE PROCEEDINGS A QUO WAS ENTERED INTO BY
AND BETWEEN TWO JAPANESE NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE
AND EXECUTED IN TOKYO, JAPAN.

B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE NEED TO


REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE LIGHT OF
RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.[26]

The pivotal question that this Court is called upon to resolve is whether the subject matter jurisdiction of
Philippine courts in civil cases for specific performance and damages involving contracts executed outside the
country by foreign nationals may be assailed on the principles of lex loci celebrationis, lex contractus, the state
of the most significant relationship rule, or forum non conveniens.

However, before ruling on this issue, we must first dispose of the procedural matters raised by the respondent.

Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205 has already barred
the filing of the second petition docketed as CA-G.R. SP No. 60827 (fundamentally raising the same issues as
those in the first one) and the instant petition for review thereof.

We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's defective
certification of non-forum shopping, it was a dismissal without prejudice.[27] The same holds true in the CA's
dismissal of the said case due to defects in the formal requirement of verification [28] and in the other
requirement in Rule 46 of the Rules of Court on the statement of the material dates.[29] The dismissal being
without prejudice, petitioners can re-file the petition, or file a second petition attaching thereto the
appropriate verification and certificationas they, in fact didand stating therein the material dates, within the
prescribed period[30] in Section 4, Rule 65 of the said Rules.[31]

The dismissal of a case without prejudice signifies the absence of a decision on the merits and leaves the
parties free to litigate the matter in a subsequent action as though the dismissed action had not been
commenced. In other words, the termination of a case not on the merits does not bar another action involving
the same parties, on the same subject matter and theory.[32]

Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even if
petitioners still indicated in the verification and certification of the second certiorari petition that the first had
already been dismissed on procedural grounds,[33] petitioners are no longer required by the Rules to indicate
in their certification of non-forum shopping in the instant petition for review of the second certiorari petition,
the status of the aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum
shopping about any event that will not constitute resjudicata and litis pendentia, as in the present case, is not
a fatal defect. It will not warrant the dismissal and nullification of the entire proceedings, considering that the
evils sought to be prevented by the said certificate are no longer present.[34]

The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized to verify
and certify, on behalf of Nippon, the certiorari petition filed with the CA and not the instant petition. True, the
Authorization[35] dated September 4, 2000, which is attached to the second certiorari petition and which is also
attached to the instant petition for review, is limited in scopeits wordings indicate that Hasegawa is given the
authority to sign for and act on behalf of the company only in the petition filed with the appellate court, and
that authority cannot extend to the instant petition for review.[36] In a plethora of cases, however, this Court
has liberally applied the Rules or even suspended its application whenever a satisfactory explanation and a
subsequent fulfillment of the requirements have been made.[37] Given that petitioners herein sufficiently
explained their misgivings on this point and appended to their Reply[38] an updated Authorization[39] for
Hasegawa to act on behalf of the company in the instant petition, the Court finds the same as sufficient
compliance with the Rules.
However, the Court cannot extend the same liberal treatment to the defect in the verification and certification.
As respondent pointed out, and to which we agree, Hasegawa is truly not authorized to act on behalf
of Nippon in this case. The aforesaid September 4, 2000 Authorization and even the subsequent August 17,
2001 Authorization were issued only by Nippon's president and chief executive officer, not by the company's
board of directors. In not a few cases, we have ruled that corporate powers are exercised by the board of
directors; thus, no person, not even its officers, can bind the corporation, in the absence of authority from the
board.[40] Considering that Hasegawa verified and certified the petition only on his behalf and not on behalf of
the other petitioner, the petition has to be denied pursuant to Loquias v. Office of the
Ombudsman.[41] Substantial compliance will not suffice in a matter that demands strict observance of the
Rules.[42] While technical rules of procedure are designed not to frustrate the ends of justice, nonetheless, they
are intended to effect the proper and orderly disposition of cases and effectively prevent the clogging of court
dockets.[43]

Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the trial court's
denial of their motion to dismiss. It is a well-established rule that an order denying a motion to dismiss is
interlocutory, and cannot be the subject of the extraordinary petition for certiorari or mandamus. The
appropriate recourse is to file an answer and to interpose as defenses the objections raised in the motion, to
proceed to trial, and, in case of an adverse decision, to elevate the entire case by appeal in due course.[44] While
there are recognized exceptions to this rule,[45]petitioners' case does not fall among them.

This brings us to the discussion of the substantive issue of the case.

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear and
resolve the civil case for specific performance and damages filed by the respondent. The ICA subject of the
litigation was entered into and perfected in Tokyo, Japan, by Japanese nationals, and written wholly in the
Japanese language. Thus, petitioners posit that local courts have no substantial relationship to the
parties[46] following the [state of the] most significant relationship rule in Private International Law.[47]

The Court notes that petitioners adopted an additional but different theory when they elevated the case to
the appellate court. In the Motion to Dismiss[48] filed with the trial court, petitioners never contended that the
RTC is an inconvenient forum. They merely argued that the applicable law which will determine the validity or
invalidity of respondent's claim is that of Japan, following the principles of lex loci celebrationis and lex
contractus.[49] While not abandoning this stance in their petition before the appellate court, petitioners
on certiorari significantly invoked the defense of forum non conveniens.[50] On petition for review before this
Court, petitioners dropped their other arguments, maintained the forum non conveniens defense, and
introduced their new argument that the applicable principle is the [state of the] most significant relationship
rule.[51]

Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in theory, as
explained in Philippine Ports Authority v. City of Iloilo.[52] We only pointed out petitioners' inconstancy in their
arguments to emphasize their incorrect assertion of conflict of laws principles.

To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction,
choice of law, and recognition and enforcement of judgments. Corresponding to these phases are the following
questions: (1) Where can or should litigation be initiated? (2) Which law will the court apply? and (3) Where
can the resulting judgment be enforced?[53]

Analytically, jurisdiction and choice of law are two distinct concepts.[54] Jurisdiction considers whether it is fair
to cause a defendant to travel to this state; choice of law asks the further question whether the application of
a substantive law which will determine the merits of the case is fair to both parties. The power to exercise
jurisdiction does not automatically give a state constitutional authority to apply forum law. While jurisdiction
and the choice of the lex fori will often coincide, the minimum contacts for one do not always provide the
necessary significant contacts for the other.[55] The question of whether the law of a state can be applied to a
transaction is different from the question of whether the courts of that state have jurisdiction to enter a
judgment.[56]

In this case, only the first phase is at issuejurisdiction. Jurisdiction, however, has various aspects. For a court to
validly exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff or the
petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case and, in
cases involving property, over the res or the thing which is the subject of the litigation.[57] In assailing the trial
court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which
establishes and organizes the court. It is given only by law and in the manner prescribed by law.[58] It is further
determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some
of the claims asserted therein.[59] To succeed in its motion for the dismissal of an action for lack of jurisdiction
over the subject matter of the claim,[60] the movant must show that the court or tribunal cannot act on the
matter submitted to it because no law grants it the power to adjudicate the claims.[61]

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested
by law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-0264 for specific
performance and damages is one not capable of pecuniary estimation and is properly cognizable by the RTC
of Lipa City.[62] What they rather raise as grounds to question subject matter jurisdiction are the principles
of lex loci celebrationis and lex contractus, and the state of the most significant relationship rule.

The Court finds the invocation of these grounds unsound.


Lex loci celebrationis relates to the law of the place of the ceremony[63] or the law of the place where a contract
is made.[64] The doctrine of lex contractus or lex loci contractus means the law of the place where a contract is
executed or to be performed.[65] It controls the nature, construction, and validity of the contract[66] and it may
pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or
implicitly.[67] Under the state of the most significant relationship rule, to ascertain what state law to apply to a
dispute, the court should determine which state has the most substantial connection to the occurrence and
the parties. In a case involving a contract, the court should consider where the contract was made, was
negotiated, was to be performed, and the domicile, place of business, or place of incorporation of the
parties.[68] This rule takes into account several contacts and evaluates them according to their relative
importance with respect to the particular issue to be resolved.[69]

Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules
proper for the second phase, the choice of law.[70] They determine which state's law is to be applied in resolving
the substantive issues of a conflicts problem.[71] Necessarily, as the only issue in this case is that of jurisdiction,
choice-of-law rules are not only inapplicable but also not yet called for.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet
pointed out any conflict between the laws of Japan and ours. Before determining which law should apply, first
there should exist a conflict of laws situation requiring the application of the conflict of laws rules.[72] Also,
when the law of a foreign country is invoked to provide the proper rules for the solution of a case, the existence
of such law must be pleaded and proved.[73]

It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or
administrative agency, there are three alternatives open to the latter in disposing of it: (1) dismiss the case,
either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction
over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case and take into
account or apply the law of some other State or States.[74] The courts power to hear cases and controversies is
derived from the Constitution and the laws. While it may choose to recognize laws of foreign nations, the court
is not limited by foreign sovereign law short of treaties or other formal agreements, even in matters regarding
rights provided by foreign sovereigns.[75]

Neither can the other ground raised, forum non conveniens,[76] be used to deprive the trial court of its
jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules
of Court does not include it as a ground.[77] Second, whether a suit should be entertained or dismissed on the
basis of the said doctrine depends largely upon the facts of the particular case and is addressed to the sound
discretion of the trial court.[78] In this case, the RTC decided to assume jurisdiction. Third, the propriety of
dismissing a case based on this principle requires a factual determination; hence, this conflicts principle is more
properly considered a matter of defense.[79]

Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by
respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate, the trial and
appellate courts correctly denied the petitioners motion to dismiss.
WHEREFORE, premises considered, the petition for review on certiorari is DENIED.

SO ORDERED.
CHESTER DE JOYA, Petitioner,
vs.
JUDGE PLACIDO C. MARQUEZ, in his capacity as Presiding Judge of Branch 40, Manila-RTC, PEOPLE OF THE
PHILIPPINES and THE SECRETARY OF THE DEPARTMENT OF JUSTICE, Respondents.

This is a petition for certiorari and prohibition that seeks the Court to nullify and set aside the warrant of arrest
issued by respondent judge against petitioner in Criminal Case No. 03-219952 for violation of Article 315, par.
2(a) of the Revised Penal Code in relation to Presidential Decree (P.D.) No. 1689. Petitioner asserts that
respondent judge erred in finding the existence of probable cause that justifies the issuance of a warrant of
arrest against him and his co-accused.

Section 6, Rule 112 of the Revised Rules of Criminal Procedure provides:

Sec. 6. When warrant of arrest may issue. – (a) By the Regional Trial Court. – Within ten (10) days from the filing
of the complaint or information, the judge shall personally evaluate the resolution of the prosecutor and its
supporting evidence. He may immediately dismiss the case if the evidence on record clearly fails to establish
probable cause. If he finds probable cause, he shall issue a warrant of arrest, or a commitment order if the
accused has already been arrested pursuant to a warrant issued by the judge who conducted the preliminary
investigation or when the complaint or information was filed pursuant to section 7 of this Rule. In case of doubt
on the existence of probable cause, the judge may order the prosecutor to present additional evidence within
five (5) days from notice and the issuance must be resolved by the court within thirty (30) days from the filing
of the complaint or information.

x x x1

This Court finds from the records of Criminal Case No. 03-219952 the following documents to support the
motion of the prosecution for the issuance of a warrant of arrest:

1. The report of the National Bureau of Investigation to Chief State Prosecutor Jovencito R. Zuño as
regards their investigation on the complaint filed by private complainant Manuel Dy Awiten against
Mina Tan Hao @ Ma. Gracia Tan Hao and Victor Ngo y Tan for syndicated estafa. The report shows
that Hao induced Dy to invest more than a hundred million pesos in State Resources Development
Management Corporation, but when the latter’s investments fell due, the checks issued by Hao in
favor of Dy as payment for his investments were dishonored for being drawn against insufficient funds
or that the account was closed.2

2. Affidavit-Complaint of private complainant Manuel Dy Awiten.3

3. Copies of the checks issued by private complainant in favor of State Resources Corporation.4

4. Copies of the checks issued to private complainant representing the supposed return of his
investments in State Resources.5

5. Demand letter sent by private complainant to Ma. Gracia Tan Hao.6

6. Supplemental Affidavit of private complainant to include the incorporators and members of the
board of directors of State Resources Development Management Corporation as participants in the
conspiracy to commit the crime of syndicated estafa. Among those included was petitioner Chester
De Joya.7
7. Counter-Affidavits of Chester De Joya and the other accused, Ma. Gracia Hao and Danny S. Hao.

Also included in the records are the resolution issued by State Prosecutor Benny Nicdao finding probable cause
to indict petitioner and his other co-accused for syndicated estafa,8 and a copy of the Articles of Incorporation
of State Resources Development Management Corporation naming petitioner as incorporator and director of
said corporation.

This Court finds that these documents sufficiently establish the existence of probable cause as required under
Section 6, Rule 112 of the Revised Rules of Criminal Procedure. Probable cause to issue a warrant of arrest
pertains to facts and circumstances which would lead a reasonably discreet and prudent person to believe that
an offense has been committed by the person sought to be arrested. It bears remembering that "in
determining probable cause, the average man weighs facts and circumstances without resorting to the
calibrations of our technical rules of evidence of which his knowledge is nil. Rather, he relies on the calculus of
common sense of which all reasonable men have an abundance."9 Thus, the standard used for the issuance of
a warrant of arrest is less stringent than that used for establishing the guilt of the accused. As long as the
evidence presented shows a prima facie case against the accused, the trial court judge has sufficient ground
to issue a warrant of arrest against him.

The foregoing documents found in the records and examined by respondent judge tend to show that therein
private complainant was enticed to invest a large sum of money in State Resources Development Management
Corporation; that he issued several checks amounting to P114,286,086.14 in favor of the corporation; that the
corporation, in turn, issued several checks to private complainant, purportedly representing the return of his
investments; that said checks were later dishonored for insufficient funds and closed account; that petitioner
and his co-accused, being incorporators and directors of the corporation, had knowledge of its activities and
transactions. These are all that need to be shown to establish probable cause for the purpose of issuing a
warrant of arrest. It need not be shown that the accused are indeed guilty of the crime charged. That matter
should be left to the trial. It should be emphasized that before issuing warrants of arrest, judges merely
determine personally the probability, not the certainty, of guilt of an accused. Hence, judges do not conduct
a de novo hearing to determine the existence of probable cause. They just personally review the initial
determination of the prosecutor finding a probable cause to see if it is supported by substantial evidence. 10 In
case of doubt on the existence of probable cause, the Rules allow the judge to order the prosecutor to present
additional evidence. In the present case, it is notable that the resolution issued by State Prosecutor Benny
Nicdao thoroughly explains the bases for his findings that there is probable cause to charge all the accused
with violation of Article 315, par. 2(a) of the Revised Penal Code in relation to P.D. No. 1689.

The general rule is that this Court does not review the factual findings of the trial court, which include the
determination of probable cause for the issuance of warrant of arrest. It is only in exceptional cases where this
Court sets aside the conclusions of the prosecutor and the trial judge on the existence of probable cause, that
is, when it is necessary to prevent the misuse of the strong arm of the law or to protect the orderly
administration of justice. The facts obtaining in this case do not warrant the application of the
exception.lavvph!l.ne+

In addition, it may not be amiss to note that petitioner is not entitled to seek relief from this Court nor from
the trial court as he continuously refuses to surrender and submit to the court’s jurisdiction. Justice Florenz D.
Regalado explains the requisites for the exercise of jurisdiction and how the court acquires such jurisdiction,
thus:

x x x Requisites for the exercise of jurisdiction and how the court acquires such jurisdiction:
a. Jurisdiction over the plaintiff or petitioner: This is acquired by the filing of the complaint, petition or
initiatory pleading before the court by the plaintiff or petitioner.

b. Jurisdiction over the defendant or respondent: This is acquired by the voluntary appearance or
submission by the defendant or respondent to the court or by coercive process issued by the court to
him, generally by the service of summons.

c. Jurisdiction over the subject matter: This is conferred by law and, unlike jurisdiction over the parties,
cannot be conferred on the court by the voluntary act or agreement of the parties.

d. Jurisdiction over the issues of the case: This is determined and conferred by the pleadings filed in
the case by the parties, or by their agreement in a pre-trial order or stipulation, or, at times by their
implied consent as by the failure of a party to object to evidence on an issue not covered by the
pleadings, as provided in Sec. 5, Rule 10.

e. Jurisdiction over the res (or the property or thing which is the subject of the litigation). This is acquired
by the actual or constructive seizure by the court of the thing in question, thus placing it in custodia
legis, as in attachment or garnishment; or by provision of law which recognizes in the court the power
to deal with the property or subject matter within its territorial jurisdiction, as in land registration
proceedings or suits involving civil status or real property in the Philippines of a non-resident
defendant.

Justice Regalado continues to explain:

In two cases, the court acquires jurisdiction to try the case, even if it has not acquired jurisdiction over the
person of a nonresident defendant, as long as it has jurisdiction over the res, as when the action involves the
personal status of the plaintiff or property in the Philippines in which the defendant claims an interest. In such
cases, the service of summons by publication and notice to the defendant is merely to comply with due process
requirements. Under Sec. 133 of the Corporation Code, while a foreign corporation doing business in the
Philippines without a license cannot sue or intervene in any action here, it may be sued or proceeded against
before our courts or administrative tribunals.11

Again, there is no exceptional reason in this case to allow petitioner to obtain relief from the courts without
submitting to its jurisdiction. On the contrary, his continued refusal to submit to the court’s jurisdiction should
give this Court more reason to uphold the action of the respondent judge. The purpose of a warrant of arrest
is to place the accused under the custody of the law to hold him for trial of the charges against him. His evasive
stance shows an intent to circumvent and frustrate the object of this legal process. It should be remembered
that he who invokes the court’s jurisdiction must first submit to its jurisdiction.

WHEREFORE, the petition is DISMISSED.

No costs.

SO ORDERED.
BOSTON EQUITY RESOURCES, INC., Petitioner,
vs.
COURT OF APPEALS AND LOLITA G. TOLEDO, Respondents.

DECISION

PEREZ, J.:

Before the Court is a Petition for Review on Certiorari seeking to reverse and set aside: (1) the Decision,1 dated
28 February 2006 and (2) the Resolution,2 dated 1 August 2006 of the Court of Appeals in CA-G.R. SP No. 88586.
The challenged decision granted herein respondent's petition for certiorari upon a finding that the trial court
committed grave abuse of discretion in denying respondent's motion to dismiss the complaint against
her.3 Based on this finding, the Court of Appeals reversed and set aside the Orders, dated 8 November
20044 and 22 December 2004,5respectively, of the Regional Trial Court (RTC) of Manila, Branch 24.

The Facts

On 24 December 1997, petitioner filed a complaint for sum of money with a prayer for the issuance of a writ
of preliminary attachment against the spouses Manuel and Lolita Toledo.6 Herein respondent filed an Answer
dated 19 March 1998 but on 7 May 1998, she filed a Motion for Leave to Admit Amended Answer 7 in which
she alleged, among others, that her husband and co-defendant, Manuel Toledo (Manuel), is already dead.8 The
death certificate9of Manuel states "13 July 1995" as the date of death. As a result, petitioner filed a motion,
dated 5 August 1999, to require respondent to disclose the heirs of Manuel.10 In compliance with the verbal
order of the court during the 11 October 1999 hearing of the case, respondent submitted the required names
and addresses of the heirs.11Petitioner then filed a Motion for Substitution,12 dated 18 January 2000, praying
that Manuel be substituted by his children as party-defendants. It appears that this motion was granted by the
trial court in an Order dated 9 October 2000.13

Pre-trial thereafter ensued and on 18 July 2001, the trial court issued its pre-trial order containing, among
others, the dates of hearing of the case.14

The trial of the case then proceeded. Herein petitioner, as plaintiff, presented its evidence and its exhibits were
thereafter admitted.

On 26 May 2004, the reception of evidence for herein respondent was cancelled upon agreement of the
parties. On 24 September 2004, counsel for herein respondent was given a period of fifteen days within which
to file a demurrer to evidence.15 However, on 7 October 2004, respondent instead filed a motion to dismiss
the complaint, citing the following as grounds: (1) that the complaint failed to implead an indispensable party
or a real party in interest; hence, the case must be dismissed for failure to state a cause of action; (2) that the
trial court did not acquire jurisdiction over the person of Manuel pursuant to Section 5, Rule 86 of the Revised
Rules of Court; (3) that the trial court erred in ordering the substitution of the deceased Manuel by his heirs;
and (4) that the court must also dismiss the case against Lolita Toledo in accordance with Section 6, Rule 86 of
the Rules of Court.16

The trial court, in an Order dated 8 November 2004, denied the motion to dismiss for having been filed out of
time, citing Section 1, Rule 16 of the 1997 Rules of Court which states that: "Within the time for but before
filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made x x
x."17 Respondent’s motion for reconsideration of the order of denial was likewise denied on the ground that
"defendants’ attack on the jurisdiction of this Court is now barred by estoppel by laches" since respondent
failed to raise the issue despite several chances to do so.18
Aggrieved, respondent filed a petition for certiorari with the Court of Appeals alleging that the trial court
seriously erred and gravely abused its discretion in denying her motion to dismiss despite discovery, during the
trial of the case, of evidence that would constitute a ground for dismissal of the case.19

The Court of Appeals granted the petition based on the following grounds:

It is elementary that courts acquire jurisdiction over the person of the defendant x x x only when the latter
voluntarily appeared or submitted to the court or by coercive process issued by the court to him, x x x. In this
case, it is undisputed that when petitioner Boston filed the complaint on December 24, 1997, defendant
Manuel S. Toledo was already dead, x x x. Such being the case, the court a quo could not have acquired
jurisdiction over the person of defendant Manuel S. Toledo.

x x x the court a quo’s denial of respondent’s motion to dismiss was based on its finding that respondent’s
attack on the jurisdiction of the court was already barred by laches as respondent failed to raise the said ground
in its [sic] amended answer and during the pre-trial, despite her active participation in the proceedings.

However, x x x it is well-settled that issue on jurisdiction may be raised at any stage of the proceeding, even
for the first time on appeal. By timely raising the issue on jurisdiction in her motion to dismiss x x x respondent
is not estopped from raising the question on jurisdiction.

Moreover, when issue on jurisdiction was raised by respondent, the court a quo had not yet decided the case,
hence, there is no basis for the court a quo to invoke estoppel to justify its denial of the motion for
reconsideration;

It should be stressed that when the complaint was filed, defendant Manuel S. Toledo was already dead. The
complaint should have impleaded the estate of Manuel S. Toledo as defendant, not only the wife, considering
that the estate of Manuel S. Toledo is an indispensable party, which stands to be benefited or be injured in the
outcome of the case. x x x

xxxx

Respondent’s motion to dismiss the complaint should have been granted by public respondent judge as the
same was in order. Considering that the obligation of Manuel S. Toledo is solidary with another debtor, x x x,
the claim x x x should be filed against the estate of Manuel S. Toledo, in conformity with the provision of Section
6, Rule 86 of the Rules of Court, x x x.20

The Court of Appeals denied petitioner’s motion for reconsideration. Hence, this petition.

The Issues

Petitioner claims that the Court of Appeals erred in not holding that:

1. Respondent is already estopped from questioning the trial court’s jurisdiction;

2. Petitioner never failed to implead an indispensable party as the estate of Manuel is not an
indispensable party;

3. The inclusion of Manuel as party-defendant is a mere misjoinder of party not warranting the
dismissal of the case before the lower court; and
4. Since the estate of Manuel is not an indispensable party, it is not necessary that petitioner file its
claim against the estate of Manuel.

In essence, what is at issue here is the correctness of the trial court’s orders denying respondent’s motion to
dismiss.

The Ruling of the Court

We find merit in the petition.

Motion to dismiss filed out of time

To begin with, the Court of Appeals erred in granting the writ of certiorari in favor of respondent. Well settled
is the rule that the special civil action for certiorari is not the proper remedy to assail the denial by the trial
court of a motion to dismiss. The order of the trial court denying a motion to dismiss is merely interlocutory,
as it neither terminates nor finally disposes of a case and still leaves something to be done by the court before
a case is finally decided on the merits.21 Therefore, "the proper remedy in such a case is to appeal after a
decision has been rendered."22

As the Supreme Court held in Indiana Aerospace University v. Comm. on Higher Education:23

A writ of certiorari is not intended to correct every controversial interlocutory ruling; it is resorted only to
correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to lack of jurisdiction. Its
function is limited to keeping an inferior court within its jurisdiction and to relieve persons from arbitrary acts
– acts which courts or judges have no power or authority in law to perform. It is not designed to correct
erroneous findings and conclusions made by the courts. (Emphasis supplied)

Even assuming that certiorari is the proper remedy, the trial court did not commit grave abuse of discretion in
denying respondent’s motion to dismiss. It, in fact, acted correctly when it issued the questioned orders as
respondent’s motion to dismiss was filed SIX YEARS AND FIVE MONTHS AFTER SHE FILED HER AMENDED
ANSWER. This circumstance alone already warranted the outright dismissal of the motion for having been filed
in clear contravention of the express mandate of Section 1, Rule 16, of the Revised Rules of Court. Under this
provision, a motion to dismiss shall be filed within the time for but before the filing of an answer to the
complaint or pleading asserting a claim.24

More importantly, respondent’s motion to dismiss was filed after petitioner has completed the presentation
of its evidence in the trial court, giving credence to petitioner’s and the trial court’s conclusion that the filing
of the motion to dismiss was a mere ploy on the part of respondent to delay the prompt resolution of the case
against her.

Also worth mentioning is the fact that respondent’s motion to dismiss under consideration herein is not the
first motion to dismiss she filed in the trial court. It appears that she had filed an earlier motion to dismiss26 on
the sole ground of the unenforceability of petitioner’s claim under the Statute of Frauds, which motion was
denied by the trial court. More telling is the following narration of the trial court in its Order denying
respondent’s motion for reconsideration of the denial of her motion to dismiss:

As can be gleaned from the records, with the admission of plaintiff’s exhibits, reception of defendants’
evidence was set on March 31, and April 23, 2004 x x x . On motion of the defendants, the hearing on March
31, 2004 was cancelled.
On April 14, 2004, defendants sought the issuance of subpoena ad testificandum and duces tecum to one Gina
M. Madulid, to appear and testify for the defendants on April 23, 2004. Reception of defendants’ evidence was
again deferred to May 26, June 2 and June 30, 2004, x x x.

On May 13, 2004, defendants sought again the issuance of a subpoena duces tecum and ad testificandum to
the said Gina Madulid. On May 26, 2004, reception of defendants [sic] evidence was cancelled upon the
agreement of the parties. On July 28, 2004, in the absence of defendants’ witness, hearing was reset to
September 24 and October 8, 2004 x x x.

On September 24, 2004, counsel for defendants was given a period of fifteen (15) days to file a demurrer to
evidence. On October 7, 2004, defendants filed instead a Motion to Dismiss x x x.27

Respondent’s act of filing multiple motions, such as the first and earlier motion to dismiss and then the motion
to dismiss at issue here, as well as several motions for postponement, lends credibility to the position taken by
petitioner, which is shared by the trial court, that respondent is

deliberately impeding the early disposition of this case. The filing of the second motion to dismiss was,
therefore, "not only improper but also dilatory."28 Thus, the trial court, "far from deviating or straying off
course from established jurisprudence on the matter, x x x had in fact faithfully observed the law and legal
precedents in this case."29 The Court of Appeals, therefore, erred not only in entertaining respondent’s petition
for certiorari, it likewise erred in ruling that the trial court committed grave abuse of discretion when it denied
respondent’s motion to dismiss.

On whether or not respondent is estopped from


questioning the jurisdiction of the trial court

At the outset, it must be here stated that, as the succeeding discussions will demonstrate, jurisdiction over the
person of Manuel should not be an issue in this case. A protracted discourse on jurisdiction is, nevertheless,
demanded by the fact that jurisdiction has been raised as an issue from the lower court, to the Court of Appeals
and, finally, before this Court. For the sake of clarity, and in order to finally settle the controversy and fully
dispose of all the issues in this case, it was deemed imperative to resolve the issue of jurisdiction.

1. Aspects of Jurisdiction

Petitioner calls attention to the fact that respondent’s motion to dismiss questioning the trial court’s
jurisdiction was filed more than six years after her amended answer was filed. According to petitioner,
respondent had several opportunities, at various stages of the proceedings, to assail the trial court’s
jurisdiction but never did so for six straight years. Citing the doctrine laid down in the case of Tijam, et al. v.
Sibonghanoy, et al.30 petitioner claimed that respondent’s failure to raise the question of jurisdiction at an
earlier stage bars her from later questioning it, especially since she actively participated in the proceedings
conducted by the trial court.

Petitioner’s argument is misplaced, in that, it failed to consider that the concept of jurisdiction has several
aspects, namely: (1) jurisdiction over the subject matter; (2) jurisdiction over the parties; (3) jurisdiction over
the issues of the case; and (4) in cases involving property, jurisdiction over the res or the thing which is the
subject of the litigation.31

The aspect of jurisdiction which may be barred from being assailed as a result of estoppel by laches is
jurisdiction over the subject matter. Thus, in Tijam, the case relied upon by petitioner, the issue involved was
the authority of the then Court of First Instance to hear a case for the collection of a sum of money in the
amount of ₱1,908.00 which amount was, at that time, within the exclusive original jurisdiction of the municipal
courts.

In subsequent cases citing the ruling of the Court in Tijam, what was likewise at issue was the jurisdiction of
the trial court over the subject matter of the case. Accordingly, in Spouses Gonzaga v. Court of Appeals, 32 the
issue for consideration was the authority of the regional trial court to hear and decide an action for reformation
of contract and damages involving a subdivision lot, it being argued therein that jurisdiction is vested in the
Housing and Land Use Regulatory Board pursuant to PD 957 (The Subdivision and Condominium Buyers
Protective Decree). In Lee v. Presiding Judge, MTC, Legaspi City,33 petitioners argued that the respondent
municipal trial court had no jurisdiction over the complaint for ejectment because the issue of ownership was
raised in the pleadings. Finally, in People v. Casuga,34 accused-appellant claimed that the crime of grave
slander, of which she was charged, falls within the concurrent jurisdiction of municipal courts or city courts
and the then courts of first instance, and that the judgment of the court of first instance, to which she had
appealed the municipal court's conviction, should be deemed null and void for want of jurisdiction as her
appeal should have been filed with the Court of Appeals or the Supreme Court.

In all of these cases, the Supreme Court barred the attack on the jurisdiction of the respective courts concerned
over the subject matter of the case based on estoppel by laches, declaring that parties cannot be allowed to
belatedly adopt an inconsistent posture by attacking the jurisdiction of a court to which they submitted their
cause voluntarily.35

Here, what respondent was questioning in her motion to dismiss before the trial court was that court’s
jurisdiction over the person of defendant Manuel. Thus, the principle of estoppel by laches finds no application
in this case. Instead, the principles relating to jurisdiction over the person of the parties are pertinent herein.

The Rules of Court provide:

RULE 9
EFFECT OF FAILURE TO PLEAD

Section 1. Defenses and objections not pleaded. – Defenses and objections not pleaded either in a motion to
dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on
record that the court has no jurisdiction over the subject matter, that there is another action pending between
the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations,
the court shall dismiss the claim.

RULE 15
MOTIONS

Sec. 8. Omnibus motion. – Subject to the provisions of Section 1 of Rule 9, a motion attacking a pleading, order,
judgment, or proceeding shall include all objections then available, and all objections not so included shall be
deemed waived.

Based on the foregoing provisions, the "objection on jurisdictional grounds which is not waived even if not
alleged in a motion to dismiss or the answer is lack of jurisdiction over the subject matter. x x x Lack of
jurisdiction over the subject matter can always be raised anytime, even for the first time on appeal, since
jurisdictional issues cannot be waived x x x subject, however, to the principle of estoppel by laches."36

Since the defense of lack of jurisdiction over the person of a party to a case is not one of those defenses which
are not deemed waived under Section 1 of Rule 9, such defense must be invoked when an answer or a motion
to dismiss is filed in order to prevent a waiver of the defense.37 If the objection is not raised either in a motion
to dismiss or in the answer, the objection to the jurisdiction over the person of the plaintiff or the defendant
is deemed waived by virtue of the first sentence of the above-quoted Section 1 of Rule 9 of the Rules of Court.38

The Court of Appeals, therefore, erred when it made a sweeping pronouncement in its questioned decision,
stating that "issue on jurisdiction may be raised at any stage of the proceeding, even for the first time on
appeal" and that, therefore, respondent timely raised the issue in her motion to dismiss and is, consequently,
not estopped from raising the question of jurisdiction. As the question of jurisdiction involved here is that over
the person of the defendant Manuel, the same is deemed waived if not raised in the answer or a motion to
dismiss. In any case, respondent cannot claim the defense since "lack of jurisdiction over the person, being
subject to waiver, is a personal defense which can only be asserted by the party who can thereby waive it by
silence."39

2. Jurisdiction over the person of a defendant is acquired through a valid service of summons; trial court did
not acquire jurisdiction over the person of Manuel Toledo

In the first place, jurisdiction over the person of Manuel was never acquired by the trial court. A defendant is
informed of a case against him when he receives summons. "Summons is a writ by which the defendant is
notified of the action brought against him. Service of such writ is the means by which the court acquires
jurisdiction over his person."40

In the case at bar, the trial court did not acquire jurisdiction over the person of Manuel since there was no
valid service of summons upon him, precisely because he was already dead even before the complaint against
him and his wife was filed in the trial court. The issues presented in this case are similar to those in the case of
Sarsaba v. Vda. de Te.41

In Sarsaba, the NLRC rendered a decision declaring that Patricio Sereno was illegally dismissed from
employment and ordering the payment of his monetary claims. To satisfy the claim, a truck in the possession
of Sereno’s employer was levied upon by a sheriff of the NLRC, accompanied by Sereno and his lawyer, Rogelio
Sarsaba, the petitioner in that case. A complaint for recovery of motor vehicle and damages, with prayer for
the delivery of the truck pendente lite was eventually filed against Sarsaba, Sereno, the NLRC sheriff and the
NLRC by the registered owner of the truck. After his motion to dismiss was denied by the trial court, petitioner
Sarsaba filed his answer. Later on, however, he filed an omnibus motion to dismiss citing, as one of the grounds,
lack of jurisdiction over one of the principal defendants, in view of the fact that Sereno was already dead when
the complaint for recovery of possession was filed.

Although the factual milieu of the present case is not exactly similar to that of Sarsaba, one of the issues
submitted for resolution in both cases is similar: whether or not a case, where one of the named defendants
was already dead at the time of its filing, should be dismissed so that the claim may be pursued instead in the
proceedings for the settlement of the estate of the deceased defendant. The petitioner in the Sarsaba Case
claimed, as did respondent herein, that since one of the defendants died before summons was served on him,
the trial court should have dismissed the complaint against all the defendants and the claim should be filed
against the estate of the deceased defendant. The petitioner in Sarsaba, therefore, prayed that the complaint
be dismissed, not only against Sereno, but as to all the defendants, considering that the RTC did not acquire
jurisdiction over the person of Sereno.42 This is exactly the same prayer made by respondent herein in her
motion to dismiss.

The Court, in the Sarsaba Case, resolved the issue in this wise:
x x x We cannot countenance petitioner’s argument that the complaint against the other defendants should
have been dismissed, considering that the RTC never acquired jurisdiction over the person of Sereno. The
court’s failure to acquire jurisdiction over one’s person is a defense which is personal to the person claiming
it. Obviously, it is now impossible for Sereno to invoke the same in view of his death. Neither can petitioner
invoke such ground, on behalf of Sereno, so as to reap the benefit of having the case dismissed against all of
the defendants. Failure to serve summons on Sereno’s person will not be a cause for the dismissal of the
complaint against the other defendants, considering that they have been served with copies of the summons
and complaints and have long submitted their respective responsive pleadings. In fact, the other defendants
in the complaint were given the chance to raise all possible defenses and objections personal to them in their
respective motions to dismiss and their subsequent answers.43 (Emphasis supplied.)

Hence, the Supreme Court affirmed the dismissal by the trial court of the complaint against Sereno only.

Based on the foregoing pronouncements, there is no basis for dismissing the complaint against respondent
herein. Thus, as already emphasized above, the trial court correctly denied her motion to dismiss.

On whether or not the estate of Manuel

Toledo is an indispensable party

Rule 3, Section 7 of the 1997 Rules of Court states:

SEC. 7. Compulsory joinder of indispensable parties. – Parties-in-interest without whom no final determination
can be had of an action shall be joined either as plaintiffs or defendants.

An indispensable party is one who has such an interest in the controversy or subject matter of a case that a
final adjudication cannot be made in his or her absence, without injuring or affecting that interest. He or she
is a party who has not only an interest in the subject matter of the controversy, but "an interest of such nature
that a final decree cannot be made without affecting that interest or leaving the controversy in such a condition
that its final determination may be wholly inconsistent with equity and good conscience. It has also been
considered that an indispensable party is a person in whose absence there cannot be a determination between
the parties already before the court which is effective, complete or equitable." Further, an indispensable party
is one who must be included in an action before it may properly proceed.44

On the other hand, a "person is not an indispensable party if his interest in the controversy or subject matter
is separable from the interest of the other parties, so that it will not necessarily be directly or injuriously
affected by a decree which does complete justice between them. Also, a person is not an indispensable party
if his presence would merely permit complete relief between him or her and those already parties to the action,
or if he or she has no interest in the subject matter of the action." It is not a sufficient reason to declare a
person to be an indispensable party simply because his or her presence will avoid multiple litigations. 45

Applying the foregoing pronouncements to the case at bar, it is clear that the estate of Manuel is not an
indispensable party to the collection case, for the simple reason that the obligation of Manuel and his wife,
respondent herein, is solidary.

The contract between petitioner, on the one hand and respondent and respondent’s husband, on the other,
states:

FOR VALUE RECEIVED, I/We jointly and severally46 (in solemn) promise to pay BOSTON EQUITY RESOURCES,
INC. x x x the sum of PESOS: [ONE MILLION FOUR HUNDRED (₱1,400,000.00)] x x x.47
The provisions and stipulations of the contract were then followed by the respective signatures of respondent
as "MAKER" and her husband as "CO-MAKER."48 Thus, pursuant to Article 1216 of the Civil Code, petitioner
may collect the entire amount of the obligation from respondent only. The aforementioned provision states:
"The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The
demand made against one of them shall not be an obstacle to those which may subsequently be directed
against the others, so long as the debt has not been fully collected."

In other words, the collection case can proceed and the demands of petitioner can be satisfied by respondent
only, even without impleading the estate of Manuel. Consequently, the estate of Manuel is not an
indispensable party to petitioner’s complaint for sum of money.

However, the Court of Appeals, agreeing with the contention of respondent, held that the claim of petitioner
should have been filed against the estate of Manuel in accordance with Sections 5 and 6 of Rule 86 of the Rules
of Court. The aforementioned provisions provide:

SEC. 5. Claims which must be filed under the notice. If not filed, barred; exceptions. All claims for money against
the decedent, arising from contract, express or implied, whether the same be due, not due, or contingent, all
claims for funeral expenses and judgment for money against the decedent, must be filed within the time
limited in the notice; otherwise, they are barred forever, except that they may be set forth as counterclaims in
any action that the executor or administrator may bring against the claimants. x x x.

SEC. 6. Solidary obligation of decedent. Where the obligation of the decedent is solidary with another debtor,
the claim shall be filed against the decedent as if he were the only debtor, without prejudice to the right of the
estate to recover contribution from the other debtor. x x x.

The Court of Appeals erred in its interpretation of the above-quoted provisions.

In construing Section 6, Rule 87 of the old Rules of Court, the precursor of Section 6, Rule 86 of the Revised
Rules of Court, which latter provision has been retained in the present Rules of Court without any revisions,
the Supreme Court, in the case of Manila Surety & Fidelity Co., Inc. v. Villarama, et. al.,49 held:50

Construing Section 698 of the Code of Civil Procedure from whence [Section 6, Rule 87] was taken, this Court
held that where two persons are bound in solidum for the same debt and one of them dies, the whole
indebtedness can be proved against the estate of the latter, the decedent’s liability being absolute and primary;
x x x. It is evident from the foregoing that Section 6 of Rule 87 provides the procedure should the creditor
desire to go against the deceased debtor, but there is certainly nothing in the said provision making compliance
with such procedure a condition precedent before an ordinary action against the surviving solidary debtors,
should the creditor choose to demand payment from the latter, could be entertained to the extent that failure
to observe the same would deprive the court jurisdiction to take cognizance of the action against the surviving
debtors. Upon the other hand, the Civil Code expressly allows the creditor to proceed against any one of the
solidary debtors or some or all of them simultaneously. There is, therefore, nothing improper in the creditor’s
filing of an action against the surviving solidary debtors alone, instead of instituting a proceeding for the
settlement of the estate of the deceased debtor wherein his claim could be filed.

The foregoing ruling was reiterated and expounded in the later case of Philippine National Bank v.
Asuncion51where the Supreme Court pronounced:

A cursory perusal of Section 6, Rule 86 of the Revised Rules of Court reveals that nothing therein prevents a
creditor from proceeding against the surviving solidary debtors. Said provision merely sets up the procedure
in enforcing collection in case a creditor chooses to pursue his claim against the estate of the deceased solidary
debtor. The rule has been set forth that a creditor (in a solidary obligation) has the option whether to file or
not to file a claim against the estate of the solidary debtor. x x x

xxxx

It is crystal clear that Article 1216 of the New Civil Code is the applicable provision in this matter. Said provision
gives the creditor the right to "proceed against anyone of the solidary debtors or some or all of them
simultaneously." The choice is undoubtedly left to the solidary creditor to determine against whom he will
enforce collection. In case of the death of one of the solidary debtors, he (the creditor) may, if he so chooses,
proceed against the surviving solidary debtors without necessity of filing a claim in the estate of the deceased
debtors. It is not mandatory for him to have the case dismissed as against the surviving debtors and file its
claim against the estate of the deceased solidary debtor, x x x. For to require the creditor to proceed against
the estate, making it a condition precedent for any collection action against the surviving debtors to prosper,
would deprive him of his substantive rightsprovided by Article 1216 of the New Civil Code. (Emphasis supplied.)

As correctly argued by petitioner, if Section 6, Rule 86 of the Revised Rules of Court were applied literally,
Article 1216 of the New Civil Code would, in effect, be repealed since under the Rules of Court, petitioner has
no choice but to proceed against the estate of [the deceased debtor] only. Obviously, this provision diminishes
the [creditor’s] right under the New Civil Code to proceed against any one, some or all of the solidary debtors.
Such a construction is not sanctioned by principle, which is too well settled to require citation, that a
substantive law cannot be amended by a procedural rule. Otherwise stated, Section 6, Rule 86 of the Revised
Rules of Court cannot be made to prevail over Article 1216 of the New Civil Code, the former being merely
procedural, while the latter, substantive.

Based on the foregoing, the estate of Manuel is not an indispensable party and the case can proceed as against
respondent only. That petitioner opted to collect from respondent and not from the estate of Manuel is
evidenced by its opposition to respondent’s motion to dismiss asserting that the case, as against her, should
be dismissed so that petitioner can proceed against the estate of Manuel.

On whether or not the inclusion of Manuel as


party defendant is a misjoinder of party

Section 11 of Rule 3 of the Rules of Court states that "neither misjoinder nor non-joinder of parties is ground
for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on
its own initiative at any stage of the action and on such terms as are just. Any claim against a misjoined party
may be severed and proceeded with separately."

Based on the last sentence of the afore-quoted provision of law, a misjoined party must have the capacity to
sue or be sued in the event that the claim by or against the misjoined party is pursued in a separate case. In
this case, therefore, the inclusion of Manuel in the complaint cannot be considered a misjoinder, as in fact, the
action would have proceeded against him had he been alive at the time the collection case was filed by
petitioner. This being the case, the remedy provided by Section 11 of Rule 3 does not obtain here. The name
of Manuel as party-defendant cannot simply be dropped from the case. Instead, the procedure taken by the
Court in Sarsaba v. Vda. de Te,52whose facts, as mentioned earlier, resemble those of this case, should be
followed herein. There, the Supreme Court agreed with the trial court when it resolved the issue of jurisdiction
over the person of the deceased Sereno in this wise:

As correctly pointed by defendants, the Honorable Court has not acquired jurisdiction over the person of
Patricio Sereno since there was indeed no valid service of summons insofar as Patricio Sereno is concerned.
Patricio Sereno died before the summons, together with a copy of the complaint and its annexes, could be
served upon him.

However, the failure to effect service of summons unto Patricio Sereno, one of the defendants herein, does
not render the action DISMISSIBLE, considering that the three (3) other defendants, x x x, were validly served
with summons and the case with respect to the answering defendants may still proceed independently. Be it
recalled that the three (3) answering defendants have previously filed a Motion to Dismiss the Complaint which
was denied by the Court.

Hence, only the case against Patricio Sereno will be DISMISSED and the same may be filed as a claim against
the estate of Patricio Sereno, but the case with respect to the three (3) other accused [sic] will proceed.
(Emphasis supplied.)53

As a result, the case, as against Manuel, must be dismissed.

In addition, the dismissal of the case against Manuel is further warranted by Section 1 of Rule 3 of the Rules of
Court, which states that: only natural or juridical persons, or entities authorized by law may be parties in a civil
action." Applying this provision of law, the Court, in the case of Ventura v. Militante,54 held:

Parties may be either plaintiffs or defendants. x x x. In order to maintain an action in a court of justice, the
plaintiff must have an actual legal existence, that is, he, she or it must be a person in law and possessed of a
legal entity as either a natural or an artificial person, and no suit can be lawfully prosecuted save in the name
of such a person.

The rule is no different as regards party defendants. It is incumbent upon a plaintiff, when he institutes a
judicial proceeding, to name the proper party defendant to his cause of action. In a suit or proceeding in
personam of an adversary character, the court can acquire no jurisdiction for the purpose of trial or judgment
until a party defendant who actually or legally exists and is legally capable of being sued, is brought before it.
It has even been held that the question of the legal personality of a party defendant is a question of substance
going to the jurisdiction of the court and not one of procedure.

The original complaint of petitioner named the "estate of Carlos Ngo as represented by surviving spouse Ms.
Sulpicia Ventura" as the defendant.1âwphi1 Petitioner moved to dismiss the same on the ground that the
defendant as named in the complaint had no legal personality. We agree.

x x x. Considering that capacity to be sued is a correlative of the capacity to sue, to the same extent, a decedent
does not have the capacity to be sued and may not be named a party defendant in a court action. (Emphases
supplied.)

Indeed, where the defendant is neither a natural nor a juridical person or an entity authorized by law, the
complaint may be dismissed on the ground that the pleading asserting the claim states no cause of action or
for failure to state a cause of action pursuant to Section 1(g) of Rule 16 of the Rules of Court, because a
complaint cannot possibly state a cause of action against one who cannot be a party to a civil action.55

Since the proper course of action against the wrongful inclusion of Manuel as party-defendant is the dismissal
of the case as against him, thus did the trial court err when it ordered the substitution of Manuel by his heirs.
Substitution is proper only where the party to be substituted died during the pendency of the case, as expressly
provided for by Section 16, Rule 3 of the Rules of Court, which states:
Death of party;duty of counsel. – Whenever a party to a pending action dies, and the claim is not thereby
extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after such death of
the fact thereof, and to give the name and address of his legal representative or representatives. x x x

The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator x x x.

The court shall forthwith order said legal representative or representatives to appear and be substituted within
a period of thirty (30) days from notice. (Emphasis supplied.)

Here, since Manuel was already dead at the time of the filing of the complaint, the court never acquired
jurisdiction over his person and, in effect, there was no party to be substituted.

WHEREFORE, the petition is GRANTED. The Decision dated 28 February 2006 and the Resolution dated 1
August 2006 of the Court of Appeals in CA-G.R. SP No. 88586 are REVERSED and SET ASIDE. The Orders of the
Regional Trial Court dated 8 November 2004 and 22 December 2004, respectively, in Civil Case No. 97-86672,
are REINSTATED. The Regional Trial Court, Branch 24, Manila is hereby DIRECTED to proceed with the trial of
Civil Case No. 97-86672 against respondent Lolita G. Toledo only, in accordance with the above
pronouncements of the Court, and to decide the case with dispatch.

SO ORDERED.
AGG TRUCKING AND/OR ALEXANG GAEID, G.R. No. 195033

Petitioners,

- versus -

MELANIO B. YUAG,

Respondent.

In this Petition for Review on Certiorari under Rule 45 with Prayer for Issuance of Writ of Temporary and/or
Permanent Injunction, assailed is the 23 June 2010 Decision of the Court of Appeals (CA), Cagayan de Oro City,
in CA-G.R. SP No. 01854-MIN.[1] Reversing the 30 November 2006 Resolution of the National Labor Relations
Commission and reinstating, with modification, the 30 August 2006 Decision of the labor arbiter, the CA
disposed as follows:

WHEREFORE, premises considered, the instant Petition is hereby GRANTED, and the
Resolution dated November 30, 2006 is hereby REINSTATED subject to MODIFICATION, thus:

Private respondent Alex Ang Gaeid and/or AAG Trucking is hereby ORDERED to pay petitioner
Melanio B. Yuag or his heirs or assigns the following:

(1) FULL BACKWAGES, inclusive of all allowances, other benefits or their monetary equivalent
computed from the time petitioner's compensation was withheld from him starting
December 6, 2004 until the time he was employed by his new employer (Bernie Ragandang),
instead of the date of his supposed reinstatement which We no longer require as explained
above.

(2) SEPARATION PAY (in lieu of the supposed reinstatement) equivalent to one-half () month
pay for every year of service. A fraction of at least six (6) months shall be considered one (1)
whole year.

(3) TEMPERATE DAMAGES in the amount of Five Thousand Pesos (Php5,000.00) for the
financial loss suffered by the petitioner when he was abruptly dismissed as a truck driver on
December 6, 2004 (during or around the Christmas season), although the exact amount of
such damage is incapable of exact determination); and

(4) EXEMPLARY DAMAGES in the amount of Five Thousand Pesos (Php5,000.00) as a


corrective measure in order to set out an example to serve as a negative incentive or
deterrent against socially deleterious actions.
Considering that a person's wage is his/her means of livelihood i.e., equivalent to life itself,
this decision is deemed immediately executory pending appeal, should the private
respondent decide to elevate this case to the Supreme Court.

SO ORDERED.[2]

The Motion for Reconsideration filed by petitioner was denied by the CA.[3] Hence, this Petition.

The facts of the case are simple. Petitioner Alex Ang Gaeid had employed respondent Melanio Yuag as a driver
since 28 February 2002. He alleged that he had a trucking business, for which he had 41 delivery trucks driven
by 41 drivers, one of whom was respondent.[4] His clients were Busco Sugar Milling Co., Inc., operating in
Quezon, Bukidnon; and Coca-cola Bottlers Company in Davao City and Cagayan de Oro City.[5] Respondent
received his salary on commission basis of 9% of his gross delivery per trip. He was assigned to a ten-wheeler
truck and was tasked to deliver sacks of sugar from the Busco Sugar Mill to the port of Cagayan de
Oro.[6] Petitioner noticed that respondent had started incurring substantial shortages since 30 September
2004, when he allegedly had a shortage of 32 bags, equivalent to ₱48,000; followed by 50 bags, equivalent
to ₱75,000, on 11 November 2004.[7] It was also reported that he had illegally sold bags of sugar along the way
at a lower price, and that he was banned from entering the premises of the Busco Sugar Mill.[8] Petitioner asked
for an explanation from respondent who remained quiet.[9]

Alarmed at the delivery shortages, petitioner took it upon himself to monitor all his drivers, including
respondent, by instructing them to report to him their location from time to time through their mobile
phones.[10] He also required them to make their delivery trips in convoy, in order to avoid illegal sale of cargo
along the way.[11]

Respondent, along with 20 other drivers, was tasked to deliver bags of sugar from Cagayan de Oro City to Coca-
Cola Bottlers Plant in Davao City on 4 December 2004.[12] All drivers, with the exception of Yuag who could not
be reached through his cellphone, reported their location as instructed. Their reported location gave evidence
that they were indeed in convoy.[13] Afterwards, everyone, except Yuag, communicated that the delivery of
their respective cargoes had been completed.[14] The Coca-Cola Plant in Davao later reported that the delivery
had a suspiciously enormous shortage.[15]

Respondent reported to the office of the petitioner on 6 December 2004. Allegedly in a calm and polite
manner, petitioner asked respondent to explain why the latter had not contacted petitioner for two days, and
he had not gone in convoy with the other trucks, as he was told to do.[16] Respondent replied that the battery
of his cellphone had broken down.[17] Petitioner then confronted him allegedly still in a polite and
civilized manner, regarding the large shortages, but the latter did not answer.[18] Petitioner afterwards told him
to just take a rest or, in their vernacular, pahulay lang una.[19] This exchange started the dispute since
respondent construed it as a dismissal. He demanded that it be done in writing, but petitioner merely
reiterated that respondent should just take a rest in the meanwhile.[20] The former alleged that respondent
had offered to resign and demanded separation pay. At that time, petitioner could not grant the demand, as
it would entail computation which was the duty of the cashier.[21] Petitioner asked him to come back the next
day.

Instead of waiting for another day to go back to his employer, Respondent went to the Department of Labor-
Regional Arbitration Board X, that very day of the confrontation or on 6 December 2004. There he filed a
Complaint for illegal dismissal, claiming his separation pay and 13 th month pay.[22] Subsequently, after the
delivered goods to the Coca-Cola Plant were weighed on 9 December 2004, it was found out that there was a
shortage of 111 bags of sugar, equivalent to ₱166,000.[23]

Respondent argued that he was whimsically dismissed, just because he had not been able to answer his
employer's call during the time of the delivery.[24] His reason for not answering was that the battery pack of his
cellphone had broken down.[25] Allegedly enraged by that incident, his employer, petitioner herein, supposedly
shouted at him and told him, pahuway naka.[26] When he asked for a clarification, petitioner allegedly told
him, wala nay daghan istorya, pahulay na! This statement was translated by the CA thus: No more talking!
Take a rest![27] He then realized that he was being dismissed. When he asked for his separation pay, petitioner
refused.[28] Respondent thus filed a Complaint for illegal dismissal.

Ruling of the Labor Arbiter

On 30 August 2006, labor arbiter Nicodemus G. Palangan rendered his Decision sustaining respondent's
Complaint for illegal dismissal.[29] The labor arbiter made a discourse on the existence of an employer-
employee relationship between the parties. In granting the relief sought by petitioner, the labor arbiter held
as follows:

For failure on the part of the respondent to substantially prove the alleged infraction
(shortages) committed by complainant and to afford him the due process mandated by law
before he was eventually terminated, complainant's dismissal from his employment is hereby
declared illegal and the respondent is liable to reinstate him with backwages for one (1) year
but in view of the strained relationship that is now prevailing between the parties, this
Arbitration Branch finds it more equitable to grant separation pay instead equivalent to one
(1) month per year of service based on the average income for the last year of his employment
CY 2004 which is P9,974.51, as hereby computed: [30]

Thus, the labor arbiter awarded respondent separation pay and proportionate 13th month pay for 2004 and
13th month pay differential for 2003.[31]
Petitioner appealed to the NLRC, alleging that the latter erred in finding that respondent had been illegally
dismissed and that the utterance of pahulay lang una meant actual dismissal.[32] He also alleged that the
pecuniary awards of separation pay, backwages, proportionate 13th month pay and differential were
erroneous. He argued that pahulay lang una was not an act of dismissal; rather, he merely wanted to give
respondent a break, since the companys clients had lost confidence in respondent. Thus, the latter allegedly
had to wait for clients other than Busco Sugar Mill and Coca-Cola, which had banned respondent from entering
their premises.

Ruling of the NLRC

In a Resolution dated 30 November 2006,[33] the NLRC reversed the labor arbiter's ruling, holding as follows:

While the general rule in dismissal cases is that the employer has the burden to prove that
the dismissal was for just or authorized causes and after due process, said burden is
necessarily shifted to the employee if the alleged dismissal is denied by the employer, as in
this case, because a dismissal is supposedly a positive and unequivocal act by the
employer. Accordingly, it is the employee that bears the burden of proving that in fact he was
dismissed. It was then incumbent upon complainant to prove that he was in fact dismissed
from his job by individual respondent Alex V. Ang Gaeid effective December 6, 2004 when
the latter told him: Pahuway naka! (You take a rest). Sadly, he failed to discharge that
burden. Even assuming that Mr. Gaeid had the intention at that time of dismissing
complainant from his job when he uttered the said words to him, there is no proof showing
of any overt act subsequently done by Mr. Gaeid that would suggest he carried out such
intention. There is no notice of termination served to complainant. Literally construing the
remarks of Mr. Gaeid as having been dismissed from his job, complainant immediately filed
the instant complaint for illegal dismissal on the same day without first ascertaining the
veracity of the same. The how, why and the wherefore of his alleged dismissal should be
clearly demonstrated by substantial evidence. Complainant failed to do so; hence, he cannot
claim that he was illegally dismissed from employment.[34]

The NLRC further held thus:

At best, complainant should be considered on leave of absence without pay pending his new
assignment. Not having been dismissed much less illegally, complainant is not entitled to the
awarded benefits of backwages and separation pay for lack of legal and factual basis.[35]

The NLRC likewise held that the complainant was not entitled to 13th month pay, since he was paid on purely
commission basis, an exception under Presidential Decree No. 851 the law requiring employers to pay
13th month pay to their employees.[36]
Respondent moved for reconsideration,[37] in effect arguing that petitioner should not be allowed to change
the latters theory. Supposedly, the argument in the position paper of petitioner was that there was no
employer-employee relationship between them, and that he was compelled to dismiss respondent because of
the heavy losses the latter was bringing to petitioner. In this Motion for Reconsideration, respondent admitted
that his wife had received the Resolution on 12 January 2007, but that he learned of it much later, on 7
February 2007, justifying the untimely filing of the motion.[38]

The NLRC denied the Motion for Reconsideration for being filed out of time.[39] He and his counsel each
received notice of the NLRC's Resolution dated 30 November 2006, reversing the labor arbiters Decision on 11
January 2007,[40] but they only filed the motion 25 days after the period to file had already
lapsed.[41] Respondent, thus, sought recourse from the CA through a Petition for a Writ of Certiorari under Rule
65.

The CA Ruling

On 23 June 2010, brushing aside the technicality issue, the CA proceeded to resolve the substantive issues
which it deemed important, such as whether there was an employer-employee relationship between
petitioner and respondent, and whether it was correct for the NLRC to declare that respondent was not illegally
dismissed.[42] It completely reversed the NLRC and came up with the dispositive portion mentioned at the
outset.

The Issues

Petitioner is now before us citing factual errors that the CA allegedly committed, such as not appreciating
petitioner's lack of intention to dismiss respondent. These factual errors, however, are beyond this Court to
determine, especially because the records of the proceedings at the level of the labor arbiter were not attached
to the Petition. The Court is more interested in the legal issues raised by petitioner and rephrased by the Court
as follows:
I

THE COURT OF APPEALS ERRED IN REVERSING THE NLRC WITHOUT ANY FINDING OF GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION;

II

THE COURT OF APPEALS ERRED IN ENTERTAINING RESPONDENT'S PETITION


NOTWITHSTANDING THE FACT THAT HIS MOTION FOR RECONSIDERATION OF THE NLRC'S
DECISION WAS FILED OUT OF TIME;
III

THE COURT OF APPEALS ERRED IN GRANTING AWARDS BEYOND WHAT WAS PRAYED FOR IN
THE COMPLAINT SUCH AS THE AWARD OF TEMPERATE AND EXEMPLARY DAMAGES

The Court's Ruling

We find the Petition impressed with merit.

A writ of certiorari is a remedy to correct errors of jurisdiction, for which reason it must clearly show that the
public respondent has no jurisdiction to issue an order or to render a decision. Rule 65 of the Rules of Court
has instituted the petition for certiorari to correct acts of any tribunal, board or officer exercising judicial or
quasi-judicial functions with grave abuse of discretion amounting to lack or excess of jurisdiction. This remedy
serves as a check on acts, either of excess or passivity, that constitute grave abuse of discretion of a judicial or
quasi-judicial function. This Court, in San Fernando Rural Bank, Inc. v. Pampanga Omnibus Development
Corporation and Dominic G. Aquino,[43] explained thus:

Certiorari is a remedy narrow in its scope and inflexible in character. It is not a general utility
tool in the legal workshop. Certiorari will issue only to correct errors of jurisdiction and not to
correct errors of judgment. An error of judgment is one which the court may commit in the
exercise of its jurisdiction, and which error is reviewable only by an appeal. Error of jurisdiction
is one where the act complained of was issued by the court without or in excess of jurisdiction
and which error is correctible only by the extraordinary writ of certiorari. As long as the court
acts within its jurisdiction, any alleged errors committed in the exercise of its discretion will
amount to nothing more than mere errors of judgment, correctible by an appeal if the
aggrieved party raised factual and legal issues; or a petition for review under Rule 45 of the
Rules of Court if only questions of law are involved.

A cert[iorari] writ may be issued if the court or quasi-judicial body issues an order with
grave abuse of discretion amounting to excess or lack of jurisdiction. Grave abuse of discretion
implies such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason
of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to
an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all
in contemplation of law. Mere abuse of discretion is not enough. Moreover, a party is entitled
to a writ of certiorari only if there is no appeal nor any plain, speedy or adequate relief in the
ordinary course of law.

The raison detre for the rule is that when a court exercises its jurisdiction, an error
committed while so engaged does not deprive it of the jurisdiction being exercised when the
error was committed. If it did, every error committed by a court would deprive it of its
jurisdiction and every erroneous judgment would be a void judgment. In such a situation, the
administration of justice would not survive. Hence, where the issue or question involved
affects the wisdom or legal soundness of the decision not the jurisdiction of the court to
render said decision the same is beyond the province of a special civil action
for certiorari.[44](citations omitted)

Petitioner is correct in its argument that there must first be a finding on whether the NLRC committed grave
abuse of discretion and on what these acts were. In this case, the CA seemed to have forgotten that its function
in resolving a petition for certiorari was to determine whether there was grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of public respondent NLRC. The CA proceeded to review the records
and to rule on issues that were no longer disputed during the appeal to the NLRC, such as the existence of an
employer-employee relationship. The pivotal issue before the NLRC was whether petitioners telling
respondent to take a rest, or to have a break, was already a positive act of dismissing him. This issue was not
discussed by the CA.

A reading of the assailed Decision will readily reveal the patent errors of the CA. On page 11 of its Decision, it
held as follows: The NLRC likewise concluded that petitioner was not entitled to separation pay because he was
not a regular employee of private respondent, he (the petitioner) being paid on purely commission or pakyaw
basis. The CA took off from that point to give a discussion on regular employment and further held:

To Us, private respondent's advice to take a rest theory is nothing but a mere ploy to reinforce
his hypothesis that the petitioner is not a regular employee. What makes this worse is that the
NLRC bought private respondent's aforesaid theory hook, line and sinker and ruled that the
petitioner was neither dismissed from work, he (the petitioner) being considered merely on
leave of absence without pay, nor is he (the petitioner) entitled to separation pay on the
ground that he was paid on purely commission or pakyaw basis which is in legal parlance, in
effect, implies that the petitioner is not a regular employee of the private respondent, but a
mere seasonal worker or independent contractor.

It is most disturbing to see how the CA regarded labor terms paid on commission, pakyaw and seasonal worker
as one and the same. In labor law, they are different and have distinct meanings, which we do not need to
elaborate on in this Petition as they are not the issue here. It should also be remembered that a regular status
of employment is not based on how the salary is paid to an employee. An employee may be paid purely on
commission and still be considered a regular employee.[45] Moreover, a seasonal employee may also be
considered a regular employee.[46]

Further, the appreciation by the CA of the NLRC Resolution was erroneous. The fact is that the refusal by the
NLRC to grant separation pay was merely consistent with its ruling that there was no dismissal. Since
respondent was not dismissed, much less illegally dismissed, separation pay was unnecessary. The CA looked
at the issue differently and erroneously, as it held that the NLRC refused to grant the award of separation pay
because respondent had not been found to be a regular employee. The NLRC had in fact made no such
ruling. These are flagrant errors that are reversible by this

Court. They should be corrected for the sake not only of the litigants, but also of the CA, so that it would
become more circumspect in its appreciation of the records before it.

We reviewed the NLRC Resolution that reversed the LA Decision and found nothing in it that was whimsical,
unreasonable or patently violative of the law. It was the CA which erred in finding faults that were inexistent
in the NLRC Resolution.

On the issue of the propriety of entertaining the Petition for Certiorari despite the prescribed Motion for
Reconsideration with the NLRC, we find another error committed by the CA. The pertinent provisions of the
2005 Rules of Procedure of the NLRC are as follows:

Rule VII, Section 14. Motions for Reconsideration. Motions for reconsideration of any order,
resolution or decision of the Commission shall not be entertained except when based on
palpable or patent errors, provided that the motion is under oath and filed within ten (10)
calendar days from receipt of the order, resolution or decision, with proof of service that a
copy of the same has been furnished, within the reglementary period, the adverse party and
provided further, that only one such motion from the same party shall be entertained.

Rule VIII, Section 2. Finality of decisions of the Commission. (a) Finality of the decisions,
resolutions or orders of the Commission. Except as provided in Rule XI, Section 10, the
decisions, resolutions orders of the Commission/Division shall become executory after (10)
calendar days from receipt of the same.

When respondent failed to file a Motion for Reconsideration of the NLRCs 30 November 2006 Resolution within
the reglementary period, the Resolution attained finality and could no longer be modified by the Court of
Appeals. The Court has ruled as follows:

[I]t is a fundamental rule 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. Any amendment or
alteration which substantially affects a final and executory judgment is null and void for lack
of jurisdiction, including the entire proceedings held for that purpose.[47]

It cannot be argued that prescriptive periods are mere procedural rules and technicalities, which may be
brushed aside at every cry of injustice, and may be bent and broken by every appeal to pity. The Courts ruling
in Videogram Regulatory Board v. Court of Appeals finds application to the present case:

There are certain procedural rules that must remain inviolable, like those setting the periods
for perfecting an appeal or filing a petition for review, for it is doctrinally entrenched that the
right to appeal is a statutory right and one who seeks to avail of that right must comply with
the statute or rules. The rules, particularly the requirements for perfecting an appeal within
the reglementary period specified in the law, must be strictly followed as they are considered
indispensable interdictions against needless delays and for orderly discharge of judicial
business. Furthermore, the perfection of an appeal in the manner and within the period
permitted by law is not only mandatory but also jurisdictional and the failure to perfect the
appeal renders the judgment of the court final and executory. Just as a losing party has the
right to file an appeal within the prescribed period, the winning party also has the correlative
right to enjoy the finality of the resolution of his/her case.

These periods are carefully guarded and lawyers are well-advised to keep track of their
applications. After all, a denial of a petition for being time-barred is a decision on the merits.

Similarly, a motion for reconsideration filed out of time cannot reopen a final and executory judgment of the
NLRC. Untimeliness in filing motions or petitions is not a mere technical or procedural defect, as leniency
regarding this requirement will impinge on the right of the winning litigant to peace of mind resulting from the
laying to rest of the controversy.

As to the third issue, since the CA could no longer modify the NLRC Resolution, it logically follows that the
modification of the award cannot be done either. Had the Resolution not yet attained finality, the CA could
have granted some other relief, even if not specifically sought by petitioner, if such ruling is proper under the
circumstances. Rule 65 of the Rules of Court provides:
Section. 8. Proceedings after comment is filed. After the comment or other pleadings
required by the court are filed, or the time for the filing thereof has expired, the court may
hear the case or require the parties to submit memoranda. If after such hearing or filing of
memoranda or upon the expiration of the period for filing, the court finds that the allegations
of the petition are true, it shall render judgment for such relief to which the petitioner is
entitled.
However, the NLRC Resolution sought to be set aside had become final and executory 25 days before
respondent filed his Motion for Reconsideration. Thus, subsequent proceedings and modifications are not
allowed and are deemed null and void.

IN VIEW OF THE FOREGOING, the Petition is GRANTED. The assailed 23 June 2010 Decision of the Court of
Appeals and its 20 December 2010 Resolution are hereby SET ASIDE. The 30 November 2006 and 30 March
2010 Resolutions of the NLRC are AFFIRMED and sustained.

SO ORDERED.
REPUBLIC of the PHILIPPINES, represented by SOLICITOR GENERAL JOSE C. CALIDA v. MARIA LOURDES P.A.
SERENO,

G.R. No. 237428, May 11, 2018 [J. Tijam, En Banc]

DOCTRINE OF THE CASE:

Quo warranto as a remedy to oust an ineligible public official may be availed of when the subject act or
omission was committed prior to or at the time of appointment or election relating to an official’s qualifications
to hold office as to render such appointment or election invalid. Acts or omissions, even if it relates to the
qualification of integrity being a continuing requirement but nonetheless committed during the incumbency
of a validly appointed and/or validly elected official cannot be the subject of a quo warranto proceeding, but
of impeachment if the public official concerned is impeachable and the act or omission constitutes an
impeachable offense, or to disciplinary, administrative or criminal action, if otherwise.

FACTS:

From 1986 to 2006, Sereno served as a member of the faculty of the University of the Philippines-College of
Law. While being employed at the UP Law, or from October 2003 to 2006, Sereno was concurrently employed
as legal counsel of the Republic in two international arbitrations known as the PIATCO cases, and a Deputy
Commissioner of the Commissioner on Human Rights.

The Human Resources Development Office of UP (UP HRDO) certified that there was no record on Sereno’s
file of any permission to engage in limited practice of profession. Moreover, out of her 20 years of employment,
only nine (9) Statement of Assets, Liabilities, and Net Worth (SALN) were on the records of UP HRDO. In a
manifestation, she attached a copy of a tenth SALN, which she supposedly sourced from the “filing cabinets”
or “drawers of UP”. The Ombudsman likewise had no record of any SALN filed by Sereno. The JBC has certified
to the existence of one SALN. In sum, for 20 years of service, 11 SALNs were recovered.

On August 2010, Sereno was appointed as Associate Justice. On 2012, the position of Chief Justice was declared
vacant, and the JBC directed the applicants to submit documents, among which are “all previous SALNs up to
December 31, 2011” for those in the government and “SALN as of December 31, 2011” for those from the
private sector. The JBC announcement further provided that “applicants with incomplete or out-of-date
documentary requirements will not be interviewed or considered for nomination.” Sereno expressed in a letter
to JBC that since she resigned from UP Law on 2006 and became a private practitioner, she was treated as
coming from the private sector and only submitted three (3) SALNs or her SALNs from the time she became an
Associate Justice. Sereno likewise added that “considering that most of her government records in the
academe are more than 15 years old, it is reasonable to consider it infeasible to retrieve all of those files,” and
that the clearance issued by UP HRDO and CSC should be taken in her favor. There was no record that the
letter was deliberated upon. Despite this, on a report to the JBC, Sereno was said to have “complete
requirements.” On August 2012, Sereno was appointed Chief Justice.

On August 2017, an impeachment complaint was filed by Atty. Larry Gadon against Sereno, alleging that Sereno
failed to make truthful declarations in her SALNs. The House of Representatives proceeded to hear the case
for determination of probable cause, and it was said that Justice Peralta, the chairman of the JBC then, was
not made aware of the incomplete SALNs of Sereno. Other findings were made: such as pieces of jewelry
amounting to P15,000, that were not declared on her 1990 SALN, but was declared in prior years’ and
subsequent years’ SALNs, failure of her husband to sign one SALN, execution of the 1998 SALN only in 2003

On February 2018, Atty. Eligio Mallari wrote to the OSG, requesting that the latter, in representation of the
Republic, initiate a quo warranto proceeding against Sereno. The OSG, invoking the Court’s original jurisdiction
under Section 5(1), Article VIII of the Constitution in relation to the special civil action under Rule 66, the
Republic, through the OSG filed the petition for the issuance of the extraordinary writ of quo warranto to
declare as void Sereno’s appointment as CJ of the SC and to oust and altogether exclude Sereno
therefrom. [yourlawyersays]

Capistrano, Sen. De Lima, Sen. Trillianes, et. al., intervened. Sereno then filed a Motion for Inhibition against
AJ Bersamin, Peralta, Jardeleza, Tijam, and Leonardo-De Castro, imputing actual bias for having testified against
her on the impeachment hearing before the House of Representatives.

Contentions:

Office of the Solicitor General (petitioner):

OSG argues that the quo warranto is an available remedy because what is being sought is to question the
validity of her appointment, while the impeachment complaint accuses her of committing culpable violation
of the Constitution and betrayal of public trust while in office, citing Funa v. Chairman Villar, Estrada v.
Desierto and Nacionalista Party v. De Vera. OSG maintains that the phrase “may be removed from office” in
Section 2, Article XI of the Constitution means that Members of the SC may be removed through modes other
than impeachment.

OSG contends that it is seasonably filed within the one-year reglementary period under Section 11, Rule 66
since Sereno’s transgressions only came to light during the impeachment proceedings. Moreover, OSG claims
that it has an imprescriptible right to bring a quo warranto petition under the maxim nullum tempus occurit
regi (“no time runs against the king”) or prescription does not operate against the government. The State has
a continuous interest in ensuring that those who partake of its sovereign powers are qualified. Even assuming
that the one-year period is applicable to the OSG, considering that SALNs are not published, the OSG will have
no other means by which to know the disqualification.

Moreover, OSG maintains that the SC has jurisdiction, citing A.M. No. 10-4-20-SC which created a permanent
Committee on Ethics and Ethical Standards, tasked to investigate complaints involving graft and corruption
and ethical violations against members of the SC and contending that this is not a political question because
such issue may be resolved through the interpretation of the provisions of the Constitution, laws, JBC rules,
and Canons of Judicial Ethics.

OSG seeks to oust Sereno from her position as CJ on the ground that Sereno failed to show that she is a person
of proven integrity which is an indispensable qualification for membership in the Judiciary under Section 7(3),
Article VIII of the Constitution. According to the OSG, because OSG failed to fulfill the JBC requirement of filing
the complete SALNs, her integrity remains unproven. The failure to submit her SALN, which is a legal obligation,
should have disqualified Sereno from being a candidate; therefore, she has no right to hold the office. Good
faith cannot be considered as a defense since the Anti-Graft and Corrupt Practices Act (RA No. 3019) and Code
of Conduct and Ethical Standards for Public Officials and Employees (RA No. 6713) are special laws and are thus
governed by the concept of malum prohibitum, wherein malice or criminal intent is completely immaterial.
Sereno (respondent):

Sereno contends that an impeachable officer may only be ousted through impeachment, citing Section 2 of
Article XI of the Constitution, and Mayor Lecaroz v. Sandiganbayan, Cuenca v. Hon. Fernan, In Re: First
lndorsement from Hon. Gonzales, and Re: Complaint-Affidavit for Disbarment Against SAJ Antonio T.
Carpio. Sereno contends that the clear intention of the framers of the Constitution was to create an exclusive
category of public officers who can be removed only by impeachment and not otherwise. Impeachment was
chosen as the method of removing certain high-ranking government officers to shield them from harassment
suits that will prevent them from performing their functions which are vital to the continued operations of
government. Sereno further argues that the word “may” on Section 2 of Article XI only qualifies the penalty
imposable after the impeachment trial, i.e., removal from office. Sereno contends that the since the mode is
wrong, the SC has no jurisdiction.

Sereno likewise argues that the cases cited by OSG is not in all fours with the present case because the
President and the Vice President may, in fact, be removed by means other than impeachment on the basis of
Section 4, Article VII of the 1987 Constitution vesting in the Court the power to be the “sole judge” of all
contests relating to the qualifications of the President and the Vice-President. There is no such provision for
other impeachable officers. Moreover, on the rest of the cases cited by the OSG, there is no mention that quo
warranto may be allowed.

Sereno also argues that since a petition for quo warranto may be filed before the RTC, such would result to a
conundrum because a judge of lower court would have effectively exercised disciplinary power and
administrative supervision over an official of the Judiciary much higher in rank and is contrary to Sections 6
and 11, Article VIII of the Constitution which vests upon the SC disciplinary and administrative power over all
courts and the personnel thereof.

Sereno likewise posits that if a Member of the SC can be ousted through quo warranto initiated by the OSG,
the Congress’ “check” on the SC through impeachment would be rendered inutile.

Furthermore, Sereno argues that it is already time-barred. Section 11, Rule 66 provides that a petition for quo
warranto must be filed within one (1) year from the “cause of ouster” and not from the “discovery” of the
disqualification.

Moreover, Sereno contends that the Court cannot presume that she failed to file her SALNs because as a public
officer, she enjoys the presumption that her appointment to office was regular. OSG failed to overcome the
presumption created by the certifications from UP HRDO that she had been cleared of all administrative
responsibilities and charges. Her integrity is a political question which can only be decided by the JBC and the
President.

Regarding her missing SALNs, Sereno contends that the fact that SALNs are missing cannot give rise to the
inference that they are not filed. The fact that 11 SALNs were filed should give an inference to a pattern of
filing, not of non-filing.

Intervenors’ arguments:
The intervenors argue that it is not incumbent upon Sereno to prove to the JBC that she possessed the integrity
required by the Constitution; rather, the onus of determining whether or not she qualified for the post fell
upon the JBC. Moreover, submission of SALNs is not a constitutional requirement; what is only required is the
imprimatur of the JBC. The intervenors likewise contend that “qualifications” such as citizenship, age, and
experience are enforceable while “characteristics” such as competence, integrity, probity, and independence
are mere subjective considerations.

ISSUES:

Preliminary issues:

1. Whether the Court should entertain the motion for intervention


2. Whether the Court should grant the motion for the inhibition of Sereno against five Justices

Main Issues:

3. Whether the Court can assume jurisdiction and give due course to the instant petition for quo warranto.
4. Whether Sereno may be the respondent in a quo warranto proceeding notwithstanding the fact that an
impeachment complaint has already been filed with the House of Representatives.
5. Whether Sereno, who is an impeachable officer, can be the respondent in a quo warranto proceeding, i.e.,
whether the only way to remove an impeachable officer is impeachment.
6. Whether to take cognizance of the quo warranto proceeding is violative of the principle of separation of
powers
7. Whether the petition is outrightly dismissible on the ground of prescription
8. Whether the determination of a candidate’s eligibility for nomination is the sole and exclusive function of the
JBC and whether such determination. partakes of the character of a political question outside the Court’s
supervisory and review powers;
9. Whether the filing of SALN is a constitutional and statutory requirement for the position of Chief Justice.
10. If answer to ninth issue is in the affirmative, whether Sereno failed to file her SALNs as mandated by the
Constitution and required by the law and its implementing rules and regulations
11. If answer to ninth issue is in the affirmative, whether Sereno filed SALNs are not filed properly and promptly.
12. Whether Sereno failed to comply with the submission of SALNs as required by the JBC
13. If answer to the twelfth issue is in the affirmative, whether the failure to submit SALNs to the JBC voids the
nomination and appointment of Sereno as Chief Justice;
14. In case of a finding that Sereno is ineligible to hold the position of Chief Justice, whether the subsequent
nomination by the JBC and the appointment by the President cured such ineligibility.
15. Whether Sereno is a de jure or a de facto officer.

[READ: Justice Leonen’s dissenting opinion: Q&A Format]

HELD:

Anent the first issue: The intervention is improper.

Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant
therein for a certain purpose: to enable the third party to protect or preserve a right or interest that may be
affected by those proceedings. The remedy of intervention is not a matter of right but rests on the sound
discretion of the court upon compliance with the first requirement on legal interest and the second
requirement that no delay and prejudice should result. The justification of one’s “sense of patriotism and their
common desire to protect and uphold the Philippine Constitution”, and that of the Senator De Lima’s and
Trillanes’ intervention that their would-be participation in the impeachment trial as Senators-judges if the
articles of impeachment will be filed before the Senate as the impeachment court will be taken away is not
sufficient. The interest contemplated by law must be actual, substantial, material, direct and immediate, and
not simply contingent or expectant. Moreover, the petition of quo warranto is brought in the name of the
Republic. It is vested in the people, and not in any private individual or group, because disputes over title to
public office are viewed as a public question of governmental legitimacy and not merely a private quarrel
among rival claimants.

Anent the second issue: There is no basis for the Associate Justices of the Supreme Court to inhibit in the case.

It is true that a judge has both the duty of rendering a just decision and the duty of doing it in a manner
completely free from suspicion as to its fairness and as to his integrity. However, the right of a party to seek
the inhibition or disqualification of a judge who does not appear to be wholly free, disinterested, impartial and
independent in handling the case must be balanced with the latter’s sacred duty to decide cases without fear
of repression. Bias must be proven with clear and convincing evidence. Those justices who were present at the
impeachment proceedings were armed with the requisite imprimatur of the Court En Banc, given that the
Members are to testify only on matters within their personal knowledge. The mere imputation of bias or
partiality is not enough ground for inhibition, especially when the charge is without basis. There must be acts
or conduct clearly indicative of arbitrariness or prejudice before it can brand them with the stigma of bias or
partiality. Sereno’s call for inhibition has been based on speculations, or on distortions of the language, context
and meaning of the answers the Justices may have given as sworn witnesses in the proceedings before the
House.

Moreover, insinuations that the Justices of the SC are towing the line of President Duterte in entertaining
the quo warranto petition must be struck for being unfounded and for sowing seeds of mistrust and
discordance between the Court and the public. The Members of the Court are beholden to no one, except to
the sovereign Filipino people who ordained and promulgated the Constitution. It is thus inappropriate to
misrepresent that the SolGen who has supposedly met consistent litigation success before the SG shall likewise
automatically and positively be received in the present quo warranto action. As a collegial body, the Supreme
Court adjudicates without fear or favor. The best person to determine the propriety of sitting in a case rests
with the magistrate sought to be disqualified. [yourlawyersays]

Anent the third issue: A quo warranto petition is allowed against impeachable officials and SC has jurisdiction.

The SC have concurrent jurisdiction with the CA and RTC to issue the extraordinary writs, including quo
warranto. A direct invocation of the SC’s original jurisdiction to issue such writs is allowed when there are
special and important reasons therefor, and in this case, direct resort to SC is justified considering that the
action is directed against the Chief Justice. Granting that the petition is likewise of transcendental importance
and has far-reaching implications, the Court is empowered to exercise its power of judicial review. To exercise
restraint in reviewing an impeachable officer’s appointment is a clear renunciation of a judicial duty. an
outright dismissal of the petition based on speculation that Sereno will eventually be tried on impeachment is
a clear abdication of the Court’s duty to settle actual controversy squarely presented before it. Quo
warranto proceedings are essentially judicial in character – it calls for the exercise of the Supreme Court’s
constitutional duty and power to decide cases and settle actual controversies. This constitutional duty cannot
be abdicated or transferred in favor of, or in deference to, any other branch of the government including the
Congress, even as it acts as an impeachment court through the Senate.

To differentiate from impeachment, quo warranto involves a judicial determination of the eligibility or validity
of the election or appointment of a public official based on predetermined rules while impeachment is a
political process to vindicate the violation of the public’s trust. In quo warrantoproceedings referring to offices
filled by appointment, what is determined is the legality of the appointment. The title to a public office may
not be contested collaterally but only directly, by quo warranto proceedings. usurpation of a public office is
treated as a public wrong and carries with it public interest, and as such, it shall be commenced by a verified
petition brought in the name of the Republic of the Philippines through the Solicitor General or a public
prosecutor. The SolGen is given permissible latitude within his legal authority in actions for quo warranto,
circumscribed only by the national interest and the government policy on the matter at hand.

Anent the fourth issue: Simultaneous quo warranto proceeding and impeachment proceeding is not forum
shopping and is allowed.

Quo warranto and impeachment may proceed independently of each other as these remedies are distinct as
to (1) jurisdiction (2) grounds, (3) applicable rules pertaining to initiation, filing and dismissal, and (4)
limitations. Forum shopping is the act of a litigant who repetitively availed of several judicial remedies in
different courts, simultaneously or successively, all substantially founded on the same transactions and the
same essential facts and circumstances, and all raising substantially the same issues, either pending in or
already resolved adversely by some other court, to increase his chances of obtaining a favorable decision if not
in one court, then in another. The test for determining forum shopping is whether in the two (or more) cases
pending, there is identity of parties, rights or causes of action, and reliefs sought. The crux of the controversy
in this quo warranto proceedings is the determination of whether or not Sereno legally holds the Chief Justice
position to be considered as an impeachable officer in the first place. On the other hand, impeachment is for
respondent’s prosecution for certain impeachable offenses. Simply put, while Sereno’s title to hold a public
office is the issue in quo warranto proceedings, impeachment necessarily presupposes that Sereno legally
holds the public office and thus, is an impeachable officer, the only issue being whether or not she committed
impeachable offenses to warrant her removal from office.

Moreover, the reliefs sought are different. respondent in a quo warranto proceeding shall be adjudged to
cease from holding a public office, which he/she is ineligible to hold. Moreover, impeachment, a conviction for
the charges of impeachable offenses shall result to the removal of the respondent from the public office that
he/she is legally holding. It is not legally possible to impeach or remove a person from an office that he/she, in
the first place, does not and cannot legally hold or occupy.

Lastly, there can be no forum shopping because the impeachment proceedings before the House is not the
impeachment case proper, since it is only a determination of probable cause. The impeachment case is yet to
be initiated by the filing of the Articles of Impeachment before the Senate. Thus, at the moment, there is no
pending impeachment case against Sereno. The process before the House is merely inquisitorial and is merely
a means of discovering if a person may be reasonably charged with a crime.

Anent the fifth issue: Impeachment is not an exclusive remedy by which an invalidly appointed or invalidly
elected impeachable official may be removed from office.
The language of Section 2, Article XI of the Constitution does not foreclose a quo warranto action against
impeachable officers: “Section 2. The President, the Vice-President, the Members of the Supreme Court, the
Members of the Constitutional Commissions, and the Ombudsman may be removed from office on
impeachment for, and conviction of, culpable violation of the Constitution, treason, bribery, graft and
corruption, other high crimes, or betrayal of public trust.” The provision uses the permissive term “may” which
denote discretion and cannot be construed as having a mandatory effect, indicative of a mere possibility, an
opportunity, or an option. In American jurisprudence, it has been held that “the express provision for removal
by impeachment ought not to be taken as a tacit prohibition of removal by other methods when there are
other adequate reasons to account for this express provision.”

The principle in case law is that during their incumbency, impeachable officers cannot be criminally prosecuted
for an offense that carries with it the penalty of removal, and if they are required to be members of the
Philippine Bar to qualify for their positions, they cannot be charged with disbarment. The proscription does
not extend to actions assailing the public officer’s title or right to the office he or she occupies. Even the PET
Rules expressly provide for the remedy of either an election protest or a petition for quo warranto to question
the eligibility of the President and the Vice-President, both of whom are impeachable officers.

Further, that the enumeration of “impeachable offenses” is made absolute, that is, only those enumerated
offenses are treated as grounds for impeachment, is not equivalent to saying that the enumeration likewise
purport to be a complete statement of the causes of removal from office. If other causes of removal are
available, then other modes of ouster can likewise be availed. To subscribe to the view that appointments or
election of impeachable officers are outside judicial review is to cleanse their appointments or election of any
possible defect pertaining to the Constitutionally-prescribed qualifications which cannot otherwise be raised
in an impeachment proceeding. To hold otherwise is to allow an absurd situation where the appointment of
an impeachable officer cannot be questioned even when, for instance, he or she has been determined to be
of foreign nationality or, in offices where Bar membership is a qualification, when he or she fraudulently
represented to be a member of the Bar.

Anent the sixth issue: The Supreme Court’s exercise of its jurisdiction over a quo warranto petition is not
violative of the doctrine of separation of powers.

The Court’s assumption of jurisdiction over an action for quo warranto involving a person who would otherwise
be an impeachable official had it not been for a disqualification, is not violative of the core constitutional
provision that impeachment cases shall be exclusively tried and decided by the Senate. Again, the difference
between quo warranto and impeachment must be emphasized. An action for quo warranto does not try a
person’s culpability of an impeachment offense, neither does a writ of quo warranto conclusively pronounce
such culpability. The Court’s exercise of its jurisdiction over quo warranto proceedings does not preclude
Congress from enforcing its own prerogative of determining probable cause for impeachment, to craft and
transmit the Articles of Impeachment, nor will it preclude Senate from exercising its constitutionally committed
power of impeachment.

However, logic, common sense, reason, practicality and even principles of plain arithmetic bear out the
conclusion that an unqualified public official should be removed from the position immediately if indeed
Constitutional and legal requirements were not met or breached. To abdicate from resolving a legal
controversy simply because of perceived availability of another remedy, in this case impeachment, would be
to sanction the initiation of a process specifically intended to be long and arduous and compel the entire
membership of the Legislative branch to momentarily abandon their legislative duties to focus on
impeachment proceedings for the possible removal of a public official, who at the outset, may clearly be
unqualified under existing laws and case law.

For guidance, the Court demarcates that an act or omission committed prior to or at the time of appointment
or election relating to an official’s qualifications to hold office as to render such appointment or election invalid
is properly the subject of a quo warranto petition, provided that the requisites for the commencement thereof
are present. Contrariwise, acts or omissions, even if it relates to the qualification of integrity, being a continuing
requirement but nonetheless committed during the incumbency of a validly appointed and/or validly elected
official, cannot be the subject of a quo warranto proceeding, but of something else, which may either be
impeachment if the public official concerned is impeachable and the act or omission constitutes an
impeachable offense, or disciplinary, administrative or criminal action, if otherwise.

Anent the seventh issue: Prescription does not lie against the State.

The rules on quo warranto provides that “nothing contained in this Rule shall be construed to authorize an
action against a public officer or employee for his ouster from office unless the same be commenced within
one (1) year after the cause of such ouster, or the right of the petitioner to hold such office or position, arose”.
Previously, the one-year prescriptive period has been applied in cases where private individuals asserting their
right of office, unlike the instant case where no private individual claims title to the Office of the Chief Justice.
Instead, it is the government itself which commenced the present petition for quo warranto and puts in issue
the qualification of the person holding the highest position in the Judiciary.

Section 2 of Rule 66 provides that “the Solicitor General or a public prosecutor, when directed by the President
of the Philippines, or when upon complaint or otherwise he has good reason to believe that any case specified
in the preceding section can be established by proof must commence such action.” It may be stated that
ordinary statutes of limitation, civil or penal, have no application to quo warranto proceeding brought to
enforce a public right. There is no limitation or prescription of action in an action for quo warranto, neither
could there be, for the reason that it was an action by the Government and prescription could not be plead as
a defense to an action by the Government.

That prescription does not lie in this case can also be deduced from the very purpose of an action for quo
warranto. Because quo warranto serves to end a continuous usurpation, no statute of limitations applies to
the action. Needless to say, no prudent and just court would allow an unqualified person to hold public office,
much more the highest position in the Judiciary. Moreover, the Republic cannot be faulted for questioning
Sereno’s qualification· for office only upon discovery of the cause of ouster because even up to the present,
Sereno has not been candid on whether she filed the required SALNs or not. The defect on Sereno’s
appointment was therefore not discernible, but was, on the contrary, deliberately rendered obscure.

Anent the eighth issue: The Court has supervisory authority over the JBC includes ensuring that the JBC complies
with its own rules.

Section 8(1), Article VIII of the Constitution provides that “A Judicial and Bar Council is hereby created under
the supervision of the Supreme Court.” The power of supervision means “overseeing or the authority of an
officer to see to it that the subordinate officers perform their duties.” JBC’s absolute autonomy from the Court
as to place its non-action or improper· actions beyond the latter’s reach is therefore not what the Constitution
contemplates. What is more, the JBC’s duty to recommend or nominate, although calling for the exercise of
discretion, is neither absolute nor unlimited, and is not automatically equivalent to an exercise of policy
decision as to place, in wholesale, the JBC process beyond the scope of the Court’s supervisory and corrective
powers. While a certain leeway must be given to the JBC in screening aspiring magistrates, the same does not
give it an unbridled discretion to ignore Constitutional and legal requirements. Thus, the nomination by the
JBC is not accurately an exercise of policy or wisdom as to place the JBC’s actions in the same category as
political questions that the Court is barred from resolving. [yourlawyersays]

[READ: Justice Leonen’s dissenting opinion: Q&A Format]

With this, it must be emphasized that qualifications under the Constitution cannot be waived or bargained by
the JBC, and one of which is that “a Member of the Judiciary must be a person of provencompetence, integrity,
probity, and independence. “Integrity” is closely related to, or if not, approximately equated to an applicant’s
good reputation for honesty, incorruptibility, irreproachable conduct, and fidelity to sound moral and ethical
standards.” Integrity is likewise imposed by the New Code of Judicial Conduct and the Code of Professional
Responsibility. The Court has always viewed integrity with a goal of preserving the confidence of the litigants
in the Judiciary. Hence, the JBC was created in order to ensure that a member of the Supreme Court must be
a person of provencompetence, integrity, probity, and independence.

Anent the ninth issue: The filing of SALN is a constitutional and statutory requirement.

Section 17, Article XI of the Constitution states that “A public officer or employee shall, upon assumption of
office and as often thereafter as may be required by law, submit a declaration under oath of his assets,
liabilities, and net worth.” This has likewise been required by RA 3019 and RA 6713. “Failure to comply” with
the law is a violation of law, a “prima facie evidence of unexplained wealth, which may result in the dismissal
from service of the public officer.” It is a clear breach of the ethical standards set for public officials and
employees. The filing of the SALN is so important for purposes of transparency and accountability that failure
to comply with such requirement may result not only in dismissal from the public service but also in criminal
liability. Section 11 of R.A. No. 6713 even provides that non-compliance with this requirement is not only
punishable by imprisonment and/or a fine, it may also result in disqualification to hold public office.

Because the Chief Justice is a public officer, she is constitutionally and statutorily mandated to perform a
positive duty to disclose all of his assets and liabilities. According to Sereno herself in her dissenting opinion in
one case, those who accept a public office do so cum onere, or with a burden, and are considered as accepting
its burdens and obligations, together with its benefits. They thereby subject themselves to all constitutional
and legislative provisions relating thereto, and undertake to perform all the duties of their office. The public
has the right to demand the performance of those duties. More importantly, while every office in the
government service is a public trust, no position exacts a greater demand on moral righteousness and
uprightness of an individual than a seat in the Judiciary.

Noncompliance with the SALN requirement indubitably·reflects on a person’s integrity. It is not merely a trivial
or a formal requirement. The contention that the mere non-filing does not affect Sereno’s integrity does not
persuade considering that RA 6713 and RA 3019 are malum prohibitum and not malum in se. Thus, it is the
omission or commission of that act as defined by the law, and not the character or effect thereof, that
determines whether or not the provision has been violated. Malice or criminal intent is completely immaterial.

Anent the tenth issue: Sereno chronically failed to file her SALNs and thus violated the Constitution, the law,
and the Code of Judicial Conduct.
In Sereno’s 20 years of government service in UP Law, only 11 SALNs have been filed. Sereno could have easily
dispelled doubts as to the filing or nonfiling of the unaccounted SALNs by presenting them before the Court.
Yet, Sereno opted to withhold such information or such evidence, if at all, for no clear reason. The Doblada
case, invoked by Sereno, cannot be applied, because in the Doblada case, there was a letter of the head of the
personnel of the branch of the court that the missing SALN exists and was duly transmitted and received by
the OCA as the repository agency. In Sereno’s case, the missing SALNs are neither proven to be in the records
of nor was proven to have been sent to and duly received by the Ombudsman as the repository agency. The
existence of these SALNs and the fact of filing thereof were neither established by direct proof constituting
substantial evidence nor by mere inference. Moreover, the statement of the Ombudsman is categorical:
“based on records on file, there is no SALN filed by [Sereno] for calendar years 1999 to 2009 except SALN ending
December 1998.” This leads the Court to conclude that Sereno did not indeed file her SALN.

For this reason, the Republic was able to discharge its burden of proof with the certification from UP HRDO
and Ombudsman, and thus it becomes incumbent upon Sereno to discharge her burden of evidence. Further,
the burden of proof in a quo warranto proceeding is different when it is filed by the State in that the burden
rests upon the respondent.

In addition, contrary to what Sereno contends, being on leave does not exempt her from filing her SALN
because it is not tantamount to separation from government service. The fact that Sereno did not receive any
pay for the periods she was on leave does not make her a government worker “serving in an honorary capacity”
to be exempted from the SALN laws on RA 6713. [yourlawyersays]

Neither can the clearance and certification of UP HRDO be taken in favor of Sereno. During the period when
Sereno was a professor in UP, concerned authorized official/s of the Office of the President or the Ombudsman
had not yet established compliance procedures for the review of SALNs filed by officials and employees of
State Colleges and Universities, like U.P. The ministerial duty of the head of office to issue compliance order
came about only on 2006 from the CSC. As such, the U.P. HRDO could not have been expected to perform its
ministerial duty of issuing compliance orders to Sereno when such rule was not yet in existence at that time.
Moreover, the clearance are not substitutes for SALNs. The import of said clearance is limited only to clearing
Sereno of her academic and administrative responsibilities, money and property accountabilities and from
administrative charges as of the date of her resignation.

Neither can Sereno’s inclusion in the matrix of candidates with complete requirements and in the shortlist
nominated by the JBC confirm or ratify her compliance with the SALN requirement. Her inclusion in the shortlist
of candidates for the position of Chief Justice does not negate, nor supply her with the requisite proof of
integrity. She should have been disqualified at the outset. Moreover, the JBC En Banc cannot be deemed to
have considered Sereno eligible because it does not appear that Sereno’s failure to submit her SALNs was
squarely addressed by the body. Her inclusion in the shortlist of nominees and subsequent appointment to the
position do not estop the Republic or this Court from looking into her qualifications. Verily, no estoppel arises
where the representation or conduct of the party sought to be estopped is due to ignorance founded upon an
innocent mistake

Anent the eleventh issue: Sereno failed to properly and promptly file her SALNs, again in violation of the
Constitutional and statutory requirements .

Failure to file a truthful, complete and accurate SALN would likewise amount to dishonesty if the same is
attended by malicious intent to conceal the truth or to make false statements. The suspicious circumstances
include: 1996 SALN being accomplished only in 1998; 1998 SALN only filed in 2003; 1997 SALN only notarized
in 1993; 2004-2006 SALNs were not filed which were the years when she received the bulk of her fees from
PIATCO cases, 2006 SALN was later on intended to be for 2010, gross amount from PIATCO cases were not
reflected, suspicious increase of P2,700,000 in personal properties were seen in her first five months as
Associate Justice. It is therefore clear as day that Sereno failed not only in complying with the physical act of
filing, but also committed dishonesty betraying her lack of integrity, honesty and probity. The Court does not
hesitate to impose the supreme penalty of dismissal against public officials whose SALNs were found to have
contained discrepancies, inconsistencies and non-disclosures.

Anent the twelfth issue: Sereno failed to submit the required SALNs as to qualify for nomination pursuant to
the JBC rules.

The JBC required the submission of at least ten SALNs from those applicants who are incumbent Associate
Justices, absent which, the applicant ought not to have been interviewed, much less been considered for
nomination. From the minutes of the meeting of the JBC, it appeared that Sereno was singled out from the
rest of the applicants for having failed to submit a single piece of SALN for her years of service in UP Law. It is
clear that JBC did not do away with the SALN requirement, but still required substantial compliance.
Subsequently, it appeared that it was only Sereno who was not able to substantially comply with the SALN
requirement, and instead of complying, Sereno wrote a letter containing justifications why she should no
longer be required to file the SALNs: that she resigned from U.P. in 2006 and then resumed government service
only in 2009, thus her government service is not continuous; that her government records are more than 15
years old and thus infeasible to retrieve; and that U.P. cleared her of all academic and administrative
responsibilities and charges.

These justifications, however, did not obliterate the simple fact that Sereno submitted only 3 SALNs to the JBC
in her 20-year service in U.P., and that there was nary an attempt on Sereno’s part to comply. Moreover,
Sereno curiously failed to mention that she did not file several SALNs during the course of her employment in
U.P. Such failure to disclose a material fact and the concealment thereof from the JBC betrays any claim of
integrity especially from a Member of the Supreme Court. [yourlawyersays]

Indubitably, Sereno not only failed to substantially comply with the submission of the SALNs but there was no
compliance at all. Dishonesty is classified as a grave offense the penalty of which is dismissal from the service
at the first infraction. A person aspiring to public office must observe honesty, candor and faithful compliance
with the law. Nothing less is expected. Dishonesty is a malevolent act that puts serious doubt upon one’s ability
to perform his duties with the integrity and uprightness demanded of a public officer or employee. For these
reasons, the JBC should no longer have considered Sereno for interview.

Moreover, the fact that Sereno had no permit to engage in private practice while in UP, her false
representations that she was in private practice after resigning from UP when in fact she was counsel for the
government, her false claims that the clearance from UP HRDO is proof of her compliance with SALNs
requirement, her commission of tax fraud for failure to truthfully declare her income in her ITRs for the years
2007-2009, procured a brand new Toyota Land Cruiser worth at least P5,000,000, caused the hiring of Ms.
Macasaet without requisite public bidding, misused P3,000,000 of government funds for hotel accommodation
at Shangri-La Boracay as the venue of the 3rd ASEAN Chief Justices meeting, issued a TRO in Coalition of
Associations of Senior Citizens in the Philippines v. COMELECcontrary to the Supreme Court’s internal rules,
manipulated the disposition of the DOJ request to transfer the venue of the Maute cases outside of Mindanao,
ignored rulings of the Supreme Court with respect to the grant of survivorship benefits which caused undue
delay to the release of survivorship benefits to spouses of deceased judges and Justices, manipulated the
processes of the JBC to exclude then SolGen, now AJ Francis Jardeleza, by using highly confidential document
involving national security against the latter among others, all belie the fact that Sereno has integrity.

Anent the thirteenth issue: Sereno’s failure to submit to the JBC her SALNs for several years means that her
integrity was not established at the time of her application

The requirement to submit SALNs is made more emphatic when the applicant is eyeing the position of Chief
Justice. On the June 4, 2012, JBC En Banc meeting, Senator Escudero proposed the addition of the requirement
of SALN in order for the next Chief Justice to avoid what CJ Corona had gone through. Further, the failure to
submit the required SALNs means that the JBC and the public are divested of the opportunity to consider the
applicant’s fitness or propensity to commit corruption or dishonesty. In Sereno’s case, for example, the waiver
of the confidentiality of bank deposits would be practically useless for the years that she failed to submit her
SALN since the JBC cannot verify whether the same matches the entries indicated in the SALN.

Anent the fourteenth issue: Sereno’s ineligibility for lack of proven integrity cannot be cured by her nomination
and subsequent appointment as Chief Justice.

Well-settled is the rule that qualifications for public office must be possessed at the time of appointment and
assumption of office and also during the officer’s entire tenure as a continuing requirement. The voidance of
the JBC nomination as a necessary consequence of the Court’s finding that Sereno is ineligible, in the first place,
to be a candidate for the position of Chief Justice and to be nominated for said position follows as a matter of
course. The Court has ample jurisdiction to do so without the necessity of impleading the JBC as the Court can
take judicial notice of the explanations from the JBC members and the OEO. he Court, in a quo warranto
proceeding, maintains the power to issue such further judgment determining the respective rights in and to
the public office, position or franchise of all the parties to the action as justice requires.

Neither will the President’s act of appointment cause to qualify Sereno. Although the JBC is an office
constitutionally created, the participation of the President in the selection and nomination process is evident
from the composition of the JBC itself.

An appointment is essentially within the discretionary power of whomsoever it is vested, subject to the only
condition that the appointee should possess the qualifications required by law. While the Court surrenders
discretionary appointing power to the President, the exercise of such discretion is subject to the non-
negotiable requirements that the appointee is qualified and all other legal requirements are satisfied, in the
absence of which, the appointment is susceptible to attack.

Anent the fifteenth issue: Sereno is a de facto officer removable through quo warranto

The effect of a finding that a person appointed to an office is ineligible therefor is that his presumably valid
appointment will give him color of title that confers on him the status of a de facto officer. For lack of a
Constitutional qualification, Sereno is ineligible to hold the position of Chief Justice and is merely holding a
colorable right or title thereto. As such, Sereno has never attained the status of an impeachable official and
her removal from the office, other than by impeachment, is justified. The remedy, therefore, of a quo warranto
at the instance of the State is proper to oust Sereno from the appointive position of Chief
Justice. [yourlawyersays]
DISPOSITIVE PORTION:

WHEREFORE, the Petition for Quo Warranto is GRANTED.

Sereno is found DISQUALIFIED from and is hereby adjudged GUILTY of UNLAWFULLY HOLDING and EXERCISING
the OFFICE OF THE CHIEF JUSTICE. Accordingly, Sereno is OUSTED and EXCLUDED therefrom.

The position of the Chief Justice of the Supreme Court is declared vacant and the Judicial and Bar Council is
directed to commence the application and nomination process.

This Decision is immediately executory without need of further action from the Court.

Sereno is ordered to SHOW CAUSE within ten (10) days from receipt hereof why she should not be sanctioned
for violating the Code of Professional Responsibility and the Code of Judicial Conduct for transgressing the sub
judice rule and for casting aspersions and ill motives to the Members of the Supreme Court.