1. CALIFORNIA CLOTHING INC VS.

QUINONES GR NO 175822, OCT 23 2013

G.R. No. 175822 October 23, 2013

CALIFORNIA CLOTHING INC. and MICHELLE S. YBAÑEZ, Petitioners,

vs.
SHIRLEY G. QUIÑONES, Respondent.

DECISION

PERALTA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the ; Rules of Court are the Court of Appeals
Decision1 dated August 3, 2006 and Resolution2 dated November 14, 2006 in CA-G.R. CV No. 80309. The assailed
decision reversed and set aside the June 20, 2003 Decision 3 of the Regional Trial Court of Cebu City (RTC), Branch 58,
in Civil Case No. CEB-26984; while the assailed resolution denied the motion for reconsideration filed by petitioner
Michelle Ybañez (Ybañez).

The facts of the case, as culled from the records, are as follows:

On July 25, 2001, respondent Shirley G. Quiñones, a Reservation Ticketing Agent of Cebu Pacific Air in Lapu Lapu City,
went inside the Guess USA Boutique at the second floor of Robinson’s Department Store (Robinson’s) in Cebu City. She
fitted four items: two jeans, a blouse and a shorts, then decided to purchase the black jeans worth
₱2,098.00.4 Respondent allegedly paid to the cashier evidenced by a receipt 5 issued by the store.6

While she was walking through the skywalk connecting Robinson’s and Mercury Drug Store (Mercury) where she was
heading next, a Guess employee approached and informed her that she failed to pay the item she got. She, however,
insisted that she paid and showed the employee the receipt issued in her favor. 7 She then suggested that they talk about
it at the Cebu Pacific Office located at the basement of the mall. She first went to Mercury then met the Guess employees
as agreed upon.8

When she arrived at the Cebu Pacific Office, the Guess employees allegedly subjected her to humiliation in front of the
clients of Cebu Pacific and repeatedly demanded payment for the black jeans. 9 They supposedly even searched her
wallet to check how much money she had, followed by another argument. Respondent, thereafter, went home. 10

On the same day, the Guess employees allegedly gave a letter to the Director of Cebu Pacific Air narrating the incident,
but the latter refused to receive it as it did not concern the office and the same took place while respondent was off
duty.11 Another letter was allegedly prepared and was supposed to be sent to the Cebu Pacific Office in Robinson’s, but
the latter again refused to receive it.12 Respondent also claimed that the Human Resource Department (HRD) of
Robinson’s was furnished said letter and the latter in fact conducted an investigation for purposes of canceling
respondent’s Robinson’s credit card. Respondent further claimed that she was not given a copy of said damaging
letter.13 With the above experience, respondent claimed to have suffered physical anxiety, sleepless nights, mental
anguish, fright, serious apprehension, besmirched reputation, moral shock and social humiliation. 14 She thus filed the
Complaint for Damages15 before the RTC against petitioners California Clothing, Inc. (California Clothing), Excelsis
Villagonzalo (Villagonzalo), Imelda Hawayon (Hawayon) and Ybañez. She demanded the payment of moral, nominal, and
exemplary damages, plus attorney’s fees and litigation expenses. 16

In their Answer,17 petitioners and the other defendants admitted the issuance of the receipt of payment. They claimed,
however, that instead of the cashier (Hawayon) issuing the official receipt, it was the invoicer (Villagonzalo) who did it
manually. They explained that there was miscommunication between the employees at that time because prior to the
issuance of the receipt, Villagonzalo asked Hawayon " Ok na ?," and the latter replied " Ok na ," which the former believed
to mean that the item has already been paid.18 Realizing the mistake, Villagonzalo rushed outside to look for respondent
and when he saw the latter, he invited her to go back to the shop to make clarifications as to whether or not payment was
indeed made. Instead, however, of going back to the shop, respondent suggested that they meet at the Cebu Pacific
Office. Villagonzalo, Hawayon and Ybañez thus went to the agreed venue where they talked to respondent. 19 They
pointed out that it appeared in their conversation that respondent could not recall whom she gave the payment. 20 They
emphasized that they were gentle and polite in talking to respondent and it was the latter who was arrogant in answering
their questions.21 As counterclaim, petitioners and the other defendants sought the payment of moral and exemplary
damages, plus attorney’s fees and litigation expenses.22

On June 20, 2003, the RTC rendered a Decision dismissing both the complaint and counterclaim of the parties. From the
evidence presented, the trial court concluded that the petitioners and the other defendants believed in good faith that
respondent failed to make payment. Considering that no motive to fabricate a lie could be attributed to the Guess
employees, the court held that when they demanded payment from respondent, they merely exercised a right under the
honest belief that no payment was made. The RTC likewise did not find it damaging for respondent when the
confrontation took place in front of Cebu Pacific clients, because it was respondent herself who put herself in that situation
by choosing the venue for discussion. As to the letter sent to Cebu Pacific Air, the trial court also did not take it against the
Guess employees, because they merely asked for assistance and not to embarrass or humiliate respondent. In other
words, the RTC found no evidence to prove bad faith on the part of the Guess employees to warrant the award of
damages.23

On appeal, the CA reversed and set aside the RTC decision, the dispositive portion of which reads:

WHEREFORE, the instant appeal is GRANTED. The decision of the Regional Trial Court of Cebu City, Branch 58, in Civil
Case No. CEB-26984 (for: Damages) is hereby REVERSED and SET ASIDE. Defendants Michelle Ybañez and California
Clothing, Inc. are hereby ordered to pay plaintiff-appellant Shirley G. Quiñones jointly and solidarily moral damages in the
amount of Fifty Thousand Pesos (₱50,000.00) and attorney’s fees in the amount of Twenty Thousand Pesos
(₱20,000.00).

SO ORDERED.24

While agreeing with the trial court that the Guess employees were in good faith when they confronted respondent inside
the Cebu Pacific Office about the alleged non-payment, the CA, however, found preponderance of evidence showing that
they acted in bad faith in sending the demand letter to respondent’s employer. It found respondent’s possession of both
the official receipt and the subject black jeans as evidence of payment. 25 Contrary to the findings of the RTC, the CA
opined that the letter addressed to Cebu Pacific’s director was sent to respondent’s employer not merely to ask for
assistance for the collection of the disputed payment but to subject her to ridicule, humiliation and similar injury such that
she would be pressured to pay.26 Considering that Guess already started its investigation on the incident, there was a
taint of bad faith and malice when it dragged respondent’s employer who was not privy to the transaction. This is
especially true in this case since the purported letter contained not only a narrative of the incident but accusations as to
the alleged acts of respondent in trying to evade payment.27 The appellate court thus held that petitioners are guilty of
abuse of right entitling respondent to collect moral damages and attorney’s fees. Petitioner California Clothing Inc. was
made liable for its failure to exercise extraordinary diligence in the hiring and selection of its employees; while Ybañez’s
liability stemmed from her act of signing the demand letter sent to respondent’s employer. In view of Hawayon and
Villagonzalo’s good faith, however, they were exonerated from liability. 28

Ybañez moved for the reconsideration29 of the aforesaid decision, but the same was denied in the assailed November 14,
2006 CA Resolution.

Petitioners now come before the Court in this petition for review on certiorari under Rule 45 of the Rules of Court based
on the following grounds:

I.

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE LETTER SENT TO THE CEBU PACIFIC
OFFICE WAS MADE TO SUBJECT HEREIN RESPONDENT TO RIDICULE, HUMILIATION AND SIMILAR INJURY.

II.

THE HONORABLE COURT OF APPEALS ERRED IN AWARDING MORAL DAMAGES AND ATTORNEY’S FEES.30

The petition is without merit.

Respondent’s complaint against petitioners stemmed from the principle of abuse of rights provided for in the Civil Code on
the chapter of human relations. Respondent cried foul when petitioners allegedly embarrassed her when they insisted that
she did not pay for the black jeans she purchased from their shop despite the evidence of payment which is the official
receipt issued by the shop. The issuance of the receipt notwithstanding, petitioners had the right to verify from respondent
whether she indeed made payment if they had reason to believe that she did not. However, the exercise of such right is
not without limitations. Any abuse in the exercise of such right and in the performance of duty causing damage or injury to
another is actionable under the Civil Code. The Court’s pronouncement in Carpio v. Valmonte 31 is noteworthy:

In the sphere of our law on human relations, the victim of a wrongful act or omission, whether done willfully or negligently,
is not left without any remedy or recourse to obtain relief for the damage or injury he sustained. Incorporated into our civil
law are not only principles of equity but also universal moral precepts which are designed to indicate certain norms that
spring from the fountain of good conscience and which are meant to serve as guides for human conduct. First of these
fundamental precepts is the principle commonly known as "abuse of rights" under Article 19 of the Civil Code. It provides
that " Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone
his due and observe honesty and good faith."x x x 32 The elements of abuse of rights are as follows: (1) there is a legal
right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. 33
In this case, petitioners claimed that there was a miscommunication between the cashier and the invoicer leading to the
erroneous issuance of the receipt to respondent. When they realized the mistake, they made a cash count and discovered
that the amount which is equivalent to the price of the black jeans was missing. They, thus, concluded that it was
respondent who failed to make such payment. It was, therefore, within their right to verify from respondent whether she
indeed paid or not and collect from her if she did not. However, the question now is whether such right was exercised in
good faith or they went overboard giving respondent a cause of action against them.

Under the abuse of rights principle found in Article 19 of the Civil Code, a person must, in the exercise of legal right or
duty, act in good faith. He would be liable if he instead acted in bad faith, with intent to prejudice another. 34 Good faith
refers to the state of mind which is manifested by the acts of the individual concerned. It consists of the intention to
abstain from taking an unconscionable and unscrupulous advantage of another. 35 Malice or bad faith, on the other hand,
implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity. 36

Initially, there was nothing wrong with petitioners asking respondent whether she paid or not. The Guess employees were
able to talk to respondent at the Cebu Pacific Office. The confrontation started well, but it eventually turned sour when
voices were raised by both parties. As aptly held by both the RTC and the CA, such was the natural consequence of two
parties with conflicting views insisting on their respective beliefs. Considering, however, that respondent was in
possession of the item purchased from the shop, together with the official receipt of payment issued by petitioners, the
latter cannot insist that no such payment was made on the basis of a mere speculation. Their claim should have been
proven by substantial evidence in the proper forum.

It is evident from the circumstances of the case that petitioners went overboard and tried to force respondent to pay the
amount they were demanding. In the guise of asking for assistance, petitioners even sent a demand letter to respondent’s
employer not only informing it of the incident but obviously imputing bad acts on the part of
respondent.1âwphi1 Petitioners claimed that after receiving the receipt of payment and the item purchased, respondent
"was noted to hurriedly left (sic) the store." They also accused respondent that she was not completely being honest when
she was asked about the circumstances of payment, thus:

x x x After receiving the OR and the item, Ms. Gutierrez was noted to hurriedly left (sic) the store. x x x

When I asked her about to whom she gave the money, she gave out a blank expression and told me, "I can’t remember."
Then I asked her how much money she gave, she answered, "₱2,100; 2 pcs 1,000 and 1 pc 100 bill." Then I told her that
that would (sic) impossible since we have no such denomination in our cash fund at that moment. Finally, I asked her if
how much change and if she received change from the cashier, she then answered, "I don’t remember." After asking
these simple questions, I am very certain that she is not completely being honest about this. In fact, we invited her to
come to our boutique to clear these matters but she vehemently refused saying that she’s in a hurry and very busy. 37

Clearly, these statements are outrightly accusatory. Petitioners accused respondent that not only did she fail to pay for the
jeans she purchased but that she deliberately took the same without paying for it and later hurriedly left the shop to evade
payment. These accusations were made despite the issuance of the receipt of payment and the release of the item
purchased. There was, likewise, no showing that respondent had the intention to evade payment. Contrary to petitioners’
claim, respondent was not in a rush in leaving the shop or the mall. This is evidenced by the fact that the Guess
employees did not have a hard time looking for her when they realized the supposed non-payment.
It can be inferred from the foregoing that in sending the demand letter to respondent’s employer, petitioners intended not
only to ask for assistance in collecting the disputed amount but to tarnish respondent’s reputation in the eyes of her
employer. To malign respondent without substantial evidence and despite the latter’s possession of enough evidence in
her favor, is clearly impermissible. A person should not use his right unjustly or contrary to honesty and good faith,
otherwise, he opens himself to liability.38

The exercise of a right must be in accordance with the purpose for which it was established and must not be excessive or
unduly harsh.39 In this case, petitioners obviously abused their rights.

Complementing the principle of abuse of rights are the provisions of Articles 20 and 2 of the Civil Code which read: 40

Article 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter
for the same.

Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals or good
customs, or public policy shall compensate the latter for the damage.

In view of the foregoing, respondent is entitled to an award of moral damages and attorney s fees. Moral damages may be
awarded whenever the defendant s wrongful act or omission is the proximate cause of the plaintiffs physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and
similar injury in the cases specified or analogous to those provided in Article 2219 of the Civil Code. 41 Moral damages are
not a bonanza. They are given to ease the defendant s grief and suffering. They should, thus, reasonably approximate the
extent of hurt caused and the gravity of the wrong done. 42 They are awarded not to enrich the complainant but to enable
the latter to obtain means, diversions, or amusements that will serve to alleviate the moral suffering he has
undergone.43 We find that the amount of ₱50,000.00 as moral damages awarded by the CA is reasonable under the
circumstances. Considering that respondent was compelled to litigate to protect her interest, attorney s fees in the amount
of of₱20,000.00 is likewise just and proper.

.
2. ESTRADA VS ESCRITOR - AM NO. P-02-1651 AUG 3, 2003

Estrada v. Escritor Digest

Estrada v. Escritor
A.M.No. P-02-1651, August 4, 2003
Puno, J.:
Facts:

1. Respondent is the Court interpreter of RTC Branch 253 in Las Pinas City. The complainant Estrada requested for an
investigation of respondent for living with a man not her husband while she was still legally married and having borne a
child within this live-in arrangement. Estrada believed that Escritor is committing a grossly immoral act which tarnishes the
image of the judiciary, thus she should not be allowed to remain employed therein as it might appear that the court
condones her act.

2. Respondent admitted she started living with Luciano Quilapio, Jr. more than 20 years ago when her husband was still
alive but living with another woman. She likewise admitted having a son with Quilapio but denies any liability for alleged
grossly immoral conduct because, 1) She is a member of the Jehovah’s Witnesses and the Watch Tower Society, 2) That
the conjugal arrangement was in conformity with their religious beliefs, and 3) That the conjugal arrangement with
Quilapio has the approval of her congregation.

3. Escritor likewise claimed that she had executed a “Declaration of Pledging Faithfulness' in accordance with her religion
which allows members of the Jehovah’s witnesses who have been abandoned by their spouses to enter into marital
relations. The Declaration thus makes the resulting union moral and binding within the congregation all over the world
except in countries where divorce is allowed.

Held:
Escritor was therefore held not administratively liable for grossly immoral conduct. Escritor’s conjugal arrangement cannot
be penalized as she has made out a case for exemption from the law based on her fundamental right to religion. The
Court recognizes that state interests must be upheld in order that freedoms—including religious freedom—may be
enjoyed.

In the area of religious exercise as preferred freedom, however, man stands accountable to an authority higher than the
state, and so the state interest sought to be upheld must be so compelling that its violation will erode the very fabric of the
state that will also protect the freedom. In the absence of a showing that the state interest exists, man must be allowed to
subscribe to the Infinite.

Facts:

Escritor is a court interpreter since 1999 in the RTC of Las Pinas City. She has been living with Quilapio, a man who is not
her husband, for more than twenty five years and had a son with him as well. Respondent’s husband died a year before
she entered into the judiciary while Quilapio is still legally married to another woman.
Complainant Estrada requested the Judge of said RTC to investigate respondent. According to complainant, respondent
should not be allowed to remain employedtherein for it will appear as if the court allows such act.

Respondent claims that their conjugal arrangement is permitted by her religion—the Jehovah’s Witnesses and the Watch
Tower and the Bible Trace Society. They allegedly have a ‘Declaration of Pledging Faithfulness’ under the approval of
their congregation. Such a declaration is effective when legal impediments render it impossible for a couple to legalize
their union.

Issue:

Whether or Not the State could penalize respondent for such conjugal arrangement.

Held:

No. The State could not penalize respondent for she is exercising her right to freedom of religion. The free exercise of
religion is specifically articulated as one of the fundamental rights in our Constitution. As Jefferson put it, it is the most
inalienable and sacred of human rights. The State’s interest in enforcing its prohibition cannot be merely abstract or
symbolic in order to be sufficiently compelling to outweigh a free exercise claim. In the case at bar, the State has not
evinced any concrete interest in enforcing the concubinage or bigamy charges against respondent or her partner. Thus
the State’s interest only amounts to the symbolic preservation of an unenforced prohibition. Furthermore,
a distinctionbetween public and secular morality and religious morality should be kept in mind. The jurisdiction of the Court
extends only to public and secular morality.

The Court further states that our Constitution adheres the benevolent neutrality approach that gives room
for accommodation of religious exercises as required by the Free Exercise Clause. This benevolent neutrality
could allow for accommodationof morality based on religion, provided it does not offend compelling state interests.
Assuming arguendo that the OSG has proved a compelling state interest, it has to further demonstrate that the state has
used the least intrusive means possible so that the free exercise is not infringed any more than necessary to achieve the
legitimate goal of the state. Thus the conjugal arrangement cannot be penalized for it constitutes an exemption to the law
based on her right to freedom of religion.
3. PHILIPPINE CARPET MANUFACTURING CORP VS TAGYAMON - GR NO. 191475 DEC 11, 2013

G.R. No. 191475 December 11, 2013

PHILIPPINE CARPET MANUFACTURING CORPORATION, PACIFIC CARPET MANUFACTURING CORPORATION,

MR. PATRICIO LIM and MR. DAVID LIM, Petitioners,
vs.
IGNACIO B. TAGYAMON,PABLITO L. LUNA, FE B. BADA YOS, GRACE B. MARCOS, ROGELIO C. NEMIS,
ROBERTO B. ILAO, ANICIA D. DELA CRUZ and CYNTHIA L. COMANDAO, Respondents.

DECISION

PERALTA, J.:

The Case

This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Court of
Appeals (CA) Decision1 dated July 7, 2009 and Resolution2 dated February 26, 2010 in CA-G.R. SP No. 105236. The
assailed decision granted the petition for certiorari filed by respondents Ignacio B. Tagyamon (Tagyamon), Pablito I. Luna
(Luna), Fe B. Badayos (Badayos), Grace B. Marcos (Marcos), Rogelio C. Nemis (Nemis), Roberto B. Ilao (Ilao), Anicia D.
Dela Cruz (Dela Cruz), and Cynthia L. Comandao (Comandao), the dispositive portion of which reads:

WHEREFORE, the petition is GRANTED. The private respondent is hereby ordered to reinstate the petitioners with full
backwages less the amounts they received as separation pays. In case reinstatement would no longer be feasible
because the positions previously held no longer exist, the private respondent shall pay them backwages plus, in lieu of
reinstatement, separation pays equal to one (1) month pay, or one-half (1/2) month pay for every year of service,
whichever is higher. In addition, the private respondent is hereby ordered to pay the petitioners moral damages in the
amount of ₱20,000.00 each.

SO ORDERED.3

The Facts

Petitioner Philippine Carpet Manufacturing Corporation (PCMC) is a corporation registered in the Philippines engaged in
the business of manufacturing wool and yarn carpets and rugs. 4 Respondents were its regular and permanent employees,
but were affected by petitioner’s retrenchment and voluntary retirement programs.

On March 15, 2004, Tagyamon,5 Luna,6 Badayos,7 Dela Cruz,8 and Comandao9 received a uniformly worded
Memorandum of dismissal, to wit:

This is to inform you that in view of a slump in the market demand for our products due to the un-competitiveness of our
price, the company is constrained to reduce the number of its workforce. The long-term effects of September 11 and the
war in the Middle East have greatly affected the viability of our business and we are left with no recourse but to reorganize
and downsize our organizational structure.
We wish to inform you that we are implementing a retrenchment program in accordance with Article 283 of the Labor
Code of the Philippines, as amended, and its implementing rules and regulations.

In this connection, we regret to advise you that you are one of those affected by the said exercise, and your employment
shall be terminated effective at the close of working hours on April 15, 2004.

Accordingly, you shall be paid your separation pay as mandated by law. You will no longer be required to report for work
during the 30-day notice period in order to give you more time to look for alternative employment. However, you will be
paid the salary corresponding to the said period. We shall process your clearance and other documents and you may
claim the payables due you on March 31, 2004.

Thank you for your services and good luck to your future endeavors.10

As to Marcos, Ilao, and Nemis, they claimed that they were dismissed effective March 31, 2004, together with fifteen (15)
other employees on the ground of lack of market/slump in demand. 11 PCMC, however, claimed that they availed of the
company’s voluntary retirement program and, in fact, voluntarily executed their respective Deeds of Release, Waiver, and
Quitclaim.12

Claiming that they were aggrieved by PCMC’s decision to terminate their employment, respondents filed separate
complaints for illegal dismissal against PCMC, Pacific Carpet Manufacturing Corporation, Mr. Patricio Lim and Mr. David
Lim. These cases were later consolidated. Respondents primarily relied on the Supreme Court’s decision in Philippine
Carpet Employees Association (PHILCEA) v. Hon. Sto. Tomas (Philcea case), 13 as to the validity of the company’s
retrenchment program. They further explained that PCMC did not, in fact, suffer losses shown by its acts prior to and
subsequent to their termination.14 They also insisted that their acceptance of separation pay and signing of quitclaim is not
a bar to the pursuit of illegal dismissal case.15

PCMC, for its part, defended its decision to terminate the services of respondents being a necessary management
prerogative. It pointed out that as an employer, it had no obligation to keep in its employ more workers than are necessary
for the operation of his business. Thus, there was an authorized cause for dismissal. Petitioners also stressed that
respondents belatedly filed their complaint as they allowed almost three years to pass making the principle of laches
applicable. Considering that respondents accepted their separation pay and voluntarily executed deeds of release, waiver
and quitclaim, PCMC invoked the principle of estoppel on the part of respondents to question their separation from the
service. Finally, as to Marcos, Ilao and Nemis, PCMC emphasized that they were not dismissed from employment, but in
fact they voluntarily retired from employment to take advantage of the company’s program. 16

On August 23, 2007, Labor Arbiter (LA) Donato G. Quinto, Jr. rendered a Decision dismissing the complaint for lack of
merit.17 The LA found no flaw in respondents’ termination as they voluntarily opted to retire and were subsequently re-
employed on a contractual basis then regularized, terminated from employment and were paid separation benefits. 18 In
view of respondents’ belated filing of the complaint, the LA concluded that such action is a mere afterthought designed
primarily for respondents to collect more money, taking advantage of the 2006 Supreme Court decision. 19
On appeal, the National Labor Relations Commission (NLRC) sustained the LA decision.20 In addition to the LA
ratiocination, the NLRC emphasized the application of the principle of laches for respondents’ inaction for an
unreasonable period.

Still undaunted, respondents elevated the matter to the CA in a petition for certiorari. In reversing the earlier decisions of
the LA and the NLRC, the CA refused to apply the principle of laches, because the case was instituted prior to the
expiration of the prescriptive period set by law which is four years. It stressed that said principle cannot be invoked earlier
than the expiration of the prescriptive period.21 Citing the Court’s decision in the Philcea case, the CA applied the doctrine
of stare decisis, in view of the similar factual circumstances of the cases. As to Ilao, Nemis and Marcos, while
acknowledging their voluntary resignation, the CA found the same not a bar to the illegal dismissal case because they did
so on the mistaken belief that PCMC was losing money. 22 With the foregoing findings, the CA ordered that respondents
be reinstated with full backwages less the amounts they received as separation pay. In case of impossibility of
reinstatement, the CA ordered PCMC to pay respondents backwages and in lieu of reinstatement, separation pay equal to
one month pay or ½ month pay for every year of service whichever is higher, plus moral damages. 23

The Issues

Aggrieved, petitioners come before the Court in this petition for review on certiorari based on this ground, to wit:

IN RENDERING ITS DISPUTED DECISION AND RESOLUTION, THE COURT A QUO HAS DECIDED A QUESTION OF
SUBSTANCE NOT IN ACCORD WITH LAW AND/OR ESTABLISHED JURISPRUDENCE.

a) Res Judicata should not be followed if to follow it is to perpetuate error (Philippine Trust Co., and Smith Bell & Co. vs.
Mitchell, 59 Phil. 30, 36 (1933). The (Supreme) Court is not precluded from rectifying errors of judgment if blind and
stubborn adherence to the doctrine of immutability of final judgments would involve the sacrifice of justice for technicality
(Heirs of Maura So vs. Obliosca, G.R. No. 147082, January 28, 2008, 542 SCRA 406)

b) Not all waivers and quitclaims are invalid as against public policy. Waivers that represent a voluntary and reasonable
settlement of the laborer’s claims are legitimate and should be respected by the Court as the law between the parties
(Gamogamo vs. PNOC Shipping and Transport Corp., G.R. No. 141707, May 2, 2002; Alcasero vs. NLRC, 288 SCRA
129) Where the persons making the waiver has done so voluntarily, with a full understanding thereof, and the
consideration for the quitclaim is credible and reasonable, the transaction must be recognized as valid and binding
undertaking (Periquet vs. NLRC, 186 SCRA 724 [1990]; Magsalin vs. Coca Cola Bottlers Phils., Inc. vs. National
Organization of Working Men (N.O.W.M.], G.R. No. 148492, May 2, 2003).24

Petitioners contend that the Philcea case decided by this Court and relied upon by the CA in the assailed decision was
based on erroneous factual findings, inapplicable financial statement, as well as erroneous analysis of such financial
statements.25 They, thus, implore the Court to revisit the cited case in order to dispense with substantial justice.26 They
explain that the Court made conclusions based on erroneous information. Petitioners also insist that the doctrines of res
judicata and law of the case are not applicable, considering that this case does not involve the same parties as
the Philcea case.27 They likewise point out that not all respondents were involuntarily separated on the ground of
redundancy as some of them voluntarily availed of the company’s Voluntary Separation Program. 28They further contend
that respondents are guilty not only of laches but also of estoppel in view of their inaction for an unreasonable length of
time to assail the alleged illegal dismissal and in voluntarily executing a release, quitclaim and waiver.29

The Court’s Ruling

Laches

Laches has been defined as the failure or neglect for an unreasonable and unexplained length of time to do that which by
exercising due diligence, could or should have been done earlier, thus, giving rise to a presumption that the party entitled
to assert it either has abandoned or declined to assert it.30 It has been repeatedly31 held by the Court that:

x x x Laches is a doctrine in equity while prescription is based on law. Our courts are basically courts of law not courts of
equity. Thus, laches cannot be invoked to resist the enforcement of an existing legal right. x x x Courts exercising equity
jurisdiction are bound by rules of law and have no arbitrary discretion to disregard them. In Zabat Jr. v. Court of Appeals x
x x, this Court was more emphatic in upholding the rules of procedure. We said therein:

As for equity which has been aptly described as a "justice outside legality," this is applied only in the absence of, and
never against, statutory law or, as in this case, judicial rules of procedure. Aequetas nunguam contravenit legis. The
pertinent positive rules being present here, they should preempt and prevail over all abstract arguments based only on
equity.

Thus, where the claim was filed within the [four-year] statutory period, recovery therefore cannot be barred by laches.
Courts should never apply the doctrine of laches earlier than the expiration of time limited for the commencement of
actions at law."32

An action for reinstatement by reason of illegal dismissal is one based on an injury to the complainants’ rights which
should be brought within four years from the time of their dismissal pursuant to Article 1146 33 of the Civil Code.
Respondents’ complaint filed almost 3 years after their alleged illegal dismissal was still well within the prescriptive period.
Laches cannot, therefore, be invoked yet.34 To be sure, laches may be applied only upon the most convincing evidence of
deliberate inaction, for the rights of laborers are protected under the social justice provisions of the Constitution and under
the Civil Code.35

Stare Decisis

The main issue sought to be determined in this case is the validity of respondents’ dismissal from employment. Petitioners
contend that they either voluntarily retired from the service or terminated from employment based on an authorized cause.
The LA and the NLRC are one in saying that the dismissal was legal. The CA, however, no longer discussed the validity
of the ground of termination. Rather, it applied the Court’s decision in the Philcea case where the same ground was
thoroughly discussed. In other words, the appellate court applied the doctrine of stare decisis and reached the same
conclusion as the earlier case.

Under the doctrine of stare decisis, when a court has laid down a principle of law as applicable to a certain state of facts, it
will adhere to that principle and apply it to all future cases in which the facts are substantially the same, even though the
parties may be different.36 Where the facts are essentially different, however, stare decisis does not apply, for a perfectly
sound principle as applied to one set of facts might be entirely inappropriate when a factual variant is introduced. 37

The question, therefore, is whether the factual circumstances of this present case are substantially the same as
the Philcea case.

We answer in the affirmative.

This case and the Philcea case involve the same period which is March to April 2004; the issuance of Memorandum to
employees informing them of the implementation of the cost reduction program; the implementation of the voluntary
retirement program and retrenchment program, except that this case involves different employees; the execution of deeds
of release, waiver, and quitclaim, and the acceptance of separation pay by the affected employees.

The illegality of the basis of the implementation of both voluntary retirement and retrenchment programs of petitioners had
been thoroughly ruled upon by the Court in the Philcea case. It discussed the requisites of both retrenchment and
redundancy as authorized causes of termination and that petitioners failed to substantiate them. In ascertaining the bases
of the termination of employees, it took into consideration petitioners’ claim of business losses; the purchase of machinery
and equipment after the termination, the declaration of cash dividends to stockholders, the hiring of 100 new employees
after the retrenchment, and the authorization of full blast overtime work for six hours daily. These, said the Court, are
inconsistent with petitioners’ claim that there was a slump in the demand for its products which compelled them to
implement the termination programs. In arriving at its conclusions, the Court took note of petitioners’ net sales, gross and
net profits, as well as net income. The Court, thus, reached the conclusion that the retrenchment effected by PCMC is
invalid due to a substantive defect. We quote hereunder the Court’s pronouncement in the Philcea case, to wit:

Respondents failed to adduce clear and convincing evidence to prove the confluence of the essential requisites for a valid
retrenchment of its employees. We believe that respondents acted in bad faith in terminating the employment of the
members of petitioner Union.

Contrary to the claim of respondents that the Corporation was experiencing business losses, respondent Corporation, in
fact, amassed substantial earnings from 1999 to 2003. It found no need to appropriate its retained earnings except on
March 23, 2001, when it appropriated ₱60,000,000.00 to increase production capacity. x x x

xxxx

The evidence on record belies the ₱22,820,151.00 net income loss in 2004 as projected by the SOLE. On March 29,
2004, the Board of Directors approved the appropriation of ₱20,000,000.00 to purchase machinery to improve its facilities,
and declared cash dividends to stockholders at ₱30.00 per share. x x x

xxxx

It bears stressing that the appropriation of ₱20,000,000.00 by the respondent Corporation on September 16, 2004 was
made barely five months after the 77 Union members were dismissed on the ground that respondent Corporation was
suffering from "chronic depression." Cash dividends were likewise declared on March 29, 2004, barely two weeks after it
implemented its "retrenchment program."

If respondent Corporation were to be believed that it had to retrench employees due to the debilitating slump in demand
for its products resulting in severe losses, how could it justify the purchase of ₱20,000,000.00 worth of machinery and
equipment? There is likewise no justification for the hiring of more than 100 new employees, more than the number of
those who were retrenched, as well as the order authorizing full blast overtime work for six hours daily. All these are
inconsistent with the intransigent claim that respondent Corporation was impelled to retrench its employees precisely
because of low demand for its products and other external causes.

xxxx

That respondents acted in bad faith in retrenching the 77 members of petitioner is buttressed by the fact that Diaz issued
his Memorandum announcing the cost-reduction program on March 9, 2004, after receipt of the February 10, 2004 letter
of the Union president which included the proposal for additional benefits and wage increases to be incorporated in the
CBA for the ensuing year. Petitioner and its members had no inkling, before February 10, 2004, that respondent
Corporation would terminate their employment. Moreover, respondent Corporation failed to exhaust all other means to
avoid further losses without retrenching its employees, such as utilizing the latter's respective forced vacation leaves.
Respondents also failed to use fair and reasonable criteria in implementing the retrenchment program, and instead chose
to retrench 77 of the members of petitioner out of the dismissed 88 employees. Worse, respondent Corporation hired new
employees and even rehired the others who had been "retrenched."

As shown by the SGV & Co. Audit Report, as of year end December 31, 2003, respondent Corporation increased its net
sales by more than ₱8,000,000.00. Respondents failed to prove that there was a drastic or severe decrease in the
product sales or that it suffered severe business losses within an interval of three (3) months from January 2004 to March
9, 2004 when Diaz issued said Memorandum. Such claim of a depressed market as of March 9, 2004 was only a pretext
to retaliate against petitioner Union and thereby frustrate its demands for more monetary benefits and, at the same time,
justify the dismissal of the 77 Union members.

xxxx

In contrast, in this case, the retrenchment effected by respondent Corporation is invalid due to a substantive defect, non-
compliance with the substantial requirements to effect a valid retrenchment; it necessarily follows that the termination of
the employment of petitioner Union's members on such ground is, likewise, illegal. As such, they (petitioner Union's
members) are entitled to reinstatement with full backwages.38

We find no reason to depart from the above conclusions which are based on the Court’s examination of the evidence
presented by the parties therein. As the respondents here were similarly situated as the union members in
the Philcea case, and considering that the questioned dismissal from the service was based on the same grounds under
the same circumstances, there is no need to relitigate the issues presented herein. In short, we adopt the Court’s earlier
findings that there was no valid ground to terminate the employees.
A closer look at petitioners’ arguments would show that they want the Court to re-examine our decision in
the Philcea case allegedly on the ground that the conclusions therein were based on erroneous interpretation of the
evidence presented.

Indeed, in Abaria v. National Labor Relations Commission,39 although the Court was confronted with the same issue of
the legality of a strike that has already been determined in a previous case, the Court refused to apply the doctrine
of stare decisis insofar as the award of backwages was concerned because of the clear erroneous application of the law.
We held therein that the Court abandons or overrules precedents whenever it realizes that it erred in the prior
decision.40 The Court’s pronouncement in that case is instructive:

The doctrine though is not cast in stone for upon a showing that circumstances attendant in a particular case override the
great benefits derived by our judicial system from the doctrine of stare decisis, the Court is justified in setting it aside. For
the Court, as the highest court of the land, may be guided but is not controlled by precedent. Thus, the Court, especially
with a new membership, is not obliged to follow blindly a particular decision that it determines, after re-examination, to call
for a rectification.41

The Abaria case, however, is not applicable in this case.1âwphi1 There is no reason to abandon the Court’s ruling in
the Philcea case.

Do we apply the aforesaid decision to all the respondents herein? Again, we answer in the affirmative.

Just like the union members in the Philcea case, respondents Tagyamon, Luna, Badayos, Dela Cruz, and Comandao
received similarly worded memorandum of dismissal effective April 15, 2004 based on the same ground of slump in the
market demand for the company’s products. As such, they are similarly situated in all aspects as the union members. With
respect to respondents Marcos, Nemis and Ilao, although they applied for voluntary retirement, the same was not
accepted by petitioner. Instead, it issued notice of termination dated March 6, 2004 to these same employees. 42 And while
it is true that petitioner paid them separation pay, the payment was in the nature of separation and not retirement pay. In
other words, payment was made because of the implementation of the retrenchment program and not because of
retirement.43 As their application for availing of the company’s voluntary retirement program was based on the wrong
premise, the intent to retire was not clearly established, or rather that the retirement is involuntary. Thus, they shall be
considered discharged from employment.44 Consequently, they shall be treated as if they are in the same footing as the
other respondents herein and the union members in the Philcea case.

Waivers, Releases and Quitclaims

"As a rule, deeds of release and quitclaim cannot bar employees from demanding benefits to which they are legally
entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to
estoppel."45 To excuse respondents from complying with the terms of their waivers, they must locate their case within any
of three narrow grounds: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the
employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public
policy, morals, or good customs or prejudicial to a third person with a right recognized by law. 46The instant case falls
under the first situation.
As the ground for termination of employment was illegal, the quitclaims are deemed illegal as the employees’ consent had
been vitiated by mistake or fraud. The law looks with disfavor upon quitclaims and releases by employees pressured into
signing by unscrupulous employers minded to evade legal responsibilities. 47 The circumstances show that petitioner’s
misrepresentation led its employees, specifically respondents herein, to believe that the company was suffering losses
which necessitated the implementation of the voluntary retirement and retrenchment programs, and eventually the
execution of the deeds of release, waiver and quitclaim.48

It can safely be concluded that economic necessity constrained respondents to accept petitioners’ monetary offer and sign
the deeds of release, waiver and quitclaim. That respondents are supervisors and not rank-and-file employees does not
make them less susceptible to financial offers, faced as they were with the prospect of unemployment. The Court has
allowed supervisory employees to seek payment of benefits and a manager to sue for illegal dismissal even though, for a
consideration, they executed deeds of quitclaims releasing their employers from liability. 49

x x x There is no nexus between intelligence, or even the position which the employee held in the company when it
concerns the pressure which the employer may exert upon the free will of the employee who is asked to sign a release
and quitclaim. A lowly employee or a sales manager, as in the present case, who is confronted with the same dilemma of
whether [to sign] a release and quitclaim and accept what the company offers them, or [to refuse] to sign and walk out
without receiving anything, may do succumb to the same pressure, being very well aware that it is going to take quite a
while before he can recover whatever he is entitled to, because it is only after a protracted legal battle starting from the
labor arbiter level, all the way to this Court, can he receive anything at all. The Court understands that such a risk of not
receiving anything whatsoever, coupled with the probability of not immediately getting any gainful employment or means
of livelihood in the meantime, constitutes enough pressure upon anyone who is asked to sign a release and quitclaim in
exchange of some amount of money which may be way below what he may be entitled to based on company practice and
policy or by law.50

The amounts already received by respondents as consideration for signing the releases and quitclaims should be
deducted from their respective monetary awards.51

WHEREFORE, premises considered, the petition is hereby DENIED. The Court of Appeals Decision dated July 7, 2009
and Resolution dated February 26, 2010 in CA-G.R. SP No. 105236 are AFFIRMED.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice
4. CABAOBAS, ET AL VS PEPSI-COLA PRODUCTS, PHILS. INC. - GR NO. 176908, MARCH 25, 2015

G.R. No. 176908

PURISIMO M. CABA OBAS, EXUPERIO C. MOLINA, GILBERTO V. OPINION, VICENTE R. LAURON, RAMON M. DE
PAZ, JR., ZACARIAS E. CARBO, JULITO G. ABARRACOSO, DOMINGO B. GLORIA, and FRANCISCO P.
CUMPIO, Petitioners,
vs.
PEPSI-COLA PRODUCTS, PHILIPPINES, INC., Respondents.

RESOLUTION

PERALTA, J.:

For resolution is petitioners' Motion for Reconsideration of the Court's Decision dated March 25, 2015 with Motion to Refer
Case to the [Court] En Banc, stating that:

WITH ALL DUE RESPECT, THIS MATTER IS PROPER FOR RESOLUTION BY THIS HONORABLE COURT, EN
BANC.1

WITH ALL DUE RESPECT, THIS CASE HAS TO BE DECIDED ON THE BASIS OF ITS OWN PECULIAR FACTUAL
SETTING AND NOT ON THE BASIS OF THE FACTS PROVED AND EXISTING IN THE CASE OF MOLON.2

RESPONDENT FAILED TO PROVE COMPLIANCE WITH ALL OF THE REQUISITES OF A VALID RETRENCHMENT
PROGRAM AND THE DECISIONS OF THE HONORABLE COURT OF APPEALS AND NLRC ARE BEREFT OF ANY
DISCUSSION OR CONCLUSION THAT RESPONDENT COMPLIED WITH THE THIRD, FOURTH AND FIFTH
REQUISITES.3

Petitioners contend that the principle of stare decisis is not applicable becaifse the factual circumstances of this case and
those in the case of PepsiCo/ a Products, Inc. v. Molon,4are divergent. According to petitioners, records in Molon show
that both the Court of Appeals (CA) and the National Labor Relations Commission (NLRC) had already determined that
Pepsi complied with the requirements of substantial loss and due notice to both the DOLE and the workers to be
retrenched, and that the requisite separation pay had already been paid as evidenced by the September 1999 quitclaims.
In contrast, petitioners point out that a few days after service of their notices of termination, four (4) employees5 were
regularized, and replacements to the forty-seven (47) dismissed employees were also hired, and that they have not yet
received their separation pay. Petitioners conclude that respondent Pepsi-Cola Products, Inc. (PCPI) failed to prove the
fourth and the fifth requisites of a valid retrenchment program, 6as the CA and the NLRC were silent on the matter.

Petitioners' motion for reconsideration with motion to refer the case to the Court en bane is denied for lack of merit.

Contrary to petitioners' contention, the factual circumstances of this case and those in Molon are not divergent, hence, the
principle of stare decisis is applicable. As held in the Court's Decision dated March 25, 2015:
x x x the issues, subject matters and causes of action between the parties in Pepsi-Cola Products Philippines, Inc. v.
Molon and the present case are identical, namely, the validity of PCPPI's retrenchment program, and the legality of its
employees' termination. There is also substantial identity of parties because there is a community of interest between the
parties in the first case and the parties in the second case, even if the latter was not impleaded in the first case. The
respondents in Pepsi-Cola Products Philippines, Inc. vs. Molon are petitioners' former co-employees and co-union
members of LEPCEU-ALU who were also terminated pursuant to the PCPPI's retrenchment program. The only difference
between the two cases is the date of the employees' termination, i.e., Molon, et al., belong to the first batch of employees
retrenched on July 31, 1999, while petitioners belong to the second batch retrenched on February 15, 2000. That the
validity of the same PCPPI retrenchment program had already been passed upon and, thereafter, sustained in the related
case of

Pepsi-Cola Products Philippines, Inc. v. Molon, albeit involving different parties, impels the Court to accord a similar
disposition and uphold the legality of same program.xx x 7

On petitioners' claim that after they were served notices of termination, 4 employees were regularized, and replacements
to the 47 dismissed employees were also hired, the Court has resolved the same in the Decision dated March 25, 2015,
thus:

On PCPPI's alleged failure to explain its acts of regularizing four (4) employees and hiring of sixty (63) replacements and
additional workers, the Court upholds the NLRC's correct ruling thereon, viz.:

Let Us squarely tackle this issue of replacements in the cases of the complainant in this case. We bear in mind that
replacements refer to the regular workers subjected to retrenchment, occupying regular positions in the company
structure.1âwphi1 Artemio Kempis, a filer mechanic with a salary of P9,366.00 was replaced by Rogelio Castil. Rogelio
Castil was hired through an agency named Helpmate Janitorial Services. Castil's employer is Helpmate Janitorial
Services. How can a janitorial service employee perform the function of a filer mechanic? How much does Pepsi Cola pay
Helpmate Janitorial Services for the contract of service? These questions immediately come to mind. Being , not a regular
employee of Pepsi Cola, he is not a replacement of Kempis. The idea of rightsizing is to reduce the number of workers
and related functions and trim clown, streamline, or simplify the structure of the organization to the level of utmost
efficiency and productivity in order to realize profit and survive. After the CRP shall have been implemented, the desired
size of the corporation is attained. Engaging the services of service contractors does not expand the size of the corporate
structure. In this sense, the retrenched workers were not replaced.

The same is true in the case of Exuperio C. Molina who was allegedly replaced by Eddie Piamonte, an employee of,
again, Helpmate Janitorial Services; of Gilberto V. Opinion who was allegedly replaced by Norlito Ulahay, an employee of
Nestor Ortiga General Services; of Purisimo M. Caba[o]bas who was allegedly replaced by Christopher Albadrigo, an
employee of Helpmate Janitorial Services; of Vicente R. Lauran who was allegedly replaced by Wendylen Bron, an
employee of Double "N" General Services; of Ramos M. de Paz, who was disabled, and replaced by Alex Dieta, an
employee of Nestor Ortiga General Services; and of Zacarias E. Carbo who was allegedly replaced by an employee of
Double "N" General Services. x x x8

There is also no merit in petitioners' claim that PCPI failed to comply with the third requisite of a valid retrenchment
program, since they have not yet been paid their separation pay.
In their Consolidated Posi_tion Paper, petitioners only sought for reinstatement without loss of seniority rights and other
privileges, payment of backwages, damages and attorney's fees on account of their unlawful retrenchment. PCPI, on the
other hand, alleged in its position paper that it had offered to pay petitioners separation package equivalent to 150% or
1.5 months for every year of service, and that they were served individual notices advising them to claim their separation
pay. In its Decision dated December 15, 2000, the Labor Arbiter ruled that it was duly established that the last two (2)
requisites for a valid retrenchment under Article 283 of the Labor Code, were complied with by PCPPI,9 namely, written
notices to employees and to the Department of Labor and Employment, and the payment of separation pay. On appeal,
the NLRC ruled in its September 11, 2002 Decision that having been validly retrenched, petitioners were not entitled to
reinstatement with full backwages. However, in ordering PCPI to pay petitioners' separation benefits of 1 Y2 month salary
for every year of service, plus commutation of all vacation and sick leave credits, the NLRC noted that the corresponding
length of petitioners' services with PCPI are different from what they had erroneously alleged. 10 Meanwhile, the CA held in
its Decision dated July 31, 2006 that the requisite for the payment of separation pay was evidenced by the notices sent by
PCPI to petitioners.11 Clearly, PCPI cannot be faulted for petitioners' failure to receive their separation pay.

Likewise without merit is petitioners' contention that PCPI failed to establish the fourth and fifth requisites of a valid
retrenchment program, i.e., that the employer exercised its prerogative in good faith for the advancement of its interest
and not to defeat or circumvent the employees' right to security of tenure, and it used fair and reasonable criteria in
ascertaining who would be dismissed and who would be retained.

It bears emphasis that petitioners are raising such issue only for the first time in this motion for reconsideration, and that
explains why the NLRC and the CA did not discuss such issue in the first place. Notably, petitioners' main contention in
their petition for review on certiorari is that PCPI' s retrenchment program and their consequent dismissal from
employment were both unlawful because it failed to prove financial losses and to explain its act of hiring replacement and
additional workers, and its true motive was to prevent their union, LEPCEU-ALU, from becoming the certified bargaining
agent. Suffice it to state that, as a rule, no question will be entertained on appeal unless it has been raised in the
proceedings below. "Points of law, theories, issues and arguments not brought to the attention of the lower court,
administrative agency or quasi-judicial body, need not be considered by a reviewing court, as they cannot be raised for
the first time at that late stage. Basic considerations of fairness and due process impel this rule. Any issue raised for the
first time on appeal is barred by estoppel. "12

In view of the foregoing discussion, the Court finds that this case cannot be considered as one of those cases under the
Internal Rules of the Supreme Court13 (A.M. No. 10-4-20-SC) that shall be acted upon by the Court En Banc.

WHEREFORE, petitioners' Motion for Reconsideration of the Court's March 25, 2015 Decision with Motion to Refer Case
to the [Court] En Banc is DENIED.

SO ORDERED.
5. CO VS. COURT OF APPEALS AND PEOPLE - GR NO. 100776, OCT. 28, 1993

G.R. No. 100776 October 28, 1993

ALBINO S. CO, petitioner,

vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

Antonio P. Barredo for petitioner.

The Solicitor General for the people.

NARVASA, C.J.:

In connection with an agreement to salvage and refloat asunken vessel — and in payment of his share of the expenses of
the salvage operations therein stipulated — petitioner Albino Co delivered to the salvaging firm on September 1, 1983 a
check drawn against the Associated Citizens' Bank, postdated November 30, 1983 in the sum of P361,528.00. 1 The
check was deposited on January 3, 1984. It was dishonored two days later, the tersely-stated reason given by the bank
being: "CLOSED ACCOUNT."

A criminal complaint for violation of Batas Pambansa Bilang 222 was filed by the salvage company against Albino Co with
the Regional Trial Court of Pasay City. The case eventuated in Co's conviction of the crime charged, and his being
sentenced to suffer a term of imprisonment of sixty (60) days and to indemnify the salvage company in the sum of
P361,528.00.

Co appealed to the Court of Appeals. There he sought exoneration upon the theory that it was reversible error for the
Regional Trial Court to have relied, as basis for its verdict of conviction, on the ruling rendered on September 21, 1987 by
this Court in Que v. People, 154 SCRA 160 (1987)3 — i.e., that a check issued merely to guarantee the performance of an
obligation is nevertheless covered by B.P. Blg. 22. This was because at the time of the issuance of the check
on September 1, 1983, some four (4) years prior to the promulgation of the judgment in Que v. Peopleon September 21,
1987, the delivery of a "rubber" or "bouncing" check as guarantee for an obligation was not considered a punishable
offense, an official pronouncement made in a Circular of the Ministry of Justice. That Circular (No. 4), dated December 15,
1981, pertinently provided as follows:

2.3.4. Where issuance of bouncing check is neither estafa nor violation of B.P. Blg. 22.

Where the check is issued as part of an arrangement to guarantee or secure the payment of an
obligation, whether pre-existing or not, the drawer is not criminally liable for either estafa or violation of
B.P. Blg. 22 (Res. No. 438, s. 1981, Virginia Montano vs. Josefino Galvez, June 19, 1981; Res. No. 707,
s. 1989; Alice Quizon vs. Lydia Calingo, October 23, 1981, Res. No. 769, s. 1981, Alfredo Guido vs.
Miguel A. Mateo, et. al., November 17, 1981; Res. No. 589, s. 1981, Zenaida Lazaro vs. Maria Aquino,
August 7, 1981).
This administrative circular was subsequently reversed by another issued on August 8, 1984 (Ministry Circular No. 12) —
almost one (1) year after Albino Co had delivered the "bouncing" check to the complainant on September 1, 1983. Said
Circular No. 12, after observing inter alia that Circular No. 4 of December 15, 1981 appeared to have been based on "a
misapplication of the deliberation in the Batasang Pambansa, . . . (or) the explanatory note on the original bill, i.e. that the
intention was not to penalize the issuance of a check to secure or guarantee the payment of an obligation," as follows: 4

Henceforth, conforming with the rule that an administrative agency having interpreting authority may reverse its
administration interpretation of a statute, but that its review interpretation applies only prospectively (Waterbury Savings
Bank vs. Danaher, 128 Conn., 476; 20 a2d 455 (1941), in all cases involving violation of Batas Pambansa Blg. 22 where
the check in question is issued after this date, the claim that the check is issued as a guarantee or part of an arrangement
to secure an obligation collection will no longer be considered a valid defense.

Co's theory was rejected by the Court of Appeals which affirmed his conviction. Citing Senarillos v. Hermosisima, 101
Phil. 561, the Appellate Court opined that the Que doctrine did not amount to the passage of new law but was merely a
construction or interpretation of a pre-existing one, i.e., BP 22, enacted on April 3, 1979.

From this adverse judgment of the Court of Appeals, Albino Co appealed to this Court on certiorari under Rule 45 of the
Rules of Court. By Resolution dated September 9, 1991, the Court dismissed his appeal. Co moved for reconsideration
under date of October 2, 1991. The Court required comment thereon by the Office of the Solicitor General. The latter
complied and, in its comment dated December 13, 1991, extensively argued against the merits of Albino Co's theory on
appeal, which was substantially that proffered by him in the Court of Appeals. To this comment, Albino Co filed a reply
dated February 14, 1992. After deliberating on the parties' arguments and contentions, the Court resolved, in the interests
of justice, to reinstate Albino Co's appeal and adjudicate the same on its merits.

Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the
Philippines," according to Article 8 of the Civil Code. "Laws shall have no retroactive effect, unless the contrary is
provided," declares Article 4 of the same Code, a declaration that is echoed by Article 22 of the Revised Penal Code:
"Penal laws shall have, a retroactive effect insofar as they favor the person guilty of a felony, who is not a habitual criminal
. . .5

The principle of prospectivity of statutes, original or amendatory, has been applied in many cases. These include: Buyco
v. PNB, 961 2 SCRA 682 (June 30, 1961), holding that Republic Act No. 1576 which divested the Philippine National
Bank of authority to accept back pay certificates in payment of loans, does not apply to an offer of payment made before
effectivity of the act; Largado v. Masaganda, et al., 5 SCRA 522 (June 30, 1962), ruling that RA 2613, s amended by RA
3090 on June, 1961, granting to inferior courts jurisdiction over guardianship cases, could not be given retroactive effect,
in the absence of a saving clause; Larga v. Ranada, Jr., 64 SCRA 18, to the effect that Sections 9 and 10 of Executive
Order No. 90, amending Section 4 of PD 1752, could have no retroactive application; People v. Que Po Lay, 94 Phil. 640,
holding that a person cannot be convicted of violating Circular No. 20 of the Central, when the alleged violation occurred
before publication of the Circular in the Official Gazette; Baltazar v. C.A., 104 SCRA 619, denying retroactive application
to P.D. No. 27 decreeing the emancipation of tenants from the bondage of the soil, and P.D. No. 316 prohibiting ejectment
of tenants from rice and corn farmholdings, pending the promulgation of rules and regulations implementing P.D. No.
27; Nilo v. Court of Appeals, 128 SCRA 519, adjudging that RA 6389 whichremoved "personal cultivation" as a ground for
the ejectment of a tenant cannot be given retroactive effect in the absence of a statutory statement for retroactivity; Tac-
An v. CA, 129 SCRA 319, ruling that the repeal of the old Administrative Code by RA 4252 could not be accorded
retroactive effect; Ballardo v. Borromeo, 161 SCRA 500, holding that RA 6389 should have only prospective application;
(see also Bonifacio v. Dizon, 177 SCRA 294 and Balatbat v. CA, 205 SCRA 419).

The prospectivity principle has also been made to apply to administrative rulings and circulars, to wit: ABS-CBN
Broadcasting Corporation v. CTA, Oct. 12, 1981, 108 SCRA 142, holding that a circular or ruling of the Commissioner of
Internal Revenue may not be given retroactive effect adversely to a taxpayer: Sanchez v.COMELEC, 193 SCRA 317,
ruling that Resolution No. 90-0590 of the Commission on Elections, which directed the holding of recall proceedings, had
no retroactive application; Romualdez v. CSC, 197 SCRA 168, where it was ruled that CSC Memorandum Circular No.
29, s. 1989 cannot be given retrospective effect so as to entitle to permanent appointment an employee whose temporary
appointment had expired before the Circular was issued.

The principle of prospectivity has also been applied to judicial decisions which, "although in themselves not laws, are
nevertheless evidence of what the laws mean, . . . (this being) the reason whyunder Article 8 of the New Civil Code,
'Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system . . .'"

So did this Court hold, for example, in Peo. v. Jabinal, 55 SCRA 607, 611:

It will be noted that when appellant was appointed Secret Agent by the Provincial Government in 1962, and Confidential
Agent by the Provincial commander in 1964, the prevailing doctrine on the matter was that laid down by Us in People
v. Macarandang (1959) and People v. Lucero (1958).6 Our decision in People v. Mapa,7 reversing the aforesaid doctrine,
came only in 1967. The sole question in this appeal is: should appellant be acquitted on the basis of Our rulings
in Macarandang and Lucero, or should his conviction stand in view of the complete reverse of the Macarandang and
Lucero doctrine in Mapa? . . .

Decisions of this Court, although in themselves not laws, are nevertheless evidence of what the laws mean, and this is the
reason why under Article 8 of the New Civil Code, "Judicial decisions applying or interpreting the laws or the Constitution
shall form a part of the legal system . . ."The interpretation upon a law by this Court constitutes, in a way, a part of the law
as of the date that law was originally passed, since this Court's construction merely establishes the contemporaneous
legislative intent that the law thus construed intends to effectuate. The settled rule supported by numerous authorities is a
restatement of the legal maxim "legis interpretation legis vim obtinet" — the interpretation placed upon the written law by a
competent court has the force of law. The doctrine laid down in Lucero and Macarandang was part of the jurisprudence,
hence, of the law, of the land, at the time appellant was found in possession of the firearm in question and where he was
arraigned by the trial court. It is true that the doctrine was overruled in the Mapa case in 1967, but when a doctrine of this
Court is overruled and a different view is adopted, the new doctrine should be applied prospectively, and should not apply
to parties who had relied on, the old doctrine and acted on the faith thereof. This is especially true in the construction and
application of criminal laws, where it is necessary that the punishment of an act be reasonably foreseen for the guidance
of society.

So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan v. Court of Appeals, et al. (G.R. No. 97973)
and Development Bank of the Philippines v. Court of Appeals, et al (G.R. No 97998), Jan. 27, 1992, 205 SCRA 515, 527-
528:8
We sustain the petitioners' position, It is undisputed that the subject lot was mortgaged to DBP on February 24, 1970. It
was acquired by DBP as the highest bidder at a foreclosure sale on June 18, 1977, and then sold to the petitioners on
September 29, 1979.

At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated
in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP are bound by these
decisions for pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the Constitution
shall form a part of the legal system of the Philippines." But while our decisions form part of the law of the land, they are
also subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect unless the contrary is
provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward.
The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have
already become vested or impairs the obligations of contract and hence, is unconstitutional (Francisco vs. Certeza, 3
SCRA 565 [1061]).

The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. Thus,
we emphasized in People v. Jabinal, 55 SCRA 607 [1974]" . . . when a doctrine of this Court is overruled and a different
view is adopted, the new doctrine should be applied prospectively and should not apply to parties who had relied on the
old doctrine and acted on the faith thereof.

A compelling rationalization of the prospectivity principle of judicial decisions is well set forth in the oft-cited case of Chicot
County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]. The Chicot doctrine advocates the imperative
necessity to take account of the actual existence of a statute prior to its nullification, as an operative fact negating
acceptance of "a principle of absolute retroactive invalidity.

Thus, in this Court's decision in Tañada v. Tuvera,9 promulgated on April 24, 1985 — which declared "that presidential
issuances of general application, which have not been published,shall have no force and effect," and as regards which
declaration some members of the Court appeared "quite apprehensive about the possible unsettling effect . . . (the)
decision might have on acts done in reliance on the validity of these presidential decrees . . ." — the Court said:

. . . . The answer is all too familiar. In similar situation is in the past this Court, had taken the pragmatic and realistic
course set forth in Chicot County Drainage District vs. Baxter Bank (308 U.S. 371, 374) to wit:

The courts below have proceeded on the theory that the Act of Congress, having found to be unconstitutional, was not a
law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged
decree. Norton vs. Shelby County, 118 US 425, 442; Chicago, I. & L. Ry. Co. v. Hackett, 228 U. S. 559, 566. It is quite
clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with
qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have
consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect
of the subsequent ruling as to invalidity may have to be considered in various aspects — with respect to particular
conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations
deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its
previous application, demand examination. These questions are among the most difficult of those who have engaged the
attention of courts, state and federal, and it is manifest from numerous decisions that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified.

Much earlier, in De Agbayani v. PNB, 38 SCRA 429 — concerning the effects of the invalidation of "Republic Act No. 342,
the moratorium legislation, which continued Executive Order No. 32, issued by the then President Osmeña, suspending
the enforcement of payment of all debts and other monetary obligations payable by war sufferers," and which had been
"explicitly held in Rutter v. Esteban (93 Phil. 68 [1953] 10 . . . (to be) in 1953 'unreasonable and oppressive, and should not
be prolonged a minute longer . . ." — the Court made substantially the same observations, to wit:11

. . . . The decision now on appeal reflects the orthodox view that an unconstitutional act, for that matter an executive order
or a municipal ordinance likewise suffering from that infirmity, cannot be the source of any legal rights or duties. Nor can it
justify any official act taken under it. Its repugnancy to the fundamental law once judicially declared results in its being to
all intents and purposes amere scrap of paper. . . . It is understandable why it should be so, the Constitution being
supreme and paramount. Any legislative or executive act contrary to its terms cannot survive.

Such a view has support in logic and possesses the merit of simplicity. lt may not however be sufficiently realistic. It does
not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in
force and had to be compiled with. This is so as until after the judiciary, in an appropriate case, declares its invalidity,, it is
entitled to obedience and respect. Parties may have acted under it and may have changed theirpositions, what could be
more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive
act was in operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being
nullified, its existence is a fact must be reckoned with. This is merely to reflect awareness that precisely because the
judiciary is the governmental organ which has the final say on whether or not a legislative or executive measure is valid, a,
period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of
nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had
transpired prior to such adjudication.

In the language of an American Supreme Court decision: 'The actual existence of a statute, prior to such a determination
[of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot
always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be
considered in various aspects, — with respect to particular relations, individual and corporate, and particular conduct,
private and official (Chicot County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]). This language has
been quoted with approval in a resolution in Araneta v. Hill (93 Phil. 1002 [1953]) and the decision in Manila Motor Co.
Inc. v. Flores (99 Phil. 738 [1956]). An even more recent instance is the opinion of Justice Zaldivar speaking for the Court
in Fernandez v. Cuerva and Co. (L-21114, Nov. 28, 1967, 21 SCRA 1095).

Again, treating of the effect that should be given to its decision in Olaguer v. Military Commission No 34, 12 — declaring
invalid criminal proceedings conducted during the martial law regime against civilians, which had resulted in the conviction
and incarceration of numerous persons — this Court, in Tan vs. Barrios, 190 SCRA 686, at p. 700, ruled as follows:

In the interest of justice and consistently, we hold that Olaguer should, in principle, be applied prospectively only to future
cases and cases still ongoing or not yet final when that decision was promulgated. Hence, there should be no retroactive
nullification of final judgments, whether of conviction or acquittal, rendered by military courts against civilians before the
promulgation of the Olaguer decision. Such final sentences should not be disturbed by the State. Only in particular cases
where the convicted person or the State shows that there was serious denial of constitutional rights of the accused,
should the nullity of the sentence be declared and a retrial be ordered based on the violation of the constitutional rights of
the accused and not on the Olaguer doctrine. If a retrial is no longer possible, the accused should be released since
judgment against him is null on account of the violation of his constitutional rights and denial of due process.

xxx xxx xxx

The trial of thousands of civilians for common crimes before the military tribunals and commissions during the ten-year
period of martial rule (1971-1981) which were created under general orders issued by President Marcos in the exercise of
his legislative powers is an operative fact that may not just be ignored. The belated declaration in 1987 of the
unconstitutionality and invalidity of those proceedings did not erase the reality of their consequences which occurred long
before our decision in Olaguer was promulgated and which now prevent us from carrying Olaguer to the limit of its logic.
Thus did this Court rule in Municipality of Malabang v. Benito, 27 SCRA 533, where the question arose as to whether the
nullity of creation of a municipality by executive order wiped out all the acts of the local government abolished. 13

It would seem then, that the weight of authority is decidedly in favor of the proposition that the Court's decision of
September 21, 1987 in Que v. People, 154 SCRA 160 (1987) 14 that a check issued merely to guarantee the performance
of an obligation is nevertheless covered by B.P. Blg. 22 — should not be given retrospective effect to the prejudice of the
petitioner and other persons situated, who relied on the official opinion of the Minister of Justice that such a check did not
fall within the scope of B.P. Blg. 22.

Inveighing against this proposition, the Solicitor General invokes U.S. v. Go Chico, 14 Phil. 128, applying the familiar
doctrine that in crimes mala prohibita, the intent or motive of the offender is inconsequential, the only relevant inquiry
being, "has the law been violated?" The facts in Go Chico are substantially different from those in the case at bar. In the
former, there was no official issuance by the Secretary of Justice or other government officer construing the special law
violated; 15 and it was there observed, among others, that "the defense . . . (of) an honest misconstruction of the law under
legal advice" 16 could not be appreciated as a valid defense. In the present case on the other hand, the defense is that
reliance was placed, not on the opinion of a private lawyer but upon an official pronouncement of no less than the attorney
of the Government, the Secretary of Justice, whose opinions, though not law, are entitled to great weight and on which
reliance may be placed by private individuals is reflective of the correct interpretation of a constitutional or statutory
provision; this, particularly in the case of penal statutes, by the very nature and scope of the authority that resides in as
regards prosecutions for their violation.17 Senarillos vs.Hermosisima, supra, relied upon by the respondent Court of
Appeals, is crucially different in that in said case, as in U.S. v. Go Chico, supra, no administrative interpretation antedated
the contrary construction placed by the Court on the law invoked.

This is after all a criminal action all doubts in which, pursuant to familiar, fundamental doctrine, must be resolved in favor
of the accused. Everything considered, the Court sees no compelling reason why the doctrine of mala prohibita should
override the principle of prospectivity, and its clear implications as herein above set out and discussed, negating criminal
liability.

WHEREFORE, the assailed decisions of the Court of Appeals and of the Regional Trial Court are reversed and set aside,
and the criminal prosecution against the accused-petitioner is DISMISSED, with costs de oficio.
SO ORDERED.

Padilla, Regalado, Nocon and Puno, JJ., concur

6. CALTEX VS PALOMAR - L- 19650, SEPT 29, 1966, 18 SCRA 427

G.R. No. L-19650 September 29, 1966

CALTEX (PHILIPPINES), INC., petitioner-appellee,

vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-appellant.

Office of the Solicitor General for respondent and appellant.

Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:

In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid the groundwork for a
promotional scheme calculated to drum up patronage for its oil products. Denominated "Caltex Hooded Pump Contest", it
calls for participants therein to estimate the actual number of liters a hooded gas pump at each Caltex station will
dispense during a specified period. Employees of the Caltex (Philippines) Inc., its dealers and its advertising agency, and
their immediate families excepted, participation is to be open indiscriminately to all "motor vehicle owners and/or licensed
drivers". For the privilege to participate, no fee or consideration is required to be paid, no purchase of Caltex products
required to be made. Entry forms are to be made available upon request at each Caltex station where a sealed can will be
provided for the deposit of accomplished entry stubs.

A three-staged winner selection system is envisioned. At the station level, called "Dealer Contest", the contestant whose
estimate is closest to the actual number of liters dispensed by the hooded pump thereat is to be awarded the first prize;
the next closest, the second; and the next, the third. Prizes at this level consist of a 3-burner kerosene stove for first; a
thermos bottle and a Ray-O-Vac hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and a
screwdriver set for third. The first-prize winner in each station will then be qualified to join in the "Regional Contest" in
seven different regions. The winning stubs of the qualified contestants in each region will be deposited in a sealed can
from which the first-prize, second-prize and third-prize winners of that region will be drawn. The regional first-prize winners
will be entitled to make a three-day all-expenses-paid round trip to Manila, accompanied by their respective Caltex
dealers, in order to take part in the "National Contest". The regional second-prize and third-prize winners will receive cash
prizes of P500 and P300, respectively. At the national level, the stubs of the seven regional first-prize winners will be
placed inside a sealed can from which the drawing for the final first-prize, second-prize and third-prize winners will be
made. Cash prizes in store for winners at this final stage are: P3,000 for first; P2,000 for second; Pl,500 for third; and
P650 as consolation prize for each of the remaining four participants.
Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but also for the
transmission of communications relative thereto, representations were made by Caltex with the postal authorities for the
contest to be cleared in advance for mailing, having in view sections 1954(a), 1982 and 1983 of the Revised
Administrative Code, the pertinent provisions of which read as follows:

SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of the following classes, whether sealed
as first-class matter or not, shall be imported into the Philippines through the mails, or to be deposited in or carried by the
mails of the Philippines, or be delivered to its addressee by any officer or employee of the Bureau of Posts:

Written or printed matter in any form advertising, describing, or in any manner pertaining to, or conveying or
purporting to convey any information concerning any lottery, gift enterprise, or similar scheme depending in whole
or in part upon lot or chance, or any scheme, device, or enterprise for obtaining any money or property of any kind
by means of false or fraudulent pretenses, representations, or promises.

"SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or company is engaged in conducting any
lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or
drawing of any kind, or that any person or company is conducting any scheme, device, or enterprise for obtaining money
or property of any kind through the mails by means of false or fraudulent pretenses, representations, or promises, the
Director of Posts may instruct any postmaster or other officer or employee of the Bureau to return to the person,
depositing the same in the mails, with the word "fraudulent" plainly written or stamped upon the outside cover thereof, any
mail matter of whatever class mailed by or addressed to such person or company or the representative or agent of such
person or company.

SECTION 1983. Deprivation of use of money order system and telegraphic transfer service.—The Director of Posts may,
upon evidence satisfactory to him that any person or company is engaged in conducting any lottery, gift enterprise or
scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind, or that any
person or company is conducting any scheme, device, or enterprise for obtaining money or property of any kind through
the mails by means of false or fraudulent pretenses, representations, or promise, forbid the issue or payment by any
postmaster of any postal money order or telegraphic transfer to said person or company or to the agent of any such
person or company, whether such agent is acting as an individual or as a firm, bank, corporation, or association of any
kind, and may provide by regulation for the return to the remitters of the sums named in money orders or telegraphic
transfers drawn in favor of such person or company or its agent.

The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in which the Caltex,
thru counsel, enclosed a copy of the contest rules and endeavored to justify its position that the contest does not violate
the anti-lottery provisions of the Postal Law. Unimpressed, the then Acting Postmaster General opined that the scheme
falls within the purview of the provisions aforesaid and declined to grant the requested clearance. In its counsel's letter of
December 7, 1960, Caltex sought a reconsideration of the foregoing stand, stressing that there being involved no
consideration in the part of any contestant, the contest was not, under controlling authorities, condemnable as a lottery.
Relying, however, on an opinion rendered by the Secretary of Justice on an unrelated case seven years before (Opinion
217, Series of 1953), the Postmaster General maintained his view that the contest involves consideration, or that, if it
does not, it is nevertheless a "gift enterprise" which is equally banned by the Postal Law, and in his letter of December 10,
1960 not only denied the use of the mails for purposes of the proposed contest but as well threatened that if the contest
was conducted, "a fraud order will have to be issued against it (Caltex) and all its representatives".

Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief against Postmaster
General Enrico Palomar, praying "that judgment be rendered declaring its 'Caltex Hooded Pump Contest' not to be
violative of the Postal Law, and ordering respondent to allow petitioner the use of the mails to bring the contest to the
attention of the public". After issues were joined and upon the respective memoranda of the parties, the trial court
rendered judgment as follows:

In view of the foregoing considerations, the Court holds that the proposed 'Caltex Hooded Pump Contest' announced to
be conducted by the petitioner under the rules marked as Annex B of the petitioner does not violate the Postal Law and
the respondent has no right to bar the public distribution of said rules by the mails.

The respondent appealed.

The parties are now before us, arrayed against each other upon two basic issues: first, whether the petition states a
sufficient cause of action for declaratory relief; and second, whether the proposed "Caltex Hooded Pump Contest" violates
the Postal Law. We shall take these up in seriatim.

1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable legal basis for the
remedy at the time it was invoked, declaratory relief is available to any person "whose rights are affected by a statute . . .
to determine any question of construction or validity arising under the . . . statute and for a declaration of his rights
thereunder" (now section 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably to established
jurisprudence on the matter, laid down certain conditions sine qua non therefor, to wit: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory
relief must have a legal interest in the controversy; and (4) the issue involved must be ripe for judicial determination
(Tolentino vs. The Board of Accountancy, et al., G.R. No. L-3062, September 28, 1951; Delumen, et al. vs. Republic of
the Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The
gravamen of the appellant's stand being that the petition herein states no sufficient cause of action for declaratory relief,
our duty is to assay the factual bases thereof upon the foregoing crucible.

As we look in retrospect at the incidents that generated the present controversy, a number of significant points stand out
in bold relief. The appellee (Caltex), as a business enterprise of some consequence, concededly has the unquestioned
right to exploit every legitimate means, and to avail of all appropriate media to advertise and stimulate increased
patronage for its products. In contrast, the appellant, as the authority charged with the enforcement of the Postal Law,
admittedly has the power and the duty to suppress transgressions thereof — particularly thru the issuance of fraud orders,
under Sections 1982 and 1983 of the Revised Administrative Code, against legally non-mailable schemes. Obviously
pursuing its right aforesaid, the appellee laid out plans for the sales promotion scheme hereinbefore detailed. To forestall
possible difficulties in the dissemination of information thereon thru the mails, amongst other media, it was found
expedient to request the appellant for an advance clearance therefor. However, likewise by virtue of his jurisdiction in the
premises and construing the pertinent provisions of the Postal Law, the appellant saw a violation thereof in the proposed
scheme and accordingly declined the request. A point of difference as to the correct construction to be given to the
applicable statute was thus reached. Communications in which the parties expounded on their respective theories were
exchanged. The confidence with which the appellee insisted upon its position was matched only by the obstinacy with
which the appellant stood his ground. And this impasse was climaxed by the appellant's open warning to the appellee that
if the proposed contest was "conducted, a fraud order will have to be issued against it and all its representatives."

Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's insistent assertion of its claim
to the use of the mails for its proposed contest, and the challenge thereto and consequent denial by the appellant of the
privilege demanded, undoubtedly spawned a live controversy. The justiciability of the dispute cannot be gainsaid. There is
an active antagonistic assertion of a legal right on one side and a denial thereof on the other, concerning a real — not a
mere theoretical — question or issue. The contenders are as real as their interests are substantial. To the appellee, the
uncertainty occasioned by the divergence of views on the issue of construction hampers or disturbs its freedom to
enhance its business. To the appellant, the suppression of the appellee's proposed contest believed to transgress a law
he has sworn to uphold and enforce is an unavoidable duty. With the appellee's bent to hold the contest and the
appellant's threat to issue a fraud order therefor if carried out, the contenders are confronted by the ominous shadow of
an imminent and inevitable litigation unless their differences are settled and stabilized by a tranquilizing declaration (Pablo
y Sen, et al. vs. Republic of the Philippines, G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the
appellant, the time is long past when it can rightly be said that merely the appellee's "desires are thwarted by its own
doubts, or by the fears of others" — which admittedly does not confer a cause of action. Doubt, if any there was, has
ripened into a justiciable controversy when, as in the case at bar, it was translated into a positive claim of right which is
actually contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West
Coast Theaters, 36 Ariz., 251, 284 Pac. 350).

We cannot hospitably entertain the appellant's pretense that there is here no question of construction because the said
appellant "simply applied the clear provisions of the law to a given set of facts as embodied in the rules of the contest",
hence, there is no room for declaratory relief. The infirmity of this pose lies in the fact that it proceeds from the assumption
that, if the circumstances here presented, the construction of the legal provisions can be divorced from the matter of their
application to the appellee's contest. This is not feasible. Construction, verily, is the art or process of discovering and
expounding the meaning and intention of the authors of the law with respect to its application to a given case, where that
intention is rendered doubtful, amongst others, by reason of the fact that the given case is not explicitly provided for in the
law (Black, Interpretation of Laws, p. 1). This is precisely the case here. Whether or not the scheme proposed by the
appellee is within the coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the
intended meaning of the words used therein. To our mind, this is as much a question of construction or interpretation as
any other.

Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can amount to nothing
more than an advisory opinion the handing down of which is anathema to a declaratory relief action. Of course, no breach
of the Postal Law has as yet been committed. Yet, the disagreement over the construction thereof is no longer nebulous
or contingent. It has taken a fixed and final shape, presenting clearly defined legal issues susceptible of immediate
resolution. With the battle lines drawn, in a manner of speaking, the propriety — nay, the necessity — of setting the
dispute at rest before it accumulates the asperity distemper, animosity, passion and violence of a full-blown battle which
looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded.
Paraphrasing the language in Zeitlin vs. Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am.
Jur., 2d., p. 869, to deny declaratory relief to the appellee in the situation into which it has been cast, would be to force it
to choose between undesirable alternatives. If it cannot obtain a final and definitive pronouncement as to whether the anti-
lottery provisions of the Postal Law apply to its proposed contest, it would be faced with these choices: If it launches the
contest and uses the mails for purposes thereof, it not only incurs the risk, but is also actually threatened with the certain
imposition, of a fraud order with its concomitant stigma which may attach even if the appellee will eventually be vindicated;
if it abandons the contest, it becomes a self-appointed censor, or permits the appellant to put into effect a virtual fiat of
previous censorship which is constitutionally unwarranted. As we weigh these considerations in one equation and in the
spirit of liberality with which the Rules of Court are to be interpreted in order to promote their object (section 1, Rule 1,
Revised Rules of Court) — which, in the instant case, is to settle, and afford relief from uncertainty and insecurity with
respect to, rights and duties under a law — we can see in the present case any imposition upon our jurisdiction or any
futility or prematurity in our intervention.

The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in this case if he
believes that it will not have the final and pacifying function that a declaratory judgment is calculated to subserve. At the
very least, the appellant will be bound. But more than this, he obviously overlooks that in this jurisdiction, "Judicial
decisions applying or interpreting the law shall form a part of the legal system" (Article 8, Civil Code of the Philippines). In
effect, judicial decisions assume the same authority as the statute itself and, until authoritatively abandoned, necessarily
become, to the extent that they are applicable, the criteria which must control the actuations not only of those called upon
to abide thereby but also of those in duty bound to enforce obedience thereto. Accordingly, we entertain no misgivings
that our resolution of this case will terminate the controversy at hand.

It is not amiss to point out at this juncture that the conclusion we have herein just reached is not without precedent.
In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a corporation engaged in promotional advertising
was advised by the county prosecutor that its proposed sales promotion plan had the characteristics of a lottery, and that
if such sales promotion were conducted, the corporation would be subject to criminal prosecution, it was held that the
corporation was entitled to maintain a declaratory relief action against the county prosecutor to determine the legality of its
sales promotion plan. In pari materia, see also: Bunis vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs.
Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.

In fine, we hold that the appellee has made out a case for declaratory relief.

2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical terminology in sections 1954(a),
1982 and 1983 thereof, supra, condemns as absolutely non-mailable, and empowers the Postmaster General to issue
fraud orders against, or otherwise deny the use of the facilities of the postal service to, any information concerning "any
lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or
drawing of any kind". Upon these words hinges the resolution of the second issue posed in this appeal.

Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc. vs. Topacio, 44 Phil.,
278, 283-284, which significantly dwelt on the power of the postal authorities under the abovementioned provisions of the
Postal Law, this Court declared that —

While countless definitions of lottery have been attempted, the authoritative one for this jurisdiction is that of the United
States Supreme Court, in analogous cases having to do with the power of the United States Postmaster General, viz.:
The term "lottery" extends to all schemes for the distribution of prizes by chance, such as policy playing, gift exhibitions,
prize concerts, raffles at fairs, etc., and various forms of gambling. The three essential elements of a lottery are: First,
consideration; second, prize; and third, chance. (Horner vs. States [1892], 147 U.S. 449; Public Clearing House vs. Coyne
[1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395;
U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p. 233, ante.)

Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too obvious in the disputed
scheme to be the subject of contention. Consequently as the appellant himself concedes, the field of inquiry is narrowed
down to the existence of the element of consideration therein. Respecting this matter, our task is considerably lightened
inasmuch as in the same case just cited, this Court has laid down a definitive yard-stick in the following terms —

In respect to the last element of consideration, the law does not condemn the gratuitous distribution of property by
chance, if no consideration is derived directly or indirectly from the party receiving the chance, but does condemn as
criminal schemes in which a valuable consideration of some kind is paid directly or indirectly for the chance to draw a
prize.

Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which the invitation to
participate therein is couched. Thus —

No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to buy anything? Simply estimate
the actual number of liter the Caltex gas pump with the hood at your favorite Caltex dealer will dispense from — to —, and
win valuable prizes . . . ." .

Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any service be rendered,
or any value whatsoever be given for the privilege to participate. A prospective contestant has but to go to a Caltex
station, request for the entry form which is available on demand, and accomplish and submit the same for the drawing of
the winner. Viewed from all angles or turned inside out, the contest fails to exhibit any discernible consideration which
would brand it as a lottery. Indeed, even as we head the stern injunction, "look beyond the fair exterior, to the substance,
in order to unmask the real element and pernicious tendencies which the law is seeking to prevent" ("El Debate", Inc. vs.
Topacio, supra, p. 291), we find none. In our appraisal, the scheme does not only appear to be, but actually is, a
gratuitous distribution of property by chance.

There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex products simply to win a
prize would actually be indirectly paying a consideration for the privilege to join the contest. Perhaps this would be tenable
if the purchase of any Caltex product or the use of any Caltex service were a pre-requisite to participation. But it is not. A
contestant, it hardly needs reiterating, does not have to buy anything or to give anything of value.1awphîl.nèt

Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would naturally benefit the
sponsor in the way of increased patronage by those who will be encouraged to prefer Caltex products "if only to get the
chance to draw a prize by securing entry blanks". The required element of consideration does not consist of the benefit
derived by the proponent of the contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App.
(Supp.) 788, is whether the participant pays a valuable consideration for the chance, and not whether those conducting
the enterprise receive something of value in return for the distribution of the prize. Perspective properly oriented, the
standpoint of the contestant is all that matters, not that of the sponsor. The following, culled from Corpus Juris Secundum,
should set the matter at rest:

The fact that the holder of the drawing expects thereby to receive, or in fact does receive, some benefit in the way of
patronage or otherwise, as a result of the drawing; does not supply the element of consideration. Griffith Amusement Co.
vs. Morgan, Tex. Civ. App., 98 S.W., 2d., 844" (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest" proposed by the appellee is
not a lottery that may be administratively and adversely dealt with under the Postal Law.

But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money, or of any real or personal
property by lot, chance, or drawing of any kind", which is equally prescribed? Incidentally, while the appellant's brief
appears to have concentrated on the issue of consideration, this aspect of the case cannot be avoided if the remedy here
invoked is to achieve its tranquilizing effect as an instrument of both curative and preventive justice. Recalling that the
appellant's action was predicated, amongst other bases, upon Opinion 217, Series 1953, of the Secretary of Justice,
which opined in effect that a scheme, though not a lottery for want of consideration, may nevertheless be a gift enterprise
in which that element is not essential, the determination of whether or not the proposed contest — wanting in
consideration as we have found it to be — is a prohibited gift enterprise, cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit words, there appears to be a
consensus among lexicographers and standard authorities that the term is commonly applied to a sporting artifice of
under which goods are sold for their market value but by way of inducement each purchaser is given a chance to win a
prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with
Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128
Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus
conceived, the term clearly cannot embrace the scheme at bar. As already noted, there is no sale of anything to which the
chance offered is attached as an inducement to the purchaser. The contest is open to all qualified contestants irrespective
of whether or not they buy the appellee's products.

Going a step farther, however, and assuming that the appellee's contest can be encompassed within the broadest sweep
that the term "gift enterprise" is capable of being extended, we think that the appellant's pose will gain no added comfort.
As stated in the opinion relied upon, rulings there are indeed holding that a gift enterprise involving an award by chance,
even in default of the element of consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. States, 235
Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford vs. Fox-Great
Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only one side of the coin. Equally
impressive authorities declare that, like a lottery, a gift enterprise comes within the prohibitive statutes only if it exhibits the
tripartite elements of prize, chance and consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio
vs. Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs.
Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State,
193 S.E., 605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent conflict of opinions
is explained by the fact that the specific statutory provisions relied upon are not identical. In some cases, as pointed out in
54 C.J.S., 851, the terms "lottery" and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others, the
necessity for the element of consideration or chance has been specifically eliminated by statute. (54 C.J.S., 351-352,
citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, supra). The lesson that we
derive from this state of the pertinent jurisprudence is, therefore, that every case must be resolved upon the particular
phraseology of the applicable statutory provision.

Taking this cue, we note that in the Postal Law, the term in question is used in association with the word "lottery". With the
meaning of lottery settled, and consonant to the well-known principle of legal hermeneutics noscitur a sociis — which
Opinion 217 aforesaid also relied upon although only insofar as the element of chance is concerned — it is only logical
that the term under a construction should be accorded no other meaning than that which is consistent with the nature of
the word associated therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term "gift
enterprise" be so construed. Significantly, there is not in the law the slightest indicium of any intent to eliminate that
element of consideration from the "gift enterprise" therein included.

This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to the determination thereof
being an accepted extrinsic aid in statutory construction. Mail fraud orders, it is axiomatic, are designed to prevent the use
of the mails as a medium for disseminating printed matters which on grounds of public policy are declared non-mailable.
As applied to lotteries, gift enterprises and similar schemes, justification lies in the recognized necessity to suppress their
tendency to inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839, 143 Pa. Super. 208).
Since in gambling it is inherent that something of value be hazarded for a chance to gain a larger amount, it follows
ineluctably that where no consideration is paid by the contestant to participate, the reason behind the law can hardly be
said to obtain. If, as it has been held — Gratuitous distribution of property by lot or chance does not constitute "lottery", if
it is not resorted to as a device to evade the law and no consideration is derived, directly or indirectly, from the party
receiving the chance, gambling spirit not being cultivated or stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286,
41 N.M., 258." (25 Words and Phrases, perm. ed., p. 695, emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to hold that, under the
prohibitive provisions of the Postal Law which we have heretofore examined, gift enterprises and similar schemes therein
contemplated are condemnable only if, like lotteries, they involve the element of consideration. Finding none in the contest
here in question, we rule that the appellee may not be denied the use of the mails for purposes thereof. Recapitulating, we
hold that the petition herein states a sufficient cause of action for declaratory relief, and that the "Caltex Hooded Pump
Contest" as described in the rules submitted by the appellee does not transgress the provisions of the Postal Law.

ACCORDINGLY, the judgment appealed from is affirmed. No costs.

7. CIR VS. LIMPAN INVESTMENT CORP., L-28571 AND L-28644, JULY 31, 1970

CASTRO, J.:
These are sister cases, elevated to us from the Court of Tax Appeals on petition for review by the Commissioner of
Internal Revenue.

The Limpan Investment Corporation filed income tax returns for the years 1959 and 1960, which became the bases a two
deficiency tax assessments flowing from deductions disallowed after investigation and verification by the Bureau of
Internal Revenue.

The assessments were disputed, and thereafter appeal was seasonably lodged with the Court of Tax Appeals.

Decision was rendered in CTA case 1358 [L-28571] on September 20, 1967, reducing the deficiency assessment to
P26,137. Decision was rendered in CTA case 1397 [L-28644] on December 11, 1967, reducing the deficiency
assessment to P7,240.48.

The uniform dispositive part of the decisions in both cases reads as follows:

"... If the deficiency income tax is not paid in full within thirty (30) days from the date this decision becomes final
and executory, petitioner shall pay a surcharge of five per cent (5%) of the unpaid amount plus interest at the rate of one
per cent (1%) a month, computed from the date this decision becomes final until paid, provided that the maximum amount
that may be collected as interest shall not exceed the amount corresponding to a period of three (3) years ..." (italics ours)

The present petitions for review are limited to the sole issue of when payment by the Limpan Investment Corporation of
the 5% surcharge and the 1% monthly interest for delinquency did legally accrue.

Resolving the issue thus posed, we hold that that portion of the judgment of the CTA which has the effect of fixing a new
date for the payment of surcharges and interests is reversible error.

Section 51, paragraph (e) of the National Internal Revenue Code, as amended by Republic Act No. 2343, provides:

"(e) Additions to the tax in case of nonpayment. --

"(1) Tax shown on the return. - Where the amount determined by the taxpayer as the tax imposed by this Title or any
installment thereof, or any part of such amount or installment; is not paid on or before the date prescribed for its payment,
there shall be collected as part of the tax, interest upon such unpaid amount at the rate of one per centum a month from
the date prescribed for its payment until it is paid: Provided, That the maximum amount that may be collected as interest
on deficiency shall in no case exceed the amount corresponding to a period of three years, the present provisions
regarding prescription to the contrary notwithstanding.

"(2) Deficiency. --Where a deficiency, or any interest assessed in connection therewith under paragraph (d) of this
section, or any addition to the taxes provided for in section seventy-two of this Code is not paid in full within thirty days
from the date of notice and demand from the Commissioner of Internal revenue, there shall be collected upon the unpaid
amount, as part of the tax, interest at the rate of one per centum a month from the date of such notice and demand until it
is paid: Provided, That the maximum amount that may be collected as interest on deficiency shall in no case exceed the
amount corresponding to a period of three years, the present provisions regarding prescription to the contrary
notwithstanding.
"(3) Surcharge. -- If any amount of the tax included in the notice and demand from the Commissioner of Internal
Revenue is not paid in full within thirty days after such notice and demand, there shall be collected in addition to the
interest prescribed herein and in paragraph (d) above and as part of the tax a surcharge of five per centum of the amount
of tax unpaid."

It is a cardinal rule of statutory construction that where the terms of the statute are clear and unambiguous, no
interpretation is called for, and the law is applied as written, [1] for application is the first duty of courts, and interpretation,
only where literal application is impossible or inadequate.[2]

The above legal provision makes no distinctions nor does it establish exceptions. It directs the collection of the surcharge
and interest at the stated rates upon any sum or sums due and unpaid after the dates prescribed in subsections (b), (c),
and (d) of section 51 of the Act for the payment of the amounts due. The provision therefore is mandatory in case of
delinquency. The intention of the law is precisely to discourage delay in the payment of taxes due to the State and, in this
sense, the surcharge and interest charged are not penal but compensatory in nature. They are compensation to the State
for the delay in payment, or for the concomitant use of the funds by the taxpayer beyond the dates he should have paid
them to the State.[3]

It is obvious that the interest and surcharge are invariably considered as "part of the tax," so that the rule governing
payment of taxes on the dates fixed by law would apply, and Would leave no room for discretion on the part of revenue
officials, or the Court of Tax Appeals for that matter.[4]

In L-28571, interest shall be computed from September 7, 1962, the date of notice and demand, at 1% per month, for 3
years, no payment having been made within thirty days from such notice and demand. The surcharge of 5% accrued on
failure to pay the deficiency tax due within thirty days from notice and demand. In L-28644, interest shall be computed
from April 4, 1963, the date of notice and demand, at 1% per month, for 3 years, no payment having been made within
thirty days from such notice and demand. The surcharge of 5% accrued on failure to pay the deficiency tax due within
thirty days from notice and demand.

ACCORDINGLY, the judgments a quo are modified in the sense that the respondent Limpan Investment Corporation is
hereby ordered (1) In L-28571, to pay to the Commissioner of Internal Revenue 5% surcharge on the 1959 deficiency
income tax of P26,137, plus 1% monthly interest on the said deficiency tax from September 7, 1962 to September 6,
1965; and (2) in L-28644, 5% surcharge on the 1960 deficiency income tax of P7,240.48, plus 1% monthly interest on the
said deficiency tax, from April 4, 1963 to April 3, 1966. As thus modified, the judgments a quo are affirmed. Costs in both
instances against the respondent Limpan Investment Corporation.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Teehankee, and Villamor, JJ., concur.
Barredo, J., did not take part.
8. REQUEST OF JUDGE TITO G. GUSTILO THAT THE SECOND 25% GRANT OF THE SPECIAL ALLOWANCE FOR
JUDGES BE INCLUDED IN THE COMPUTATION OF HIS RETIREMENT BENEFITS, AM NO. RTJ-04-1868, AUG. 13,
2004

RE: REQUEST OF JUDGE TITO G. GUSTILO THAT THE SECOND 25% GRANT OF THE SPECIAL ALLOWANCE
FOR JUDGES BE INCLUDED IN THE COMPUTATION OF HIS RETIREMENT BENEFITS.

RESOLUTION

CALLEJO, SR., J.:

In his Letter dated May 26, 2004 addressed to Chief Justice Hilario G. Davide, Jr., Judge Tito G. Gustilo of the
Regional Trial Court of Iloilo City, Branch 23, avers that he is due to retire at the age of 70 (compulsory retirement) on
September 29, 2004. By then, he would have served the Judiciary for 21 years; 7 years and 11-and-1/2 months of which
as Executive Judge of the RTC of Iloilo City. Judge Gustilo requests that, considering his retirement is barely one month
from November 2004, the second tranche of the Special Allowance granted to judges under Republic Act No. 9227 [1] be
included in the computation of his retirement benefits.

To recall, Rep. Act No. 9227, which took effect on November 11, 2003, [2] granted additional compensation in the form
of Special Allowance to justices, judges and all other positions in the Judiciary with the equivalent rank of justices of the
Court of Appeals and judges of the Regional Trial Court. Section 2 thereof reads:

Sec. 2. Grant of Special Allowances. All justices, judges and all other positions in the Judiciary with the equivalent rank of
justices of the Court of Appeals and judges of the Regional Trial Court as authorized under existing laws shall be granted
special allowances equivalent to one hundred percent (100%) of the basic monthly salary specified for their respective
salary grades under Republic Act No. 6758, as amended, otherwise known as the Salary Standardization Law, to be
implemented for a period of four (4) years.

The grant of special allowances shall be implemented uniformly in such sums or amounts equivalent to twenty-five
percent (25%) of the basic salaries of the positions covered hereof. Subsequent implementation shall be in such sums
and amounts and up to the extent only that can be supported by the funding source specified in Section 3 hereof.

Further, Section 5 of the same law provides:

Sec. 5. Inclusion in the Computation of Retirement Benefits. For purposes of retirement, only the allowances actually
received and the tranche or tranches of the special allowance already implemented and received pursuant to this Act by
the justices, judges and all other positions in the Judiciary with the equivalent rank of justices of the Court of Appeals and
judges of the Regional Trial Court as authorized under existing laws shall, at the date of their retirement, be included in
the computation of their respective retirement benefits.

On March 9, 2004, in A.M. No. 03-12-04-SC (Re: Possible Means to Implement the Special Allowance under R.A.
9227 and to Increase the Judiciary Development Fund), the Court promulgated the GUIDELINES ON THE GRANT OF
ADDITIONAL COMPENSATION IN THE FORM OF SPECIAL ALLOWANCE FOR JUSTICES AND JUDGES IN THE
JUDICIARY AND ALL OTHER OFFICIALS WITH THE EQUIVALENT RANK OF JUSTICES OF THE COURT OF
APPEALS AND JUDGES OF THE REGIONAL TRIAL COURT. The Guidelines provide for the manner of the
implementation in this wise:

4.1 The Special Allowance shall be implemented uniformly in such sums or amounts equivalent to twenty-five percent
(25%) of the actual basic monthly salaries for the positions covered starting 11 November 2003 until the one hundred
percent (100%) special allowance is fully implemented.

If the source of fund is insufficient to cover the twenty-five percent (25%) special allowance for any year, it shall be
granted in such sums and amounts and up to the extent only that can be supported by the funding source specified in
Section 3 of Rep. Act No. 9227; provided that annually the special allowance shall always be twenty-five percent (25%) of
the actual basic monthly salary.

The Guidelines, likewise, reiterate that:

4.2 For purposes of computing the retirement benefits, only the special allowance actually received and that which has
accrued at the time of retirement shall be included.

Paragraph 7.0 thereof states that cases not covered thereby shall be referred to the Chief Justice for resolution.

Judge Gustilo claims that pursuant to OCA Circular No. 48-2004 dated March 3, 2004, the first tranche of the Special
Allowance equivalent to 25% was implemented starting November 11, 2003. The next 25% (second tranche) will be
implemented on November 11, 2004. In this connection, Judge Gustilo appeals to the Chief Justice that, in the
computation of his retirement benefits, the second tranche of the Special Allowance be included since his retirement is
only one (1) month and twelve (12) days before its implementation on November 11, 2004.

In support thereof, Judge Gustilo points out that in the past, Judges who retire in October are included in the grant of
the December 13th month pay. He, thus, invokes the liberal policy of the Court in granting benefits to the underpaid Trial
Court Judges.

In the Memorandum dated June 18, 2004 for the Chief Justice, the Office of the Court Administrator
(OCA)[3] recommends that the request of Judge Gustilo be granted. The OCA cites Judge Gustilos service record in the
Judiciary, which started on January 18, 1983, including his exemplary record of disposing cases at an average of 2.25
cases each month. It also mentions that Judge Gustilo, as Executive Judge, introduced several innovations in
the Iloilo City courts and was able to manage well the 17 judges under his administrative supervision.Further, Judge
Gustilo was the recipient of several awards and recognitions.[4] Considering the foregoing, the OCA concludes that it is but
just and fair that the second additional Special Allowance of 25% be granted to him and included in the computation of his
retirement benefits.[5]

In compliance with the Courts Resolution dated July 6, 2004, referring Judge Gustilos letter and the OCAs
memorandum to her for study and recommendation, Chief Attorney Edna E. Dio submitted her Report dated July 15,
2004. The Chief Attorney recommends that Judge Gustilos request be denied for not being in accord with Rep. Act No.
9227 and the Guidelines promulgated by the Court.

After a careful evaluation of Judge Gustilos letter, the OCAs memorandum and the Chief Attorneys report, the Court,
regrettably, cannot grant the request of Judge Gustilo.
 It is axiomatic that when the law is clear, the function of the courts is simple application, not interpretation or
circumvention.[6] With respect to the manner of computation of the retirement benefits in light of the Special Allowance
granted under Rep. Act No. 9227, Section 5 thereof, quoted anew below, could not be any clearer:

Sec. 5. Inclusion in the Computation of Retirement Benefits. For purposes of retirement, only the allowances actually
received and the tranche or tranches of the special allowance already implemented and received pursuant to this Act by
the justices, judges and all other positions in the Judiciary with the equivalent rank of justices of the Court of Appeals and
judges of the Regional Trial Court as authorized under existing laws shall, at the date of their retirement, be included in
the computation of their respective retirement benefits.

A plain reading of the above provision shows that, for purposes of retirement, only the allowances actually
received and the tranche or tranches already received and implemented, upon the date of retirement, shall be included in
the computation of the retirement benefits. Otherwise put, before the Special Allowance could be considered in the
computation of retirement benefits, it should have been actually received and the tranche or tranches thereof should have
been already implemented and received at the date of retirement.

Section 5 of Rep. Act No. 9227 is clear and unambiguous. There is no room for its interpretation. Further, the
foregoing exchange among the members of the Bicameral Conference Committee [7] on the Disagreeing Provisions of
Senate Bill (SB) No. 2018 and House Bill (HB) No. 5178[8] is particularly instructive:

...

THE CHAIRMAN (SEN. PANGILINAN). Accepted.

Section 4. No questions? (Silence)

Section 5. (Silence)

Just again for purposes of record and clarification, Section 5, lines 3 and 4, For purposes of retirement, only the
allowances actually received, and so forth and so on, I just like to make it clear that the computation of retirement would
include the salary already being received, plus the special allowance.

THE CO-CHAIRMAN (REP. ANDAYA). Yes.

THE CHAIRMAN (SEN. PANGILINAN). Because this seems to suggest that you compute, rather the computation of
retirement will be on the basis only of the special allowance. So, at least, lets make that on record.

THE CO-CHAIRMAN (REP. ANDAYA). Yes. On record, yes.

And I think that first word in the title of Section 5, Inclusion also explains that.

REP. LIBANAN. Mr. Chairman.

THE CO-CHAIRMAN (REP. ANDAYA). Congressman Libanan.

REP. LIBANAN. For the sake of further clarification, would it mean that if, for example, a judge retires on the second year
of the implementation, so his retirement benefits would be only computed.

THE CHAIRMAN (SEN. PANGILINAN). On the basis of what he is already receiving.

REP. LIBANAN. on the basis of [what] he is receiving, not on the 100 percent.

THE CO-CHAIRMAN (REP. ANDAYA). Actually receiving. That is correct.

REP. LIBANAN. Thank you, Mr. Chairman.

...

THE CHAIRMAN (SEN. PANGILINAN). Can we now go back to Section 5?

THE CHAIRMAN (REP. ANDAYA). Section 5, Mr. Chairman, just a suggestion but in the House panel

SEN. ARROYO. Kasi kung mandatory, doon sa voluntary, hindi naman dapat iyon.

THE CHAIRMAN (REP. ANDAYA). Ill be constrained to withdraw my proposal.

SEN. ARROYO. But your idea is very attractive.

SEN. VILLAR. In fact, its too attractive. In the first place, iyong allowance is already part of the retirement benefit. Iyon,
malaking bagay na iyon, eh.

Mr. Chairman, may add-on pa. Medyo sobra naman yata na iyon.

SEN. ARROYO. No, because by the accident of birth, when they retire, they retire on the second year, halimbawa, 68 sila
ngayon. Pagkatapos, mandatorily they have to retire at the age of 70, di iyong benefits nila is

THE CHAIRMAN (SEN. PANGILINAN). For those born in 1934 up to 1937.

THE CHAIRMAN (REP. ANDAYA). But the fact here remains, the allowances they have been receiving so far which is
over and above, kasama na talaga sa retirement. I mean, sobra-sobra na, eh. Lahat na lang ng allowance na puwedeng
gawin, nandoon na, eh. At saka nagre-retire pa sila sa 70, ibig sabihin talagang marami na iyan.

THE CHAIRMAN (SEN. PANGILINAN). Okay?

THE CHAIRMAN (REP. ANDAYA). Okay.

THE CHAIRMAN (SEN. PANGILINAN). So, as is?

THE CHAIRMAN (REP. ANDAYA). Nandoon na, eh.

THE CHAIRMAN (SEN. PANGILINAN). So, whether they retire at 60 or 70, whether they opt for early retirement or
mandatory retirement, they will receive the actual. Would it not be a good idea to encourage them to stay on [9]

Thus, the congressional records as well as the text itself of Rep. Act No. 9227 reveal the unequivocal intention of the
lawmakers that only the Special Allowance actually received at the date of retirement shall be included in the computation
of the retirement benefits.

The Guidelines promulgated by this Court pursuant to Rep. Act No. 9227 is even more definite as it used the
term accrued in this wise: only the special allowance actually received and that which has accrued at the time of
retirement shall be included. As correctly reasoned by the Chief Attorney:

Notably, the phrase has accrued at the time of retirement is used in the Guidelines instead of the tranche or tranches of
the special allowance already implemented and received which is used in Section 5 of Rep. Act No. 9227. Nevertheless,
the same meaning is conveyed. The word accrue means to come into existence as an enforceable claim: vest as a right
or to come by way of increase or addition: arise as a growth or result or to be periodically accumulated in the process of
time whether as an increase or a decrease. Hence, a Special Allowance that has not yet come into existence as an
enforceable claim or has not yet vested on the recipient judge as a matter of right cannot be considered in the
computation of retirement benefits.[10]

Indeed, accrue in its past tense is in sense of due and demandable; vested.[11] In the case of Judge Gustilo, on the
date of his retirement, the second tranche of the Special Allowance has not accrued as yet; hence, it cannot be said that
the same is due and demandable or that it has vested insofar as he is concerned.

The Chief Attorney, likewise, correctly posits that the strict application of Section 5 of Rep. Act No. 9227 is called for
by the fact that, under Section 3 thereof,[12] the source for the Special Allowance is the Judiciary Development Fund
(JDF), established under Presidential Decree No. 1949, which basically comes from the docket fees paid by litigants:

... As such, the JDF as a fund source is not constant or fixed in amount, as its amount depends on the amount collected
by the courts and the amount of increase in docket fees that the Court would impose.The fact of the JDF becoming
insufficient has been foreseen by the Court and is reflected in the second paragraph of 4.1 of the Guidelines quoted
above. It is worth noting that until now, the first tranche of the Special Allowance has been received only for the months of
11 November 2003 until February 2004. The delay in receipt thereof may continue if courts nationwide do not timely
transmit the reports of collections to the OCA, as the JDF should be disbursed only if the reports of collections and the
deposits under the JDF account for the Special Allowance tally in accordance with accounting and auditing rules. [13]

While this Court had, in certain cases,[14] adopted a liberal stance in interpreting retirement laws in favor of the
retiree, it cannot do so in this case because, as earlier stated, Section 5 of Rep. Act No. 9227 is quite clear and
unambiguous. In other words, there is no room for interpretation but only simple application of the law.

ACCORDINGLY, the request of Judge Tito G. Gustilo that the second 25% or second tranche of the Special
Allowance granted under Rep. Act No. 9227 be included in the computation of his retirement benefits is DENIED.

SO ORDERED.
9. MANTRADE FMMC DIVISION EMPLOYEES AND WORKERS UNION VS. BACUNGAN, GR NO. 48437 SEPT 30
1986

DECISION

FERIA, J:

This is a petition for Certiorari and Mandamus filed by petitioner against arbitrator Froilan M. Bacungan and Mantrade
Development Corporation arising from the decision of respondent arbitrator, the dispositive part of which reads as follows:

"CONSIDERING ALL THE ABOVE, We rule that Mantrade Development Corporation is not under legal obligation to pay
holiday pay (as provided for in Article 94 of the Labor Code in the third official Department of Labor edition) to its monthly
paid employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of
not less than the statutory or established minimum wage, and this rule is applicable not only as of March 2, 1976 but as of
November 1, 1974."

Petitioner questions the validity of the pertinent section of the Rules and Regulations Implementing the Labor Code as
amended on which respondent arbitrator based his decision.

On the other hand, respondent corporation has raised procedural and substantive objections. It contends that petitioner is
barred from pursuing the present action in view of Article 263 of the Labor Code, which provides in part that "voluntary
arbitration awards or decisions shall be final, inappealable, and executory," as well as the rules implementing the same;
the pertinent provision of the Collective Bargaining Agreement between petitioner and respondent corporation; and Article
2044 of the Civil Code which provides that "any stipulation that the arbitrators' award or decision shall be final, is valid,
without prejudice to Articles 2038, 2039, and 2040." Respondent corporation further contends that the special civil action
of certiorari does not lie because respondent arbitrator is not an "officer exercising judicial functions" within the
contemplation of Rule 65, Section 1, of the Rules of Court; that the instant petition raises an error of judgment on the part
of respondent arbitrator and not an error of jurisdiction; that it prays for the annulment of certain rules and regulations
issued by the Department of Labor, not for the annulment of the voluntary arbitration proceedings; and that appeal by
certiorari under Section 29 of the Arbitration Law, Republic Act No. 876, is not applicable to the case at bar because
arbitration in labor disputes is expressly excluded by Section 3 of said law.

These contentions have been ruled against in the decision of this Court in the case of Oceanic Bic Division (FFW) vs.
Romero, promulgated on July 16, 1984, wherein it stated:

"We agree with the petitioner that the decisions of voluntary arbitrators must be given the highest respect and as a
general rule must be accorded a certain measure of finality. This is especially true where the arbitrator chosen by the
parties enjoys the first rate credentials of Professor Flerida Ruth Pineda Romero, Director of the U.P. Law Center and an
academician of unquestioned expertise in the field of Labor Law. It is not correct, however, that this respect precludes the
exercise of judicial review over their decisions. Article 262 of the Labor Code making voluntary arbitration awards final,
inappealable and executory, except where the money claims exceed P100,000.00 or 40% of the paid-up capital of the
employer or where there is abuse of discretion or gross incompetence refers to appeals to the National Labor Relations
Commission and not to judicial review.
"In spite of statutory provisions making 'final' the decisions of certain administrative agencies, we have taken cognizance
of petitions questioning these decisions where want of jurisdiction, grave abuse of discretion, violation of due process,
denial of substantial justice, or erroneous interpretation of the Law were brought to our attention. . . .

xxx xxx xxx

"A voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity. There is no reason why her decisions
involving interpretation of law should be beyond this Court's review. Administrative officials are presumed to act in
accordance with law and yet we do not hesitate to pass upon their work where a question of law is involved or where a
showing of abuse of discretion in their official acts is properly raised in petitions for certiorari." (130 SCRA 392, 399, 400-
401)

In denying petitioner's claim for holiday pay, respondent arbitrator stated that although monthly salaried employees are
not among those excluded from receiving such additional pay under Article 94 of the Labor Code of the Philippines, to
wit:

ART. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in
retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid compensation
equivalent to twice his regular rate; and

(c ) As used in this Article, "holiday" includes: New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first
of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and the thirtieth of December, and
the day designated by law for holding a general election.

they appear to be excluded under Sec. 2, Rule IV, Book III of the Rules and Regulations implementing said provision
which reads thus:

SEC. 2. Status of employees paid by the month. Employees who are uniformly paid by the month, irrespective of the
number of working days therein, with a salary of not less than the statutory or established minimum wage shall be
presumed to be paid for all days in the month whether worked or not.

Respondent arbitrator further opined that respondent corporation does not have any legal obligation to grant its monthly
salaried employees holiday pay, unless it is argued that the pertinent section of the Rules and Regulations implementing
Section 94 of the Labor Code is not in conformity with the law, and thus, without force and effect.

This issue was subsequently decided on October 24, 1984 by a division of this Court in the case of Insular Bank of Asia
and America Employees' Union (IBAAEU) vs. Inciong, wherein it held as follows:

"WE agree with the petitioner's contention that Section 2, Rule IV, Book III of the implementing rules and Policy Instruction
No. 9, issued by the then Secretary of Labor are null and void since in the guise of clarifying the Labor Code's provisions
on holiday pay, they in effect amended them by enlarging the scope of their exclusion (p. 11, rec.)

"Article 94 of the Labor Code, as amended by P.D. 850, provides:

'Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in
retail and service establishments regularly employing less than ten (10) workers . . .'

"The coverage and scope of exclusion of the Labor Code's holiday pay provisions is spelled out under Article 82 thereof
which reads:

'Art. 82.Coverage. The provision of this Title shall apply to employees in all establishments and undertakings, whether
for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons, in the personal service of another, and
workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.'

xxx xxx xxx

"From the above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits of holiday
pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor excludes monthly paid
employees from the said benefits by inserting under Rule IV, Book III of the implementing rules, Section 2, which provides
that: 'employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of
not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether
worked or not.'" (132 SCRA 663, 672-673)

This ruling was reiterated by the Court en banc on August 28, 1985 in the case of Chartered Bank Employees Association
vs. Ople, wherein it added that:

"The questioned Sec. 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction No. 9 add another
excluded group, namely 'employees who are uniformly paid by the month.' While the additional exclusion is only in the
form of a presumption that all monthly paid employees have already been paid holiday pay, it constitutes a taking away or
a deprivation which must be in the law if it is to be valid. An administrative interpretation which diminishes the benefits of
labor more than what the statute delimits or withholds is obviously ultra vires." (138 SCRA 273, 282. See also CBTC
Employees Union vs., Clave, January 7, 1986, 141 SCRA 9.)

Lastly, respondent corporation contends that mandamus does not lie to compel the performance of an act which the law
does not clearly enjoin as a duty. True it is also that mandamus is not proper to enforce a contractual obligation, the
remedy being an action for specific performance (Province of Pangasinan vs. Reparations Commission, November 29,
1977, 80 SCRA 376). In the case at bar, however, in view of the above cited subsequent decisions of this Court clearly
defining the legal duty to grant holiday pay to monthly salaried employees, mandamus is an appropriate equitable remedy
(Dionisio vs. Paterno, July 23, 1980, 98 SCRA 677; Gonzales vs. Government Service Insurance System, September 10,
1981, 107 SCRA 492).

WHEREFORE, the questioned decision of respondent arbitrator is SET ASIDE and respondent corporation is ordered to
GRANT holiday pay to its monthly salaried employees. No costs.

SO ORDERED.Fernan, Alampay, Gutierrez, Jr. and Paras, JJ., concur.

10. CONDE VS. IAC, GR NO. 70443 SEPT. 15, 1986

BRAULIO CONDE, RUFINA CONDE, GERARDO CONDE, CONCHITA C. LUNDANG, and ALFREDO
VENTURA, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, HON. CESAR C. PERALEJO, in his capacity as Presiding Judge, Regional
Trial Court, Branch LXVI, Third Judicial Region, Capas, Tarlac, and MARCELO GUTIERREZ, respondents.

Tomas P. Matic, Jr. for petitioners.

Adelaido G. Rivera for private respondent.

GUTIERREZ, JR., J.:

On January 16, 1984, the petitioners filed an action to annul the judgment of the Court of Appeals dated September 23,
1981, which reversed the decision of the Regional Trial Court and ordered the petitioners and/or their successors-in-
interest to deliver immediately the ownership and possession of the property in question to the then plaintiff-appellant
Marcelo Gutierrez. In their complaint filed before the Regional Trial Court of Capas, Tarlac, the petitioners alleged that
through fraud, Gutierrez was able to make it appear that he was the son of Esteban Gutierrez and Fermina Ramos and as
a necessary consequence of such filiation, was the absolute owner by succession of the property in question.

On February 27, 1984, the trial court dismissed the petitioners' complaint on the ground that it had no jurisdiction to annul
the judgment of the Court of Appeals. Upon the denial of their motion for reconsideration, the petitioners filed a petition for
certiorari, mandamus and a writ of injunction before the appellate court. The said court in turn, dismissed the petition and
a subsequent motion for reconsideration on the grounds that a Regional Trial Court is without jurisdiction to annul the
judgment of the Court of Appeals and that only the Supreme Court is empowered to review the judgment of said appellate
court. Hence, the petitioners elevated the case before this Court.

On August 31, 1984, we issued a resolution dated August 22, 1984, remanding the case to the appellate court for
decision on the merits.

The resolution reads as follows:

The respondent intermediate Appellate Court erred when it declared that the complaint for annulment of judgment in this
case should be filed with the Supreme Court. This Court has no original jurisdiction to look into allegations of fraud upon
which the complaint for annulment is based. In January, 1984, the petitioners filed a complaint with the Regional Trial
Court of Tarlac seeking among other things the annulment of a decision which had already passed, on appeal, the Court
of Appeals in CA-G.R. No. 60139-R. On February 17, 1984, the lower court dismissed the petitioners' complaint for
annulment of judgment. The petitioners appealed the dismissal to the respondent Intermediate Appellate Court which
denied due course to the petition stating that what is sought to be annulled is a decision of the Court of Appeals over
which the regional trial court is obviously without jurisdiction. The decision sought to be annulled calls for the turning over
of possession to the original respondent of the disputed properties. While the judgment being enforced may have been
that of the Court of Appeals, it was actually an appellate judgment rendered on a review of the trial court's decision.
Considering that Section 9 of the Judiciary Reorganization Act of 1980-B.P. No. 129 gives the Intermediate Appellate
Court exclusive jurisdiction over actions for annulment of judgments of regional trial courts, the COURT RESOLVED to
REMAND this case to the Intermediate Appellate Court for it to hear and decide the action.

On January 29, 1985, the appellate court rendered a decision dismissing the petition for lack of jurisdiction and for lack of
merit. In its decision on the issue of jurisdiction, the respondent court ruled that since the decision of the Metropolitan Trial
Court can be annulled by the Regional Trial Court and a decision of the latter is annullable by the Court of Appeals, then
logically the decision of the appellate court should be annullable only by the Supreme Court. Moreover, the appellate court
ruled that it is but logical to conclude that it cannot annul its own decision unless there is an express grant under the
Judiciary Reorganization Act of 1980. Finding none, it stated that it must perforce dismiss the case for lack of jurisdiction.

On the merits of the petition, the appellate court ruled that the fraud relied upon by the petitioners is only intrinsic and
thus, even on the assumption that it has jurisdiction to decide the case, still the same has no merit. It dismissed the
petition. The petitioners elevated this decision to us.

On June 5, 1985, we resolved to require the respondents to comment on the petition. Notwithstanding proof that a copy of
the petition was served on the respondents' counsel on June 24, 1985, no comment has been filed.

We decide the petition.

We need not emphasize the rule that this Court decides appeals which only involve questions of law and that "it is not the
function of the Supreme Court to analyze or weigh such evidence all over again, its jurisdiction being limited to receiving
errors of law that might have been committed by the lower court." (Baniqued v. Court of Appeals, 127 SCRA 596, 601;
citing Tiongco v. de la Merced, 58 SCRA 89). It was, thus, totally pointless for the Intermediate Appellate Court to delve
into the question of whether or not it has jurisdiction to pass upon the merits of the petition which then alleged the
perpetration of fraud by one of the parties in the original case, and which thereby called for a review of the factual findings
of the court. Furthermore, the fact that this Court already remanded the case to the appellate court for decision on the
merits should have prompted the latter to limit its decision only to the merits of the case.

There are instances when this Court desires a further review of facts or a detailed analysis and systematic presentation of
issues which the appellate court is in a more favored position to accomplish. Standing between the trial courts and the
Supreme Court, the appellate court was precisely created to take over much of the work that used to be previously done
by this Court. It has been of great help to the Supreme Court in synthesizing facts, issues, and rulings in an orderly and
intelligible manner and in Identifying errors which ordinarily might have escaped detection. Statistics will show that the
great majority of petitions to review the decisions of the appellate court have been denied due course for lack of merit in
minute resolutions. The appellate court has, therefore, freed this Court to better discharge its constitutional duties and
perform its most important work which, in the words of Dean Vicente G. Sinco, "is less concerned with the decision of
cases that begin and end with the transient rights and obligations of particular individuals but is more intertwined with the
direction of national policies, momentous economic and social problems, the delimitation of governmental authority and its
impact upon fundamental rights." (Philippine Political Law, 10th Edition, p. 323). It is, therefore, difficult to understand why
a Division of the Intermediate Appellate Court should hesitate to help the Supreme Court and to act on an action which it
was specifically ordered to hear and decide.
If its initial hesitation was due to doubts about the correctness of our action, then it should recall the admonition in Tugade
v. Court of Appeals (85 SCRA 226, 230-231) that:

xxx xxx xxx

Respondent Court of Appeals really was devoid of any choice at all It could not have ruled in any other way on the legal
question raised. This Tribunal having spoken, its duty was to obey. It is as simple as that. There is relevance to this
excerpt from Barrera v. Barrera (34 SCRA 98): 'The delicate task of ascertaining the significance that attaches to a
constitutional or statutory provision, an executive order, a procedural norm or a municipal ordinance is committed to the
judiciary. It thus discharges a role no less crucial than that appertaining to the other two departments in the maintenance
of the rule of law. To assure stability in legal relations and avoid confusion, it has to speak with one voice. It does so with
finality, logically and rightly, through the highest judicial organ, this Court. What it says then should be definitive and
authoritative, binding on those occupying the lower ranks in the judicial hierarchy. They have to defer and to submit.' (Ibid.
107. The opinion of Justice Laurel in People v. Vera, 65 Phil. 56 [1937] was cited.) The ensuing paragraphs of the opinion
in Barrera further emphasizes the point: 'Such a thought was reiterated in an opinion of Justice J.B.L. Reyes and further
emphasized in these words: 'Judge Gaudencio Cloribel need not be reminded that the Supreme Court, by tradition and in
our system of judicial administration, has the last word on what the law is it is the final arbiter of any justifiable
controversy. There is only one Supreme Court from whose decisions an other courts should take their bearings. (Justice
J.B.L. Reyes spoke thus in Albert v. Court of First Instance of Manila [Br. VI], 23 SCRA 948, 961).

The fault of the Intermediate Appellate Court is mitigated by the fact that it still decided the remanded case on the merits.
It stated:

On February of 1950 an original complaint for recovery of possession of a parcel of land was filed before the Court of First
Instance of Tarlac, which was subsequently amended on March 19, 1951.

On May 20, 1976, after a full blown trial the Regional Trial Court Branch 64 (formerly Court of First Instance) of Tarlac,
rendered a decision dismissing the complaint and ordering plaintiff Marcelo Gutierrez to pay the defendants the costs of
the suit. The dispositive portion of which reads as follows:

WHEREFORE, judgment is hereby rendered dismissing the complaint and ordering plaintiff Marcelo Gutierrez to pay the
defendants the costs of this suit. He (sic) pronouncement as to damages for want of proof.

From the above judgment an appeal was filed with the Court of Appeals.

On September 23, 1981, the then Court of Appeals reversed the decision of the Regional Trial Court, Branch 64, this time
ordering the ten appellees (now petitioners) to deliver the ownership and possession of the litigated property to then
appellant (now respondent Marcelo Gutierrez), which decision became final and executory on December 20, 1982, the
dispositive portion of which reads, as follows:

WHEREFORE, in the light of the foregoing, the decision appealed from, not being in accordance with the applicable law
and evidence and finding validity in the errors assigned, is hereby reversed and set aside. In lieu thereof, another one is
entered ordering defendants-appellees and/or their successors-in-interest to deliver immediately the ownership and
possession of the property described under par. 3 of the complaint to herein plaintiff- appellant Marcelo Gutierrez. With
costs.

On January 16, 1984, an action to annul the judgment of the former Court of Appeals was filed before the Regional Trial
Court, Branch 56, Third Judicial Region in Capas, Tarlac.

On February 27, 1984, the respondent Court (Regional Trial Court), dismissed the case for annulment of judgment on the
ground that it has no jurisdiction to annul the judgment of the Court of Appeals.

On March 19, 1984, the motion for reconsideration filed by herein petitioner was denied by the respondent court.
Accordingly, a petition for certiorari, mandamus and a writ of injunction was filed before the Intermediate Appellate Court
and raffled to the Third Special Cases Division, The court dismissed the petition for lack of merit on the ground that a
Regional Trial Court is without jurisdiction to annul a judgment of the Intermediate Appellate Court, the dispositive portion
of which reads:

WHEREFORE, this case should be, as it is hereby DISMISSED OUTRIGHT. With costs against the petitioners.

On June 14, 1984, the motion for reconsideration filed by herein petitioner was denied by this Court.

xxx xxx xxx

Finally, a judgment based on alleged false testimony is not an extrinsic fraud by which an action for annulment of
judgment could be grounded. The Supreme Court in Ilacad v. Court of Appeals (supra, p. 302), declared that:

xxx xxx xxx

... and speaking of extrinsic fraud, it is that fraudulent scheme of the prevailing litigant which prevents a party from having
his day in court from presenting his case. Fraud has been regarded as extrinsic or collateral, within the meaning of the
rule 'where it is one of the effect of which prevents a party from having a trial, or real contests, or from presenting all of his
case to the court, or where it operates upon matters pertaining not to the judgment itself, but to the manner by which it
was procured so that there is not a fair submission of the controversy. In other words, extrinsic fraud refers to any
fraudulent act of the prevailing party in the litigation which is committed outside of the trial of the case, where the defeated
party has been prevented from presenting fully his side of the case, by fraud or deception practiced on him by his
opponent.

The resort to fraud in introducing fabricated evidence is definitely an intrinsic fraud, hence false testimony being a matter
of evidence is definitely intrinsic and not extrinsic. Fraud consisting in acting fictitious cause of false testimony is intrinsic
(sic) (Francisco v. David, 38 CG 714). Intrinsic fraud takes the form of acts of a party in a litigation during the trial such as
the use of forged instruments or perjured testimony, which did not affect the presentation of the case, but did prevent a
fair and just determination of the case (Libudan v. Palma, [S1, 45 SCRA 17]). Intrinsic fraud is not sufficient to attack a
judgment (Yatco v. Sumagui, 44623-R, July 31, 1971).

Petitioners stand that extrinsic fraud was employed by the respondents, is bereft of any factual basis, hence, even on
the assumption that this court has jurisdiction to decide this issue, still the petitioners cause of action must fail.
A careful review of the present petition and of the records of the appellate court on this case shows that even on the
assumption that all the facts alleged in the petition are true, the petition should be dismissed for lack of merit because the
fraud allegedly perpetrated by the private respondent in AC-G.R. SP No. 03301 is only intrinsic in nature and not extrinsic.
Fraud is regarded as extrinsic or collateral where it has prevented a party from having a trial or from presenting an of his
case to the court. (Asian Surety and Insurance Co. v. Island Steel, Inc., 118 SCRA 233, 239; citing Amuran v. Aquino, 38
Phil. 29). In the case at bar, the fraud was in the nature of documents allegedly manufactured by Marcelo Gutierrez to
make it appear that he was the rightful heir of the disputed property, Hence, the Intermediate Appellate Court is correct in
finding the fraud to be intrinsic in nature.

WHEREFORE, the petition is hereby DISMISSED for lack of merit. The respondents' counsel, Atty. Adelaido G. Rivera is
fined Five Hundred Pesos (P500.00) for his failure to act on the order to file comment.

SO ORDERED.

Feria (Chairman), Fernan, Alampay and Paras, JJ., concur

11. CHARTERED BANK EMPLOYEES ASSOCIATION VS OPLE, GR NO. 44747, AUG. 29, 1985

G.R. No. L-44717 August 28, 1985

THE CHARTERED BANK EMPLOYEES ASSOCIATION, petitioner,

vs.
HON. BLAS F. OPLE, in his capacity as the Incumbent Secretary of Labor, and THE CHARTERED
BANK, respondents.

GUTIERREZ, JR., J.:

This is a petition for certiorari seeking to annul the decision of the respondent Secretary, now Minister of Labor which
denied the petitioner's claim for holiday pay and its claim for premium and overtime pay differentials. The petitioner claims
that the respondent Minister of Labor acted contrary to law and jurisprudence and with grave abuse of discretion in
promulgating Sec. 2, Rule IV, Book III of the Integrated Rules and in issuing Policy Instruction No. 9, both referring to
holidays with pay.

On May 20, 1975, the Chartered Bank Employees Association, in representation of its monthly paid employees/members,
instituted a complaint with the Regional Office No. IV, Department of Labor, now Ministry of Labor and Employment
(MOLE) against private respondent Chartered Bank, for the payment of ten (10) unworked legal holidays, as well as for
premium and overtime differentials for worked legal holidays from November 1, 1974.

The memorandum for the respondents summarizes the admitted and/or undisputed facts as follows:

l. The work force of respondent bank consists of 149 regular employees, all of whom are paid by the month;

2. Under their existing collective bargaining agreement, (Art. VII thereof) said monthly paid employees are paid for
overtime work as follows:

Section l. The basic work week for all employees excepting security guards who by virtue of the nature of their work are
required to be at their posts for 365 days per year, shall be forty (40) hours based on five (5) eight (8) hours days, Monday
to Friday.

Section 2. Time and a quarter hourly rate shall be paid for authorized work performed in excess of eight (8) hours from
Monday through Friday and for any hour of work performed on Saturdays subject to Section 5 hereof.

Section 3. Time and a half hourly rate shall be paid for authorized work performed on Sundays, legal and special holidays.

xxx xxx xxx

xxx xxx xxx

Section 5. The provisions of Section I above notwithstanding the BANK may revert to the six (6) days work week, to
include Saturday for a four (4) hour day, in the event the Central Bank should require commercial banks to open for
business on Saturday.

3. In computing overtime pay and premium pay for work done during regular holidays, the divisor used in arriving at the
daily rate of pay is 251 days although formerly the divisor used was 303 days and this was when the respondent bank
was still operating on a 6-day work week basis. However, for purposes of computing deductions corresponding to
absences without pay the divisor used is 365 days.

4. All regular monthly paid employees of respondent bank are receiving salaries way beyond the statutory or minimum
rates and are among the highest paid employees in the banking industry.

5. The salaries of respondent bank's monthly paid employees suffer no deduction for holidays occurring within the month.

On the bases of the foregoing facts, both the arbitrator and the National Labor Relations Commission (NLRC) ruled in
favor of the petitioners ordering the respondent bank to pay its monthly paid employees, holiday pay for the ten (10) legal
holidays effective November 1, 1974 and to pay premium or overtime pay differentials to all employees who rendered
work during said legal holidays. On appeal, the Minister of Labor set aside the decision of the NLRC and dismissed the
petitioner's claim for lack of merit basing its decision on Section 2, Rule IV, Book Ill of the Integrated Rules and Policy
Instruction No. 9, which respectively provide:

Sec. 2. Status of employees paid by the month. Employees who are uniformly paid by the month, irrespective of the
number of working days therein, with a salary of not less than the statutory or established minimum wage shall be
presumed to be paid for all days in the month whether worked or not.

POLICY INSTRUCTION NO. 9

TO: All Regional Directors

SUBJECT: PAID LEGAL HOLIDAYS

The rules implementing PD 850 have clarified the policy in the implementation of the ten (10) paid legal holidays. Before
PD 850, the number of working days a year in a firm was considered important in determining entitlement to the benefit.
Thus, where an employee was working for at least 313 days, he was considered definitely already paid. If he was working
for less than 313, there was no certainty whether the ten (10) paid legal holidays were already paid to him or not.

The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily employees. In the case of monthly,
only those whose monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit.

Under the rules implementing PD 850, this policy has been fully clarified to eliminate controversies on the entitlement of
monthly paid employees. The new determining rule is this: 'If the monthly paid employee is receiving not less than P240,
the maximum monthly minimum wage, and his monthly pay is uniform from January to December, he is presumed to be
already paid the ten (10) paid legal holidays. However, if deductions are made from his monthly salary on account of
holidays in months where they occur, then he is still entitled to the ten (10) paid legal holidays.
These new interpretations must be uniformly and consistently upheld.

This issuance shall take effect immediately.

The issues are presented in the form of the following assignments of errors:

First Error

Whether or not the Secretary of Labor erred and acted contrary to law in promulgating Sec. 2, Rule IV, Book III of the
Integrated Rules and Policy Instruction No. 9.

Second Error

Whether or not the respondent Secretary of Labor abused his discretion and acted contrary to law in applying Sec. 2, Rule
IV of the Integrated Rules and Policy Instruction No. 9 abovestated to private respondent's monthly-paid employees.

Third Error

Whether or not the respondent Secretary of Labor, in not giving due credence to the respondent bank's practice of paying
its employees base pay of 100% and premium pay of 50% for work done during legal holidays, acted contrary to law and
abused his discretion in denying the claim of petitioners for unworked holidays and premium and overtime pay differentials
for worked holidays.

The petitioner contends that the respondent Minister of Labor gravely abused his discretion in promulgating Section 2,
Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9 as guidelines for the implementation of Articles 82
and 94 of the Labor Code and in applying said guidelines to this case. It maintains that while it is true that the respondent
Minister has the authority in the performance of his duty to promulgate rules and regulations to implement, construe and
clarify the Labor Code, such power is limited by provisions of the statute sought to be implemented, construed or clarified.
According to the petitioner, the so-called "guidelines" promulgated by the respondent Minister totally contravened and
violated the Code by excluding the employees/members of the petitioner from the benefits of the holiday pay, when the
Code itself did not provide for their expanding the Code's clear and concise conclusion and notwithstanding the Code's
clear and concise phraseology defining those employees who are covered and those who are excluded from the benefits
of holiday pay.

On the other hand, the private respondent contends that the questioned guidelines did not deprive the petitioner's
members of the benefits of holiday pay but merely classified those monthly paid employees whose monthly salary already
includes holiday pay and those whose do not, and that the guidelines did not deprive the employees of holiday pay. It
states that the question to be clarified is whether or not the monthly salaries of the petitioner's members already includes
holiday pay. Thus, the guidelines were promulgated to avoid confusion or misconstruction in the application of Articles 82
and 94 of the Labor Code but not to violate them. Respondent explains that the rationale behind the promulgation of the
questioned guidelines is to benefit the daily paid workers who, unlike monthly-paid employees, suffer deductions in their
salaries for not working on holidays. Hence, the Holiday Pay Law was enacted precisely to countervail the disparity
between daily paid workers and monthly-paid employees.
The decision in Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong (132 SCRA 663) resolved a
similar issue. Significantly, the petitioner in that case was also a union of bank employees. We ruled that Section 2, Rule
IV, Book III of the Integrated Rules and Policy Instruction No. 9, are contrary to the provisions of the Labor Code and,
therefore, invalid This Court stated:

It is elementary in the rules of statutory construction that when the language of the law is clear and unequivocal the law
must be taken to mean exactly what it says. In the case at bar, the provisions of the Labor Code on the entitlement to the
benefits of holiday pay are clear and explicit it provides for both the coverage of and exclusion from the benefit. In Policy
Instruction No. 9, the then Secretary of Labor went as far as to categorically state that the benefit is principally intended
for daily paid employees, when the law clearly states that every worker shall be paid their regular holiday pay. This is
flagrant violation of the mandatory directive of Article 4 of the Labor Code, which states that 'All doubts in the
implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be
resolved in favor of labor.' Moreover, it shall always be presumed that the legislature intended to enact a valid and
permanent statute which would have the most beneficial effect that its language permits (Orlosky v. Hasken, 155 A. 112)

Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5 of the Labor Code
authorizing him to promulgate the necessary implementing rules and regulations.

We further ruled:

While it is true that the contemporaneous construction placed upon a statute by executive officers whose duty is to
enforce it should be given great weight by the courts, still if such construction is so erroneous, as in the instant case, the
same must be declared as null and void. It is the role of the Judiciary to refine and, when necessary correct constitutional
(and/or statutory) interpretation, in the context of the interactions of the three branches of the government, almost always
in situations where some agency of the State has engaged in action that stems ultimately from some legitimate area of
governmental power (The Supreme Court in Modern Role, C.B. Swisher 1958, p. 36).

xxx xxx xxx

In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the Labor Code and Policy Instruction No.
9 issued by the then Secretary of Labor must be declared null and void. Accordinglyl public respondent Deputy Minister of
Labor Amado G. Inciong had no basis at all to deny the members of petitioner union their regular holiday pay as directed
by the Labor Code.

Since the private respondent premises its action on the invalidated rule and policy instruction, it is clear that the
employees belonging to the petitioner association are entitled to the payment of ten (10) legal holidays under Articles 82
and 94 of the Labor Code, aside from their monthly salary. They are not among those excluded by law from the benefits of
such holiday pay.

Presidential Decree No. 850 states who are excluded from the holiday provisions of that law. It states:

ART. 82. Coverage. The provision of this Title shall apply to employees in all establishments and undertakings, whether
for profit or not, but not to government employees, managerial employees, field personnel members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and
workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. (Emphasis supplied).

The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction No. 9 add
another excluded group, namely, "employees who are uniformly paid by the month." While the additional exclusion is only
in the form of a presumption that all monthly paid employees have already been paid holiday pay, it constitutes a taking
away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which diminishes the
benefits of labor more than what the statute delimits or withholds is obviously ultra vires.

It is argued that even without the presumption found in the rules and in the policy instruction, the company practice
indicates that the monthly salaries of the employees are so computed as to include the holiday pay provided by law. The
petitioner contends otherwise.

One strong argument in favor of the petitioner's stand is the fact that the Chartered Bank, in computing overtime
compensation for its employees, employs a "divisor" of 251 days. The 251 working days divisor is the result of subtracting
all Saturdays, Sundays and the ten (10) legal holidays from the total number of calendar days in a year. If the employees
are already paid for all non-working days, the divisor should be 365 and not 251.

The situation is muddled somewhat by the fact that, in computing the employees' absences from work, the respondent
bank uses 365 as divisor. Any slight doubts, however, must be resolved in favor of the workers. This is in keeping with the
constitutional mandate of promoting social justice and affording protection to labor (Sections 6 and 9, Article II,
Constitution). The Labor Code, as amended, itself provides:

ART. 4. Construction in favor of labor. All doubts in the implementation and interpretation of the provisions of this Code,
including its implementing rules and regulations, shall be resolved in favor of labor.

Any remaining doubts which may arise from the conflicting or different divisors used in the computation of overtime pay
and employees' absences are resolved by the manner in which work actually rendered on holidays is paid. Thus,
whenever monthly paid employees work on a holiday, they are given an additional 100% base pay on top of a premium
pay of 50%. If the employees' monthly pay already includes their salaries for holidays, they should be paid only premium
pay but not both base pay and premium pay.

The contention of the respondent that 100% base pay and 50% premium pay for work actually rendered on holidays is
given in addition to monthly salaries only because the collective bargaining agreement so provides is itself an argument in
favor of the petitioner stand. It shows that the Collective Bargaining Agreement already contemplated a divisor of 251
days for holiday pay computations before the questioned presumption in the Integrated Rules and the Policy Instruction
was formulated. There is furthermore a similarity between overtime pay, which is computed on the basis of 251 working
days a year, and holiday pay, which should be similarly treated notwithstanding the public respondents' issuances. In both
cases overtime work and holiday work- the employee works when he is supposed to be resting. In the absence of an
express provision of the CBA or the law to the contrary, the computation should be similarly handled.

We are not unmindful of the fact that the respondent's employees are among the highest paid in the industry. It is not the
intent of this Court to impose any undue burdens on an employer which is already doing its best for its personnel. we have
to resolve the labor dispute in the light of the parties' own collective bargaining agreement and the benefits given by law to
all workers. When the law provides benefits for "employees in all establishments and undertakings, whether for profit or
not" and lists specifically the employees not entitled to those benefits, the administrative agency implementing that law
cannot exclude certain employees from its coverage simply because they are paid by the month or because they are
already highly paid. The remedy lies in a clear redrafting of the collective bargaining agreement with a statement that
monthly pay already includes holiday pay or an amendment of the law to that effect but not an administrative rule or a
policy instruction.

12. PEOPLE VS SALES, ET. AL., GR NO. 66469, JULY 29, 1986

G.R. No. L-66469 July 29, 1986

PEOPLE OF THE PHILIPPINES and ALFREDO QUIJANO, petitioners,

vs.
HON. BERNARDO SALAS (In his capacity as Presiding Judge of RTC, Cebu, Branch VIII), MARIO ABONG,
ALFREDO DE LEON, ERIWADWIN MONTEBON, ROMEO DE GUZMAN, & EDUARDO MABUHAY, respondents.

Basilio E. Duaban for accused.

CRUZ, J.:

Mario Abong was originally charged with homicide in the Court of First Instance of Cebu but before he could be arraigned
the case was reinvestigated on motion of the prosecution. 1 As a result of the reinvestigation, an amended information was
filed, with no bail recommended, to which he pleaded not guilty. 2 Trial commenced, but while it was in progress, the
prisoner, taking advantage of the first information for homicide, succeeded in deceiving the city court of Cebu into granting
him bail and ordering his release; and so he escaped. 3 The respondent judge, learning later of the trickery, cancelled the
illegal bail bond and ordered Abong's re-arrest.4 But he was gone. Nonetheless, the prosecution moved that the hearing
continue in accordance with the constitutional provision authorizing trial in absentia under certain circumstances.5 The
respondent judge denied the motion, however, and suspended all proceedings until the return of the accused. 6 The order
of the trial court is now before us on certiorari and mandamus.7

The judge erred. He did not see the woods for the trees. He mistakenly allowed himself to be tethered by the literal
reading of the rule when he should have viewed it from the broader perspective of its intendment.

The rule is found in the last sentence of Article IV, Section 19, of the 1973 Constitution, reading in full as follows:

Section 19. In all criminal prosecution, the accused shall be presumed innocent until the contrary is proved and shall enjoy
the right to be heard by himself and counsel, to he informed of the nature and cause of the accusation against him, to
have a speedy, impartial, and public trial, to meet the witnesses face to face, and to have compulsory process to secure
the attendance of witnesses and the production of evidence in his behalf. However, after arraignment, trial may proceed
notwithstanding the absence of the accused provided that he has been duly notified and his failure to appear is unjustified.

The purpose of this rule is to speed up the disposition of criminal cases, trial of which could in the past be indefinitely
deferred, and many times completely abandoned, because of the defendant's escape. The old case ofPeople v.
Avanceña 8 required his presence at certain stages of the trial which as a result, had to be discontinued as long as the
defendant had not re-appeared or remained at large. As his right to be present at these stages was then held not waivable
even by his escape, such escape thus operated to the fugitive's advantage, and in mockery of the authorities, insofar as
the trial could not proceed as long as he had not been recaptured.

The doctrine laid down in that case has been modified by Section 19, which now allows trial in absentia, Now, the prisoner
cannot by simply escaping thwart his continued prosecution and possibly eventual conviction provided only that: a) he has
been arraigned; b) he has been duly notified of the trial; and c) his failure to appear is unjustified.

The respondent judge was probably still thinking of the old doctrine when he ruled that trial in absentia of the escapee
could not be held because he could not be duly notified under Section 19. He forgets that the fugitive is now deemed to
have waived such notice precisely because he has escaped, and it is also this escape that makes his failure to appear at
his trial unjustified. Escape can never be a legal justification. In the past, his escape "rewarded" him by postponing all
further proceedings against him and in effect ultimately absolving him of the charge he was facing. Under the present rule,
his escape will, legally speaking, operate to Ms disadvantage by preventing him from attending his trial, which will
continue even in his absence and most likely result in his conviction.

The right to be present at one's trial may now be waived except only at that stage where the prosecution intends to
present witnesses who will Identify the accused.9 Under Section 19, the defendant's escape will be considered a waiver of
this right and the inability of the court to notify him of the subsequent hearings will not prevent it from continuing with his
trial. He will be deemed to have received due notice. The same fact of his escape will make his failure to appear
unjustified because he has, by escaping, placed himself beyond the pale, and protection, of the law.

Trial in absentia was not allowed in Borja v. Mendoza 10 because it was held notwithstanding that the accused had not
been previously arraigned. His subsequent conviction was properly set aside. But in the instant case, since all the
requisites are present, there is absolutely no reason why the respondent judge should refuse to try the accused, who had
already been arraigned at the time he was released on the illegal bail bond. Abong should be prepared to bear the
consequences of his escape, including forfeiture of the right to be notified of the subsequent proceedings and of the right
to adduce evidence on his behalf and refute the evidence of the prosecution, not to mention a possible or even probable
conviction.

We admonish against a too-literal reading of the law as this is apt to constrict rather than fulfill its purpose and defeat the
intention of its authors. That intention is usually found not in "the letter that killeth but in the spirit that vivifieth," which is
not really that evanescent or elusive. As judges, we must look beyond and not be bound by the language of the law,
seeking to discover, by our own lights, the reason and the rhyme for its enactment. That we may properly apply it
according to its ends, we need and must use not only learning but also vision.
The trial judge is directed to investigate the lawyer who assisted Mario Abong in securing bail from the city court of Cebu
on the basis of the withdrawn information for homicide and to report to us the result of his investigation within sixty days.

WHEREFORE, the order of the trial court dated December 22, 1983, denying the motion for the trial in absentia of the
accused is set aside. The respondent judge is directed to continue hearing the case against the respondent Mario
Abong in absentia as long as he has not reappeared, until it is terminated. No costs.

13. VILLANUEVA VS COMELEC, GR NO. 54718, DECEMBER 4, 1985

224 Phil. 491

TEEHANKEE, J.:

Upon consideration of petitioner's motion for reconsideration of the decision of May 3, 1983[1] (which dismissed his petition
to set aside respondent Comelec's resolutions of February 21, 1980 and July 31, 1980 denying his petition for annulment
of the proclamation of respondent Vivencio Lirio as the elected vice-mayor of Dolores, Quezon and for his proclamation
instead as such elected vice-mayor for having received the clear majority of the votes cast), the comments of public and
private respondents and petitioner's consolidated reply and manifestation and motion of June 25, 1985 (stating that
respondent abandoned his claim to the office and accepted and assumed on June 10, 1985, the position of municipal trial
judge of Lucban and Sampaloc, Quezon, as verified from the records of the Office of the Court Administrator), the Court
Resolved to RECONSIDER and SET ASIDE its aforesaid decision and to GRANT the petition at bar.

The undisputed facts show that one Narciso Mendoza, Jr. had filed on January 4, 1980, the last day for filing of
certificates of candidacy in the January 30, 1980 local elections, his sworn certificate of candidacy as independent for the
office of vice-mayor of the municipality of Dolores, Quezon. But later on the very same day, Mendoza filed an unsworn
letter in his own handwriting withdrawing his said certificate of candidacy "for personal reasons." Later on January 25,
1980, petitioner Crisologo Villanueva, upon learning of his companion Mendoza's withdrawal, filed his own sworn
"Certificate of Candidacy in Substitution" of Mendoza's for the said office of vice mayor as a one-man independent ticket.
x x x The results showed petitioner to be the clear winner over respondent with a margin of 452 votes (3,112 votes as
against his opponent respondent Lirio's 21660 votes). But the Municipal Board of Canvassers disregarded all votes cast in
favor of petitioner as stray votes on the basis of the Provincial Election Officer's erroneous opinion that since petitioner's
name does not appear in the Comelec's certified list of candidates for that municipality, it could be presumed that his
candidacy was not duly approved by the Comelec so that his votes could not be "legally counted." x x x The canvassers
accordingly proclaimed respondent Vivencio G. Lirio as the only unopposed candidate and as the duly elected vice mayor
of the municipality of Dolores.
Respondent Comelec issued its questioned resolution on February 21, 1980 denying the petition on two grounds after
citing the pertinent legal provisions, as follows:

"The 1978 Election Code provides:

'SEC. 27. x x x No certificate of candidacy duly filed shall be considered withdrawn x x x unless the candidate files with the
office which received the certificate x x x or with the Commission a sworn statement of withdrawal x x x."

'SEC. 28. x x x If, after the last day for filing certificates of candidacy, a candidate with a certificate of candidacy duly filed
should x x x withdraw x x x any voter qualified for the office may file his certificate of candidacy for the office for which x x
x the candidate who has withdrawn x x x was a candidate on or before mid/day of election x x x.'

"Clearly, Petitioner Villanueva could not have substituted for Candidate Mendoza on the strength of Section 28 of the
1978 Election Code which he invokes. For one thing, Mendoza's withdrawal of his certificate is not under oath,
as required under Section 27 of the Code; hence it produces no legal effect. For another, said withdrawal was made not
after the last day (January 4, 1980) for filing certificates of candidacy, as contemplated under Sec. 28 of the Code, but
on that very same day." (Emphasis copied.)
Upon a restudy of the case, the Court finds merit in the reconsideration prayed for, which would respect the will of the
electorate instead of defeating the same through the invocation of formal or technical defects. (De Guzman vs. Board of
Canvassers, 48 Phil. 211 [1925], citing Lino Luna vs. Rodriguez, 39 Phil. 208 [1918]; Badelles vs. Cabili, 27 SCRA 121
[1969]; Yra vs. Abaño, 52 Phil. 380 [1928]; Canceran vs. Comelec, 107 Phil. 607 [1960]; Corocoro vs. Bascara, 9 SCRA
522 [1963], Pungutan vs. Abubakar, 43 SCRA 11 [1972]; and Lacson, Jr. vs. Posadas 72 SCRA 170 [1976]).

The Court holds that the Comelec's first ground for denying due course to petitioner's substitute certificate of candidacy,
i.e. that Mendoza's withdrawal of his certificate of candidacy was not "under oath," should be rejected. It is not seriously
contended by respondent nor by the Comelec that Mendoza's withdrawal was not an actual fact and a reality, so much so
that no votes were cast for him at all. In fact, Mendoza's name, even though his candidacy was filed on the last day within
the deadline, was not in the Comelec's certified list of candidates. His unsworn withdrawal filed later on the same day had
been accepted by the election registrar without protest nor objection. On the other hand, since there was no time to
include petitioner's name in the Comelec list of registered candidates, because the election was only four days away,
petitioner as substitute candidate circularized formal notices of his candidacy to all chairmen and members of the citizens
election committees in compliance with the suggestion of the Comelec Law Manager, Atty. Zoilo Gomez.

The fact that Mendoza's withdrawal was not sworn is but a technicality which should not be used to frustrate the people's
will in favor of petitioner as the substitute candidate. In Guzman vs. Board of Canvassers, 48 Phil. 211, clearly
applicable, mutatis mutandis, this Court held that "(T)he will of the people cannot be frustrated by a technicality that the
certificate of candidacy had not been properly sworn to. This legal provision is mandatory and non-compliance therewith
before the election would be fatal to the status of the candidate before the electorate, but after the people have expressed
their will, the result of the election cannot be defeated by the fact that the candidate has not sworn to his certificate or
candidacy." (See also Gundan vs. Court of First Instance, 66 Phil. 125). As likewise ruled by this Court in Canceran vs.
Comelec, 107 Phil. 607, the legal requirement that a withdrawal be under oath will be held to be merely directory and
Mendoza's failure to observe the requirement should be "considered a harmless irregularity."
As to the second ground, Mendoza's withdrawal of his certificate of candidacy right on the very same day that he filed his
certificate of candidacy on January 4, 1980 which was the very last day for filing of certificates of candidacy shows that he
was not serious about his certificate of candidacy. But this could not be done to would-be bonafide candidates, like
petitioner who had not filed his candidacy in deference to Mendoza's candidacy who was one of his "co-planners" with
"some concerned citizens ... (who) held causes to put up a slate that will run against the erstwhile unopposed KBL slate."

The Comelec's post-election act of denying petitioner's substitute candidacy certainly does not seem to be in consonance
with the substance and spirit of the law. Section 28 of the 1978 Election Code provides for such substitute candidates in
case of death, withdrawal or disqualification up to mid-day of the very day of the elections. Mendoza's withdrawal was filed
on the last hour of the last day for regular filing of candidacies on January 4, 1980, which he had filed earlier that same
day. For all intents and purposes, such withdrawal should therefore be considered as having been made substantially and
in truth after the last day, even going by the literal reading of the provision by the Comelec. Indeed, the statement of
former Chief Justice Enrique M. Fernando in his dissent that "the bona fides of petitioner Crisologo Villanueva y Paredes
as a substitute candidate cannot, (in his opinion), be successfully assailed. It follows that the votes cast in his favor must
be counted. Such being the case, there is more than sufficient justification for his proclamation as Vice Mayor. xxx".

ACCORDINGLY, the Court SETS ASIDE the questioned Resolutions of respondent Comelec and annuls the
proclamation of respondent Lirio as elected vice-mayor of Dolores, Quezon and instead declares petitioner as the duly
elected vice-mayor of said municipality and entitled forthwith to assume said office, take the oath of office and discharge
its functions. This resolution is IMMEDIATELY EXECUTORY. SO ORDERED.

Concepcion, Jr., Abad Santos, Plana, Escolin, Gutierrez, Jr., De La Fuente, Cuevas, Alampay, and Patajo, JJ., concur.

Aquino, C.J., see dissenting opinion.

Melencio-Herrera and Relova, JJ., on leave.

G. R. No. L-31455 February 28, 1985 FILIPINAS ENGINEERING AND MACHINE SHOP, Petitioner, vs. HON. JAIME N.
FERRER, LINO PATAJO et. Al. Cuevas J. FACTS: In preparation for the national elections of November 11, 1969, then
respondent Commissioners of the Commission on Elections (COMELEC) issued an INVITATION TO BID CALL No. 127
on September 16, 1969 calling for the submission of sealed proposals for the manufacture and delivery of 1 1,000 units of
voting booths.

Among the seventeen bidders who submitted proposals in response to the said INVITATION were the herein petitioner,
Filipinos Engineering and Machine Shop, (Filipinas for short) and the private respondent, Acme Steel Manufacturing
Company, (Acme for short). the COMELEC issued a Resolution awarding the contract (for voting booths) to Acme,
subject to the condition, among others, that “(Acme) improves the sample submitted in such manner as it would be rust
proof or rust resistant.
On October 11, 1969, the COMELEC issued Purchase Order No. 682 for the manufacture and supply of the 11,000 Units
of voting booths in favor of Acme. Acme accepted the terms of the purchase. chanroblesvirtualawlibrary chanrobles virtual
law library On October 16, 1969, Filipinas filed an Injunction suit with the then Court of First Instance of Manila, docketed
as Civil Case No. 77972, against herein public respondents COMELEC Commissioners, chairman and members of the
Comelec Bidding Committee, and private respondent Acme. hanroblesvirtualawlibrary chanrobles virtual law library
Filipinas also applied for a writ of preliminary injunction. After hearing petitioner’s said application, the respondent Judge
in an order dated October 20, 1969 denied the writ prayed for. Acting on the motion (to dismiss), the respondent Judge
issued the questioned Order dismissing Civil Case No. 77972. Filipinas’ motion for reconsideration was denied for lack of
merit. chanroblesvirtualawlibrary chanrobles virtual law library Hence, the instant appeal. chanroblesvirtualawlibrary
chanrobles virtual law library Issues:

Whether or not the lower court has jurisdiction to take cognizance of a suit involving an order of the COMELEC dealing
with an award of contract arising from its invitation to bid; Whether or not Filipinas, the losing bidder, has a cause of action
under the premises against the COMELEC and Acme, the winning bidder, to enjoin them from complying with their
contract. chanroblesvirtualawlibrary chanrobles virtual law library s virtual law library Held: The Supreme Court resolved
the first issue in the affirmative.

By constitutional mandate- chanrobles virtual law library The Commission on Elections shall have exclusive charge of the
enforcement and administration of all laws relative to the conduct of elections and shall exercise all other functions which
may be conferred upon it by law Hence it has been consistently held 9 that it is the Supreme Court, not the Court of First
Instance, which has exclusive jurisdiction to review on certiorari final decisions, orders or rulings of the COMELEC relative
to the conduct of elections and enforcement of election laws. hanroblesvirtualawlibrary chanrobles virtual law library We
are however, far from convince that an order of the COMELEC awarding a contract to a private party, as a result of its
choice among various proposals submitted in response to its invitation to bid comes within the purview of a “final order”
which is exclusively and directly appealable to this court on certiorari.

What is contemplated by the term “final orders, rulings and decisions” of the COMELEC reviewable by certiorari by the
Supreme Court as provided by law are those rendered in actions or proceedings before the COMELEC and taken
cognizance of by the said body in the exercise of its adjudicatory or quasi-judicial powers. chanroblesvirtualawlibrary
chanrobles virtual On the second issue, We rule that Filipinas, the losing bidder, has no cause of action under the
premises to enjoin the COMELEC from pursuing its contract with Acme, the winning bidder. hanroblesvirtualawlibrary
chanrobles virtual law library While it may be true that the lower court has the jurisdiction over controversies dealing with
the COMELEC’s award of contracts, the same being purely administrative and civil in nature, nevertheless, herein
petitioner has no cause of action on the basis of the allegations of its complaint. chanroblesvirtualawlibrary chanrobles
virtual law library Indeed, while the law requires the exercise of sound discretion on the part of procurement authorities, 10
and that the reservation to reject any or all ids may not be used as a shield to a fraudulent award, 11 petitioner has
miserably failed to prove or substantiate the existence of malice or fraud on the part of the public respondents in the
challenged award. chanroblesvirtualawlibrary chanrobles virtual law library In issuing the resolution awarding the contract
for voting booths in Acme’s favor, the Commissioners of the COMELEC had taken into account that Acme’s bid was the
lowest; that Acme was a responsible manufacturer; and that upon an ocular inspection of the samples submitted by the
bidders, Acme’s sample was favorable chosen subject to certain conditions cited in the resolution.

In fine, the public respondents properly exercised its sound discretion in making the award. chanroblesvirtualawlibrary
chanrobles virtual law library WHEREFORE, finding the instant petition to be without merit aside from being moot and
academic, the same is hereby DISMISSED. G. R. No. 108399 July 31, 1997 RAFAEL M. ALUNAN III et. al vs ROBERT
MIRASOL, et. al FACTS: August 27, 1992, the Commission on Elections issued Resolution No. 499, providing guidelines
for the holding of the general elections for the SK on September 30, 1992 The guidelines placed the SK elections under
the direct control and supervision of the DILG, with the technical assistance of the COMELEC. 2 After two
postponements, the elections were finally scheduled on December 4, 1992. Accordingly, registration in the six districts of
Manila was conducted. A total of 152,363 youngsters, aged 15 to 21 years old, registered, 15,749 of them filing
certificates of candidacies. The City Council passed the necessary appropriations for the elections.

On September 18, 1992, however, the DILG, through then Secretary Rafael M. Alunan III, issued a letter-resolution
“exemption” the City of Manila from holding elections for the SK on the ground that the elections previously held on May
26, 1990 were to be considered the first under the newly-enacted Local Government Code. On November 27, 1992
private respondents, claiming to represent the 24,000 members of the Katipunan ng Kabataan, filed a petition for certiorari
and mandamus in the RTC of Manila to set aside the resolution of the DILG.

They argued that petitioner Secretary of Interior and Local Government had no power to amend the resolutions of the
COMELEC calling for general elections for SKs and that the DILG resolution in question denied them the equal protection
of the laws. On November 27, 1992, the trial court, through Executive Judge, now COMELEC Chairman, Bernardo P.
Pardo, issued an injunction, ordering petitioners “to desist from implementing the order of the respondent Secretary dated
September 18, 1992, . . . until further orders of the Court. On the same day, he ordered petitioners “to perform the
specified pre-election activities in order to implement Resolution No. 2499 dated August 27, 1992 of the Commission on
Elections providing for the holding of a general election of the Sangguniang Kabataan on December 4, 1992
simultaneously in every barangay throughout the country. ” The case was subsequently reraffled to Branch 36 of the
same court. On January 19, 1993, the new judge, Hon. Wilfredo D. Reyes, rendered a decision, holding that (1) the DILG
had no power to “exempt” the City of Manila from holding SK elections on December 4, 1992 because under Art.

IX, C, §2(1) of the Constitution the power to enforce and administer “all laws and regulations relative to the conduct of an
election, plebiscite, initiative, referendum, and recall” is vested solely in the COMELEC; (2) the COMELEC had already in
effect determined that there had been no previous elections for KB by calling for general elections for SK officers in every
barangay without exception; and (3) the “exemption” of the City of Manila was violative of the equal protection clause of
the Constitution because, according to the DILG’s records, in 5,000 barangays KB elections were held between January
1, 1988 and January 1, 1992 but only in the City of Manila, where there were 897 barangays, was there no elections held
on December 4, 1992. Petitioners sought this review on certiorari. ISSUE: There are two questions raised in this case.
The first is whether the Secretary of Interior and Local Government can “exempt” a local government unit from holding
elections for SK officers on December 4, 1992 and the second is whether the COMELEC can provide that “the
Department of Interior and Local Government shall have direct control and supervision over the election of sangguniang
kabataan with the technical assistance by the Commission on Elections. ” HELD: First. As already stated, by §4 of
Resolution No. 2499, the COMELEC placed the SK elections under the direct control and supervision of the DILG.
Contrary to respondents’ contention, this did not contravene Art. IX, C, §2(1) of the Constitution which provides that the
COMELEC shall have the power to “enforce and administer all laws and regulations relative to the conduct of an election,
plebiscite, initiative, referendum, and recall. Elections for SK officers are not subject to the supervision of the COMELEC
in the same way that, as we have recently held, contests involving elections of SK officials do not fall within the jurisdiction
of the COMELEC Second. It is contended that, in its resolution in question, the COMELEC did not name the barangays
which, because they had conducted kabataang barangay elections between January 1, 1988 and January 1, 1992, were
not included in the SK elections to be held on December 4, 1992. That these barangays were precisely to be determined
by the DILG is, however, fairly inferable from the authority given to the DILG to supervise the conduct of the elections.

Since §532(d) provided for kabataang barangay officials whose term of office was extended beyond 1992, the authority to
supervise the conduct of elections in that year must necessarily be deemed to include the authority to determine which
kabataang barangay would not be included in the 1992 elections. The decision of the Regional Trial Court of Manila,
Branch 36 is REVERSED and the case filed against petitioner by private respondents is DISMISSED. G. R. No. 103956
March 31, 1992 BLO UMPAR ADIONG, Petitioner, vs. COMMISSION ON ELECTIONS, Respondent GUTIERREZ, JR. ,
J. : FACTS: Petitioner Blo Umpar Adiong, a senatorial candidate in the May 11, 1992 elections assailed the COMELEC’s
Resolution insofar as it prohibits the posting of decals and stickers in “mobile” places like cars and other moving vehicles.
According to him such prohibition is violative of Section 82 of the Omnibus Election Code and Section 11(a) of Republic
Act No. 6646.

In addition, the petitioner believes that with the ban on radio, television and print political advertisements, he, being a
neophyte in the field of politics stands to suffer grave and irreparable injury with this prohibition. The posting of decals and
stickers on cars and other moving vehicles would be his last medium to inform the electorate that he is a senatorial
candidate in the May 11, 1992 elections. Finally, the petitioner states that as of February 22, 1992 (the date of the
petition) he has not received any notice from any of the Election Registrars in the entire country as to the location of the
supposed “Comelec Poster Areas. ” chanrobles virtual law library ISSUE

Whether or not the Commission on Elections (COMELEC) may prohibit the posting of decals and stickers on “mobile”
places, public or private, and limit their location or publication to the authorized posting areas that it fixes. HELD: The
petition is impressed with merit. The COMELEC’s prohibition on posting of decals and stickers on “mobile” places whether
public or private except in designated areas provided for by the COMELEC itself is null and void on constitutional grounds.
First – the prohibition unduly infringes on the citizen’s fundamental right of free speech enshrined in the Constitution (Sec.
4, Article III). There is no public interest substantial enough to warrant the kind of restriction involved in this case.

The posting of decals and stickers in mobile places like cars and other moving vehicles does not endanger any substantial
government interest. There is no clear public interest threatened by such activity so as to justify the curtailment of the
cherished citizen’s right of free speech and expression. Under the clear and present danger rule not only must the danger
be patently clear and pressingly present but the evil sought to be avoided must be so substantive as to justify a clamp
over one’s mouth or a writing instrument to be stilled: Second – the questioned prohibition premised on the statute and as
couched in the resolution is void for overbreadth. ibrary A statute is considered void for overbreadth when “it offends the
constitutional principle that a governmental purpose to control or prevent activities constitutionally subject to state
regulations may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected
freedoms. ” (Zwickler v. Koota, 19 L ed 2d 444 [1967]). In sum, the prohibition on posting of decals and stickers on
“mobile” places whether public or private except in the authorized areas designated by the COMELEC becomes
censorship which cannot be justified by the Constitution: The petition was GRANTED. The portion of Section 15 (a) of
Resolution No. 347 of the Commission on Elections providing that “decals and stickers may be posted only in any of the
authorized posting areas provided in paragraph (f) of Section 21 hereof” is DECLARED NULL and VOID. G. R. No.
135691 September 27, 1999 EMMANUEL SINACA, petitioner, vs. MIGUEL MULA and COMMISSION ON ELECTIONS,
respondents. DAVIDE, JR. , C. J. : In the 11 May 1998 elections, the two opposing factions of the ruling party LAKAS-
NUCD-UMPD (hereafter LAKAS) filled in separate candidates for the position of mayor of the Municipality of Malimano,
Surigao del Norte. One faction headed by Robert Z. Barbers (hereafter “BARBERS Wing”) nominated Grachil G. Canoy
(hereafter CANOY), while the other group lead by Francisco T. MATUGAS (hereafter “MATUGAS Wing”) endorsed the
candidacy of Teodoro F. Sinaca, Jr. hereafter TEODORO). Miguel H. Mula (hereafter MULA), a candidate for vice-mayor
and belonging to the “BARBERS Wing,” filed before the COMELEC a petition for disqualification against TEODORO
which was docketed as SPA 98-021. On 8 May 1998, the Second Division of the COMELEC issued a resolution
disqualifying TEODORO as candidate for mayor of the Municipality of Malimono, Surigao del Norte and ordering the
cancellation of his certificate of candidacy because of prior conviction of bigamy, a crime involving moral turpitude. 2 On
10 May 1998, TEODORO filed a motion for reconsideration of the aforesaid resolution. On even date, herein petitioner
Emmanuel D.

Sinaca, (hereafter EMMANUEL), an independent candidate, withdrew his certificate of candidacy for Sangguniang Bayan
Member, joined and became a member of the LAKAS party and was nominated by the LAKAS “MATUGAS Wing” as the
substitute mayoralty candidate for the Municipality of Malimono, Surigao del Norte. On the basis of said nomination,
EMMANUEL filed his certificate of candidacy 3 attached thereto is his certificate of nomination as LAKAS mayoralty
candidate signed by Governor Francisco T. MATUGAS (hereafter MATUGAS), as party provincial chairman together with
EMMANUEL’s written acceptance of the party’s nomination. 4 On 11 May 1998, MULA filed through mail another petition
for disqualification, this time against EMMANUEL, which was received by the COMELEC on 14 May 1998 and was
docketed as SPA No. 98-292.

In his petition MULA contended that the nomination of EMMANUEL as substitute candidate is illegal on the following
grounds: a) The substitute, before he filed his Certificate of Candidacy as LAKAS candidate, was an independent
candidate. Being so, he cannot rightfully substitute the disqualified one; On 28 May 1998, the COMELEC Second Division
dismissed the petition for disqualification and upheld the candidacy for mayor of EMMANUEL. MULA filed a motion for
reconsideration raising in the main that the signature alone of MATUGAS in the nomination was not sufficient because the
party’s authority to nominate was given to both MATUGAS and Senator Robert S. Barbers (hereafter BARBERS), in their
joint capacity, and that the nomination of EMMANUEL is void since he was an independent candidate prior to his
nomination. On 6 October 1998, the COMELEC en banc issued a Resolution 9 which set aside the resolution dated 28
May 1998 of the Second Division and disqualified EMMANUEL. Emmanuel filed a Special Civil Action in the Supreme
Court for Certiorari, Mandamus and Prohibition. ISSUE: Whether or not Emmanuel’s nomination as a substitute candidate
was regular and valid. HELD: In the instant case, there was substantial compliance with the substitution of candidate.
Emmanuel was properly nominated as substitute candidate by the LAKAS Party to which Teodoro, the disqualified
candidate belongs as evidence by the Certificate of Nomination and Acceptance signed by Matugas, the Party’s provincial
chairman. The fact that EMMANUEL was an independent candidate prior to his nomination is immaterial.

What is more significant is that he had previously withdrawn his certificate of candidacy as independent candidate for
Sangguniang member before he filed his certificate of candidacy as a substitute for TEODORO at which time he was, for
all intents and purposes, already deemed a member of the LAKAS party “MATUGAS wing. ” Even the fact that
EMMANUEL only became a member of the LAKAS party after the disqualification of TEODORO, will not affect the validity
of the substitution. There is nothing in the Constitution or the statute which requires as a condition precedent that a
substitute candidate must have been a member of the party concerned for a certain period of time before he can be
nominated as such.

Section 77 of the Omnibus Election Code only mandates that a substitute candidate should be a person belonging to and
certified by the same political party as the candidate to be replaced. We cannot provide for an additional requirement or
condition not provided under the said provision without encroaching into the domain of the legislative department. Where
a candidate has received popular mandate, overwhelmingly and clearly expressed, all possible doubts should be resolved
in favor of the candidate’s eligibility for to rule otherwise is to defeat the will of the people. 33 Above and beyond all, the
determination of the true will of the electorate should be paramount. It is their voice, not ours or of anyone else, that must
prevail. This, in essence, is the democracy we continue to hold sacred. The petition was GRANTED.

The assailed resolution of 6 October 1998 of the COMELEC en banc is hereby REVERSED and SET ASIDE and another
one rendered declaring EMMANUEL SINACA as having been duly elected mayor of the Municipality of Malimono, Surigao
del Norte. G. R. No. L-54718 December 4, 1985 CRISOLOGO VILLANUEVA Y PARDES, petitioner, vs. COMMISSION
ON ELECTIONS, MUNICIPAL BOARD OF CANVASSERS OF DOLORES, QUEZON, VIVENCIO G. LIRIO respondents.
TEEHANKEE, J. : The undisputed facts show that one Narciso Mendoza, Jr. had filed on January 4, 1980, the last day for
filing of certificates of candidacy in the January 30, 1980 local elections, his sworn certificate of candidacy as independent
or the office of vice-mayor of the municipality of Dolores, Quezon. But later on the very same day, Mendoza filed an
unsworn letter in his own handwriting withdrawing his said certificate of candidacy “for personal reasons. ” Later on
January 25, 1980, petitioner Crisologo Villanueva, upon learning of his companion Mendoza’s withdrawal, filed his own
sworn “Certificate of Candidacy in substitution” of Mendoza’s for the said office of vice mayor as a one-man independent
ticket. … The results showed petitioner to be the clear winner over respondent with a margin of 452 votes (3,112 votes as
against his opponent respondent Lirio’s 2,660 votes).

But the Municipal Board of Canvassers disregarded all votes cast in favor of petitioner as stray votes on the basis of the
Provincial Election Officer’s erroneous opinion that since petitioner’s name does not appear in the Comelec’s certified list
of candidates for that municipality, it could be presumed that his candidacy was not duly approved by the Comelec so that
his votes could not be “legally counted. ” … The canvassers accordingly proclaimed respondent Vivencio G. Lirio as the
only unopposed candidate and as the duly elected vice mayor of the municipality of Dolores. Villanueva filed a petition for
annulment of the proclamation of Lirio.

Respondent Comelec issued its questioned resolution on February 21, 1980 denying the petition on the ground that
Villanueva’s withdrawal of certificate is not under oath. And that the withdrawal was made not after the last dy but on that
very same day. ISSUE: Upon a restudy of the case, the Court finds merit in the reconsideration prayed for, which would
respect the will of the electorate instead of defeating the same through the invocation of formal or technical defects. The
Court holds that the Comelec’s first ground for denying due course to petitioner’s substitute certificate of candidacy, i. e.
that Mendoza’s withdrawal of his certificate of candidacy was not “under oath,” should be rejected.

It is not seriously contended by respondent nor by the Comelec that Mendoza’s withdrawal was not an actual fact and a
reality, so much so that no votes were cast for him at all, In fact, Mendoza’s name, even though his candidacy was filed
on the last day within the deadline, was not in the Comelec’s certified list of candidates. His unsworn withdrawal filed later
on the same day had been accepted by the election registrar without protest nor objection The fact that Mendoza’s
withdrawal was not sworn is but a technicality which should not be used to frustrate the people’s will in favor of petitioner
as the substitute candidate. As to the second ground, Mendoza’s withdrawal of his certificate of candidacy right on the
very same day that he filed his certificate of candidacy on January 4, 1980 which was the very last day for filing of
certificates of candidacy shows that he was not serious about his certificate of candidacy.

But this could not be done to would be bonafide candidates, like petitioner who had not filed his candidacy in deference to
Mendoza’s candidacy who was one of his ” co-planners ” with “some concerned citizens … (who) held causes to put up a
slate that will run against the erstwhile unopposed KBL slate.

ACCORDINGLY, the Court SETS ASIDE the questioned Resolutions of respondent Comelec and annuls the proclamation
of respondent Lirio as elected vice-mayor of Dolores, Quezon and instead declares petitioner as the duly elected vice-
mayor of said municipality and entitled forthwith to assume said office, take the oath of office and discharge its functions
[G. R. No. 136351. July 28, 1999]

JOEL G. MIRANDA, Petitioner, vs. ANTONIO M. ABAYA and the COMMISSION ON ELECTIONS, Respondents. MELO,
J. : FACTS: On March 24, 1998, Jose Pempe Miranda, then incumbent mayor of Santiago City, Isabela, filed his
certificate of candidacy for the same mayoralty post for the synchronized May 11, 1998 elections. On March 27, 1998,
private respondent Antonio M. Abaya filed a Petition to Deny Due Course to and/or Cancel Certificate of Candidacy (pp.
26-33, Rollo), which was docketed as SPA No. 98-019. The petition was GRANTED by the Comelec in its resolution
dated May 5, 1998 (pp. 36-43, Rollo). The Comelec further ruled to DISQUALIFY Jose Pempe Miranda. On May 6, 1998,
way beyond the deadline for filing a certificate of candidacy, petitioner Joel G. Miranda filed his certificate of candidacy for
the mayoralty post, supposedly as a substitute for his father, Jose Pempe During the May 11, 1998 elections, petitioner
and private respondent vied for the mayoralty seat, with petitioner garnering 22,002 votes, 1,666 more votes than private
respondent who got only 20, 336 votes. On May 13, 1998, private respondent filed a Petition to Declare Null and Void
Substitution with Prayer for Issuance of Writ of Preliminary Injunction and/or Temporary Restraining Order, which was
docketed as SPA No. 98-288.

He prayed for the nullification of petitioners certificate of candidacy for being void ab initio because the certificate of
candidacy of Jose Pempe Miranda, whom petitioner was supposed to substitute, had already been cancelled and denied
due course. On May 16, 1998, Comelecs First Division dismissed SPA No. 98-288 motu proprio (pp. 57-61, Rollo). Private
respondent moved for reconsideration (pp. 62-72, Rollo). On December 8, 1998, the Comelec En Banc rendered the
assailed decision aforequoted, resolving to GRANT the motion for reconsideration, thus nullifying the substitution by
petitioner Joel G. Miranda of his father as candidate for the mayoralty post of Santiago City. On December 9, 1998,
petitioner sought this Courts intercession via a petition for certiorari, with prayer for the issuance of a temporary
restraining order and/or writ of preliminary injunction.

ISSUES: 1. Whether the annulment of petitioners substitution and proclamation was issued without jurisdiction and/or with
grave abuse of discretion amounting to lack of jurisdiction; and 2. Whether the order of the Comelec directing the
proclamation of the private respondent was issued with grave abuse of discretion amounting to lack of jurisdiction. HELD:
The Court finds neither lack of jurisdiction nor grave abuse of discretion attended the annulment of the substitution and
proclamation of petitioner. On the matter of jurisdiction, there is no question that the case at hand is within the exclusive
original jurisdiction of the Comelec. On the issue of soundness of the disposition in SPA No. 8-288, the Court finds that
the Comelecs action nullifying the substitution by and proclamation of petitioner for the mayoralty post of Santiago City,
Isabela is proper and legally sound. All told, a disqualified candidate may only be substituted if he had a valid certificate of
candidacy in the first place because, if the disqualified candidate did not have a valid and seasonably filed certificate of
candidacy, he is and was not a candidate at all. If a person was not a candidate, he cannot be substituted under Section
77 of the Code. Besides, if we were to allow the so-called substitute to file a new and original certificate of candidacy
beyond the period for the filing thereof, it would be a crystalline case of unequal protection of the law, an act abhorred by
our Constitution. The question to settle next is whether or not aside from Joel Pempe Miranda being disqualified by the
Comelec in its May 5, 1998 resolution, his certificate of candidacy had likewise been denied due course and cancelled.
The Court rules that it was. Comelec committed no grave abuse of discretion in resolving SPA No. 98-288 in favor of
private respondent. As earlier pointed out, the result in the dispositive portion of the December 8, 1998 resolution
pertaining to the issues involved in SPA No. 98-288 is correct insofar as it annulled the election and proclamation of Joel
G. Miranda. But even assuming for the sake of argument that it is not, still, this supposed error does not constitute grave
abuse of discretion which may be annulled and reversed in the present petition for certiorari.

14. ROSS INDUSTRIAL CONSTRUCTION INC., ET. AL. VS. NLRC, GR NO. 172409, FEB. 4, 2008

DECISION
TINGA, J.:

In this Petition for Review on Certiorari[1] under Rule 45 of the 1997 Rules of Civil Procedure, petitioners Roos Industrial
Construction, Inc. and Oscar Tocmo assail the Court of Appeals [2] Decision dated 12 January 2006 in C.A. G.R. SP No.
87572 and its Resolution[3] dated 10 April 2006 denying their Motion for Reconsideration.[4]

The following are the antecedents.

On 9 April 2002, private respondent Jose Martillos (respondent) filed a complaint against petitioners for illegal dismissal
and money claims such as the payment of separation pay in lieu of reinstatement plus full backwages, service incentive
leave, 13th month pay, litigation expenses, underpayment of holiday pay and other equitable reliefs before the National
Capital Arbitration Branch of the National Labor Relations Commission (NLRC), docketed as NLRC NCR South Sector
Case No. 30-04-01856-02.

Respondent alleged that he had been hired as a driver-mechanic sometime in 1988 but was not made to sign any
employment contract by petitioners. As driver mechanic, respondent was assigned to work at Carmona, Cavite and he
worked daily from 7:00 a.m. to 10:00 p.m. at the rate of P200.00 a day. He was also required to work during legal holidays
but was only paid an additional 30% holiday pay. He likewise claimed that he had not been paid service incentive leave
and 13th month pay during the entire course of his employment. On 16 March 2002, his employment was allegedly
terminated without due process.[5]

Petitioners denied respondents allegations. They contended that respondent had been hired on several occasions as a
project employee and that his employment was coterminous with the duration of the projects. They also maintained that
respondent was fully aware of this arrangement. Considering that respondents employment had been validly terminated
after the completion of the projects, petitioners concluded that he is not entitled to separation pay and other monetary
claims, even attorneys fees.[6]

The Labor Arbiter ruled that respondent had been illegally dismissed after finding that he had acquired the status of a
regular employee as he was hired as a driver with little interruption from one project to another, a task which is necessary
to the usual trade of his employer.[7] The Labor Arbiter pertinently stated as follows:

x x x If it were true that complainant was hired as project employee, then there should have been project
employment contracts specifying the project for which complainants services were hired, as well as the duration
of the project as required in Art. 280 of the Labor Code. As there were four (4) projects where complainant was
allegedly assigned, there should have been the equal number of project employment contracts executed by the
complainant. Further, for every project termination, there should have been the equal number of termination
report submitted to the Department of Labor and Employment. However, the record shows that there is only one
termination [report] submitted to DOLE pertaining to the last project assignment of complainant in
Carmona, Cavite.

In the absence of said project employment contracts and the corresponding Termination Report to DOLE at every
project termination, the inevitable conclusion is that the complainant was a regular employee of the respondents.

In the case of Maraguinot, Jr. v. NLRC, 284 SCRA 539, 556 [1998], citing capital Industrial Construction Group v.
NLRC, 221 SCRA 469, 473-474 [1993], it was ruled therein that a project employee may acquire the status of a
regular employee when the following concurs: (1) there is a continuous rehiring of project employees even after
the cessation of a project; and (2) the tasks performed by the alleged project employee are vital, necessary and
indispensable to the usual business or trade of the employer. Both factors are present in the instant case. Thus,
even granting that complainant was hired as a project employee, he eventually became a regular employee as
there was a continuous rehiring of this services.

xxx

In the instant case, apart from the fact that complainant was not made to sign any project employment contract x
x x he was successively transferred from one project after another, and he was made to perform the same kind of
work as driver.[8]

The Labor Arbiter ordered petitioners to pay respondent the aggregate sum of P224,647.17 representing backwages,
separation pay, salary differential, holiday pay, service incentive leave pay and 13 th month pay.[9]

Petitioners received a copy of the Labor Arbiters decision on 17 December 2003. On 29 December 2003, the last day of
the reglementary period for perfecting an appeal, petitioners filed a Memorandum of Appeal [10] before the NLRC and paid
the appeal fee. However, instead of posting the required cash or surety bond within the reglementary period, petitioners
filed a Motion for Extension of Time to Submit/Post Surety Bond. [11] Petitioners stated that they could not post and submit
the required surety bond as the signatories to the bond were on leave during the holiday season, and made a commitment
to post and submit the surety bond on or before 6 January 2004. The NLRC did not act on the motion. Thereafter, on 6
January 2004, petitioners filed a surety bond equivalent to the award of the Labor Arbiter. [12]

In a Resolution[13] dated July 29, 2004, the Second Division of the NLRC dismissed petitioners appeal for lack of
jurisdiction. The NLRC stressed that the bond is an indispensable requisite for the perfection of an appeal by the employer
and that the perfection of an appeal within the reglementary period and in the manner prescribed by law is mandatory and
jurisdictional. In addition, the NLRC restated that its Rules of Procedure proscribes the filing of any motion for extension of
the period within which to perfect an appeal. The NLRC summed up that considering that petitioners appeal had not been
perfected, it had no jurisdiction to act on said appeal and the assailed decision, as a consequence, has become final and
executory.[14] The NLRC likewise denied petitioners Motion for Reconsideration [15] for lack of merit in another
Resolution.[16] On 11 November 2004, the NLRC issued an entry of judgment declaring its resolution final and executory
as of 9 October 2004. On respondents motion, the Labor Arbiter ordered that the writ of execution be issued to enforce
the award. On 26 January 2005, a writ of execution was issued.[17]

Petitioners elevated the dismissal of their appeal to the Court of Appeals by way of a special civil action of certiorari. They
argued that the filing of the appeal bond evinced their willingness to comply and was in fact substantial compliance with
the Rules. They likewise maintained that the NLRC gravely abused its discretion in failing to consider the meritorious
grounds for their motion for extension of time to file the appeal bond. Lastly, petitioners contended that the NLRC gravely
erred in issuing an entry of judgment as the assailed resolution is still open for review. [18] On 12 January 2006, the Court
of Appeals affirmed the challenged resolution of the NLRC. Hence, the instant petition.

Before this Court, petitioners reiterate their previous assertions. They insist on the application of Star Angel Handicraft v.
National Labor Relations Commission, et al.[19] where it was held that a motion for reduction of bond may be filed in lieu of
the bond during the period for appeal. They aver that Borja Estate v. Ballad,[20] which underscored the importance of the
filing of a cash or surety bond in the perfection of appeals in labor cases, had not been promulgated yet in 2003 when
they filed their appeal. As such, the doctrine in Borja could not be given retroactive effect for to do so would prejudice and
impair petitioners right to appeal. Moreover, they point out that judicial decisions have no retroactive effect.[21]

The Court denies the petition.

The Court reiterates the settled rule that an appeal from the decision of the Labor Arbiter involving a monetary award is
only deemed perfected upon the posting of a cash or surety bond within ten (10) days from such decision. [22] Article 223 of
the Labor Code states:

ART. 223. Appeal.Decisions, awards or orders of the Labor Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders.

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from.

xxx

Contrary to petitioners assertion, the appeal bond is not merely procedural but jurisdictional. Without said bond, the NLRC
does not acquire jurisdiction over the appeal.[23]Indeed, non-compliance with such legal requirements is fatal and has the
effect of rendering the judgment final and executory. [24] It must be stressed that there is no inherent right to an appeal in a
labor case, as it arises solely from the grant of statute.[25]

Evidently, the NLRC did not acquire jurisdiction over petitioners appeal within the ten (10)-day reglementary period to
perfect the appeal as the appeal bond was filed eight (8) days after the last day thereof. Thus, the Court cannot ascribe
grave abuse of discretion to the NLRC or error to the Court of Appeals in refusing to take cognizance of petitioners
belated appeal.

While indeed the Court has relaxed the application of this requirement in cases where the failure to comply with the
requirement was justified or where there was substantial compliance with the rules, [26] the overpowering legislative intent
of Article 223 remains to be for a strict application of the appeal bond requirement as a requisite for the perfection of an
appeal and as a burden imposed on the employer.[27] As the Court held in the case of Borja Estate v. Ballad:[28]

The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by the
employer is underscored by the provision that an appeal may be perfected only upon the posting of a cash or
surety bond. The word only makes it perfectly clear that the LAWMAKERS intended the posting of a cash or
surety bond by the employer to be

the exclusive means by which an employers appeal may be considered completed. The law however does not
require its outright payment, but only the posting of a bond to ensure that the award will be eventually paid should
the appeal fail. What petitioners have to pay is a moderate and reasonable sum for the premium of such bond.[29]
Moreover, no exceptional circumstances obtain in the case at bar which would warrant a relaxation of the bond
requirement as a condition for perfecting the appeal. It is only in highly meritorious cases that this Court opts not to strictly
apply the rules and thus prevent a grave injustice from being done [30] and this is not one of those cases.

In addition, petitioners cannot take refuge behind the Courts ruling in Star Angel. Pertinently, the Court stated in Computer
Innovations Center v. National Labor Relations Commission:[31]

Moreover, the reference in Star Angel to the distinction between the period to file the appeal and to perfect the
appeal has been pointedly made only once by this Court in Gensoli v. NLRC thus, it has not acquired the sheen of
venerability reserved for repeatedly-cited cases. The distinction, if any, is not particularly evident or material in
the Labor Code; hence, the reluctance of the Court to adopt such doctrine. Moreover, the present provision in
the NLRC Rules of Procedure, that the filing of a motion to reduce bond shall not stop the running of the period to
perfect appeal flatly contradicts the notion expressed in Star Angel that there is a distinction between filing an
appeal and perfecting an appeal.

Ultimately, the disposition of Star Angel was premised on the ruling that a motion for reduction of the appeal bond
necessarily stays the period for perfecting the appeal, and that the employer cannot be expected to perfect the
appeal by posting the proper bond until such time the said motion for reduction is resolved. The unduly stretched-
out distinction between the period to file an appeal and to perfect an appeal was not material to the resolution
of Star Angel, and thus could properly be considered as obiter dictum.[32]

Lastly, the Court does not agree that the Borja doctrine should only be applied prospectively. In the first place, Borja is not
a ground-breaking precedent as it is a reiteration, emphatic though, of long standing jurisprudence. [33] It is well to recall
too our pronouncement in Senarillos v. Hermosisima, et al.[34] that the judicial interpretation of a statute constitutes part of
the law as of the date it was originally passed, since the Courts construction merely establishes the contemporaneous
legislative intent that the interpreted law carried into effect. Such judicial doctrine does not amount to the passage of a
new law but consists merely of a construction or interpretation of a pre-existing one, as is the situation in this case.[35]

At all events, the decision of the Labor Arbiter appears to be well-founded and petitioners ill-starred appeal untenable.

WHEREFORE, the Petition is DENIED. Costs against petitioners.

SO ORDERED.

DANTE O. TINGA

15. CAYETANO VS MONSOD – GR NO. 100113, SEPT. 3, 1991

16. LEGARDA VS COURT OF APPEALS, JUNE 10, 1992

G.R. No. 94457 October 16, 1997

VICTORIA LEGARDA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, NEW CATHAY HOUSE, INC., THE HONORABLE REGIONAL TRIAL
COURT OF QUEZON CITY, Branch 94, respondents.

RESOLUTION

ROMERO, J.:

For our resolution is the motion for reconsideration of the March 18, 1991, decision of the Court's First Division, filed by
private respondent New Cathay House, Inc. (Cathay). A brief narration of the facts is in order.

The parties hereto entered into a lease agreement over a certain Quezon City property owned by petitioner Victoria
Legarda. For some reason or another, she refused to sign the contract although respondent lessee, Cathay, made a
deposit and a down payment of rentals, prompting the latter to file before the Regional Trial Court of Quezon City, Branch
94 a complaint1 against the former for specific performance with preliminary injunction and damages. The court a
quo issued the injunction. In the meantime, Legarda's counsel, noted lawyer Dean Antonio Coronel, requested a 10-day
extension of time to file an answer which the court granted. Atty. Coronel, however, failed to file an answer within the
extended period. His client was eventually declared in default, Cathay was allowed to present evidence ex-parte, and on
March 25, 1985, a judgment by default was reached by the trial court ordering Legarda to execute the lease contract in
favor of, and to pay damages to, Cathay.

On April 9, 1985, a copy of said decision was served on Atty. Coronel but he took no action until the judgment became
final and executory. A month later, the trial court issued a writ of execution and a public auction was held where Cathay's
manager, Roberto V. Cabrera Jr., as highest bidder, was awarded the property of P367,500.00 in satisfaction of the
judgment debt. Consequently, a Certificate of Sale was issued by the sheriff on June 27, 1985. Upon failure of Legarda to
redeem her property within the one-year redemption period, a Final Deed of Sale was issued by the sheriff on July 8,
1986, which was registered by Cabrera with the Register of Deeds three days later. Hence, Legarda's Transfer Certificate
of Title (TCT) No. 270814 was cancelled with the issuance of TCT No. 350892 in the name of Cabrera.

Despite the lapse of over a year since the judgment by default became final and executory, Atty. Coronel made no move
on behalf of his client. He did not even inform her of all these developments. When Legarda did learn of the adverse
decision, "she nevertheless did not lose faith in her counsel" 2 and prevailed upon him to seek appropriate relief. Thus, on
October 23, 1986, he filed a petition for annulment of judgment with prayer for the issuance of a writ of preliminary
mandatory injunction before the Court of Appeals.3

On November 29, 1989, the appellate court rendered a decision affirming the March 25, 1985, decision of the trial court,
dismissing the petition for annulment of judgment, and holding Legarda bound by the negligence of her counsel. It
considered her allegation of fraud by Cathay to be "improbable," and added that there was "pure and simple negligence"
on the part of petitioner's counsel who failed to file an answer and, later, petition for relief from judgment default. Upon
notice of the Court of Appeals decision, Atty. Coronel again neglected to protect his client's interest by failing to file a
motion for reconsideration or to appeal therefrom until said decision became final on December 21, 1989.
Sometime in March 1990, Legarda learned of the adverse decision of the Court of Appeals dated November 29, 1989, not
from Atty. Coronel but from his secretary. She then hired a new counsel for the purpose of elevating her case to this
Court. The new lawyer filed a petition for certiorari praying for the annulment of the decision of the trial and appellate
courts and of the sheriff's sale, alleging, among other things, that Legarda lost in the courts below because her previous
lawyer was grossly negligent and inefficient, whose omissions cannot possibly bind her because this amounted to
violation of her right to due process of law. She, therefore, asked Cathay (not Cabrera) to reconvey the subject property to
her.

On March 18, 1991, a decision4 was rendered in this case by Mr. Justice Gancayco, ruling, inter alia, as follows: (a)
granting the petition; (b) nullifying the trial court's decision dated March 25, 1985, the Court of Appeals decision dated
November 29, 1989, the Sheriff's Certificate of Sale dated June 27, 1985, of the property in question, and the subsequent
final deed of sale covering the same property; and (c) ordering Cathay to reconvey said property to Legarda, and the
Register of Deeds to cancel the registration of said property in the name of Cathay (not Cabrera) and to issue a new one
in Legarda's name.

The Court then declared that Atty. Coronel committed, not just ordinary or simple negligence, but reckless, inexcusable
and gross negligence, which deprived his client of her property without due process of law. His acts, or the lack of it,
should not be allowed to bind Legarda who has been "consigned to penury" because "her lawyer appeared to have
abandoned her case not once but repeatedly." Thus, the Court ruled against tolerating "such unjust enrichment" of Cathay
at Legarda's expense, and noted that counsel's "lack of devotion to duty is so gross and palpable that this Court must
come to the aid of his distraught client."

Aggrieved by this development, Cathay filed the instant motion for reconsideration, alleging, inter alia, that reconveyance
is not possible because the subject property had already been sold by its owner, Cabrera, even prior to the promulgation
of said decision.

By virtue of the Gancayco decision, Cathay was duty bound to return the subject property to Legarda. The impossibility of
this directive is immediately apparent, for two reasons: First, Cathay neither possessed nor owned the property so it is in
no position to reconvey the same; second, even if it did, ownership over the property had already been validly transferred
to innocent third parties at the time of promulgation of said judgment.

There is no question that the highest bidder at the public auction was Cathay's manager. It has not been shown nor even
alleged, however, that Roberto Cabrera had all the time been acting for or in behalf of Cathay. For all intents and
purposes, Cabrera was simply a vendee whose payment effectively extinguished Legarda's liability to Cathay as the
judgment creditor. No proof was ever presented which would reveal that the sale occurred only on paper, with Cabrera
acting as a mere conduit for Cathay. What is clear from the records is that the auction sale was conducted regularly, that
a certificate of sale and, subsequently, a final deed of sale were issued to Cabrera which allowed him to consolidate his
ownership over the subject property, register it and obtain a title in his own name, and sell it to Nancy Saw, an innocent
purchaser for value, at a premium price. Nothing on record would demonstrate that Cathay was the beneficiary of the sale
between Cabrera and Saw. Cabrera himself maintained that he was "acting in his private (as distinct from his corporate)
capacity" 5 when he participated in the bidding.
Since the decision of the Court of Appeals gained finality on December 21, 1989, the subject property has been sold and
ownership thereof transferred no less than three times, viz.: (a) from Cabrera to Nancy Saw on March 21, 1990, four
months after the decision of the Court of Appeals became final and executory and one year before the promulgation of the
March 18, 1991, decision under reconsideration; (b) from Nancy Saw to Lily Tanlo Sy Chua on August 7, 1990, more than
one year before the Court issued a temporary restraining order in connection with this case; and (c) from the spouses
Victor and Lily Sy Chua to Janet Chong Luminlun on April 3, 1992. With these transfers, Cabrera's TCT No. 350892 gave
way to Saw's TCT No. 31672, then to Chua's TCT No. 31673, and finally to Luminlun's TCT No. 99143, all issued by the
Register of Deeds of Quezon City on April 3, 1990, August 8, 1990, and November 24, 1993, respectively.

We do not have to belabor the fact that all the successors-in-interest of Cabrera to the subject lot were transferees for
value and in good faith, having relied as they did on the clean titles of their predecessors. The successive owners were
each armed with their own indefeasible titles which automatically brought them under the eagis of the Torrens System. As
the Court declared in Sandoval v. Court of Appeals, 6 "(i)t is settled doctrine that one who deals with property registered
under the Torrens system need not go beyond the same, but only has to rely on the title. He is charged with notice only
such burdens and claims as are annotated on the title." 7 In the case at bar, it is not disputed that no notice of lis
pendens was ever annotated on any of the titles of the subsequent owners. And even if there were such a notice, it would
not have created a lien over the property because the main office of a lien is to a warn prospective buyers that the
property they intend to purchase is the subject of a pending litigation. Therefore, since the property is already in the hands
of Luminlun, an innocent purchaser for value, it can no longer be returned to its original owner by Cabrera, much less by
Cathay itself.

Another point to consider, though not raised as an issue in this case, is the fact that Cabrera was impleaded as a party-
respondent only on August 12, 1991, after the promulgation of the Gancayco decision. 8 The dispositive portion itself
ordered Cathay, instead of Cabrera, to reconvey the property to Legarda. Cabrera was never a party to this case, either
as plaintiff-appellee below or as respondent in the present action. Neither did he ever act as Cathay's representative. As
we held in the recent case of National Power Corporation v. NLRC, et al.,9 "(j)urisdiction over a party is acquired by his
voluntary appearance or submission to the court or by the coercive process issued by the court to him, generally by
service of summons." 10 In other words, until Cabrera was impleaded as party respondent and ordered to file a comment
in the August 12, 1991, resolution, the Court never obtained jurisdiction over him, and to command his principal to
reconvey a piece of property which used to be HIS would not only be inappropriate but would also constitute a real
deprivation of one's property without due process of law.

Assuming arguendo that reconveyance is possible, that Cathay and Cabrera are one and the same and that Cabrera's
payment redounded to the benefit of his principal, reconveyance, under the facts and evidence obtaining in this case,
would still not address the issues raised herein.

The application of the sale price to Legarda's judgment debt constituted a payment which extinguished her liability to
Cathay as the party in whose favor the obligation to pay damages was established. 11 It was a payment in the sense that
Cathay had to resort to a court-supervised auction sale in order to execute the judgment. 12 With the fulfillment of the
judgment debtor's obligation, nothing else was required to be done.

Under the Gancayco ruling, the order of reconveyance was premised on the alleged gross negligence of Legarda's
counsel which should not be allowed to bind her as she was deprived of her property "without due process of law."
It is, however, basic that as long as a party was given the opportunity to defend her interests in due course, she cannot be
said to have been denied due process of law, for this opportunity to be heard is the very essence of due process. The
chronology of events shows that the case took its regular course in the trial and appellate courts but Legarda's counsel
failed to act as any ordinary counsel should have acted, his negligence every step of the way amounting to
"abandonment," in the words of the Gancayco decision. Yet, it cannot be denied that the proceedings which led to the
filing of this case were not attended by any irregularity. The judgment by default was valid, so was the ensuing sale at
public auction. If Cabrera was adjudged highest bidder in said auction sale, it was not through any machination on his
part. All of his actuations that led to the final registration of the title in his name were aboveboard, untainted by any
irregularity.

The fact that Cabrera is an officer of Cathay does not make him a purchaser in bad faith. His act in representing the
company was never questioned nor disputed by Legarda. And while it is true that he won in the bidding, it is likewise true
that said bidding was conducted by the book. There is no call to be alarmed in case an official of the company emerges as
the winning bidder since in some cases, the judgment creditor himself personally participates in the bidding.

There is no gainsaying that Legarda is the judgment debtor here. Her property was sold at public auction to satisfy the
judgment debt. She cannot claim that she was illegally deprived of her property because such deprivation was done in
accordance with the riles on execution of judgments. Whether the money used to pay for said property came from the
judgment creditor or its representative is not relevant. What is important is that it was purchase for value. Cabrera parted
with real money at the auction. In his "Sheriff's Certificate of Sale" dated June 27, 1985, 13Deputy Sheriff Angelito R.
Mendoza certified, inter alia, that the "highest bidder paid to the Deputy Sheriff the said amount of P376,500.00, the sale
price of the levied property." If this does not constitute payment, what then is it? Had there been no real purchase and
payment below, the subject property would never have been awarded to Cabrera and registered in his name, and the
judgment debt would never have been satisfied. Thus, to require either Cathay or Cabrera to reconvey the property would
be an unlawful intrusion into the lawful exercise of the latter's proprietary rights over the land in question, an act which
would constitute an actual denial of property without due process of law.

It may be true that the subject lot could have fetched a higher price during the public auction, as Legarda claims, but the
records fail to betray any hint of a bid higher than Cabrera's which was bypassed in his favor. Certainly, he could not help
it if his bid of P376,500.00 was the highest. Moreover, in spite of this allegedly low selling price, Legarda still failed to
redeem her property within the one-year redemption period. She could not feign ignorance of said sale on account of her
counsel's failure to so inform her, because such auction sales comply with requirements of notice and publication under
the Rules of Court. In the absence of any clear and convincing proof that such requisites were not followed, the
presumption of regularity stands. Legarda also maintains that she was in the United States during the redemption period,
but she admits the she left the Philippines only on July 13, 1985, or sixteen days after the auction sale of June 27, 1985.
Finally, she admits that her mother Ligaya represented her during her absence. 14 In short, she was not totally in the dark
as to the fate of her property and she could have exercised her right of redemption if she chose to, but she did not.

Neither Cathay nor Cabrera should be made to suffer for the gross negligence of Legarda's counsel. If she may be said to
be "innocent" because she was ignorant of the acts of negligence of her counsel, with more reason are respondents truly
"innocent." As between two parties who may lose due to the negligence or incompetence of the counsel of one, the party
who was responsible for making it happen should suffer the consequences. This reflects the basic common law maxim, so
succinctly stated by Justice J.B.L. Reyes, that ". . . (B)etween two innocent parties, the one who made it possible for the
wrong to be done should be the one to bear the resulting loss." 15 In this case, it was not respondents, but Legarda, who
misjudged and hired the services of the lawyer who practically abandoned her case and who continued to retain him even
after his proven apathy and negligence.

The Gancayco decision makes much of the fact that Legarda is now "consigned to penury" and, therefore, this Court
"must come to the aid of the distraught client." It must be remembered that this Court renders decisions, not on the basis
of emotions but on its sound judgment, applying the relevant, appropriate law. Much as it may pity Legarda, or any losing
litigant for that matter, it cannot play the role of a "knight in shining armor" coming to the aid of someone, who through her
weakness, ignorance or misjudgment may have been bested in a legal joust which complied with all the rules of legal
proceedings.

In Vales v. Villa, 16 this Court warned against the danger of jumping to the aid of a litigant who commits serious error of
judgment resulting in his own loss:

. . . Courts operate not because one person has been defeated or overcome by another, but because he has been
defeated or overcome illegally. Men may do foolish things, make ridiculous contracts, use miserable judgment, and lose
money by them — indeed, all they have in the world; but not for that alone can the law intervene and restore. There must
be, in addition, a violation of law, the commission of what the law knows as an actionable of law, the commission of what
the law knows as an actionable wrong, before the courts are authorized to lay hold of the situation and remedy it.

Respondents should not be penalized for Legarda's mistake. If the subject property was at all sold, it was only after the
decisions of the trial and appellate courts had gained finality. These twin judgments, which were nullified by
the Gancayco decision, should be respected and allowed to stand by this Court for having become final and executory.

"A judgment may be broadly defined as the decision or sentence of the law given by a court or other tribunal as the result
of proceedings instituted therein." 17 It is "a judicial act which settles the issues, fixes the rights and liabilities of the parties,
and determines the proceeding, and it is regarded as the sentence of the law pronounced by the court on the action or
question before
it." 18

In the case at bar, the trial court's judgment was based on Cathay's evidence after Legarda was declared in default.
Damages were duly awarded to Cathay, not whimsically, but upon proof of its entitlement thereto. The issue of whether
the plaintiff (Cathay) deserved to recover damages because of the defendant's (Legarda's) refusal to honor their lease
agreement was resolved. Consequently, the right of Cathay to be vindicated for such breach and the liability incurred by
Legarda in the process were determined.

This judgment became final when she failed to avail of remedies available to her, such as filing a motion for
reconsideration or appealing the case. At the time, the issues raised in the complaint had already been determined and
disposed of by the trial court. 19 This is the stage of finality which judgments must at one point or another reach. In our
jurisdiction, a judgment becomes ipso facto final when no appeal is perfected or the reglementary period to appeal
therefrom expires. "The necessity of giving finality to judgments that are not void is self-evident. The interests of society
impose it. The opposite view might make litigations more unendurable than the wrongs (they are) intended to redress. It
would create doubt, real or imaginary, and controversy would constantly arise as to what the judgment or order was.
Public policy and sound practice demand that, at the risk of occasional errors, judgments of courts should become final at
some definite date fixed by law. The very object for which courts were instituted was to put an end to
controversies." 20 When judgments of lower courts gain finality, "they, too, become inviolable, impervious to modification.
They may, then, no longer be reviewed, or in any way modified directly or indirectly, by a higher court, not even by the
Supreme Court." 21 In other words, once a judgment becomes final, the only errors that may be corrected are those which
are
clerical.22

From the foregoing precedents, it is readily apparent that the real issue that must be resolved in this motion for
reconsideration is the alleged illegality of the final judgments of the trial and appellate courts.

Void judgments may be classified into two groups: those rendered by a court without jurisdiction to do so and those
obtained by fraud or collusion. 23 This case must be tested in light of the guidelines governing the latter class of
judgments. "In this regard, an action to annul a judgment on the ground of fraud will not lie unless the fraud is extrinsic or
collateral and facts upon which it is based (have) not been controverted or resolved in the case where (the) judgment was
rendered." 24 Where is the fraud in the case at bar? Was Legarda unlawfully barred from the proceedings below? Did her
counsel sell her out to the opponent?

It must be noted that, aside from the fact that no extrinsic fraud attended the trial and resolution of this case, the
jurisdiction of the court a quo over the parties and the subject matter was never raised as an issue by Legarda. Such
being the case, the decision of the trial court cannot be nullified. Errors of judgment, if any, can only be reviewed on
appeal, failing which the decision becomes final and executory, "valid and binding upon the parties in the case and their
successors in interest." 25

At this juncture, it must be pointed out that while Legarda went to the Court of Appeals claiming precisely that the trial
court's decision was fraudulently obtained, she grounded her petition before the Supreme Court upon her estranged
counsel's negligence. This could only imply that at the time she filed her petition for annulment of judgment, she
entertained no notion that Atty. Coronel was being remiss in his duties. It was only after the appellate court's decision had
become final and executory, a writ of execution issued, the property auctioned off then sold to an innocent purchaser for
value, that she began to protest the alleged negligence of her attorney. In most cases, this would have been dismissed
outright for being dilatory and appearing as an act of desperation on the part of a vanquished litigant.
The Gancayco ruling, unfortunately, ruled otherwise.

Fortunately, we now have an opportunity to rectify a grave error of the past.

WHEREFORE, the Motion for Reconsideration of respondent New Cathay House, Inc. is hereby GRANTED.
Consequently, the decision dated March 18, 1991, of the Court's First Division is VACATED and SET ASIDE. A new
judgment is hereby entered DISMISSING the instant petition for review and AFFIRMING the November 29, 1989, decision
of the Court of Appeals in CA-G.R. No. SP-10487. Costs against petitioner Victoria Legarda.

SO ORDERED.
Davide, Jr., Melo, Mendoza, Francisco, Panganiban and Torres, Jr., JJ., concur.

Regalado, J., is on leave.

Narvasa, C.J., I dissent reserving the filing of a separate opinion.

Separate Opinions

KAPUNAN, J., separate, concurring and dissenting:

I fully subscribe to the ruling of the Court nullifying for lack of due process the decision of the Regional Trial Court of
Quezon City dated March 25, 1995 in Civil Case No. Q-43811, as well as the decision of the Court of Appeals dated
November 29, 1989 in CA-G.R. No. SP-10487. The rule is that a client is bound by the acts, even mistakes, of his counsel
in the realm of procedural technique. The exception to this rule is when the negligence of counsel, as here, is so gross,
reckless and inexcusable that the client is deprived of his day in court. (People's Homesite & Housing Corp. vs. Tiongco,
12 SCRA 471 [1964]; Escudero vs. Dulay, 158 SCRA 69 [1988]; De Guzman vs. Sandiganbayan, 256 SCRA 171 [1996]),
in which case, the remedy then is to reopen the case and allow the party who was denied his day in court to adduce his
evidence.

The decision, however, is erroneous insofar as it directs private respondent New Cathay House, Inc. to effect the
"reconveyance" of the property to petitioner. Reconveyance is a remedy of the landowner whose property has been
wrongfully or erroneously registered in the name of another but which recourse cannot be availed of if the property has
passed to an innocent purchaser for value. Here, there has been no definite finding that New Cathay House, Inc. or its
representative, Mr. Roberto V. Cabrera, Jr. has committed any wrongful, unlawful or fraudulent act which deprived
petitioner of her land. As between two innocent parties, the one who made it possible for the wrong to be done should
suffer the loss. Certainly, New Cathay House, Inc. cannot be made to suffer the loss by compelling it to reconvey the land
to petitioner who lost he property due to the gross and inexcusable negligence of her counsel. Moreover, the remedy of
reconveyance cannot be availed of if the property has passed to innocent third parties for value.

There being no legal ground to order New Cathay House, Inc. to reconvey the property to petitioner, the suggested
alternative solution to direct Mr. Roberto V. Cabrera, Jr., the representative of New Cathay House, Inc. to turn over to
petitioner the amount of P4 million he received from Nancy Saw has no leg to stand on, because, as already mentioned,
there is yet no determination that he is a guilty party and, moreover, he cannot go against the transferees for
indemnification or otherwise, if the subsequent transferees are innocent purchasers for value.

The nullification of the decisions of the Regional Trial Court and the Court of Appeals is the necessary consequence of the
finding that petitioner was deprived of her day in court by the gross and inexcusable negligence of her counsel and for the
purpose of reopening of Civil Case No. Q-4311 (for specific performance with preliminary injunction and damages) to
afford opportunity to petitioner to file her answer to the complaint and adduce evidence in her favor. The rights of the
parties should be threshed out in the case, including the determination of whether or not the transferees of the property
had acquired the same in good faith and for value, and the legal consequences and effects of such determination.
In view of the foregoing considerations, I vote to:

1. MODIFY the decision of March 18, 1991 by deleting portions thereof ordering: (a) private respondent New Cathay
House, Inc. to reconvey the property to petitioner; and (b) the Register of Deeds to cancel the registration of the property
in the name of private respondent and to issue a new one in the name of petitioner; and

2. REMAND the case to the Regional Trial Court of Quezon City, Branch 94, for further proceedings.

Puno and Vitug, JJ., concur.

HERMOSISIMA, JR., J., dissenting:

I regret I cannot join the majority in ruling against petitioner Victoria Legarda.

The facts, as culled from the records, are not controverted.

It appears that petitioner Victoria Legarda was the owner of a parcel of land and the improvements thereon, located at 123
West Avenue, Quezon City. Sometime in November, 1984, petitioner agreed to lease unto private respondent New
Cathay House, Inc. one of her two houses in said address. A serious disagreement having arisen between the parties as
to the terms of the lease, private respondent, on January 21, 1985, filed a complaint against the petitioner for specific
performance with preliminary injunction and damages with the Regional Trial Court of Quezon City, Branch XCIV,
alleging, inter alia, that: (1) petitioner entered into a lease agreement with the private respondent through the latter's
representative, Roberto V. Cabrera, Jr., of the aforestated property of petitioner effective January 1, 1985 until December
31, 1989 or for a period of five (5) years; (2) the agreed rental is P12,000.00 per month with 5% escalation per year; (3)
on November 23, 1984, the parties consummated their agreement upon private respondent's payment to petitioner of
P72,000.00 as deposit and downpayment of rentals; (4) private respondent drew up the written contract and sent it to
petitioner but the latter failed and refused to execute and sign the same despite repeated demands of respondent; and (5)
that respondent suffered damages due to the delay in the renovation and opening of its restaurant business due to the
efforts of the petitioner aimed at stopping the works and renovations being done by respondent's workers.

The private respondent prayed that pending the resolution of the case, a restraining order be issued against petitioner or
her agents enjoining them from stopping the renovation and use of the premises by the private respondent. It was also
prayed that after due hearing the petitioner be ordered to execute the lease contract; to pay actual, compensatory,
exemplary and other damages in such amounts as may be proved during the trial including P30,000.00 attorney's fees
plus P300.00 per appearance of counsel, and to pay the expenses of litigation.1

Petitioner engaged the services of the late Dean Antonio Coronel to handle her case. Said counsel filed his appearance
with an urgent motion for extension of time to file petitioner's answer to the complaint within 10 (ten) days from February
6, 1985, 2 which motion was granted by the trial court giving petitioner until February 20, 1985 to file her answer.
Petitioner's counsel, however, inexplicably failed to file her answer within the extended period given by the court,
prompting private respondent to move that she be declared in default. The court granted the motion and private
respondent was allowed to present evidence ex-parte. Thereafter, on March 25, 1985, the trial court rendered judgment
by default against petitioner, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering defendant Victoria G. Legarda to execute and sign Exhibit "D," the
lease contract for the premises at 123 West Avenue, Quezon City. Accordingly, the preliminary injunction earlier issued on
January 31, 1985 is hereby made permanent.

Judgment is likewise rendered ordering defendant to pay exemplary damages in the sum of P100,000.00 to serve as
example and deterrent for others, and actual and compensatory damages as follows:

1. For lost and destroyed goodwill and reputation in the amount of P100,000.00;

2. The sum of P61,704.40 as adjustments in the costs of labor and materials for the renovation of the premises;

3. The sum of P50,000.00 as unearned income for the delay of plaintiff's operations from January 1, 1985 up to February
25, 1985 or a period of almost two (2) months;

4. The sum of P16,635.57 and P50,424.40 as additional compensatory damages incurred by plaintiff for the extension of
the lease of its premises at Makati and salaries of idle employees, respectively;

5. The sum of P10,000.00 as and by was of attorney's fees; and

6. The costs of suit.

SO ORDERED.3

Copy of said decision was duly served on counsel for the petitioner on April 9, 1985 but counsel did not take any action.
Consequently, the judgment became final and executory. On May 8, 1985, upon motion of private respondent, a writ of
execution was issued by the trial court.

At public auction, the sheriff sold the subject property of the petitioner to Roberto V. Cabrera, Jr., Director and General
Manager of private respondent corporation, as the highest bidder, for the sum of P376,500.00 to satisfy the judgment
debt. The sheriff issued a Certificate of Sale dated June 27, 1985 4 covering the said property. Uniformed by her counsel
of these proceedings on execution, petitioner failed to redeem her property within the one-year redemption period, as a
result of which, ownership over the same was consolidated in the name of Roberto V. Cabrera, Jr. The sheriff issued a
Final Deed of Sale 5 on July 8, 1986 in his favor. Cabrera registered the deed in the office of the Register of Deeds on
July 11, 1986.

Upon learning of this unfortunate turn of events, petitioner prevailed upon her counsel to seek the appropriate relief. On
October 23, 1986, Atty. Coronel filed a petition before the respondent Court of Appeals, which, upon order of said court,
was amended on February 4, 1987, for the annulment of judgment rendered by the trial court on two grounds, viz.:

1. The decision was obtained by private respondent through fraud.

2. The decision is not supported by the allegations in the pleadings nor by the evidence submitted. 6
The petition prayed that a preliminary mandatory injunction issue ordering the private respondent to surrender the
property to petitioner and to enjoin the former from further harassing the threatening the peaceful possession and
enjoyment thereof by petitioner; that after hearing, the decision of the trial court in Civil Case No. Q-43811 and the
sheriff's certificate of sale be annulled; and that private respondent be adjudged to pay petitioner not less than
P500,000.00 actual and moral damages, as well as exemplary damages and attorney's fees in the amount of P50,000.00
plus the costs of the suit.7

On November 29, 1989, a decision was rendered by the respondent Court of Appeals. The court a quo made the following
pertinent observations:

. . . . [p]etitioner's above allegation of fraud supposedly practiced upon her by Roberto V. Cabrera, Jr. is so improbable as
to inspire belief. For the Coronel Law Office had already entered its appearance as petitioner's counsel by then, so that if
it were true that Cabrera had already agreed to the conditions imposed by petitioner, said law office would have asked
plaintiff to file the proper motion to dismiss or withdraw complaint with the Court, and if plaintiff had refused to do so, it
would have filed defendant's answer anyway so that she would not be declared in default. Or said law office would have
prepared a compromise agreement embodying the conditions imposed by their client in the lease contract in question
which plaintiff had allegedly already accepted, so that the same could have been submitted to the Court and judgment on
a compromise could be entered. All these, any conscientious lawyer of lesser stature than the Coronel Law Office,
headed by no less than a former law dean, Dean Antonio Coronel, or even a new member of the bar, would normally have
done under the circumstances to protect the interests of their client, instead of leaving it to the initiative of plaintiff to
withdraw its complaint against defendant, as it had allegedly promised the latter. Thus, it is our belief that this case is one
of pure and simple negligence on the part of defendant's counsel, who simply failed to file the answer in behalf of
defendant. But counsel's negligence does not stop here. For after it had been furnished with a copy of the decision by
default against defendant, it should then have appealed therefrom or filed a petition from relief from the order declaring
their client in default or from the judgment by default. Again, counsel negligently failed to do either. . . . . . 8

In view of these findings, the appellate court dismissed the petition for annulment of judgment, with costs against the
petitioner, holding the latter bound by the negligent acts of her counsel. A copy of the said judgment appears to have been
served on counsel for the petitioner. Counsel for the petitioner, however, did not, in any manner, attempt to file a motion
for reconsideration or appeal therefrom, and so the appellate court's decision became final on December 21, 1989. 9

It was only sometime in March, 1990, that petitioner was informed of the adverse decision of the court a quo, not by her
counsel but by the latter's secretary, after persistent telephone inquiries by the petitioner.

Desperately aggrieved, petitioner secured the services of another lawyer who filed the instant for certiorari under Rule 65
wherein it was prayed that the judgment of the Regional Trial Court of Quezon City in Civil Case No. Q-43811, the
decision of the Court of Appeals in CA-G.R. No. 10487, as well as the sheriff's sale at public auction of the property in
question be annulled, considering that her loss was attributable to the gross negligence and inefficiency of her counsel,
whose blunder cannot bind her as she was unduly deprived of the due process she deserves. It was further prayed that
private respondent New Cathay House, Inc. be ordered to reconvey to petitioner the property covered by TCT No.
270814, which was sold at public auction to Roberto V. Cabrera, Jr. and in whose favor its ownership was thereafter
consolidated.
On March 18, 1991, this Court, thru Justice Emilio A. Gancayco (now retired), rendered judgment 10 granting the petition
with the following ratiocinations:

xxx xxx xxx

Judged by the actuations of said counsel in this case, he has miserably failed in his duty to exercise his utmost learning
and ability in maintaining his client's cause. It is not only a case of simple negligence as found by the appellate court, but
of reckless and gross negligence, so much so that his client was deprived of her property without due process of law.

xxx xxx xxx

In its questioned decision dated November 19, 1989 the Court of Appeals found, in no uncertain terms, the negligence of
the then counsel for petitioner when he failed to file the proper motion to dismiss or to draw a compromise agreement if it
was true that they agreed on a settlement of the case; or in simply filing an answer; and that after having been furnished a
copy of the decision by the court he failed to appeal therefrom or to file a petition for relief from the order declaring
petitioner in default. In all these instances the appellate court found said counsel negligent but his acts were held to bind
his client, petitioner herein, nevertheless.

The Court disagrees and finds that the negligence of counsel in this case appears to be so gross and inexcusable. This
was compounded by the fact, that after petitioner gave said counsel another chance to make up for his omissions by
asking him to file a petition for annulment of the judgment in the appellate court, again counsel abandoned the case of
petitioner in that after he received a copy of the adverse judgment of the appellate court, he did not do anything to save
the situation or inform his client of the judgment. He allowed the judgment to lapse and become final. Such reckless and
gross negligence should not be allowed to bind the petitioner. Petitioner was thereby effectively deprived of her day in
court.

Thus, We have before Us a case where to enforce an alleged lease agreement of the property of petitioner, private
respondent went to court, and that because of the gross negligence of the counsel for the petitioner, she lost the case as
well as the title and ownership of the property, which is worth millions. The mere lessee then now became the owner of
the property. Its true owner then, the petitioner, now is consigned to penury all because her lawyer appear to have
abandoned her case not once but repeatedly.

The Court cannot allow such a grave injustice to prevail. It cannot tolerate such unjust enrichment of the private
respondent at the expense of the petitioner. The situation is aggravated by the fact that said counsel is a well-known
practicing lawyer and the dean of a law school as the Court at the beginning of this discourse observed. His competence
should be beyond cavil. Thus, there appears to be no cogent excuse for his repeated negligence and inaction. His lack of
devotion to duty is so gross and palpable that this Court must come to the aid of his distraught client, the petitioner
herein. 11

Thereupon, we ordered:

WHEREFORE, the petition is GRANTED and the questioned decision of the Regional Trial Court of Quezon City dated
March 25, 1985 in Civil Case No. Q-43811; the decision of the Court of Appeals dated November 29, 1989 in CA-G.R. No.
SP-10487; the Sheriff's Certificate of Sale dated June 27, 1985 of the property in question; and the subsequent final deed
of sale covering the same property, are all hereby declared null and void. Private respondent New Cathay House, Inc. is
directed to reconvey said property to the petitioner, and the Register of Deeds is ordered to cancel the registration of said
property in the name of private respondent and to issue a new one in the name of petitioner. Costs against private
respondent. Said counsel for petitioner is hereby required to show cause within ten (10) days from notice why he should
not be held administratively liable for his acts and omissions hereinabove described in this decision.

SO ORDERED. 12

Private respondent filed a motion to reconsider the aforesaid decision averring, inter alia, that respondent is no longer in a
position to reconvey the property to petitioner since, prior to the promulgation of the High Tribunal's decision on March 18,
1991, Robert V. Cabrera, Jr., the purchaser at the public auction sale, had already sold the questioned property to one
Nancy Saw for P4 million on March 21, 1990 and the Deed of Sale in her favor was duly registered by the Register of
Deeds of Quezon City, 13 after payment of the corresponding capital gains tax, documentary stamps and other fees
thereof. Nancy Saw, after being impleaded, in her Comment, 14 alleges that she is an innocent purchaser for value, since,
at the time she bought the property from Mr. Cabrera, Jr., she never knew of the existence of the case between the
petitioner and New Cathay House, Inc., and that, at the time of the sale, there were no existing encumbrance found at the
back of Transfer Certificate of Title No. 350892 in the name of Cabrera. Neither was there any notice of lis
pendens annotated thereto.

Alarmed by this development, this Court, thru the First Division, came out with a Resolution, dated August 12, 1991, viz.:

G.R. No. 94457 (Victoria Legarda vs. Court of Appeals, et al). The opposition to private respondent's motion for
reconsideration of the decision of March 18, 1991, filed by petitioner is NOTED. After due deliberation the Court resolved
to require private respondent to submit to the Court within ten (10) days from notice a certified true copy of the certificate
of sale and return of the deputy sheriff Angelito Mendoza relating to the execution sale of the subject property on June 27,
1985, as well as a certified true copy of the deed of sale of said property by Roberto V. Cabrera, Jr. in favor of Nancy Saw
in March, 1990 and the proof of registration of the sale and transfer of title to Nancy Saw.

Let Roberto V. Cabrera, Jr. and Nancy Saw be IMPLEADED as party respondents in this case to be served with this
resolution through counsel for private respondent, who is hereby directed to serve copies thereof on said respondents,
and said respondents are directed to submit their COMMENT to the petition and decision within ten (10) days from notice.
Let a TEMPORARY RESTRAINING ORDER be issued to the private respondent Nancy Saw enjoining her from selling,
transferring, encumbering or otherwise disposing of the property in litigation, until further orders of the Court. The Register
of Deeds of Quezon City is hereby DIRECTED not to allow the registration of any sale, transfer, encumbrance or other
disposition of the property subject of this suit which was previously covered by Transfer Certificate of Title No. 27014 in
the name of petitioner Victoria Legarda which was allegedly sold to Roberto V. Cabrera, Jr. and who in turn sold the same
to Nancy Saw. 15

It appears, however, that on August 7, 1990 or more than one (1) year prior to the issuance of the above TRO, Nancy
Saw, for her part, had also sold the subject property to one Lily Tanlo Sy Chua for P4.5 million which sale was registered
by the Register of Deeds of Quezon City on August 8, 1990. 16 Like Nancy Saw, Chua, as intervenor, maintains that she is
a buyer in good faith and for value, considering that she only came to know of the alleged defect or flaw in the title when
she tried to sell the property sometime in June, 1992 and was told by the Register of Deeds in Quezon City of the
pendency of this petition and the temporary restraining order issued by this Court on August 12, 1991. Chua argues that
being a subsequent innocent buyer for value from one who was equally an innocent purchaser for value (referring to
Nancy Saw), her title had become even more indefeasible than her predecessors-in-interest. 17

To further complicate matters, intervenor Lily Sy Chua and her husband, Victor Sy Chua, on April 3, 1992 executed a
Contract to Sell 18 over the property in litigation to a certain Janet Chong Luminlun. A Deed of Absolute Sale was
subsequently entered into by the parties, and on November 24, 1993, the Register of Deeds of Quezon City issued
Transfer Certificate of Title No. 99143 in the name of Janet Chong Luminlun.

Thereafter, petitioner filed before us on March 23, 1994 an Omnibus Motion 19 bringing to our attention this latest
development and praying that:

WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court, that:

a) Lily T. Chua, Victoria Sy Chua and Samuel Cleofe, the Register of Deeds of Quezon City be ordered to explain why
they should not be cited for contempt of court for ignoring its Order and for acts which tend to impede or obstruct the
administration of justice;

b) Samuel Cleofe, the Register of Deeds of Quezon City, be adjudged guilty of dereliction of duty and for the imposition of
appropriate sanctions therefor;

c) The "sale" to Janet C. Luminlun be declared null and void for being sham and/or having been done in direct violation of
the order of this Honorable Court and Transfer Certificate of Title No. 99143 be ordered cancelled.

Petitioner prays for such other reliefs as are just and equitable under the premises.

Manila, March 23, 1994. 20

I vote to grant the motion for reconsideration in part.

It is crucial to note that, when the First Division of this Court rendered its Decision on March 18, 1991, declaring null and
void the March 25, 1985 judgment by default of the trial court in Civil Case No. Q-43811 and ordering the private
respondent to reconvey said property to the petitioner, Transfer Certificate of Title No. 270814 previously in the name of
Legarda had already been cancelled and a new one, TCT No. 350892, 21 had already been issued on October 17, 1986 in
the name of the highest bidder, Mr. Roberto V. Cabrera, Jr. This was a clean title bereft of any lien or encumbrance,
adverse to the interest of Cabrera, Jr., annotated at the back thereof nor of any notice of lis pendens to apprise any
prospective buyer of the pendency of this litigation. It was this later title which became the subject of a Deed of Absolute
Sale 22 executed between Mr. Cabrera and Nancy Saw on March 21, 1990 for the price of P4 million. Thereupon, TCT No.
350892, in the name of Cabrera, Jr., was cancelled by the Register of Deeds of Quezon City and, after payment of the
required fees, a new title, TCT No. 31672, was issued on April 3, 1990 in the name of Nancy Saw. 23 This title likewise
contained no notice of any adverse claim from third parties. Relying on this clean title, Lily Sy Chua bought the subject
property on August 7, 1990 from Saw, which Deed of Sale was duly registered at the back of Saw's title. Thereafter, TCT
No. 31672, in the name of Saw, was cancelled and TCT No. 31673, 24 in the name of Chua, was issued on August 8,
1990 by the Register of Deeds of Quezon City. Like its predecessor titles, TCT No. 31673 was a clean title. The property
in dispute was, therefore, in the hands of Lily Sy Chua, when this Court came out with the Decision on March 18, 1991 in
G.R. No. 94457 granting Legarda's petition and ordering the reconveyance of the property back to Legarda.

I would reconsider this order of reconveyance.

Initially, it must be stressed that we are here dealing with a property registered under the Torrens System. This Court had,
on more than one occasion, stated and hence must continuously state, as long as cases like the one at bench involving
titled lands subsists, that the primary and fundamental purpose of the Torrens System of Land Registration is to quiet title
to land; to put a stop forever to any question of the legality of the title, except claims which were noted at the time of
registration in the certificate or which may arise subsequent thereto. That being the purpose of the law, once a title is
registered, the owner may rest secure, without the necessity of waiting in the portals of the court, or sitting in the "mirador
su casa," to avoid the possibility of losing his land.25

Thus, where innocent third persons relying on the correctness of the certificate of title thus issued, acquire rights over the
property, the court cannot disregard such rights and order the total cancellation of the certificate. The effect of such an
outright cancellation would be to impair public confidence in the certificate of title, for everyone dealing with property
registered under the Torrens System would have to inquire in every instance as to whether the title has been regularly or
irregularly issued by the court. 26 Indeed, this is contrary to the evident purpose of the law. Every person dealing with
registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige
him to go beyond the certificate to determine the condition of the property. 27

The subsequent transfers from Cabrera to Saw to Chua and, finally, to Janet Chong Luminlun all involve clean titles
without any encumbrance or lien annotated thereto nor of any notice of lis pendens found at the back thereof. In fact, even
if petitioner Legarda managed to have a lis pendens notice inscribed on these titles (which she was not able to do), this
would not have the effect of establishing a lien or encumbrance on the property affected. As its name suggests, the only
purpose of a notice of lis pendens is to give notice to third persons and to the whole world that any interest they might
acquire in the property pending litigation would be subject to the result of the suit. 28 If the notice is effective, a third person
who acquires the property affected by the lis pendens takes the same subject to the incidents and results of the pending
litigation. But when the adverse right fails in such litigation, the lis pendens loses its efficacy. 29 This is the only import of
a lis pendens notice which did not even finds its way in any of the titles issued covering the subject property. Hence, it can
be said without fear of contradiction that Saw, Chua, and Luminlun are innocent purchasers for value because they
bought the subject real property covered by clean titles.

Petitioner, however, would like to disqualify Saw, Chua and Luminlun as innocent purchasers for value based on alleged
suspicious circumstances surrounding the sales in their favor. These circumstances, according to her, point to the fact
that these vendees bought the questioned property at less than its actual fair market value at the time of the respective
sales. First, Saw allegedly bought the property from Cabrera at P4 million when the same property, at that time, could
have been sold P12,115,000.00. Likewise, the sale between Saw and Chua was merely simulated considering that the
purchase price was only P4,500,000.00 when the property could have been valued at more than P12 million. The last
buyer, Luminlun, could not be considered a purchaser in good faith, according to petitioner, because at the time the sale
between Chua and Luminlun was executed on April 3, 1992, the parties were already charged with knowledge of the
March 18, 1991 Decision of the Supreme Court as well as the August 12, 1991 temporary restraining order issued by the
High Tribunal.

I do not agree.

A purchaser in good faith is one who buys property of another, without notice that some other person has a right to, or
interest in, such property and pays a full and fair price for the same, at the time of such purchase, or before he has notice
of the claim or interest of some other persons in the property. Good faith consists in an honest intention to abstain from
taking any unconscientious advantage of another.30

Measured by this yardstick, Saw, Chua and Luminlun are purchasers in good faith and for value. They bought the subject
property from their respective sellers free from any lien or encumbrance or any notice of adverse claim annotated thereto.
They were presented with clean titles already in the name of their sellers, and there were no indications from the records
that, at the time of these sales, the property was in possession of a party or parties other than their respective sellers. In
other words, there were no circumstances in these sales sufficient to put the buyers on inquiry as to the real status of their
sellers' titles. From all indications, the titles presented to them were not defective titles. Thus, they have every right to rely
on the correctness of these aforesaid certificates of title. If a person purchases a piece of land on the assurance that the
seller's title thereto is valid, she should not run the risk of being told later that her acquisition was ineffectual after all. If we
were to void a sale of property covered by a clean and unencumbered torrens title, public confidence in the Torrens
System would be eroded and land transactions would have to be attended by complicated and inconclusive investigations
and uncertain proof of ownership. The consequence would be that land conflicts could proliferate and become more
abrasive, if not even violent. 31

As to the averment of the petitioner that the subsequent transferees of the property from Cabrera are not good faith
buyers due to the low purchase prices at which they acquired the property, suffice it to state that this fact alone is not
sufficient to strip them of their being good faith purchasers for value. Good faith, or the lack of it, is in its last analysis a
question of intention; but in ascertaining the intention by which one is actuated on a given occasion, we are necessarily
controlled by the evidence as to the conduct and outward acts by which alone the inward motive may, with safety, be
determined. Truly, good faith is not a visible, tangible fact that can be seen or touched, but rather a state or condition of
mind which can only be judged by actual or fancied tokens or signs. 32 Otherwise stated, good faith is the opposite of
fraud and it refers to the state of mind which is manifested by the acts of the individual concerned. 33 Here, other than the
fact that, to the mind of petitioner, the prices at which the property was sold in a series of transactions were allegedly less
than its fair market value, there certainly is no direct proof of establish that these buyers were in cabal with their sellers to
deliberately defraud the petitioner. Neither is there any proof to show that these purchasers knew the petitioner
beforehand nor of the litigation the questioned property is involved in at the time they bought the property. Indeed, they
merely relied on the certificates of title in the name of their respective sellers without any knowledge of facts and
circumstances which should have put them upon such investigation, as might be necessary, to acquaint them with any
possible defects in the titles of their vendors, which were clean titles to begin with.

Of special significance to be declared an innocent purchaser for value, however, is Janet Chong Luminlun, the last
transferee of the property who is now in possession of the realty with Transfer Certificate of Title No. 99143 registered in
her name.
It is true that when Luminlun bought the property from Chua on November 18, 1993, our March 18, 1991 Decision
ordering reconveyance of the property to Legarda already came out, followed by the issuance of our August 12, 1991
temporary restraining order. While, even considering arguendo that, Chua may have already known these developments
even before she transacted the sale of the property to Luminlun, there is no iota of evidence to establish that Luminlun,
herself, was aware of these. In fact, petitioner Legarda in her Omnibus Motion, informing us of the Chua-Luminlun
transaction, does not even make any asseveration to this effect. What is clear from the records is that at the time the
Deed of Absolute Sale was signed between the Chua spouses and Luminlun, the subject property was already titled
under the name of the seller Lily Sy Chua. Whether or not Chua had any malicious motive in effecting the transfer is of no
moment. What is material is that the buyer Luminlun was presented with a clean title in the name of her seller,
unencumbered and without any notice of adverse claim from any third party nor of any lis pendens notice inscribed
thereto. There is likewise no indication that the seller Chua was not the one in possession of the property. Clearly,
Luminlun had every right to rely on the transfer certificate of title already in the name of her seller. She was not obliged to
go beyond the title that was shown to her considering that there were no circumstances surrounding the sale sufficient to
put her on inquiry. If the rule were otherwise, the efficacy and conclusiveness of Torrens Certificate of Titles would be
futile and nugatory.

Insofar, as Mr. Cabrera is concerned, however, his good faith or bad faith in buying the property at the auction sale is no
longer material considering that the judgment by default upon which the auction sale was based is declared null and void
by our March 18, 1991 Decision, for being rendered without due process of law. Thus, the title issued in the name of
Cabrera has no mere leg to stand on, and must, of necessity, be likewise struck down.

What is the basis of this nullity?

The gross negligence of the late Dean Antonio Coronel in handling, nay mishandling, petitioner's case, docketed as Civil
Case No. Q-43811 in the court a quo, is actually beyond question as this Court had declared in a per curiamResolution
dated June 10, 1992, 34 where Coronel was meted a six (6)-month suspension from the practice of law, which suspension
order was renewed for another six (6) months in another Resolution dated March 31, 1993. 35 In fact, the majority even
concedes this. 36 Oddly though, while the majority acknowledges Coronel's gross negligence, it refuses to grant Legarda
any relief arguing that as "between two innocent parties (referring to Legarda on the one hand and Cathay and Cabrera
on the other hand), the one who made it possible for the wrong to be done should be the one to bear the resulting loss
(referring to Legarda)." According to the majority, since it was Legarda who hired the services of the lawyer
who practically abandoned her case, then it is just logical that she suffer the loss and not Cathay nor Cabrera.

With due regard to the majority, this is not just a case of she who made possible the loss should suffer its consequences.
It is true that the basic general rule is that the negligence of counsel binds the client. Hence, if counsel commits a mistake
in the course of litigation, thereby resulting in his losing the case, his client must perforce suffer the consequences of that
mistake. The reason for the rule is to avoid the act of every losing party to raise the negligence of his or her counsel to
escape an adverse decision of the court to the detriment of our justice system as no party will ever accept a losing verdict.
This general rule, however, pertains only to simple negligence of the lawyer. Where the negligence of counsel, on the
other hand, is one that is so gross, palpable, pervasive, reckless and inexcusable, such as in this case, this type of
negligence does not bind the client, since in such a case, the client is effectively deprived of his or her day in court.
However, the majority opinion, in effect, would remove the distinction between simple negligence and gross negligence of
counsel insofar as they bind the client. It cannot be overemphasized that any judgment rendered where there was gross
negligence on the part of counsel of one of the parties is one rendered without due process of law and, thus, void. 37

But what is the effect of a void judgment? Gomez v. Concepcion 38 and Heirs of Mayor Nemecio Galvez v. Court of
Appeals, et al. 39 provide the answer:

. . . A void judgment is in legal effect no judgment. By it no rights are divested. From it no rights can be obtained. Being
worthless in itself, all proceedings founded upon it are equally worthless. It neither binds nor bars any one. All acts
performed under it and all claims flowing out of it are void. The parties attempting to enforce it may be responsible as
trespassers. The purchaser at a sale by virtue of its authority finds himself without title and without redress.

Thus, the judgment by default in Civil Case No. Q-43811 being void, all acts and incidents arising therefrom must
necessarily be void since nothing can arise from a void judgment. Inevitably, the writ of execution, the levy on the property
of Legarda to satisfy the void judgment award, the subsequent public auction sale, the Deed of Sale issued in favor of the
highest bidder Cabrera, as well as the title issued in the name Cabrera ought to be struck down for they all arose from the
judgment in Civil Case No. Q-43811, which is a void judgment. Needless to state, these incidents have no leg to stand on.
Reconveyance, therefore, of the Legarda property by Cabrera, the purchaser at the auction sale, would have been in
order had the property not been transferred to innocent purchasers for value beginning with Nancy Saw. Consequently,
the only thing that Cabrera can return now to Legarda is the money he received from the first innocent purchaser of the
property worth P4 million with legal interest to be counted from the time the judgment by default of the respondent trial
court was rendered on March 25, 1985. Respondent New Cathay House, Inc., Cabrera's corporation, must return to him
the auction price in the amount of P376,500 with legal interest bidded by him at the void auction sale. WHEREFORE, I
vote to partly grant the Motion for Reconsideration. Our March 18, 1991 Decision (Gancayco Decision) is hereby
MODIFIED insofar as we ordered the reconveyance of the property back to Legarda. In lieu thereof, Mr. Roberto V.
Cabrera, Jr. is hereby ordered to return to petitioner Victoria Legarda the amount of money he received from Nancy Saw
worth Four Million Pesos (P4,000,000.00) plus legal interest counted from the time the judgment by default of the
respondent trial court was rendered on March 25, 1985. Respondent New Cathay House, Inc., for its part, is hereby
ordered to return to Cabrera the amount of P376,500.00 with legal interest paid by him at the auction sale as the highest
bidder.

17. METROBANK VS. COURT OF APPEALS, GR NOS. 86100-03, JAN. 23,1990

G.R. No. 86100-03 January 23, 1990

METROPOLITAN BANK AND TRUST COMPANY, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and ARTURO ALAFRIZ and ASSOCIATES, respondents.

Bautista, Picazo, Buyco, Tan & Fider for petitioner.

Arturo A. Alafriz & Associates for and in their own behalf.

REGALADO, J.:
This petition for review on certiorari impugns the decision of the Court of Appeals in CA-G.R. Nos. 08265-08268 1affirming
the order of Branch 168, Regional Trial Court, National Capital Judicial Region, in Civil Cases Nos. 19123-28, 19136 and
19144, fixing attorney's fees and directing herein petitioner Metropolitan Bank and Trust Company (Metrobank, for
brevity), as defendant in said civil cases, to pay its attorneys, herein private respondent Arturo Alafriz and Associates,
movant therein, the amount of P936,000.00 as attorney's fees on a quantum meruit basis.

The records show that from March, 1974 to September, 1983, private respondent handled the above-mentioned civil
cases before the then Court of First Instance of Pasig (Branches I, II, VI, X, XIII, XIX, XX AND XXIV) in behalf of
petitioner. 2 The civil cases were all for the declaration of nullity of certain deeds of sale, with damages.

The antecedental facts 3 which spawned the filing of said actions are undisputed and are hereinunder set forth as found
by the trial court and adopted substantially in the decision of respondent court. A certain Celedonio Javier bought seven
(7) parcels of land owned by Eustaquio Alejandro, et al., with a total area of about ten (10) hectares. These properties
were thereafter mortgaged by Javier with the petitioner to secure a loan obligation of one Felix Angelo Bautista and/or
International Hotel Corporation. The obligors having defaulted, petitioner foreclosed the mortgages after which certificates
of sale were issued by the provincial sheriff in its favor as purchaser thereof Subsequently, Alejandro, alleging deceit,
fraud and misrepresentation committed against him by Javier in the sale of the parcels of land, brought suits against
Javier et al., and included petitioner as defendant therein.

It was during the pendency of these suits that these parcels of land were sold by petitioner to its sister corporation,
Service Leasing Corporation on March 23, 1983 for the purported price of P600,000.00. On the same day, the properties
were resold by the latter to Herby Commercial and Construction Corporation for the purported price of P2,500,000.00.
Three months later, or on June 7, 1983, Herby mortgaged the same properties with Banco de Oro for P9,200,000.00. The
lower court found that private respondent, did not have knowledge of these transfers and transactions.

As a consequence of the transfer of said parcels of land to Service Leasing Corporation, petitioner filed an urgent motion
for substitution of party on July 28, 1983. Private respondent, on its part, filed on August 16, 1983 a verified motion to
enter in the records of the aforesaid civil cases its charging lien, pursuant to Section 37, Rule 138 of the Rules of Court,
equivalent to twenty-five percent (25%) of the actual and current market values of the litigated properties as its attorney's
fees. Despite due notice, petitioner failed to appear and oppose said motion, as a result of which the lower court granted
the same and ordered the, Register of Deeds of Rizal to annotate the attorney's liens on the certificates of title of the
parcels of land.

Meanwhile, the plaintiffs Alejandro, et al. in the aforesaid civil cases, which had been consolidated and were pending
before the Regional Trial Court of Pasig, filed a motion to dismiss their complaints therein, which motion the lower court
granted with prejudice in its order dated September 5, 1983. On December 29, 1983, the same court ordered the Register
of Deeds to annotate the attorney's liens of private respondent on the derivative titles which cancelled Transfer
Certificates of Title Nos. 453093 to 453099 of the original seven (7) parcels of land hereinbefore adverted to.

On May 28,1984, private respondent filed a motion to fix its attorney's fees, based on quantum meruit, which motion
precipitated an exchange of arguments between the parties. On May 30, 1984, petitioner manifested that it had fully paid
private respondent; the latter, in turn, countered that the amount of P50,000.00 given by petitioner could not be
considered as full payment but merely a cash advance, including the amount of P14,000.00 paid to it on December 15,
1980. It further appears that private respondent attempted to arrange a compromise with petitioner in order to avoid suit,
offering a compromise amount of P600,000.00 but the negotiations were unsuccessful.

Finally, on October 15,1984, the court a quo issued the order assailed on appeal before respondent court, granting
payment of attorney's fees to private respondent, under the following dispositive portion:

PREMISES CONSIDERED, the motion is hereby granted and the Metropolitan Bank and Trust Company (METROBANK)
and Herby Commercial and Construction Corporation 4 are hereby ordered to pay the movant Arturo Alafriz and
Associates the amount of P936,000.00 as its proper, just and reasonable attorney's fees in these cases. 5

On appeal, respondent court affirmed the order of the trial court in its decision promulgated on February 11, 1988. A
motion for reconsideration, dated March 3, 1988, was filed by petitioner but the same was denied in a resolution
promulgated on November 19, 1988, hence the present recourse.

The issues raised and submitted for determination in the present petition may be formulated thus: (1) whether or not
private respondent is entitled to the enforcement of its charging lien for payment of its attorney's fees; (2) whether or not a
separate civil suit is necessary for the enforcement of such lien and (3) whether or not private respondent is entitled to
twenty-five (25%) of the actual and current market values of the litigated properties on a quantum meruit basis.

On the first issue, petitioner avers that private respondent has no enforceable attorney's charging lien in the civil cases
before the court below because the dismissal of the complaints therein were not, in the words of Section 37, Rule 138,
judgments for the payment of money or executions issued in pursuance of such judgments. 6

We agree with petitioner.

On the matter of attorney's liens Section 37, Rule 138 provides:

. . . He shall also have a lien to the same extent upon all judgments for the payment of money, and executions issued in
pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have
caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or
issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party;
and he shall have the same right and power over such judgments and executions as his client would have to enforce his
lien and secure the payment of his just fees and disbursements.

Consequent to such provision, a charging lien, to be enforceable as security for the payment of attorney's fees, requires
as a condition sine qua non a judgment for money and execution in pursuance of such judgment secured in the main
action by the attorney in favor of his client. A lawyer may enforce his right to fees by filing the necessary petition as an
incident in the main action in which his services were rendered when something is due his client in the action from which
the fee is to be paid. 7

In the case at bar, the civil cases below were dismissed upon the initiative of the plaintiffs "in view of the frill satisfaction of
their claims." 8 The dismissal order neither provided for any money judgment nor made any monetary award to any
litigant, much less in favor of petitioner who was a defendant therein. This being so, private respondent's supposed
charging lien is, under our rule, without any legal basis. It is flawed by the fact that there is nothing to generate it and to
which it can attach in the same manner as an ordinary lien arises and attaches to real or personal property.

In point is Morente vs. Firmalino, 9 cited by petitioner in support of its position. In that case, movant-appellant attorney
sought the payment of his fees from his client who was the defendant in a complaint for injunction which was dismissed by
the trial court after the approval of an agreement entered into by the litigants. This Court held:

. . . The defendant having suffered no actual damage by virtue of the issuance of a preliminary injunction, it follows that no
sum can be awarded the defendant for damages. It becomes apparent, too, that no amount having been awarded the
defendant, herein appellant's lien could not be enforced. The appellant, could, by appropriate action, collect his fees as
attorney.

Private respondent would nevertheless insist that the lien attaches to the "proceeds of a judgment of whatever
nature," 10 relying on the case of Bacolod-Murcia Milling Co. Inc. vs. Henares 11 and some American cases holding that
the lien attaches to the judgment recovered by an attorney and the proceeds in whatever form they may be. 12

The contention is without merit just as its reliance is misplaced. It is true that there are some American cases holding that
the lien attaches even to properties in litigation. However, the statutory rules on which they are based and the factual
situations involved therein are neither explained nor may it be said that they are of continuing validity as to be applicable
in this jurisdiction. It cannot be gainsaid that legal concepts of foreign origin undergo a number of variegations or nuances
upon adoption by other jurisdictions, especially those with variant legal systems.

In fact, the same source from which private respondent culled the American cases it cited expressly declares that "in the
absence of a statute or of a special agreement providing otherwise, the general rule is that an attorney has no lien on the
land of his client, notwithstanding such attorney has, with respect to the land in question, successfully prosecuted a suit to
establish the title of his client thereto, recovered title or possession in a suit prosecuted by such client, or defended
successfully such client's right and title against an unjust claim or an unwarranted attack," 13 as is the situation in the case
at bar. This is an inescapable recognition that a contrary rule obtains in other jurisdictions thereby resulting in doctrinal
rulings of converse or modulated import.

To repeat, since in our jurisdiction the applicable rule provides that a charging lien attaches only to judgments for money
and executions in pursuance of such judgment, then it must be taken in haec verba. The language of the law is clear and
unequivocal and, therefore, it must be taken to mean exactly what it says, barring any necessity for elaborate
interpretation. 14

Notably, the interpretation, literal as it may appear to be, is not without support in Philippine case law despite the dearth of
cases on all fours with the present case. In Caina et al. vs. Victoriano, et al., 15 the Court had the occasion to rule that "the
lien of respondent is not of a nature which attaches to the property in litigation but is at most a personal claim enforceable
by a writ of execution." In Ampil vs. Juliano-Agrava, et al., 16 the Court once again declared that a charging lien
"presupposes that the attorney has secured a favorable money judgment for his client . . ." Further, in Director of Lands
vs. Ababa, et al., 17 we held that "(a) charging lien under Section 37, Rule 138 of the Revised Rules of Court is limited only
to money judgments and not to judgments for the annulment of a contract or for delivery of real property as in the instant
case."
Even in the Bacolod-Murcia Milling case, which we previously noted as cited by private respondent, there was an express
declaration that "in this jurisdiction, the lien does not attach to the property in litigation."

Indeed, an attorney may acquire a lien for his compensation upon money due his client from the adverse party in any
action or proceeding in which the attorney is employed, but such lien does not extend to land which is the subject matter
of the litigation. 18 More specifically, an attorney merely defeating recovery against his client as a defendant is not entitled
to a lien on the property involved in litigation for fees and the court has no power to fix the fee of an attorney defending the
client's title to property already in the client's
possession. 19

While a client cannot defeat an attorney's right to his charging lien by dismissing the case, terminating the services of his
counsel, waiving his cause or interest in favor of the adverse party or compromising his action, 20 this rule cannot find
application here as the termination of the cases below was not at the instance of private respondent's client but of the
opposing party.

The resolution of the second issue is accordingly subsumed in the preceding discussion which amply demonstrates that
private respondent is not entitled to the enforcement of its charging lien.

Nonetheless, it bears mention at this juncture that an enforceable charging lien, duly recorded, is within the jurisdiction of
the court trying the main case and this jurisdiction subsists until the lien is settled. 21 There is certainly no valid reason why
the trial court cannot pass upon a petition to determine attorney's fees if the rule against multiplicity of suits is to be
activated. 22 These decisional rules, however, apply only where the charging lien is valid and enforceable under the rules.

On the last issue, the Court refrains from resolving the same so as not to preempt or interfere with the authority and
adjudicative facility of the proper court to hear and decide the controversy in a proper proceeding which may be brought
by private respondent.

A petition for recovery of attorney's fees, either as a separate civil suit or as an incident in the main action, has to be
prosecuted and the allegations therein established as any other money claim. The persons who are entitled to or who
must pay attorney's fees have the right to be heard upon the question of their propriety or amount. 23 Hence, the obvious
necessity of a hearing is beyond cavil.

Besides, in fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum meruit, the
elements to be considered are generally (1) the importance of the subject matter in controversy, (2) the extent of the
services rendered, and (3) the professional standing of the lawyer. 24 These are aside from the several other
considerations laid down by this Court in a number of decisions as pointed out by respondent court. 25 A determination of
all these factors would indispensably require nothing less than a full-blown trial where private respondent can adduce
evidence to establish its right to lawful attorney's fees and for petitioner to oppose or refute the same.

Nothing in this decision should, however, be misconstrued as imposing an unnecessary burden on private respondent in
collecting the fees to which it may rightfully be entitled. But, as in the exercise of any other right conferred by law, the
proper legal remedy should be availed of and the procedural rules duly observed to forestall and obviate the possibility of
abuse or prejudice, or what may be misunderstood to be such, often to the undeserved discredit of the legal profession.
Law advocacy, it has been stressed, is not capital that yields profits. The returns it births are simple rewards for a job
done or service rendered. It is a calling that, unlike mercantile pursuits which enjoy a greater deal of freedom from
government interference, is impressed with public interest, for which it is subject to State regulation. 26

ACCORDINGLY, the instant petition for review is hereby GRANTED and the decision of respondent Court of Appeals of
February 11, 1988 affirming the order of the trial court is hereby REVERSED and SET ASIDE, without prejudice to such
appropriate proceedings as may be brought by private respondent to establish its right to attorney's fees and the amount
thereof.

SO ORDERED.

Melencio-Herrera, Paras, Padilla and Sarmiento, JJ., concur.

18. CONRAD VS. NAVARRO, ADM. CASE NO. 2033; ORTIGAS VS. NAVARRO, ADM. CASE NO. 2148, MAY 9, 1990

A.C. No. 2033 May 9, 1990

E. CONRAD and VIRGINIA BEWLEY GEESLIN, complainants,

vs.
ATTY. FELIPE C. NAVARRO, respondent.

A.C. No. 2148 May 9, 1990

ATTY. FRANCISCO ORTIGAS, JR. and ATTY. EULOGIO R. RODRIGUEZ, complainants,

vs.
ATTY. FELIPE C. NAVARRO, respondent.

Quasha, Asperilla, Ancheta, Valmonte, Peña & Marcos for complainants in AC No. 2033.

Felipe C. Navarro for and in his own behalf.

PER CURIAM:

We write this finale to the dispiriting charges filed by complainants Francisco Ortigas, Jr. and Eulogio R. Rodriguez in
Administrative Case No. 2148 1 and by spouses E. Conrad and Virginia Bewley Geeslin in Administrative Case No.
2033 2 seeking the disbarment of respondent Atty. Felipe C. Navarro for malpractice and gross misconduct.

In our resolution dated May 5, 1980, issued consequent to the Report and Recommendation of the Office of the Solicitor
General submitted to this Court on April 21, 1980, we ordered the suspension of respondent Navarro from the practice of
law during the pendency of these cases. 3

The investigative phase was conducted by said office pursuant to our resolutions of February 14, 1975 and September
13, 1976 in G.R. Nos.
L- 39386 and L-39620-29, entitled "Florentina Nuguid Vda. de Haberer vs. Court of Appeals, et al." With commendable
thoroughness and attention to detail, two reports were submitted which, in order to vividly portray the scope and
magnitude of respondent's operations and how he was able to perpetrate the anomalous transactions complained of, we
quote extensively from said reports which are sustained by the evidence of record.

I. The antecedent facts on which Administrative Case No. 2148 is premised are reported by then Solicitor General Estelito
P. Mendoza, as follows:

PREPATORY STATEMENT

This unnumbered administrative case against respondent Atty. Felipe C. Navarro (hereinafter called respondent
NAVARRO, for short) originally stemmed from the letter of a certain Angelito B. Cayanan to the Honorable Supreme Court
dated January 25, 1975 which reads as follows:
 xxx xxx xxx

I wish to respectfully inform your good office that I bought a few lots on installment basis from Atty. Felipe C. Navarro of
Ruby Hills Subdivision as evidenced by the attached OR Nos. 0512 and 0519 and a "Contract of Sale".

Atty. Navarro, some officials and representative of the said company claim that although there is a pending case No. L-
39386 under Decree No. 1425 on the property being sold, the case is almost won in their favor and are just waiting for
your final decision within a couple of months or even less.

In this connection, I am respectfully writing you this letter in order to bring to your attention this transaction and to protect
my rights in the event that any unfavorable circumstances may arise in the future.

xxx xxx xxx

Acting on the aforesaid letter, the Supreme Court, per Resolution dated February 14, 1975, referred the copy of Mr.
Cayanan's letter to the Solicitor General for "investigation of the existence of sufficient ground to proceed with the
prosecution of Atty. Felipe C. Navarro (whose address of record is No. 66 Azucena, Roxas District, Quezon City) for
suspension or removal from the office of attorney and for appropriate action." The resolution reads as follows:

L-39386 and L-39620-29 (Florentina Nuguid Vda. de Haberer vs. Court of Appeals, et al.) The court NOTED the letter
dated January 25, 1975 of Mr. Angelito B. Cayanan with its attachments (copy thereof has been furnished Atty. Felipe C.
Navarro, counsel for respondents) and RESOLVED to instruct the Clerk of Court to inform him of the status of the cases
at bar.

It appearing from said letter that Atty. Felipe C. Navarro has been selling the lots in litigation herein on installment basis to
the public (among them, Mr. Cayanan) as "absolute owner by virtue of this contract of legal services in Civil Case No.
8321, etc. of the Court of First Instance of Rizal, Pasig" (see Ruby Hills Subdivision Contract of Sale), which lots are titled
in the name of herein petitioner and not in Atty. Navarro's name and that the unwarranted claim is made on his behalf that
'the case is almost won in their favor' (see Mr. Cayanan's letter), the Court RESOLVED FURTHER to refer copy of Mr.
Cayanan's said letter with its attachments to the Solicitor General under Rule 139, Sections 1, 3, 4 and 5 for investigation
of the existence of sufficient ground to proceed with the prosecution of Atty. Felipe C. Navarro (whose address of record is
No. 66 Azucena, Roxas District, Quezon City) for suspension or removal from the office of attorney and for appropriate
action.

Aside from Mr. Cayanan, the Solicitor General is directed to communicate in the premises with Atty. Eulogio R. Rodriguez
of the law firm of Ortigas & Ortigas (with address at 10th Floor, Ortigas Bldg. Ortigas Ave., Pasig, Rizal), who under letter
of June 10, 1974 on file in Administrative Case No. 1154 has offered to make available documents in their possession
showing other sales made by Atty. Navarro of properties titled in the name of other persons, involving a total selling price
of P75 million and down payments of almost P 0.6 million.

On April 4, 1975, Assistant Solicitor General (now Justice of the Court of Appeals) Hugo E. Gutierrez, Jr. wrote Mr.
Angelito B. Cayanan asking him to submit his affidavit embodying the circumstances surrounding the matters contained in
his letter dated January 25, 1975, especially the second paragraph thereof. The letter was sent to Mr. Cayanan by
registered mail but the same was returned unserved for the reason that the addressee had moved to another address.

On the same date, April 4, 1975, Assistant Solicitor General Gutierrez, Jr. also wrote to Atty. Eulogio R. Rodriguez
requesting him for copies of the documents evidencing the sales made by respondent Navarro.

On February 13, 1976, this Honorable Court issued a Resolution in L-39386 and L-39620-29 (Florentina Nuguid Vda. de
Haberer vs. Court of Appeals, et al.) referring the letter of Atty. Francisco Ortigas, Jr. dated January 13, 1976 "for
investigation of the existence of sufficient grounds for the prosecution of Atty. Felipe C. Navarro for suspension or removal
from office and for appropriate action" and directing "Mr. Ortigas, Jr., to furnish the Office of the Solicitor General for the
purpose with a copy of said letter and all its pertinent attachments."

The aforementioned letter of Atty. Francisco Ortigas, Jr. dated January 13, 1976 reads as follows:

xxx xxx xxx

Dear Justice Teehankee,

This is to apprise your Office of the latest activities of Atty. Felipe C. Navarro who has previously been reported to the
Supreme Court as selling properties titled in the name of this Company.

We have just secured a new "subdivision plan" of Atty. Navarro showing that the lots he is now selling to the public
include those titled in the names of the heirs of the late Don Vicente Madrigal and this Company in Quezon City. Atty.
Navarro has thus expanded his activities despite recent detention by the Military. As could be seen from the attached
"plan", Navarro claims to be the owner of that huge property (actually titled in the name of the Madrigals and this
Company) bounded by Ortigas Avenue, E. delos Santos Avenue, White Plains Road and R. Rodriguez Avenue,
comprising approximately of 260 hectares.

As reported in our previous letters to the Court, Navarro claims to be the owner of some 4,000 hectares of land in the
Greater Manila Area in virtue of his handling the case of some squatters on a 1.2-hectare lot in Mandaluyong, Rizal
owned by Dona Florentina Nuguid Vda. de Haberer. He contends that whereas his squatters-clients occupy only about a
hectare, he has become, in virtue of his contract of legal services' with them, the owner of thousands of hectares of land
as these are allegedly0 covered by void titles. Navarro thus started to openly sell these properties.

Navarro's Ruby Hills and Bluehills Subdivisions, for instance, cover properties already with buildings and other
improvements. He has nevertheless been quite successful in selling portions thereof, as when he sold lots within the De
La Salle College, Wack-Wack Golf & Country Club, ABM Sison Hospital, etc. His modus operandi is described in this
Company's letter complaint dated April 8, 1974 to Gen. Prospero Olivas, copy of which is attached hereto for ready
reference.

Navarro continues to defy the authorities, for only after a brief lull he is now again openly selling titled properties of other
persons. We have provided more than sufficient documentary evidence to the Court and the Solicitor General and we
hope that formal administrative charges can now be filed against Navarro to prevent him from further perpetrating a large
scale fraud upon the public.

xxx xxx xxx

Thereafter, hearings were conducted on various dates.

COMPLAINANTS' EVIDENCE

The evidence for the complainants consist mainly of documents, most of which were presented in Criminal Cases Nos.
3158 and 3159 of the Court of First Instance of Rizal and in the various civil cases before the said court involving
Florentina Nuguid Vda. de Haberer. Complainants' sole witness, Reynaldo Morallos, merely identified the various
documentary exhibits presented by the complainants.

From the evidence adduced by the complainants, it appears that a certain Florentina Nuguid Vda. de Haberer (hereinafter
called HABERER, for short) filed in the Court of First Instance of Rizal twenty-two (22) cases for recovery of possession of
her 1.2 hectare property in Mandaluyong, Rizal titled in her name, and to eject the twenty-two (22) families squatting
thereat. Eleven (11) of these cases were raffled to Judge Emilio Salas, while the other eleven (11) cases were assigned to
Judge Pedro Navarro. All the twenty-two (22) defendants-squatters were represented by respondent NAVARRO. On
behalf of his clients, respondent NAVARRO interposed as principal defense, the alleged nullity of the HABERER'S title,
claiming that the mother title from which it emanated actually originated from Decree No. 1425 issued in G.L.R.O. Record
No. 917, which he claims to be non-existent.

The two sets of cases were decided differently. In the first set of eleven (11) cases, Judge Salas rendered a decision on
August 31, 1970 sustaining the validity of the HABERER'S title and ordering the eviction of the defendants-squatters
clients of respondent NAVARRO (Exhibit W). In finding for the plaintiff, Judge Salas stated as follows:

After due consideration of the evidence adduced by both parties, this Court finds that most of the documentary evidence
submitted by defendants are irrelevant to the case since they pertain to defendants claim of ownership over 10,000
hectares of land when the area of the property subject matter of the complaint is only 12,700 square meters. This Court
also believes that the above-mentioned claims of defendants are untenable.

Plaintiffs ownership over the property in question is evidenced by the issuance in her name, since 1929, of Transfer
Certificate of Title No. 15043. It is a settled rule in this jurisdiction that a certificate of title serves as evidence of an
indefeasible title to the property in favor of the person whose name appears therein. After the expiration of the one-year
period from the issuance of the decree of registration upon which it is based, it becomes incontrovertible (see case of
Pamintuan vs. San Agustin, 43 Phil. 558; Reyes & Nadres vs. Borbon & Director of Lands, 50 Phil. 791; Manuel Sy Juco,
et al. vs. Luis Francisco, 53 O.G., p. 2186, April 15,1957; Brizuela et al. vs. Ciriaco Vda. de Vargas, 53 O.G., p. 2822, May
15, 1957).

Defendants' claim that they became owners of the land in question by adverse possession is without merit considering
that title to land becomes non-prescriptible Sec. 42 of Act No. 496 provides that no title to registered land in derogation to
that of the registered owner shall be acquired by prescription or adverse possession (Corporation de Pp. Agustines vs.
Crisostomo, 42 Phil. 427). A title once registered cannot be defeated even by adverse, open and notorious possession.
Registered title under the Torrens System cannot be defeated by prescription. The title, once registered, is notice to the
World. All persons must take notice. No one can plead ignorance of registration (Legarda vs. Saleeby, 3 Phil. 590, 595).

Further, defendants recognized plaintiffs ownership over the property in question when they filed a petition with the
People's Homesite & Housing Corporation wherein they sought the latter's intervention for the acquisition of the property
and for the subdividing thereof into small lots to be sold to them at nominal cost. In said petition defendants not only
named the plaintiff as the owner of the property in question but they also indicated therein her title to the land as Transfer
Certificate of Title No. 15043 of the Register of Deeds of Pasig, Rizal. We quote hereunder the pertinent facts and data
concerning the property in question in defendants' petition submitted to the General Manager of the People's Homesite &
Housing Corporation, as follows:

xxx xxx xxx

1) Location of land: Barrio Burol, Mandaluyong, Rizal

2) Name of registered owner: Florentina Nuguid Vda. de Haberer

3) Address of owner: 1288 Burgos St., Paco, Manila, or c/o Bausa, Ampil, & Suarez Law Offices, Madrigal Bldg., Manila

4) Certificate of Title No. (attach photostatic copy): 15043

5) Area of land, Lot & Block & Survey Nos. 12,700 square meters(Exh G).

As regards defendants' claim that Transfer Certificate of Title No. 15043 issued since 1929 in the name of plaintiff is null
and void, this Court is of the opinion that defendants cannot assail the validity of said title in this proceeding, which is for
recovery of possession. Any attack on the decree of registration of title must be direct and not by collateral proceeding.
The title which may be issued in pursuance of said decree cannot be changed, altered, modified, enlarged or diminished
in a collateral proceeding (Legarda, et al. vs. Saleeby, 31 Phil. 590). In the case of Director of Land vs. Gan Tan, G.R. No.
L-2664, May 30, 1951, our Supreme Court, in reversing the decision of the trial court where the registered owner was
considered disqualified to acquire land under the Constitution and consequently was denied the right to constitute his title,
said: "That the disqualification raised by the Court is untenable in the light of the theory that a Torrens title cannot be
collateraly attacked. That issue can only be raised in an action instituted expressly for that purpose". (See also Ramon
Chua Yu Sun vs. The Hon. Ceferino de los Santos, et al., G.R. No. 4347, November 23,1951; James (sic) G.R. No. L-
4013, Dec. 29,1951; Samonte, et al. vs. Descallar et al., No. L-12964, Feb. 29,1960).

In view of the above-mentioned ruling of the Supreme Court, it is our opinion that there is no need to discuss the merits of
the reasons claimed by defendants why Transfer Certificate of Title No. 15043 in the name of plaintiff is null and void.
(Exh. W) Decision in Civil Cases Nos. 8322, 8323, 8327, 8370, 8375, 8374, 8382, 8691, 8693, 8696 & 8699, at pages 6-
7; 9-10).

In the second set of eleven (11) cases, Judge Pedro Navarro decided in favor of the defendants-squatters clients of
respondent NAVARRO. In his decision dated May 26, 1971, dismissing the complaints, Judge Navarro stated as follows:
Plaintiff claims to be the registered owner of a parcel of land containing an area of 12,000 square meters situated at the
corner of A. Luna, Harapin Ang Bukas and J.C. Zuluete Streets, Mandaluyong, Rizal, which is covered by, and more
particularly described in, Transfer Certificate of Title No. 15043 of the Register of Deeds of Rizal and indicated in the
sketch plan attached to the complaint as Annex A.

xxx xxx xxx

It likewise appears that ejectment proceedings have been filed in the Municipal Court of Pasig, Rizal, and in the City Court
of Quezon City against several persons occupying other parcels by Ortigas and Company, Limited Partnership, where
decisions have been rendered in favor of said Partnership. In order to forestall executions of these decisions defendants
in said ejectment cases filed class suit before this Court by the occupants of the land which was heard and tried before
Branch XV in which the Director of Lands was impleaded as a party-defendant. The decision of Branch XV in said class
suit is made part of the evidence of these defendants in the herein eleven cases for whatever the same may be worth as
aid in the determination of the merits of the issues raised herein.

As may be gleaned from said decision of Branch XV plaintiff therein assailed the validity of Decree No. 1425 as null and
void and or fictitious and the proceedings in GLRO Rec. No. 917 upon which the decree was based as also null and void.
The Court sustained the herein plaintiffs claim and rendered judgment declaring (1) the proceedings in GLRO Rec. No.
917 null and void; (2) the Decree No. 1425 null and void; (3) all original certificates of title issued by virtue of and pursuant
to the judgment in GLRO Rec. No. 917 and Decree No. 1425 utter nullities; (4) all transfer certificates of title derived from
the original certificates of title declared void under No. 3 above, particularly but not exclusively, Transfer Certificate of Title
Nos. 77652 and 77653 of the Register of Deeds of Quezon City and 126575 and its derivative Transfer Certificate of 'title
No. 135879 of the Register of Deeds of Rizal, null and void; (5) that the rightful owners of the litigated lands covered by
Transfer Certificates of Title Nos. 77652, 77653, 126575 (or 135879) are the herein plaintiffs . . . and so forth.

The Court has read copy of this decision of our Branch XV and observed findings of facts too ponderous to be ignored.

That case before Branch XV directly assails the nullity of the proceedings leading to the proceedings in GLRO Record No.
917 and, as an inevitable corollary, the nullity of Decree No. 1425 issue by virtue of such void proceedings as well as the
original certificates of title issued as consequence thereof.

In said proceeding before Branch XV the Court, among other things, found that while the decision in GLRO 917 was
supposedly rendered on April 25, 1905, the survey of the property subject matter of therein application was not made until
June 16 to August 16, 1906, or some one year after the decision. It found no proof of initial hearing of the application for
registration being published as required by law without which the Land Registration Court could not have acquired
jurisdiction over the case. Said decision also made inference that since the survey of the property was not made until a
year after the rendition of the judgment the technical descriptions appearing in the original certificates of title issued under
GLRO Rec. No. 917 Decree No. 1425, could not have been those appearing in the notice of initial hearing, if any.
Publication of accurate technical description being an essential jurisdictional requirement which cannot be dispensed with
and non-compliance with this requirement renders the proceedings and the decision and decree and titles issued arising
therefrom null and void.
The same decision of Branch XV also made its findings that James Ross who was said to have penned the decision in
GLRO Rec. No. 917, never was a judge of the Court of Land Registration at the time the decision was supposedly
rendered because the Gaceta Official for the year 1905 does not show that James Ross was listed as Judge of the Land
Registration Court or that he was ever appointed in that capacity. Furthermore, the Court found that while J.C. Welson
was the Clerk of Court on April 26, 1905, one A.K. Jones issued the decree and he signed it as Clerk of Court. The Court
even found the supposed decision in that proceedings missing and made its conclusion that since the decree which was
supposedly issued by a person who was not the Clerk of Court at the time and which decree did not contain the
description of the property ordered in the decision to be rendered because the survey of the property was only made
some one year later and that said decree cannot now even be found, the decision rendered therein is void for lack of
jurisdiction.

Now, as we have said, the foregoing findings of facts are too ponderous to be ignored. It is indeed a truism that a void
original certificate of title cannot be the source of a valid transfer certificate of title and a void judgment is, in the eyes of
the law, inexistent and cannot give source to any legal right.

The evidence now shows that the plaintiffs in said Civil Case No. 7-M(10339) before Branch XV of this Court are also the
defendants in the herein eleven cases in which their properties are also involved. Since the case before Branch XV
directly assails the nullity of the proceedings by virtue of which Decree No. 1425 and the alleged title of the plaintiff over
the parcels of land occupied by the herein eleven defendants is a derivative from such decree, it is the considered opinion
of this Court that until and unless the decision of Branch XV of this Court is reversed or set aside by final judgment,
plaintiffs prayer to order the herein eleven defendants in these eleven cases to vacate the parcels which they occupy and
on which their respective houses are built has become premature. It goes without saying that if said decision of Branch
XV will be finally affirmed, or that the same becomes final and executory, all the claims of rights to ownership and
possession of properties embraced in the decision in GLRO Rec. No. 917 and Decree No. 1425 shall become absolute
nullities. Possessions by actual occupants of all these properties had better be maintained until after final decision in Civil
Case No. 7-M(10339) shall have been rendered. (Exh. R, Decision in Civil Cases Nos. 8320, 8321, 8326, 8369, 8379,
8383, 8385, 8386, 8387 and 8700, at pp. 2, 5-9).

On June 21, 1971, Judge Navarro, acting on the motion filed by respondent NAVARRO, issued an order cancelling
HABERER's title over her property in question and directing the issuance of a new title in lieu thereof in favor of
respondent's clients Thus —

WHEREFORE, premises considered, judgment is hereby rendered dismissing the complaints in the above-entitled cases
(Nos. 8320, 8321, 8326, 8329, 8376, 8379, 8383, 8386, 8685, 8687 and 8700) all with costs against the plaintiff and
hereby ordering the Register of Deeds of Rizal to cancel Transfer Certificate of Title No. 15043 of the Register of Deeds of
Rizal issued in favor of the plaintiff Florentina Nuguid Vda. de Haberer and in view thereof issue new certificates of title in
favor of the defendants subject to the lien for attorney's fees in favor of Attorney Felipe Navarro in accordance with the
terms of the "Kasunduan Hinggil sa Serbisyo ng Abogado" which is quoted in his ex-parte motion for clarification and/or
modification of the decision.

As so modified the decision stands in all other respects.

SO ORDERED.
(Exhibit S, pp. 4-5).

On July 23, 1971, HABERER filed a motion for reconsideration of the aforesaid order, and on September 15, 1972, Judge
Navarro issued the following order:

In the order dated July 17, 1971, the Court had occasion to reiterate that its decision in this case was mainly predicated
on the decision of Branch XV of this Court that the certificate of title emanating from the proceedings in GLRO Record No.
917 were null and void and plaintiffs title happened to be one of them. The Court opined that until said decision is
reversed the actual occupants had better be maintained in their possessions of the land.

Pursuant to the same order the motion for reconsideration and new trial was set only for reception of alleged newly
discovered evidence.

The Court now understands that the decision of Branch XV is now under review by order of our Appellate Court.

It has also come to the understanding of the Court that the order of June 21, 1971, sought to be reconsidered insofar as it
ordered the cancellation of Transfer Certificate of Title No. 15043 in favor of the plaintiff, also adversely affects the
interests of other persons and entities like the Ortigas & Company, Limited Partnership, which is not a party herein,
because the certificate of title of the plaintiff is also a derivative of GLRO 917 and Decree No. 1425 from which Ortigas
and Company, Limited Partnership, derives titles over wide tracts of land. Since Ortigas & Company, Limited Partnership,
is not a party in this case whatever orders or decisions are made in this case cannot be made to affect the said company.
Decisions and orders can only affect parties to the case.

The Court therefore arrives at the conclusion that the order dated June 21, 1971, must be reconsidered on two grounds
(1) because the decision of Branch XV is now being the subject of further proceedings and (2) because it has the effect of
adversely affecting the interest of Ortigas & Company, Limited Partnership, which is not even a party herein.

WHEREFORE, as prayed, the order dated June 21, 1971, is set aside. However, the decision dated May 26, 1971,
insofar as it denies the ejectment of the present occupants of the land as stated in the decision stands.

SO ORDERED.

(Exhibit T, at pp. 2-3).

HABERER appealed from the decision of Judge Navarro while the defendants-clients of respondent NAVARRO appealed
from the decision of Judge Salas. The Navarro order of June 21, 1971 was not appealed by respondent NAVARRO's
clients.

After the rendition of the Navarro decision which made reference to the decision rendered by Judge Vivencio Ruiz of the
Court of First Instance of Rizal, Branch XV, respondent NAVARRO published in the Manila Times on July 4, 1971 the
following:

LEGAL NOTICE TO ALL THOSE INVOLVED:

PURSUANT TO THE PROVISIONS OF LAW AS INTERPRETED BY OUR SUPREME COURT RESPECTING A VAST
TRACT OF LAND LATIFUNDIO COVERING MANDALUYONG, SAN JUAN, PASIG, MARIKINA, AND QUEZON CITY,
THE DECISION DATED MAY 26, 1971 REITERATING AND REPEATING THE DECLARATION AND ORDER THAT ALL
ORIGINAL AND TRANSFER CERTIFICATES OF TITLE DERIVED FROM DECREE NO. 1425 ARE NULL AND VOID AB
INITIO RENDERED BY THE COURT OF FIRST INSTANCE OF RIZAL IN FAVOR OF THE MYRIAD CLIENTS OF THE
UNDERSIGNED HAS AUTOMATICALLY BY MERE LAPSE OF THE REGLEMENTARY PERIOD) BECOME FINAL AND
EXECUTORY.

But to every possessor in good faith there comes a time when he is considered a possessor in bad faith. When the owner
or possessor with a better right comes along, when he becomes aware that what he had taken for granted is at least
doubtful, and when he learns the grounds in support of the adverse contention, good faith ceases. The possessor may still
believe that his right is more secure, because we resign ourselves with difficulty to the sight of our vanishing hopes, but
when the final judgment of the court deprives him of the possession, all illusion necessarily disappears. (Tacas vs. Robon,
53 Phil. 356, 361-362 citing Manresa and Articles 528, 545, and 1123 of our present Civil Code).

He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to
indemnity (Art 449, Civil Code)

HOWEVER, IT IS NOT THE DESIRE OF THE UNDERSIGNED PREVAILING PARTY AND SUCCESSOR BY TITLE
ACQUIRED AFTER THE ACTIONS WERE BEGUN BY VIRTUE OF HIS CONTRACT OF LEGAL SERVICES TO
DEMAND FOR THE DEMOLITION OR REMOVAL OF THE IMPROVEMENTS AT THE EXPENSE OF THE
POSSESSOR IN BAD FAITH FOR:

The Civil Code confirms certain time-honored principles of the law of property. One of those is the principle of accession
whereby the owner of property acquires not only that which it produces but that which it united to it either naturally or
artificially. Whatever is built, planted or sown on the land of another, and the improvements or repairs made thereon,
belong to the owner of the land. Where however, the planter, builder or sower has acted in good faith, a conflict of rights
arises between the owners and it becomes necessary to protect the owner of the improvements without causing injustice
to the owner of the land. In view of the impracticability of creating what Manresa calls a state of "forced co-ownership"
(Vol. 3, 4th ed., p. 213), the law has provided a just and equitable solution by giving the owner of the land the option to
acquire the improvements after the payment of the proper indemnity or to oblige the builder or planter to pay for the land
and the sower to pay the proper rent. It is the owner of the land who is allowed to exercise the option because his right is
older and because, by the principle of accession, he is entitled to the ownership of the accessory thing." Bernardo vs.
Bataclan, 66 Phil. 598, 602; see also Filipinas Colleges, Inc. vs. Garcia Timbang, et al., 106 Phil. 247, 254).

So caveat emptor (buyers beware) of possesors in bad faith as we are ready to ask for the execution of the decision
pursuant to law and avoid a scire facias Ordinary prudence requires that those involved may please make some kind of
arrangements with the undersigned before execution by calling through the following telephones:

xxx xxx xxx

BY THE WAY, YOU ARE ALL INVITED TO JOIN THEMOTORCADE OF OUR PEOPLE'S VICTORY WHICH WILL PASS
THROUGH THE PRINCIPAL STREETS OF MANDALUYONG, SAN JUAN, PASIG, MARIKINA, AND QUEZON CITY
FROM 9 A.M. TO 12 NOON TODAY, SUNDAY, JULY 4, 1971, THE MOTORCADE WILL BEGIN FROM NO. 61 AMADO
T. REYES STREET, BARRIO BUROL, MANDALUYONG, RIZAL RETURNING TO THE SAME PLACE AT NOON FOR
LUNCH CELEBRATING TILL MIDNIGHT.

(Sgd.) FELIPE C. NAVARRO

Counsel for the Defense

60 Azucena, Roxas District, Quezon City

(Exhibit D, at pages 6-8).

Thereafter, respondent NAVARRO claimed ownership of properties originally covered by Decree 1425 including the
parcels of land owned by Ortigas & Company, Limited Partnership (hereinafter called ORTIGAS, for short), and started
selling them.

In view of the aforementioned publication, panic ensued among the lot buyers of ORTIGAS and among the property
owners whose titles were derived from Decree No. 1425. As a counter measure to allay the fears of the panicky lot buyers
and owners, ORTIGAS caused the publication in the Manila Times on July 19 and 17, 1971 the following:

WARNING

SO THE PUBLIC MAY KNOW

In reply to numerous inquiries received by Ortigas & Company, Limited Partnership with reference to an advertisement
published in the Manila Times on July 4, 1971 supposedly affecting the validity of all original certificates of title and
transfer certificates of title derived from Decree No. 1425, Ortigas & Company, Limited Partnership wishes to announce
that it is not a party to ANY case allegedly decided on May 26, 1971 by the Supreme Court or any other court and
therefore ALL ITS TITLES DERIVED FROM DECREE NO. 1425 ARE NOT IN ANY WAY AFFECTED BY SAID
DECISION.

The public is hereby requested to be wary of any person selling lands and/or rights to lands belonging to and in the name
of Ortigas & Company, Limited Partnership.

The public is also warned to be wary of MISLEADING adverstisements and/or persons basing their rights to lands of
Ortigas & Company, Limited Partnership on such "decision" of May 26, 1971 which is claimed to be "final and executory."

ORTIGAS & COMPANY, LIMITED PARTNERSHIP

(Exhibit D, at pages 4-5).

After the publication of the foregoing notices, respondent NAVARRO filed with the Court of First Instance of Rizal, Branch
VIII, two (2) complaints for libel against the officers of ORTIGAS and the officials of the defunct Manila 'times. Respondent
NAVARRO sought to recover in said cases damages allegedly sustained by him on account of his failure to consummate
thousands of sales by reason of the publication of the above notice. In support of his allegation, respondent NAVARRO
presented 169 deeds of sale over lots in his various subdivisions, the locations of which overlap the properties owned by
ORTIGAS (marked as Exhibit F, F-1 to F-168 in the instant proceedings).

On December 13, 1971, Judge Benjamin H. Aquino dismissed these two cases for libel for lack of merit (Exhibit D).

Apart from the documents pertaining to the HABERER cases and the libel cases, the complainants also presented
documents relating to Civil Case No. 7-M(10339), Court of First Instance of Rizal, Branch XV, entitled "Pedro del Rosario,
et al. vs. Ortigas & Company, Limited Partnership, et al." and Civil Case No. Q-16265, Court of First Instance of Rizal,
Quezon City, Branch XVI, entitled "Ortigas & Company, Limited Partnership vs. Felipe C. Navarro."

In Civil Case No. 7-M (10339), the plaintiffs therein sought to enjoin ORTIGAS from ejecting them. Judge Vivencio M.
Ruiz decided in favor of the plaintiffs, arguing that (1) there was no publication for the Notice of Initial Hearing set in 1905;
(2) there was no survey of the property sought to be registered; (3) the judge presiding over the defunct Court of Land
Registration was fake; and (4) the Clerk of Court of the said Court was also fake. The dispositive portion of the Ruiz
decision reads as follows:

WHEREFORE, and in view of all the foregoing, the Court hereby declares and/or orders:

1. That the proceedings in G.L.R.O. Rec. No. 917 are null and void;

2. That Decree No. 1425 is null and void and/or fictitious;

3. That all the original certificates of title issued by virtue of and pursuant to the judgments in G.L.R.0 Rec. No. 917 and
Decree No. 1425 were utter nullities;

4. That all transfer certificates of title derived from the original certificates of title declared void under No. (3) above,
particularly but not exclusively, Transfer Certificates of Title Nos. 77652 and 77653 of the Register of Deeds of Quezon
City and 126575 and its derivative Transfer Certificate of Title No. 135879 of the Register of Deeds of Rizal, were and are
null and void;

5. That the rightfully (sic) owners of the litigated lands covered by Transfer Certificates of Title Nos. 77652, 77653, 126575
(or 135879) are the herein plaintiffs, the portions owned by them being as indicated in Exhibit P;

6. That the defendant Partnership cease and desist from molesting the plaintiffs in the enjoyment and peaceful
possession of their respective landholdings;

7. That the Hon. Andres Siochi, as Presiding Judge, Municipal Court, Pasig, Rizal, and Hon. Ricardo Tensuan, as
Presiding Judge, Branch II, City Court of Quezon City, and the defendant Ortigas and Company, Limited Partnership, their
agents, representatives and any and all persons acting in their behalves, refrain and desist absolute (sic) and perpetually
from proceeding with or taking any action on Civil Cases Nos. 1134, II 13865, II-13869, II-13877, II-13913, and II-13921
filed by the herein defendant Partnership against some of the herein plaintiffs;

8. That the case be dismissed as against defendant Director of Lands;

9. That the defendant Partnership pay to the plaintiffs the sum of P50,000.00 as and for attorney's fees;

10. That the defendant Partnership pay to the plaintiffs the costs of the suit; and

Defendant Partnership's counterclaim is hereby dismissed for lack of merit.

SO ORDERED.

(Exhibit EE at pages 5-6).

ORTIGAS appealed the Ruiz decision to the Court of Appeals. On November 21, 1971, the Court of Appeals rendered a
decision setting aside the decision of Judge Ruiz and ordering a new trial to enable the petitioner to introduce newly
discovered evidence. The case was then remanded to the lower Court. On November 3, 1973, Judge Arsenio A.
Alcantara, who took the place of Judge Ruiz who was separated from the service by the President of the Philippines,
rendered a decision the dispositive portion of which reads as follows:

WHEREFORE, judgment is hereby rendered in favor of the defendant, Ortigas & Company, Limited Partnership, as
against the plaintiffs:

1. Dismissing the amended complaint;

2. Confirming the validity of Decree No. 1425, issued in Expediente 917 and all titles emanating therefrom;

3. Directing each of the plaintiffs to individually pay the defendant Company:

(a) P30.00 per month as rental of the premises occupied by them from the time of the filing of the complaint on October
20, 1967, with legal rate of interest, until they surrender the possession thereof to defendant Company;

(b) P5,000.00 as attorney's fees.

(4) Ordering plaintiff and their successors-in-interest, agents or any person or persons acting in their behalf, who are
found to be in possession of defendant company's land to vacate the same and remove and demolish their improvements
thereon at plaintiffs expenses;

(5) Ordering Atty. Emilio D. Castellanes to return the attorney's fees in the amount of P 1,030.00 he prematurely collected
from defendant company, with interest; and

(6) To pay the costs.

SO ORDERED.

(Exhibit DD at pages 44-45).

The aforesaid decision was appealed. During the pendency of the approval of the record on appeal, ORTIGAS filed a
motion for immediate execution of judgment. After exchange of pleadings by the parties, the trial court presided by Judge
Alcantara granted the motion and ordered the issuance of a writ of execution in favor of Ortigas upon filing a bond in the
amount of P250,000.00. Del Rosario, et al. filed a motion for reconsideration of the aforesaid order. Despite opposition by
Ortigas, Judge Florellana Castro-Bartolome, who was appointed to Branch XV vice Judge Alcantara, granted the motion
for reconsideration and set aside the order of Judge Alcantara. Ortigas contested the order of Judge Bartolome through a
petition for certiorari and prohibition with preliminary injunction, docketed as CA-G.R. No. SP-04060.

On September 1, 1975, the Court of Appeals promulgated a decision in the aforesaid case, the dispositive portion of
which reads as follows:

WHEREFORE, the writ of certiorari is granted. The order of the respondent Judge dated February 25, 1975, is hereby
annulled and set aside and the order of Judge Arsenio Alcantara, granting immediate execution, is hereby revived, with
instructions to the respondent judge to fully implement the latter order, including the approval of the petitioner's bond and
the issuance of the necessary writ or writs of execution. The restraining order issued at the inception of this action is
hereby (sic) permanent.

No costs.

SO ORDERED.

(Exhibit EE at pages 50-51).

This decision was the subject of a petition for review filed by respondents Del Rosario, et al., but the same was denied. So
also with the motion for reconsideration filed with the Supreme Court (Annex "A" of Exhibit FF)

In order to stop respondent NAVARRO from selling its titled properties, ORTIGAS also filed Civil Case No. Q-16265,
Court of First Instance of Rizal, Quezon City Branch XVI, entitled "Ortigas & Company, Limited Partnership vs. Felipe C.
Navarro.

On December 16, 1972, Judge Sergio A.F. Apostol rendered a decision in favor of Ortigas as follows:

xxx xxx xxx

It having been found that defendant was guilty of bad faith and fraud in claiming and selling plaintiff's land, plaintiff is
entitled to attomey's fees. This court finds the amount of attorney's fees in the sum of P50,000.00 to be fair and
reasonable considering the extent and value of the property involved and the nature of the case.

Defendant, in his answer and motion to dismiss, alleged that as a result of the issuance of the restraining order, he
suffered damages in the amount of Pl,000,000.00 daily.

Firstly, the same was not raised as a counterclaim. Therefore, this court can only treat it as an affirmative defense.

Secondly, no evidence was submitted to prove this claim of damages. Under the same authorities cited in support of the
denial of plaintiffs claim for damages, therefore, he has failed to establish what damages he had suffered.
Lastly, the court has found that plaintiff is entitled to the injunction prayed for. It follows, therefore, that the issuance of the
restraining order was proper and, hence, can not be the basis for a claim for damages.

This court cannot help but end this decision with a note of admonition and hope. The people who will ultimately suffer the
most from defendant's acts in question are his buyers, who in all probability are middle class people who themselves
wanted to make money out of the apparent sad predicament that defendant had brought upon the plaintiff. It is the fervent
hope of this court, therefore, that with the advent of the NEW SOCIETY defendant will turn a new page and make a fresh
start in life.

WHEREFORE, judgment is hereby rendered:

1. Upholding the validity and indefeasibility of plaintiffs Transfer Certificates of Title over the land in question;

2. As a consequence thereof, forever enjoining and barring the defendant, his successors-in-interest, assigns, agents or
any person or persons acting for or in his behalf, from selling and advertising, verbally, or in writing, the sale of the lands
in question and from asserting any claim or dominion or possession whatsoever on or over the said property, directly or
indirectly, adverse to the plaintiff; and

3. Ordering the defendant to pay attorney's fees in the sum of P50,000.00 plus cost of suit.

SO ORDERED.

(Exhibit II-I-a, at pages 409-411 of Exhibit II).

The afore-quoted decision was appealed to the Court of Appeals, docketed as CA-G.R. No. L-53125-R.

On December 13, 1978, the Court of Appeals promulgated a decision in the aforesaid case affirming the decision of
Judge Apostol.

Respondent NAVARRO elevated the case to this Honorable Tribunal (G.R. No. L-50156). Again, his petition was denied
for lack of merit. His subsequent motion for reconsideration was also denied. Consequently, the issue brought forth in the
sala of Judge Apostol has now been laid to rest.

EVIDENCE FOR THE RESPONDENT

Respondent NAVARRO presented both testimonial and documentary evidence. His testimonial evidence consist of his
testimony and those of Atty. Eulogio R. Rodriguez, one of the complainants; and Arsenio de Guzman, Chief of Section of
the Bureau of Lands. His documentary evidence consist of Exhibits 1 to 13, inclusive.

On direct examination, respondent NAVARRO testified that the present charges are the same as the charges in
administrative Case No. 1154, entitled, "In Re: Atty. Felipe C. Navarro, respondent", which was referred to the Office of
the Solicitor General for investigation. He further declared that this Honorable Court deferred action on the said
administrative case until such time that G.R. Nos. L-42699-42709, the heirs of the late Florentina Nuguid Vda. de Haberer
vs. Court of Appeals, et al. is terminated. Respondent's direct testimony dwelt only on these two matters and on the
identification of his Exhibits 1 to 9.

On cross-examination, respondent NAVARRO testified that he is the counsel for the defendants in the twenty-two (22)
cases before Judge Pedro Navarro and Judge Emilio Salas of the Court of First Instance of Rizal; that he became the
owner of the lands not occupied by his clients by virtue of his contract of legal services signed by them (pp. 76-78, t.s.n.,
July 7, 1977; pp. 7-10, t.s.n., Sept. 9, 1977). Said contract for legal services, which appears on pages 224-232 of Exhibit
"1", reads as follows:

KASUNDUAN HINGGIL SA SERBISYO NG ABOGADO SA MGA KINAUUKULAN NA ANG MGA BAGAY NA ITO AY
MALAMAN AT MAKARATING

Itong kasulatan na ito ay nagpapatibay at nagbibigay-bisa hinggil sa serbisyo ni Atty. Felipe C. Navarro tungkol sa aming
karapatan sa lupaing nasasakop ng diumanoy Kautusan-Blg. 1425 (Decree No. 1425) sa diumanoy Usapin Blg. 699, 875,
917, aip (Cases Nos. 699, 875, 917, etc.) sa dating Hukuman ng Pagpapatala ng Lupain defunct Court of Land
Registration) na ang nasabing diumano'y Kautusan Blg. 1425 na siyang pinagbatayan ng ipinapatalang gawagawang
dalawanput anim (26) ng mga Original Certificates of Title ng Register of Deeds ng Pasig at nagbunga ito ng maraming
Transfer Certificates of Title na sa kasalukuyan iginigiit ng mga mayhawak ngunit yan ay wala namang bisa at katuturan
(Viz., City of Manila vs. Lack, 19 Phil. 324, 340) dahil sa kapaltosan ng nasabing diumano'y Kautusan Blg. 1425 na sa
mula't sapul magpahanggang ngayon sa kasalukuyan ay iginigiit sa mga nakalagda sa ibaba ng kasunduang ito kasama
na rin ang mga dati at ibang mga kliyente ni Atty. Felipe C. Navarro na ngayon ay siyang nararapat maging kalahok sa
animnapung usapin na sa kasalukuyang hawak ni Atty. Felipe C. Navarro (Civil Cases Nos. 8322, etc. of the Court of First
Instance of Rizal, Branches I, II, and VI contesting the genuineness and due execution of Decree No. 1425 of the defunct
Court of Land Registration) upang mabigyan ang mga nakalagda sa ibaba ng mga kanikaniyang katibayan o kung sila
man ay mayhawak ng titulo na sakup ng diumano'y Kautusan Blg. 1425 ay babagohin iyan o mapapalitan ng maybisa
galing sa Hukuman upang matahimik at mapayapa ang dahilan paninirahan kanilang mula't sapul ay kanila nang
pinamamayanan sa buong kaalaman ng sambayanan at walang paglilihim ng kanilang mapayapang pagmamay-ari ng
mga lupain na sa mula't sapul ay pinaninirahan ng mga nakalagda sa ibaba ng kasunduang ito at ng kanilang ninuno o
nagpamana (predecessors-in-interest) na siyang mga pangyayari ay sapat na upang maigawad ang mabisang titulo
sapagkat ang nasabing lupain kailanmay di naging pambayan kungdi pribado o di kaya'y sariling pag-aari ng nakalagdang
may-ari sa ibaba ng kasunduang ito, dahil sa mga nabanggit ng mga pangyayari na 'natamo sa pamamagitan ng
pagbibigay-bisa ng batas di lamang ng karapatan sa pag-aangkin ng lupain kungdi maging ang karapatang ipinagkaloob
sa kanila ng pamahalaan ay nagsasaad na ang aktuwal na pagkakaloob sa kanila ng pamahalaan ng titulo ay di na
kinakailangan upang ang nasabing karapatan ay di kilanlin o pagtibayin ng Hukuman (Susi vs. Razon and Director of
Lands, 48 Phil. 242; Director of Lands vs. Abaldonado CA-G.R. No. 177-R, Jan. 12, 1948, 45 Off. Gaz 2188). Ngunit sa
dahilang mayroon huwad na titulo ang mga nag-aangkin ng mga lupain at nararapat iharap sa Hukuman ang bagay na ito
upang ang Hukuman magpatibay at magbigay-bisa ng mga titulo sa mga nakalagda sa ibaba ng kasunduang ito ayon sa
Section 10 ng Rule 39 ng Rules of Court. Sapagkat ang pamumusisyon sa isang bagay ang batayang di mapagtatalunan
hinggil sa kalaunan ng pagmamay-ari nito ng makalipas ang mahabang panahong takda ng batas, maging ito man ay
walang karampatang titulo o mabuting hangarin ay nagpapahina at sumisira sa saklaw-bisa at halaga ng pinakamahusay
na titulo na maaring nasa bagay na iyon na pinanghahawakan ng taong hindi nagmamay-ari. Bunga nito, ang
pamumusisyon ng mahigit sa tatlumpung (30) taon na tinatamasa ng isang tao bilang may-ari kahit na walang
karampatang titulo o mabuting hangarin ay gumaganap ng sapat na titulo upang makuha ang pag-aari ng lupaing tangan
sapagkat ang lampas-bisa o ang panahong itinakda ng batas sa pamamagitan ng pamumusisyon ng mahigit na
tatlumpung (30) taon ay tiyakang hadlang na maging ang pinakamahusay na titulo na kinikilala ng batas ay hindi
makatitinag o makapangingibabaw (Kincaid vs. Cabututan, 35 Phil. 383).' Hindi maaring sabihin o ipagmalakdan ng mga
nangamkam na sa pamamagitan ng kanilang huwad na titulo ay naangkin na nila ang lupain o di kayay gawing batayan
ang kanilang huwad na titulo upang masabing sila ay nagmamay-ari ng lupa. Hindi ito maaring maganap sapagkat ang
krimen at panlilinlang ay hindi maaring maging batayan ng panimula ng ay isang tunay at mabisang titulo kahit na
ipinagbili at nabili sa isang mabuti ang hangarin ng bumili ng karampatang halaga ng lupain (Levin vs. Bass, 91 Phil. 419,
439). Dahil sa itinuring ng batas na sila ay 'constructive trustees, lamang kaya hindi maganap ang lampas-bisa
(Gayondato vs. Treasurer of the Philippine Islands, 49 Phil. 244-249). Subali't dahilan sa ilang katiwalian ng katotohanan
na di nabatid ng mga nakalagda sa ibaba ng kasunduang ito na di-umano'y siyang naganap na pangyayari ngunit ang
tunay na katotohanan ay di naman ito naganap at naliligaw sa paniniwalang nararapat silang nagbayad ng rentas o alkila
at ang ilan ay binili ang lupain gayong ang katotohanan ay sila ang nararapat at tunay na may-ari sa di-umano'y Kautusan
Blg. 1425 (Decree No. 1425) ng defunct Court of Land Registration na nagbunga ng gawa-gawang titulo na sumasakop
sa buong kalawakan ng humigit kumulang ng 4,000 hectares na samakatuwid ay apatnapung (40) milyong metro
kuwadrado ng lupaing ngayon ay matatagpuan sa buong bayan ng Mandaluyong, ang buong bayan ng San Juan
sapagkat sakop ito noon ng bayan San Felipe Neri ayon sa Act No. 942, ang bahagi ng Punta sa Maynila sapagkat sakop
ito noon ng Mandaluyong na ngayon, kalahati ng bayan ng Pasig, kalahati ng bayang Mariquina, at kalahati ng Lungsod
ng Quezon sapagka't pinilas lamang ito buhat sa bayan ng Mariquina, Pasig, San Juan at Mandaluyong sa pamamagitan
ng Commonwealth Act No. 502 na pinagtibay noong Oktubre 12, 1939 at sang-ayon sa mga paglalarawan ng di-umano'y
pagsusukat o survey nagsimula sa Maytunas creek patungong ilog ng San Juan patungong dakong ibaba ng agos ng ilog
ng San Juan hanggang sa bahaging matatagpuan ang ilog ng Pasig sa Punta, Maynila at lumilisya sa patungong itaas ng
agos ng ilog Pasig na nababanggit ang sapa ng Buayang Bato sa Namayan, Mandaluyong pagkatapos ay pabalik sa ilog
Pasig sa dakong pataas ng agos ng ilog hanggang sa ilog ng Mariquina at pagsunod sa dakong pataas ng agos ng ilog
ng Mariquina hanggang sa sapa ng Pinagpatayang Buaya at lumalakdaw hanggang sa pinagmulan ng sapa ng Diliman
na umaagos ng pababa patungong ilog ng San Juan at pabalik sa sapa ng Maytunas na ang nasabing baybay-sukat o
survey sa abot makakaya ng sino mang may sapat ng kakayahang agrimensor (surveyor) ay di makabuo ng ni isa man
lamang maramihang-gilid na hugis o anyo (polygon).

Dahilan sa mga nabanggit na pangyayari, ang mga nakalagda sa ibaba ng Kasunduang ito ay sumasang-ayon na
kasunduin ang paglilingkod ni Atty. Felipe C. Navarro ng No. 66 Azucena, Roxas District, Quezon City upang gumawa ng
karampatang hakbang sa Hukuman ng Unang Dulungan ng Rizal pati Quezon City hanggang sa Corte Suprema kung
kinakailangan at gawin ang anumang paraang isinasaisip niyang tumpak at nararapat gawin sang-ayon sa batas upang
matamo ng mga makalagda sa ibaba ng kasunduang ito ang kani-kaniyang titulo ayon sa paraang minamarapat ng batas
at kaming mga nakalagda sa ibaba ng kasunduang ito ay nagkakaloob ng buong kapangyarihan kay Atty. Felipe C.
Navarro na ilagay sa kanyang pangalan at kung sa kanino man niya naising ipagkaloob ang ibang bahagi ng lupain na
aming minana o pinagsundan (predecessors-in-interest) nguni't ipinaubaya na namin kay Atty. Felipe C. Navarro bilang
bahagi ng buong kabayaran ng kanyang serbisyo at karapatang maangkin niya sangayon sa mga inilalahad ng
kasunduang ito maliban na lamang doon sa bahagi ng lupaing nais naming mapatituluhan sa ilalim ng aming kani-
kaniyang pangalan at sumasangayon kami sa pagbabayad ng karampatang halaga sa paglilingkod ni Atty. Felipe C.
Navarro nang naayon sa isinasaad ng kasunduang ito. Na sa bawa't kilos na magaganap sa pagpapatitulo ng aming mga
ariarian ang mamamahala sa mga gastos o kabayaran ay si Atty. Felipe C. Navarro na ang ibig sabihin na mula sa
pagpapasukat (survey) ng mga ari-arian hanggang sa pagbibigay ng mga plano ng mga sukat upang mapagtibay ito ng
Kagawaran ng Lupain (Bureau of Lands), paghahanda at pagnonotaryo ng mga affidavit' ng pagmay-ari, pagkuha ng mga
katibayan ng pagkamayari, bayad sa pagpasok sa husgado (filing fees), pagpapatala (registration), paggawa ng mga
kasulatan (documentation), pagsalin ng mga rekord (transcripts), pagpapatunay (certifications) at iba pang mga
kinakailangang bayaran at pagkagastuhan ay nasa kalayaan na ni Atty. Felipe C. Navarro na pagpasiyahan ng naaayon
sa kaniyang sariling kagustuhan na ang nilalayon sa bandang huli at ang tunay na hangarin ay ang mapatituluhan ng
ayon sa batas ang aming kani-kaniyang mga lupain sa aming kani-kaniyang pangalan na sa pamamagitan ng mga
tungkuling iniatang namin kay Atty. Felipe C. Navarro sa pamamagitan ng kasunduang ito, sumasang-ayon kami at
natatalian o nabibigkisan ng kasunduang ito na magbayad ng halagang Dalawampu't Limang Piso (P25.00) sa bawat
metro kuwadrado ng lupaing matitituluhan sa aming pangalan bilang kabayaran sa serbisyo o paglilingkod ni Atty. Felipe
C. Navarro; ang halagang Sampung Piso (P10.00) sa bawat metro kuwadrado ay aming magiging paunang-bayad upang
ang proyektong ito ay mapanimulan kaagad sa lalong madaling panahon at ang matitirang dapat bayarang halaga na
Labing-limang Piso (P15.00) bawa't metro kuwadrado ay aming babayaran kapag naipagkaloob na ang titulo ng lupa sa
amin sa kasunduang kapag buhat sa isang taon mula sa petsang ipinagkaloob ang titulo ng lupa ay hindi kami
nakababayad ng buo sa halagang natitira o balanse na Labing-limang Piso (P15.00) sa bawat metro kuwadrado, ang
titulo ng lupain ay mapupunta sa pangalan ni Atty. Felipe C. Navarro nguni't ang kasunduang ito na isang taong
pagbibigay-palugit ni Atty. Felipe C. Navarro upang siya ay mabigyan ng kabuuang kabayaran sa kanyang mga
paglilingkod sa usaping ito at sumasang-ayon si Atty. Felipe C. Navarro na kami ay pahintulutang isangla ang aming mga
ari-ariang may karampatang titulo na di huwad at pinagtibay ng batas sa alinmang bangko upang ito ang magsilbing
bayad sa mga paglilingkod ni Atty. Felipe C. Navarro sa usaping ito at iyon lamang ang natatanging sandali o panahong
kami ay mawawalan na ng obligasyon o tungkuling bayaran ang Dalawampu't Limang Piso (P25.00) sa bawat metro
kuwadrado ng lupaing ikinasundo namin ang serbisyo ni Atty. Felipe C. Navarro upang matituluhan nang naayon sa
batas. Sumasang-ayon din si Atty. Felipe C. Navarro na ang sinuman sa aming nakalagda sa ibaba ng kasunduang ito na
hindi kayang magbayad ng paunang-halaga na Sampung Piso (P10.00) sa bawa't metro kuwadrado ay bibigyan ng
karampatang magbayad ng makahalintulad na halaga sa bawa't buwan sa loob ng sampu (10) o dalawampung (20) taon
sang-ayon sa mga hinihingi ng pangyayari, ang titulo ng lupain ay ipagkakaloob lamang sa nagnanais umangkin nito kung
mababayaran na ang kabuuan ng paglilingkod ni Atty. Felipe C. Navarro kasama na ang "legal interest" at ang
amortization nito ngunit kinakailangan magbigay sila ng paunang bayad na Limangpung Piso (P50.00) upang panimulan
ang pagbabayad buwan-buwan (monthly installment condition) at magiging mabisa lamang ito kung matutupad ng buong
katapatan ang pagbabayad ng hulugang buwan-buwan (monthly installment) na maaring magbuhat sa halagang Limang
Piso (P5.00) hanggang Limangpung Piso (P50.00) sa bawat buwan nang naayon sa laki o kalawakan ng lupaing
nararapat na mapasa-amin ayon sa batas. Sa dahilang ang buhay ng tao ay walang katiyakang magtatagal na habang
panahon ay isinasalin namin ang aming mga karapatan at tungkulin sa aming tagapagmana lamang at gayon din si Atty.
Felipe C. Navarro na maaring manahin ang kanyang karapatan sa kasunduang ito sa mga tagapagmana lamang niya
upang itaguyod nila ang paglilingkod sa anumang paraan ayon sa batas.

SA KATUNAYAN AT KATIBAYAN NG LAHAT NG NABANGGIT NA KASUNDUANG ITO

ay lumalagda kami sa kasunduang ito na aming tutuparin ang lahat ng isinasaad sa kasunduang ito na sinasang-ayunan
din ni Atty. Felipe C. Navarro na kanyang tuparin ang kanyang tungkulin bilang manananggol na tutulong sa amin upang
kami ay mapagkalooban ng Hukuman ng titulo sa aming kani-kaniyang lupain ng naayon sa batas at siyang isinasaad din
ng kasunduang ito at kasama ng paglagda ng aming mga pangalan na siyang nais naming pangalang lumitaw sa titulo,
ang aming kani-kaniyang tirahan, kalawakan ng lupain, paraang pagbabayad at petsa na kami'y lumagda sa kasunduang
ito bilang pagpapatunay sa aming taos-pusong pagsang-ayon at hangarin tumupad sa lahat ng napapaloob sa
KASULATANG ITO.

In the course of the proceedings, respondent NAVARRO admitted that he has sold, and is still selling, properties covered
by Torrens titles in the names of ORTIGAS & CO., Madrigal, and others, but he claims that the titles of said parties are
null and void because they emanated from Decree No. 1425; that he has no title over the properties sold by him except
the contract of legal services which his clients allegedly signed; that he has no approved plans for the various subdivisions
allegedly owned by him; that he has not obtained any certificate of registration or license to sell from the National Housing
Authority; that he has not declared for taxation purposes the thousands of hectares of prime lands in Mandaluyong, San
Juan, Pasig, Quezon City and Marikina, allegedly owned by him; and that he has not filed any case directly attacking the
title of ORTIGAS and others (pp. 7-33, t.s.n., Sept. 9, 1977; Exhibit J).

Respondent NAVARRO also admits that he is the defendant in the "25-Billion-peso-case" before Judge Sergio Apostol,
docketed as Civil Case No. Q-16265, entitled "Ortigas & Company Limited Partnership vs. Felipe C. Navarro's Court of
First Instance of Rizal, Branch XVI, Quezon City"; that said case covers lands in Mandaluyong, San Juan, Pasig, Marikina
and Quezon City including those involved in the present case (pp. 8-21, t.s.n., July 7, 1977; Exhibits F, F-I to F-168).

Despite the decision of Judge Apostol upholding the validity of the Ortigas Transfer Certificate of Title and enjoining
respondent NAVARRO from selling lots covered by said title, NAVARRO still continued selling properties covered by the
injunction claiming that the said decision is ineffectual because the same has been appealed. (pp. 33-34, t.s.n., Sept. 9,
1977). 4

On the basis of the foregoing report, the Solicitor General filed a complaint with Francisco Ortigas, Jr. as complainant,
praying that respondent Navarro be disbarred, that his name be stricken from the roll of attorneys, and that his certificate
of admission to the bar be recalled.

On May 23, 1980, respondent Navarro filed his answer with prayer to lift the order of suspension. 5 Complainant Ortigas,
Jr. filed an opposition to said motion to lift suspension . 6 Respondent Navarro reiterated his plea in his manifestation dated
August 8, 1980. 7 In a resolution dated September 2, 1980, this Court denied the motion to lift the order of suspension. 8

On October 29, 1980, respondent Navarro filed an urgent ex parte motion praying for the lifting of the order of
suspension 9 which was denied by this Court on November 13, 1980. 10 He reiterated his prayer in another motion filed on
January 5, 1981 11 but the same was likewise denied in our resolution of January 22, 1981. 12

II. Administrative Case No. 2033 arose from a letter-complaint, dated March 13, 1979, filed by the spouses E. Conrad and
Virginia Geeslin with the Integrated Bar of the Philippines, charging respondent Navarro with deceit, malpractice and
gross misconduct in office, and blatant violation of the Attorney's Oath. Said letter was thereafter referred to this Court by
Integrated Bar of the Philippines President (now Chief Justice) Marcelo B. Fernan for appropriate action. 13

Pursuant to our resolution of June 4, 1979, 14 respondent Navarro filed his answer with motion to dismiss on June 29,
1979. 15 The corresponding
reply 16 and rejoinder 17 were subsequently filed. In a resolution of this Court dated October 1, 1985, the case was referred
to the Office of the Solicitor General for investigation, report and recommendation. 18

On August 28, 1989, the Office of the Solicitor General submitted its report, with the following findings and
recommendation:

CHARGES

In their Complaint dated March 13, 1979, complainants charged respondent with deceit, malpractice and gross conduct in
office, and blatant violation of the Attorney's Oath, for having deliberately misrepresented the facts and the law while
acting as counsel for the defendants in the following civil cases:

a. His insistence that our clients are no longer owners of the land subject of the cases mentioned above; he falsely
alleged that to his personal knowledge the title to the land is in the name of one Leopoldo Cojuangco. This false allegation
was made despite the final decision of the Court of First Instance of Rizal, Branch XVII, in Civil Case No. Q-18221 entitled
"E Conrad and Virginia B. Geeslin vs. Leopoldo Cojuangco, et al." (1) declaring the transfer of the lot to Leopoldo
Cojuangco was fraudulent and had been effected thru falsification; and, (2) ordering the cancellation of the title issued to
Cojuangco and the reversion of the title to our clients. Copies of the Complaint and the Decision in said case are hereto
attached as Annexes "B" and "C", respectively.

b. Mr. Navarro persisted and still persists in representing that our clients' title was rendered null and void by virtue of the
expiration of the Parity Amendment and the decision of the Supreme Court in the case of Quasha vs. Republic, 46 SCRA
160. Our clients' title to the aforesaid property was acquired by hereditary succession from the late Dr. Luther Bewley who
acquired said land in 1925. The ownership therefore of our clients is protected both under the 1935 and 1972
Constitutions. Any lawyer, even a law student, knows that the Parity Amendment and the decision in the Quasha
case, supra, covers cases where property was acquired by virtue of the Parity Amendment. Mr. Navarro is either guilty of
abysmal ignorance of the law or of complete and unabashed contempt for facts, the law of the land and for the Courts.

c. Mr. Navarro persists in misrepresenting to the Court that the title covering the land subject of the above cases had been
declared null and void in the "final and executory" decision of the Court of First Instance of Rizal, Branch II. He
deliberately omits to give the title of the case and its docket number for the obvious and malicious reason that the case he
relies upon (Heirs of Nuguid vs. Court of Appeals, G.R. No. 42699-42709) is still pending resolution before the Supreme
Court and hence cannot be "final and executory."

d. He misrepresents to the Court that the land subject of the cases heretofore enumerated is not within the territorial
jurisdiction of the Quezon City Court and hence the court has no jurisdiction. Further, that title thereto having described
the land to be part of the Municipality of San Juan del Monte, is void. He cannot disclaim knowledge however of the fact
that the area in the vicinity of Santolan Road in Quezon City was originally part of the Municipality of San Juan del Monte
territory of Quezon City when the latter was created on 14 June 1950. In the light of this fact, Mr. Navarro's representation
is false and malicious.

e. Mr. Navarro has shown a complete and total disregard for basic norms of honesty and decency in that having
prejudiced the interest of his clients because of his gross neglect to appeal in a timely manner from the decision of the
court and having adopted the wrong remedy, in complete ignorance of the law, he had influenced his clients into
commencing a case before the Tanod Bayan against the Presiding Judge of the City Court of Quezon City, Branch 1, and
Hon. Minerva Genovea The case is obviously calculated to harrass and coerce the Honorable Presiding Judge. Mr.
Navarro's conduct speaks ill of his respect for the law and the courts.

f. The penchant of Mr. Navarro to misrepresent and deceive did not stop before the City Court of Quezon City. He
continues to do so in the petition he filed before the Honorable Court of Appeals docketed as CA-G.R. No. S.P. 08928
entitled "Adolfo Corpus, et al. 'vs. Hon. Minerva Genovea et al." Copies of the Petition and the undersigned attorney's
Comments thereto are hereto attached as eAnnexes "D" and "E", respectively. (pp. 2-4, Record)

RESPONDENTS ANSWER

In his Answer dated June 29, 1979, respondent averred:

1. From the face of the Resolution itself showing that the undersigned respondent was never furnished with a copy of the
complaint, it can be gathered therefrom that the complaint is clearly intended to prevent the undersigned respondent to
proceed in defending his clients' cause in CA-G.R. No. SP-08928 (Adolfo M. Corpuz, et al. vs. Hon. Minerva C. Genovea,
the Spouses Conrad E. Geeslin and Virginia Bewley Geeslin, et al.) still pending at this writing before the Court of
Appeals. To allow complainants to harass respondent while the case (is) still pending in our courts of justice is an act in
contempt of court for which complainants and their counsel is (sic) liable.

2. Undersigned respondent as counsel for the defendants Adolfo Corpuz, et al. gave his entire devotion to the interest of
his clients, warm zeal in the maintenance and defense of their rights and the exertion of his utmost learning and ability to
the end that nothing be taken or be withheld from his clients, save by the rules of law, legally applied; for his clients are
entitled to the benefit of any and every remedy and defense that is authorized by law as was done by the undersigned
respondent in the ejectment case filed by the complainants Conrad E. Geeslin and Virginia B. Geeslin against the several
clients of the undersigned. (pp. 42-43, Record)

After complainants filed a Reply dated July 17, 1979 pointing out that respondent's Answer does not deny any of the six
(6) counts of charges specified in the Complaint, respondent filed a Rejoinder dated September 7, 1979, wherein he
averred:

1. The complainants alien spouses Conrad E. Geeslin and Virginia B. Geeslin who are citizens of the United States of
America held TCT No. 153657 which was cancelled on December 31, 1970 by TCT No. 180231 issued in the name of
Leopoldo A. Cojuangco both of which TCTs are described to be located at Santolan Road, Municipality of San Juan,
Province of Rizal, (now part of Metro-Manila) filed ejectment proceedings before the City Court of Quezon City against my
clients Victorino Manaois and Adolfo Corpuz and twenty others in Civil Case Nos. I-29872 to I-29931 which later were
elevated to the Court of Appeals in CA-G.R. No. SP-08928 entitled Adolfo M. Corpuz, et al. vs. Hon. Minerva C.Genovea
the Spouses Conrad E. Geeslin and Virginia Bewley Geeslin, et al.

2. Undersigned respondent being retained as counsel for the defendants Victorino Manaois and Adolfo Corpuz and the
twenty (20) other defendants did his bounden duty in defense of their rights and exerted his utmost learning and ability
within what the law allows that at this stage, the controversy is still under litigation before the courts as stated above.
3. Under the foregoing circumstances, the administrative action must have been resorted to by the complainants at the
instigation of their counsel who failed in wanting to defeat the defendants of their God-given rights to the land in litigation
that there can be no other conclusion left but that the administrative complaint against the respondent is 'pure'
harassment. (pp. 53-54, Record)

FINDINGS

When the case was set for hearing by the Office of the Solicitor General, the parties agreed that there is no dispute as to
the fact of the case. Hence, they were granted a period of thirty (30) days within which to file their respective memoranda,
if they so desire, after which the case will be considered submitted for resolution.

Since respondent did not deny the allegations of the Complaint, and in fact admitted during the hearing of the case set by
the Office of the Solicitor General that there is no dispute as to the facts of this case, it follows that the specifications of
the charges against him, which are duly supported by documents, are deemed sufficiently proven.

The only justification invoked by respondent is that he "gave his entire devotion to the interest of his clients" and that he
"did his bounden duty in defense of their rights and exerted his utmost learning and ability.

Consequently, respondent is deemed to have committed the misrepresentations specified by complainants, as quoted
above.

RECOMMENDATION

Respondent was also charged in Administrative Case No. 2148 entitled Ortigas vs. Navarro and has been suspended
from the practice of law since May 5, 1980. His suspension is still in effect.

The acts complained of in the present case also warrant the suspension of respondent from the practice of law.

WHEREFORE, it is respectfully recommended that respondent Atty. Felipe C. Navarro be likewise suspended from the
practice of law.

Makati, for Manila, August 17, 1989. 19

No justiciable issue was raised in Administrative Case No. 2033 as respondent Navarro failed to deny the material
allegations in the complaint of the spouses E. Conrad and Virginia B. Geeslin.

The two main issues raised by the Solicitor General in Administrative Case No. 2148 are:

1. Whether or not respondent Navarro sold properties titled in the names of other persons without the consent of the
latter; and

2. If in the affirmative, whether or not such acts constitute sufficient grounds for suspension or disbarment.
Respondent reiterated in his answer that the transfer certificates of title of Ortigas & Company, Limited Partnership and
Florentina Nuguid Vda. de Haberer were declared null and void in the decision dated March 31, 1970 of the Court of First
Instance of Rizal, Branch XV, in Civil Case No. 7-M (10339) entitled "Pedro del Rosario, et al. vs. Ortigas & Co., Ltd.
Partnership, et al.," and in the order dated June 21, 1971 of the Court of First Instance of Rizal, Branch II, in Civil Cases
Nos. 8320, 8321, 8326, 8369, 8376, 8379, 8383, 8685, 8686 and 8700 entitled "Florentina Nuguid Vda. de Haberer vs.
Federico Martinez, et al." Respondent likewise reiterated his claim of ownership over all parcels of land (including those of
Ortigas & Company, Limited Partnership and Florentina Nuguid Vda. de Haberer) covered by Decree No. 1425, G.L.R.O.
Record No. 917, which was declared null and void in the decision dated March 31, 1970 of Branch XV of the Court of First
Instance of Rizal. 20 Furthermore, he asserts ownership over the subject properties as payment for his legal services
rendered in the ejectment cases filed against his clients in Branches I and II of the former Court of First Instance of Rizal.

1. To clarify, Civil Case No. 7-M(10339)filed before Branch XV of the then Court of First Instance of Rizal directly assailed
the nullity of the proceedings in G.L.R.O. Record No. 917 by virtue of which Decree No. 1425 was issued, as well as the
original certificates of title issued as a consequence thereof. These original certificates of title include the properties
belonging to Ortigas & Company, Limited Partnership and Florentina Nuguid Vda. de Haberer. On March 31, 1970, Judge
Vivencio M. Ruiz then presiding over said Branch XV rendered a decision declaring Decree No. 1425, as well as the
original certificates of title issued pursuant thereto, null and void. Ortigas appealed the Ruiz decision to the Court of
Appeals which set the same aside and remanded the case to Branch XV for new trial. On November 3, 1973, Judge
Arsenio A. Alcantara, who replaced Judge Ruiz, rendered a decision confirming the validity of Decree No. 1425 and all
titles emanating therefrom. The said decision was pending appeal with the Court of Appeals when the investigation of
respondent by the Solicitor General was conducted.

We take judicial notice of the fact that on December 29, 1983, the Court of Appeals rendered a decision affirming in
toto the November 3, 1973 decision of Judge Alcantara, which became final and executory on May 25, 1984 insofar as
plaintiffs-appellants Pascual Santos, et al. are concerned. The plaintiffs-appellants Pedro del Rosario, et al. appealed to
the Supreme Court in a petition for review on certiorari which was, however, denied on February 18, 1985. The denial
became final and executory on April 10, 1985. Thereafter, the records of the case were remanded to Branch XV of the
Court of First Instance of Rizal for execution.

The records further show that the March 31, 1970 decision of Branch XV in Civil Case No. 7-M (10339) became the basis
of the decision rendered by Judge Pedro Navarro of Branch II on May 21, 1971 which dismissed the complaint for
ejectment filed by Haberer against the clients of respondent Navarro. However, Judge Navarro in his decision
categorically stated that "it is the considered opinion of this court that until and unless the decision of Branch XV of this
court is reversed or set aside by final judgment, plaintiffs prayer to order the herein eleven defendants in these eleven
cases to vacate the parcels which they occupy and on which their respective houses are built has become premature."
This condition was reiterated in Judge Navarro's order of September 15, 1972 wherein he stated that:

In the order dated July 17, 1971, the Court had occasion to reiterate that its decision in this case was mainly predicated
on the decision of Branch XV of this Court that the certificate of title emanating from the proceedings in GLRO Record No.
917 were null and void and plaintiffs title happened to be one of them. The Court opined that until said decision is
reversed the actual occupants had better be maintained in their possessions of the land. 21
However, to repeat, the March 31, 1970 decision of Branch XV was set aside by the Court of Appeals which remanded
the case for new trial and another one was rendered, this time by a different judge on November 3, 1973 upholding the
validity of Decree No. 1425 and all titles issued as a consequence thereof. Respondent cannot feign ignorance of the
November 3, 1973 decision, which superseded the March 31, 1970 decision, for the simple reason that it was his clients
who appealed the former decision to the Court of Appeals. In spite thereof and indicative of his bad faith, he stubbornly
continues to invoke the decision of March 31, 1970 as the source of his alleged ownership rights over the Ortigas
properties.

2. In the order of June 21, 1971, Judge Pedro Navarro of Branch II ordered the cancellation of Transfer Certificate of Title
No. 15043 issued in the name of Haberer and the issuance of new titles in the name of the defendants, subject to the lien
for attorney's fees in favor of respondent pursuant to the terms of the contract for his legal services. However, the same
judge issued an amendatory order dated September 15, 1972, which provides in part that:

It has also come to the understanding of the Court that the order of June 21, 1971, sought to be reconsidered insofar as it
ordered the cancellation of Transfer Certificate of Title No. 15043 in favor of the plaintiff, also adversely affects the
interests of other persons and entities like the Ortigas and Company, Limited Partnership, which is not a party herein,
because the certificate of title of the plaintiff is also a derivative of GLRO 917 and Decree No. 1425 from which Ortigas &
Company, Limited Partnership, derives titles over wide tracts of land. Since Ortigas & Company, Limited Partnership, is
not a party in this case whatever orders of decisions are made in this case cannot be made to affect the said company.
Decisions and orders can only affect parties to the case.

The Court therefore arrives at the conclusion that the order dated June 21, 1971, must be reconsidered on two grounds
(1) because the decision of Branch XV is now being the subject of further proceedings and (2) because it has the effect of
adversely affecting the interest of Ortigas & Company, Limited Partnership, which is not even a party herein.

WHEREFORE, as prayed, the order dated June 21, 1971, is set aside. However, the decision dated May 26, 1971,
insofar as it denies the ejectment of the present occupants of the land as stated in the decision stands. (Emphasis
supplied) 22

It is apparent, therefore, that since the order of June 21, 1971, was set aside, the inescapable conclusion is that Transfer
Certificate of Title No. 15043 stands and remains in the name of Florentina Nuguid Vda. de Haberer. Consequently, the
defendants therein never acquired title to the property covered by the title of Haberer. And, since respondent Navarro
merely derives his supposed title to the properties as a mere transferee, with more reason can he not validly become the
owner of the above properties.

3. Respondent intransigently relies on his contract for legal services executed with his clients, the defendants in the
Haberer case, as another basis of his claim of ownership over the entire property covered by Decree No. 1425. It must be
noted that the said contract was executed pursuant to the ejectment cases filed against respondent Navarro's clients
which involve only the property covered by Transfer Certificate of Title No. 15043 containing an aggregate area of 12,700
square meters, more or less. It appears that the defendants assigned rights to respondent Navarro over properties which
they did not actually occupy and which virtually extended to all the properties covered by titles issued under Decree No.
1425. As correctly observed by the Solicitor General, said defendants have not presented any document evidencing their
ownership of the parcels of land they assigned to their lawyer.
From the foregoing considerations, it is incontrovertible that respondent's pretended ownership rights over the parcels of
land covered by Decree No. 1425 have no bases whatsoever, either in fact or in law, and it is an assault on credulity to
assume that he was not aware of the vacuity of his pretensions and misrepresentations.

In resolving this disbarment case, we must perforce initially focus on the degree of integrity and respectability required
and expected of the law profession. There is no denying that membership in the legal profession is achieved only after a
long and laborious study. By years of patience, zeal and ability the attorney acquires a fixed means of support for himself
and his family. This is not to say, however, that the emphasis is on the pecuniary value of this profession but rather on the
social prestige and intellectual standing necessarily arising from and attached to the same by reason of the fact that
everyone is deemed an officer of the court. 23

The importance of the dual aspects of the legal profession has been judiciously stated by Chief Justice Marshall of the
United States Supreme Court in this wise:

On one hand, the profession of an Atty. is of great importance to an individual and the prosperity of his life may depend on
its exercise. The right to exercise it ought not to be lightly or capriciously taken from him. On the other hand, it is
extremely desirable that the respectability of the Bar should be maintained and that its harmony with the bench should be
preserved. For these objects, some controlling power, some discretion, ought to be exercised with great moderation and
judgment, but it must be exercised. 24

In a number of cases, we have repeatedly explained and stressed that the purpose of disbarment is not meant as a
punishment to deprive an attorney of a means of livelihood but is rather intended to protect the courts and the public from
the misconduct of the officers of the court and to ensure the proper administration of justice by requiring that those who
exercise this important function shall be competent, honorable and trustworthy men in whom courts and clients may
repose confidence. 25 Its objectives are to compel the lawyer to deal fairly and honestly with his client and to remove from
the profession a person whose misconduct has proven him unfit for the duties and responsibilities belonging to the office
of an attorney. 26

As a rule, an attorney enjoys the legal presumption that he is innocent of the charges until the contrary is proved, and that,
as an officer of the court, he has performed his duty in accordance with his oath. 27 Therefore, in disbarment proceedings,
the burden of proof rests upon the complainant 28, and for the court to exercise its disciplinary powers, the case against
the respondent must be established by clear, convincing and satisfactory proof. 29

We have painstakingly scrutinized and evaluated the records of these two administrative cases and we cannot but find
that strong and unassailable evidence exist to render it our irremissible duty to impose the ultimate sanction of disbarment
on respondent.

Respondent's defense is anchored primarily on the contract for legal services, executed by his clients whom he
represented in the twenty-two ejectment cases filed before Branches I and II of the former Court of First Instance of Rizal,
and quoted in full in the earlier part of this discussion.
It is extremely relevant to note that both of the aforesaid two branches of the trial court made no finding as to the validity
of the claim of ownership favorable to the defendants therein. On the contrary, Judge Salas of Branch I found for the
plaintiff and ordered the defendants, clients of respondent, to vacate the premises.

In the case before Judge Navarro of Branch II, the complaint was dismissed merely on the ground that "since the
evidence is uncontroverted that the defendants in all these eleven cases have been in open, continuous, and adverse
possession of their respective parcels dating back since their predecessors in interest, their possession must be
maintained and respected. 30

Thereafter, on June 21, 1971, the aforesaid judgment of dismissal dated May 26, 1971 was modified, and the Register of
Deeds was thereafter ordered to cancel the transfer certificate of title issued in favor of plaintiff and to issue new titles in
the name of defendants subject to the lien for attorney's fees in favor of herein respondent in accordance with the contract
for legal services hereinbefore discussed.

Eventually, however, this subsequent order was reconsidered and set aside in the order of September 15, 1972, "because
it has the effect of adversely affecting the interest of Ortigas & Co., Ltd. Partnership, which is not even a party herein," but
it reinstated the decision of May 26, 1971 insofar as it denied the ejectment of the present occupants.

As earlier noted, there is nothing in the records to show that the defendants in the ejectment cases were declared the true
owners of the land subject of said cases. Only the fact of possession was ruled upon, and what the courts recognized was
merely the defendants' right of possession. They, therefore, never become the owners of the subject lots in any sense of
the word in the absence of any declaration to that effect, by reason of which they could not have legally transmitted any
ownership rights or interests to herein respondent. Furthermore, we have seen that any further claim of ownership on their
part was finally settled by the order of September 15, 1972, setting aside the order of June 21, 1971, wherein the trial
court correctly held that the earlier order unjustifiedly affected adversely the rights of Ortigas & Company, Limited
Partnership. In addition, said court specifically excluded the title of said partnership from the effects of its decision.

Pursuant to the provisions of the contract of legal services, the defendants-clients agreed to convey to respondent
whatever properties may be adjudicated in their favor in the event of their failure to pay the attorney's fees agreed upon.
As hereinbefore stated, there was nothing awarded to the said defendants except the right to possess for the nonce the
lots they were occupying, nothing more. That respondent acquired no better right than the defendants from whom he
supposedly derived his claim is further confirmed in the order of Judge Navarro, dated June 21, 1971, denying the
issuance of new certificates of title to herein respondent who, to further stress the obvious, was not even a party but only
a lawyer of the defendants therein. It follows that his act of selling the Ortigas properties is patently and indisputably
illegal.

Respondent admits that he has no Torrens title but insists on the puerile theory that his title is his contract of legal
services. 31 Considering that the effectivity of the provisions of that contract is squarely premised on the award of said
properties to the therein defendants, and since there was no such adjudication, respondent's pretense is unmasked as an
unmitigated deception. Furthermore, it will be recalled that the land involved in the two ejectment cases consists of only
1.2 hectares whereas respondent is claiming ownership over thousands of hectares of land, the sheer absurdity of which
he could not be unaware.
Respondent further admits that he has been and is continuously selling, up to the present, the entirety of the land covered
by Decree No. 1425 32 pursuant to the decision of Branch XV of the then Court of First Instance of Rizal, dated March 31,
1970, declaring the said decree null and void as well as the titles derived therefrom.

It must nonetheless be remembered that the decision of Judge Navarro recognizing the defendants' right of possession is
subject to the final outcome of the March 31, 1970 decision of Branch XV which nullified Decree No. 1425. The latter
decision, at the time the decision of Judge Navarro was rendered, was pending appeal. This is precisely the reason why
Judge Navarro had to amend his decision a third time by setting aside the order of registration of the land in the name of
the defendants. He could not properly rule on the ownership rights of defendants therein pending a final determination of
the validity of said decree, which thus prompted him to find merely on the fact of possession. Besides, a mere declaration
of nullity cannot, per se justify the performance of any act of ownership over lands titled in the name of other persons
pursuant to said decree. To cap it all, as earlier discussed, that decision dated March 31, 1970 has been reversed and set
aside, and a new one entered confirming the validity of Decree No. 1425, which latter decision has long become final and
executory.

In Civil Case No. Q-16265, entitled "Ortigas and Co., Ltd. Partnership vs. Navarro," herein respondent was enjoined from
selling, offering for sale and advertising properties of the plaintiff therein. We have seen that a decision was subsequently
rendered therein on December 16, 1972 by Branch XVI of the Court of First Instance of Rizal upholding the validity of the
transfer certificates of title issued in the name of Ortigas and Co., Limited Partnership which became final and executory
after respondent's petition for review was denied by this Court. However, respondent continued to sell properties
belonging to Ortigas in blatant disregard of said decision. This was categorically admitted by respondent himself during
the investigation conducted by the Solicitor
General. 33

Respondent avers that the said decision cannot be enforced during the pendency of the appeal therefrom. Even if this
were true, the fact that respondent was enjoined by the court from selling portions of the Ortigas properties is compelling
reason enough for him to desist from continuing with his illegal transactions.

As correctly observed by the Solicitor General:

Respondent Navarro knew that the decision of Judge Vivencio Ruiz declaring as null and void certificates of titles
emanating from Decree No. 1425 was reversed and set aside. He knew that Judge Pedro Navarro of the Rizal Court of
First Instance exempted Ortigas & Company from the effects of his decision. He also knew that Judge Sergio Apostol of
the Rizal Court of First Instance in Quezon City had upheld the validity of the certificates of title of Ortigas & Company.
Despite all these pronouncements and his awareness thereof, respondent NAVARRO still continued to sell properties
titled in the name of Ortigas & Company and the Madrigals. 34

Lastly, the motion to dismiss filed by respondent should be, as it is hereby, denied for lack of merit. Respondent
inexplicably posits that the charges against him should be dismissed on the ground that his suspension was automatically
lifted by virtue of our resolution, dated June 30, 1980, which merely reads:

The manifestation of counsel for respondent stating among other things that the complaint against respondent could not
prosper if respondent's manifestation dated March 3, 1980 in G.R. No. L-42699-42709 and his request for certification by
the Chief Justice to the effect that the petition in G.R. Nos. L-42699-42709 is deemed dismissed pursuant to Sec. 11(2) of
Art. X of the Constitution are granted, are NOTED.

There is absolutely nothing in the resolution to support respondent's typical distortion of facts. On the contrary, our
resolutions dated September 2, 1980, November 8, 1980, and January 22, 1981 repeatedly denied respondent's motions
for the lifting of his suspension.

It further bears mention at this juncture that despite the suspension of respondent Navarro from the practice of law, he
continues to do so in clear violation and open defiance of the original resolution of suspension and the aforestated
resolutions reiterating and maintaining the same. Thus, the records of this Court disclose that in G.R. No. L-78103,
entitled "Jose de Leon, et al. vs. Court of Appeals, et al.," a Second Division case filed on April 25, 1987, counsel for
private respondents therein questioned herein respondent Navarro's personality to intervene in the case since he was
under suspension, to which respondent Navarro rejoined by insisting that his suspension had allegedly been lifted
already. In G.R. No. 85973, entitled "Hilario Abalos vs. Court of Appeals, et al.," the petition wherein was filed on
December 2, 1988 and assigned to the First Division, respondent Navarro also appeared as counsel for therein petitioner.
Said petition was denied since the same was prepared, signed and verified by respondent Navarro, a suspended member
of the Philippine Bar. Over his expostulation that his suspension had already been lifted, the Court directed the Bar
Confidant to take appropriate action to enforce the same. Again, in G.R. No. 90873, entitled "Matilde Cabugwang et al. vs.
Court of Appeals, et al.," the Second Division, in a resolution dated January 31, 1990, imposed a fine of P1,000.00 upon
said respondent for appearing therein as counsel for petitioner which fine he paid on February 5, 1990.

In at least three (3) other cases in the Second Division, respondent Navarro appeared before the Court as counsel for
petitioners therein, viz: (1) G.R. No. L-74792 (Lorenzo Valdez, et al., vs Intermediate Appellate Court, et al.), filed on June
11, 1986 and decided on December 7, 1986; (2) G.R. No.
L-76589 (Atty. Felipe C. Navarro, et al. vs. Court of Appeals, et al.), filed on November 28, 1986 and decided on May
4,1987; and (3) G.R. No. 81482 (Ricardo Rasalan vs. Flaviano Pascua, et al.), filed on January 30, 1988 and decided on
February 15, 1988. The rollos in said cases show that he also appeared as counsel for the petitioners in the Court of
Appeals, but since the lower courts' original records were not forwarded to this Court, said rollos do not reflect whether he
also appeared before the different courts a quo.

Such acts of respondent are evidential of flouting resistance to lawful orders of constituted authority and illustrate his
incorrigible despiciency for an attorney's duty to society. Verily, respondent has proven himself unworthy of the trust and
confidence reposed in him by law and by this Court, through his deliberate rejection of his oath as an officer of the court.

WHEREFORE, respondent Felipe C. Navarro is hereby DISBARRED and his name is ordered STRICKEN from the Roll
of Attorneys. Let a copy of this resolution be furnished to the Bar Confidant and the Integrated Bar of the Philippines and
spread on the personal records of respondent. This resolution is immediately executory.
19. DECENA VS. MALANYAON –AM NO. RTJ-10-2217, APRIL 8,2013

A.M. No. RTJ-10-2217 April 8, 2013

SONIA C. DECENA and REY C. DECENA, Petitioners,

vs.
JUDGE NILO A. MALANYAON, REGIONAL TRIAL COURT, BRANCH 32, IN PILI, CAMARINES SUR,Respondent.

DECISION

BERSAMIN, J.:

A judge may not involve himself in any activity that is an aspect of the private practice of law. His acceptance of an
appointment to the Bench inhibits him from engaging in the private practice of law, regardless of the beneficiary of the
activity being a member of his immediate family. He is guilty of conduct unbecoming of a judge otherwise.

Antecedents

The complainants have lodged an administrative complaint for conduct unbecoming a judge against Hon. Nilo A.
Malanyaon, the Presiding Judge of the Regional Trial Court, Branch 32, in Pili, Camarines Sur. 1

In their joint complaint-affidavit dated April 10, 2007,2 the complainants averred that complainant Rey C. Decena had
brought an administrative case in Regional Office No. V of the Civil Service Commission in Legaspi City, Albay against
Judge Malanyaon’s wife, Dr. Amelita C. Malanyaon (Dr. Amelita), then the Assistant Provincial Health Officer of the
Province of Camarines Sur; that during the hearing of the administrative case on May 4, 2006, Judge Malanyaon sat
beside his daughter, Atty. Ma. Kristina C. Malanyaon, the counsel of Dr. Amelita in the case; and that the events that then
transpired were as recounted in the joint complaint-affidavit, to wit:

3. During the early stage of the hearing when the hearing officer, Atty. Dennis Masinas Nieves, brought up the matter
regarding Dr. Malanyaon’s manifestation or motion (to dismiss the case for lack of jurisdiction), Judge Malanyaon coached
her daughter in making manifestations/motions before the hearing officer, by scribbling on some piece of paper and giving
the same to the former, thus prompting her daughter to rise from her seat and/or ask permission from the officer to speak,
and then make some manifestations while reading or glancing on the paper given by Judge Malanyaon. At one point,
Judge Malanyaon even prompted her daughter to demand that Atty. Eduardo Loria, the collaborating counsel of our
principal counsel, Atty. Mary Ailyne Zamora, be required to produce his PTR number.

4. When our principal counsel, Atty. Zamora, arrived and took over from Atty. Loria, she inquired regarding the personality
of Judge Malanyaon, being seated at the lawyer’s bench beside Atty. Malanyaon, Judge Malanyaon then proudly
introduced himself and manifested that he was the "counsel of the respondent’s counsel". Atty. Zamora proceeded to
raise the propriety of Judge Malanyaon’s sitting with and assisting his daughter in that hearing, being a member of the
judiciary, to which Judge Malanyaon loudly retorted that he be shown any particular rule that prohibits him from sitting with
his daughter at the lawyers’ bench. He insisted that he was merely "assisting" her daughter, who "just passed the bar",
defend the respondent, and was likewise helping the latter defend herself. Pertinent portion of the records of the
proceedings are as follows:

xxxx

Atty. Nieves : First, she has to enter her appearance. Okay?

Atty. Zamora : Anyway, … I don’t think, I do not memorize my PTR number, I don’t remember my PTR number, but aside
from that Your Honor, I think this Honorable Hearing Officer could take judicial notice that Atty. Ed Loria is indeed a lawyer
in good standing in IBP. And moreover, Your Honor, I would like to inquire as to the personality of the gentleman next to
the lawyer of the defendant or respondent, Your Honor?

Judge Malanyaon: I am the counsel of the complainant, ah, of the respondent’s counsel, I am Judge Malanyaon. I am
assisting her. And so what?!!

Atty. Zamora : Ah, you are the counsel of the … (interrupted)

Atty. Nieves : There’s no need to be belligerent… let’s calm down…

Atty. Zamora : Your Honor, Your Honor, we all do not know each other, and with due respect to the judge, there is also a
hearing officer here Your Honor, and I think Your Honor the Hearing Officer here deserves due respect. I mean, the word
"So what?!", I don’t think that would be proper Your Honor in this Court.

Judge Malanyaon : I am sorry your Honor, because the … is out of turn, out of turn.

Atty. Nieves : This is not necessary, actually, this is not necessary. So we might as well proceed with our hearing today.
I’ve already made a ruling regarding the, the query regarding PTR. Okay, at this stage it is not proper considering that
Atty. Loria only entered his appearance during the start of the hearing. Okay. So, we have to proceed now.

Atty. Zamora : I am accepting Your Honor the delegation again of Atty. Loria. I am entering my appearance as the lead
counsel for this case, Your Honor, as counsel for the complainant.

Atty. Nieves : Okay.

Atty. Zamora : And may I be clear that the judge will be the collaborating counsel for the respondent or the counsel of
record of the respondent?

Atty. Nieves : … of the judge is … I’m sorry?

Atty. Zamora : He manifested Your Honor that he is the counsel of the respondent.

Atty. Malanyaon : No, the counsel of the counsel of the respondent.

Atty. Nieves : He has not, he has not entered his appearance in this case.
Atty. Zamora : Would that be proper for him Your Honor, considering that he is a judge Your Honor? Would that, ah, there
will be undue influence, or whatever, Your Honor? We are just trying to avoid any bias or undue influence in this court,
Your Honor.

Atty. Nieves : Okay, it will not, considering the fact that he has not entered his appearance for the respondent.

Judge Malanyaon : If Your Honor, please, the respondent is my wife. Counsel for the respondent is my daughter. She just
passed the bar! I’m assisting her. Is it not my right, my duty to assist my daughter? And to assist my wife defend herself? I
am only sitting with my daughter! I’m not acting for the respondent!

Atty. Zamora : I don’t think Your Honor under the rule, the counsel needs a counsel. Only the one charged or the one
being charged needs a counsel.

Atty. Nieves : Okay, let’s settle this now. Judge Malanyaon has not entered his appearance. It will not in any way …

xxxx

The complainants averred that the actuations of Judge Malanyaon during the hearing of his wife’s administrative case in
the Civil Service Commission constituted violations of the New Code of Judicial Conduct for the Philippines Judiciary.

On June 21, 2007, then Court Administrator Christopher O. Lock required Judge Malanyaon to comment on the
complaint.3

On July 15, 2007, Judge Malanyaon filed his comment, refuting the allegations of the complaint thusly:

1. Complainants are the sister and nephew of my wife, Amelita C. Malanyaon, there is bad blood between them arising
from divergent political loyalties and family differences;

2. There is no reason for complainants to take offense at my sitting beside my daughter Ma. Kristina, when she appeared
for my wife in the first hearing of the administrative case Rey C. Decena filed against my wife; the hearing officer himself
could cite no rule disallowing me from sitting beside my daughter, in the counsel’s table, and he did not ask me to vacate
where I sat beside my daughter; the transcript does not support complainants’ claim;

3. It is true I snapped at Atty. Zamora, when she asked about my personality – but she was speaking out of turn as all I
was doing was sitting beside my daughter when she came as the transcript will show, I apologized to the hearing officer,
who graciously let the matter pass;

4. My daughter is a new practitioner; her law partner and lead counsel could not make it on time, and as her consultant, I
did not speak, nor enter my appearance for my wife – to lend a helping hand to a neophyte lawyer, defending her mother
in an administrative case, is not unethical, nor does it constitute the proscribed practice of law;

5. It is petty for my sister-in-law and for my nephew to complain of my presence during the hearing; it is my filial duty to
lend my wife and daughter, moral and legal support in their time of need; indeed, it is strange for complainants to take
offense at my presence and accuse me of practicing law during my stint as a judge when before the bad blood between
my wife and her sibling and nephew erupted, I helped them out with their legal problems gratis et amore and they did not
complain of my practicing law on their behalf, indeed, one of the crosses a judge must carry is the cross of base
ingratitude.4

On March 27, 2008, then Court Administrator Zenaida N. Elepaño recommended to the Court that: (a) the complaint be
re-docketed as a regular administrative matter; (b) Judge Malanyaon be found guilty of gross misconduct; and (c) Judge
Malanyaon be fined ₱50,000.00.5

On September 16, 2009, the Court required the parties to manifest within 10 days from notice if they were willing to submit
the case for resolution on the basis of the records or pleadings filed. 6

The complainants complied on November 13, 2009, stating their willingness to submit the case for resolution after a
formal investigation or hearing was conducted, and after they were given time to file their respective position papers or
memoranda.7

On January 11, 2010, the Court resolved: (a) to re-docket the administrative case as a regular administrative matter; (b) to
await Judge Malanyaon’s compliance with the September 16, 2009 resolution; and (c) to refer the administrative matter to
the OCA for evaluation, report and recommendation.8

After Judge Malanyaon did not submit any compliance with the September 16, 2009 resolution, the Court ordered him on
February 10, 2010 to show cause why he should not be disciplinarily dealt with or held in contempt for such failure, and
further directed him to still comply with the resolution.9

On February 15, 2010, Judge Malanyaon’s counsel informed the Court that Judge Malanyaon had meanwhile suffered a
massive stroke on September 2, 2009 that had affected his mental faculties and made him unfit to defend himself here;
and prayed for the suspension of the proceedings until Judge Malanyaon would have been found competent to
comprehend and stand the rigors of the investigation.10

On April 12, 2010, the Court deferred action on the case, and required Judge Malanyaon to submit a medical certificate. 11

Judge Malanyaon submitted a medical certificate dated May 27, 2010, issued by the Philippine General Hospital,
certifying that he had been confined thereaft from September 2, 2009 to October 19, 2009 for the following reason, to wit:

Cerebro Vascular disease, Hypertension Intra Cerebral Hematoma Left Thalamus with obstructive Hydrocephalus; DM
type II, Chronic Obstructive Pulmonary disease; Pneumonia; lleus (resolved); Neurogenic bladder, Benign Prostatic
Hypertrophy; Grave’s disease; Arthritis.

OPERATION PERFORMED:

Bilateral tube ventriculostomy12

Judge Malanyaon submitted two more medical certificates, the first dated October 5, 2010,13 certifying that, among others,
he was undergoing regular check-up, and the other, dated January 24, 2011,14 certifying that his functional and mental
status had been assessed as follows:
The severity and location of the hemorrage in the brain resulted in residual epoliptogenic focus (Post-gliotic seizures) and
significant impairment of cognition, memory judgment behavior (Vascular Dementia). He has problems with memory
recall, analysis of information, events and situations which may make defending himself difficult, if necessary. Although he
is independent on ambulation, he requires assistance even in basic activities of daily living. 15

The Court required the complainants to comment on Judge Malanyaon’s medical certification dated October 5, 2010.

On July 18, 2011, however, Dr. Amelita submitted a manifestation and urgent motion to dismiss, seeking the dismissal of
the administrative case against Judge Malanyaon upon the following grounds, to wit:

xxxx

2. Unfortunately, in a "Medical Certification" dated June 15, 2011 the original of which is attached hereto as Annex "1", the
attending neurologist of my husband has pronounced him permanently mentally impaired. x x x.

xxxx

3. As a consequence, my husband has permanently lost the capacity to understand the nature and object of the
administrative proceedings against him. He cannot intelligently appoint his counsel or communicate coherently with him.
He cannot testify in his own behalf, and confront and cross-examine opposing witnesses. Indeed, he cannot properly avail
himself of his rights in an adversarial administrative investigation;

4. Given the progressive mental impairment afflicting my husband, he has permanently lost the capacity to defend himself.
Thus, to continue the administrative investigation against my husband who is no longer in any position to defend himself
would constitute a denial of his right to be heard (Baikong Akang Camsa vs. Judge Aurelio Rendon, A.M. No. MTJ-02-
1395 dated 19 February 2002).16

Even so, on September 26, 2011, we required the complainants to comment on the manifestation and motion of Dr.
Amelita.17

Subsequently, Dr. Amelita submitted another motion dated January 23, 2012, 18 praying for the dismissal of the case
against Judge Malanyaon.

On February 6, 2012, Court Administrator Jose Midas P. Marquez reiterated the recommendation made on March 27,
2008 by then Court Administrator Elepaño by recommending that: (a) the administrative case be re-docketed as a regular
administrative matter; and (b) Judge Malanyaon be found guilty of gross misconduct and fined ₱50,000.00. 19

On May 3, 2012, the Court received the complainants’ compliance dated February 1, 2012, 20 as their response to the
show cause order issued in relation to their failure to submit the comment the Court had required on September 26,
2011.21

On September 4, 2012, the Court received from Dr. Amelita an urgent ex parte motion for immediate resolution, praying
that the motion to dismiss dated July 18, 2011 be already resolved. 22
Issues

For consideration and resolution are the following issues, namely: (a) whether or not Judge Malanyaon would be denied
due process if the administrative case was not dismissed; (b) whether the actuations of Judge Malanyaon complained of
constituted conduct unbecoming of a judge; and (c) if Judge Malanyaon was guilty of conduct unbecoming of a judge,
what should be the correct sanction.

Ruling

We now discuss and resolve the issues accordingly.

1. Respondent’s right to due process is not violated by resolution of the case

In her manifestation with urgent motion to dismiss,23 Dr. Amelita stressed that proceeding against Judge Malanyaon
despite his present medical state would violate his right to due process. She stated:

3. As a consequence, my husband has permanently lost the capacity to understand the nature and object of the
administrative proceedings against him. He cannot intelligently appoint his counsel or communicate coherently with him.
He cannot testify in his own behalf, and confront and cross-examine opposing witnesses. Indeed, he cannot properly avail
himself of his rights in an adversarial administrative investigation. 24

Opposing, the complainants argued that Dr. Amelita’s concern was unfounded considering that Judge Malanyaon had not
only been given the opportunity to be heard, but had been actually heard on their complaint.

The complainants’ argument is well taken.

On August 3, 2007, or prior to his suffering the massive stroke that impaired his mental faculty, Judge Malanyaon already
submitted his comment containing his explanations and refutations of the charge against him. His comment asserted that
during the hearing of the administrative case of his wife in the Regional Office of the Civil Service Commission, the
hearing officer did not even cite any rule that prohibited him from sitting beside his daughter who was then acting as the
counsel of Dr. Amelita therein, or that inhibited him from assisting his daughter in the defense of his wife. He pointed out
that although he had then lost his temper after the opposing counsel had inquired about his personality in that hearing, he
had ultimately apologized to the hearing officer, who had in turn graciously let the matter pass.

Under the circumstances, Judge Malanyaon was accorded due process. In administrative cases, the requirement of due
process is satisfied whenever the parties are afforded the fair and reasonable opportunity to explain their side of the
controversy,25 either through oral arguments or through pleadings.26 That is what happened herein. Accordingly, Dr.
Amelita’s motion was bereft of basis, and should be denied.

2. Actuations of Judge Malanyaon rendered him guilty of conduct unbecoming of a judge

The following actuations of Judge Malanyaon constituted conduct unbecoming of a judge.

First was Judge Malanyaon’s occupying a seat beside his daughter that was reserved for the lawyers during the hearing.
Such act displayed his presumptuousness, and probably even his clear intention to thereby exert his influence as a judge
of the Regional Trial Court on the hearing officer in order for the latter to favor his wife’s cause. That impression was
definitely adverse against the Judiciary, whose every judicial officer was presumed to be a subject of strict scrutiny by the
public. Being an incumbent RTC Judge, he always represented the Judiciary, and should have acted with greater
circumspection and self-restraint, simply because the administrative hearing was unavoidably one in which he could not
but be partisan. Simple prudence should have counselled him to avoid any form of suspicion of his motives, or to
suppress any impression of impropriety on his part as an RTC judge by not going to the hearing himself.

Second was Judge Malanyaon’s admission that his presence in that hearing was to advise his daughter on what to do and
say during the hearing, to the point of coaching his daughter. In the process, he unabashedly introduced himself as the
"counsel of the respondent’s counsel" upon his presence being challenged by the adverse counsel, stating that his
daughter was still inexperienced for having just passed her Bar Examinations. Such excuse, seemingly grounded on a
"filial" duty towards his wife and his daughter, did not furnish enough reason for him to forsake the ethical conduct
expected of him as a sitting judge. He ought to have restrained himself from sitting at that hearing, being all too aware that
his sitting would have him cross the line beyond which was the private practice of law.

Section 3527 of Rule 138 of the Rules of Court expressly prohibits sitting judges like Judge Malanyaon from engaging in
the private practice of law or giving professional advice to clients. Section 11, 28 Canon 4 (Propriety),29of the New Code of
Judicial Conduct and Rule 5.0730 of the Code of Judicial Conduct reiterate the prohibition from engaging in the private
practice of law or giving professional advice to clients. The prohibition is based on sound reasons of public policy,
considering that the rights, duties, privileges and functions of the office of an attorney are inherently incompatible with the
high official functions, duties, powers, discretion and privileges of a sitting judge. It also aims to ensure that judges give
their full time and attention to their judicial duties, prevent them from extending favors to their own private interests, and
assure the public of their impartiality in the performance of their functions. These objectives are dictated by a sense of
moral decency and desire to promote the public interest.31

Thus, an attorney who accepts an appointment to the Bench must accept that his right to practice law as a member of the
Philippine Bar is thereby suspended, and it shall continue to be so suspended for the entire period of his incumbency as a
judge. The term practice of law is not limited to the conduct of cases in court or to participation in court proceedings, but
extends to the preparation of pleadings or papers in anticipation of a litigation, the giving of legal advice to clients or
persons needing the same, the preparation of legal instruments and contracts by which legal rights are secured, and the
preparation of papers incident to actions and special proceedings.32

To the Court, then, Judge Malanyaon engaged in the private practice of law by assisting his daughter at his wife’s
administrative case, coaching his daughter in making manifestations or posing motions to the hearing officer, and
preparing the questions that he prompted to his daughter in order to demand that Atty. Eduardo Loria, collaborating
counsel of the complainants’ principal counsel, should produce his privilege tax receipt. Judge Malanyaon did so
voluntarily and knowingly, in light of his unhesitating announcement during the hearing that he was the counsel for Atty.
Katrina Malanyaon, the counsel of the respondent, as his response to the query by the opposing counsel why he was
seated next to Atty. Malanyaon thereat.
Third was Judge Malanyaon’s admission that he had already engaged in the private practice of law even before the
incident now the subject of this case by his statement in his comment that "it is strange for complainants to take offense at
my presence and accuse me of practicing law during my stint as a judge when before the bad blood between my wife and
her sibling and nephew erupted, I helped them out with their legal problems gratis et amore and they did not complain of
my practicing law on their behalf."33 He thereby manifested his tendencies to disregard the prohibition against the private
practice of law during his incumbency on the Bench.

Any propensity on the part of a magistrate to ignore the ethical injunction to conduct himself in a manner that would give
no ground for reproach is always worthy of condemnation.34 We should abhor any impropriety on the part of judges,
whether committed in or out of their courthouses, for they are not judges only occasionally. The Court has fittingly
emphasized in Castillo v. Calanog, Jr.:35

The Code of Judicial Ethics mandates that the conduct of a judge must be free of a whiff of impropriety not only with
respect to his performance of his judicial duties, but also to his behavior outside his sala and as a private individual. There
is no dichotomy of morality; a public official is also judged by his private morals. The Code dictates that a judge, in order
to promote public confidence in the integrity and impartiality of the judiciary, must behave with propriety at all times. As we
have very recently explained, a judge’s official life cannot simply be detached or separated from his personal existence.
Thus:

Being a subject of constant public scrutiny, a judge should freely and willingly accept restrictions on conduct that might be
viewed as burdensome by the ordinary citizen.

A judge should personify judicial integrity and exemplify honest public service. The personal behavior of a judge, both in
the performance of official duties and in private life should be above suspicion.

Fourth was Judge Malanyaon’s display of arrogance during the hearing, as reflected by his reaction to the opposing
counsel’s query on his personality to sit at the counsel table at the hearing, to wit:

I am the counsel of the complainant, ah, of the respondent’s counsel, I am Judge Malanyaon. I am assisting her. And so
what?!!

Judge Malanyaon’s uttering "And so what?" towards the opposing counsel evinced his instant resentment towards the
adverse parties’ counsel for rightly challenging his right to be sitting on a place reserved for counsel of the parties. The
utterance, for being made in an arrogant tone just after he had introduced himself as a judge, was unbecoming of the
judge that he was, and tainted the good image of the Judiciary that he should uphold at all times. 36 It is true that the
challenge of the opposing counsel might have slighted him, but that was not enough to cause him to forget that he was
still a judge expected to act with utmost sobriety and to speak with self-restraint. He thereby ignored the presence of the
hearing officer, appearing to project that he could forsake the decorum that the time and the occasion rightly called for
from him and the others just because he was a judge and the other side was not. He should not forget that a judge like
himself should be the last person to be perceived by others as a petty and sharp-tongued tyrant.

Judge Malanyaon has insisted that his actuations were excused by his filial obligation to assist his daughter, then only a
neophyte in the Legal Profession. We would easily understand his insistence in the light of our culture to be always
solicitous of the wellbeing of our family members and other close kin, even risking our own safety and lives in their
defense. But the situation of Judge Malanyaon was different, for he was a judicial officer who came under the stricture that
uniformly applied to all judges of all levels of the judicial hierarchy, forbidding him from engaging in the private practice of
law during his incumbency, regardless of whether the beneficiary was his wife or daughter or other members of his own
family.

3. What is the proper penalty?

Judge Malanyaon had been previously sanctioned by the Court on the following three occasions, namely: (a) A.M. No.
RTJ-93-1090, with admonition for gross ignorance of the law and unreasonable delay in resolving motions; 37 (b) A.M. No.
RTJ-99-1444, with reprimand for failure to resolve motions;38 and (c) A.M. No. RTJ-02-1669, with a fine of ₱20,000.00
(coupled with a stern warning that a repetition of the same or similar act would be dealt with more severely) for conduct
unbecoming of a judge.39 He had other administrative cases that were dismissed. 40 Of the three administrative cases that
merited sanctions, however, only the third should be considered as aggravating herein because it involved the similar
offense of conduct unbecoming of a judge for which he had been given the stern warning of a more severe penalty upon a
repetition.

However, our uniform treatment of administrative sanctions as having the nature of liabilities akin to those in criminal
cases now brings us to offset such aggravating circumstance with the apparent fact that the actuations of Judge
Malanyaon complained of had not been motivated by bad faith, or by any malice towards another. Indeed, he did not
intend to thereby cause any prejudice to another, having so acted from a sincere, albeit misplaced, desire to go to the
help of his wife and daughter.

Accordingly, the Court deems it condign and proper to mitigate the fine of ₱50,000.00 recommended by the Court
Administrator by imposing on Judge Malanyaon a fine of ₱40,000.00. With his disability retirement from the Judiciary
having been earlier granted by the Court, the fine shall be deducted from his remaining retirement benefits.

WHEREFORE, the Court finds and pronounces JUDGE NILO A. MALANYAON, Presiding Judge of Branch 32 of the
Regional Trial Court in Pili, Camarines Sur, administratively liable for conduct unbecoming of a Judge, and penalizes him
with a fine of ₱40,000.00.
20. IN RE: PETITION TO SIGN IN THE ROLL OF ATTORNEYS MICHAEL A. MEDADO – BM NO. 2540, SEPT. 24,
2013

RESOLlJTION SERENO, CJ: We resolve the instant Petition to Sign in the Roll of Attomeys filed by petitioner Michael A.
Medado (Medado ). Medado graduated from the University of the Philippines with the degree of Bachelor of Laws in 1979
1 and passed the same year's bar examinations with a general weighted average of 82.7

On 7 May 1980, he took the Attorney’s Oath at the Philippine International Convention Center (PICC) together with the
successful bar examinees.3 He was scheduled to sign in the Roll of Attorneys on 13 May 1980,4 but he failed to do so on
his scheduled date, allegedly because he had misplaced the Notice to Sign the Roll of Attorneys5 given by the Bar Office
when he went home to his province for a vacation.6 Several years later, while rummaging through his old college files,
Medado found the Notice to Sign the Roll of Attorneys. It was then that he realized that he had not signed in the roll, and
that what he had signed at the entrance of the PICC was probably just an attendance record.7 By the time Medado found
the notice, he was already working. He stated that he was mainly doing corporate and taxation work, and that he was not
actively involved in litigation practice. Thus, he operated “under the mistaken belief [that] since he ha[d] already taken the
oath, the signing of the Roll of Attorneys was not as urgent, nor as crucial to his status as a lawyer”;8 and “the matter of
signing in the Roll of Attorneys lost its urgency and compulsion, and was subsequently forgotten.”9 In 2005, when
Medado attended Mandatory Continuing Legal Education (MCLE) seminars, he was required to provide his roll number in
order for his MCLE compliances to be credited.10 Not having signed in the Roll of Attorneys, he was unable to provide his
roll number. About seven years later, or on 6 February 2012, Medado filed the instant Petition, praying that he be allowed
to sign in the Roll of Attorneys.11 The Office of the Bar Confidant (OBC) conducted a clarificatory conference on the
matter on 21 September 201212 and submitted a Report and Recommendation to this Court on 4 February 2013.13 The
OBC recommended that the instant petition be denied for petitioner’s gross negligence, gross misconduct and utter lack of
merit.14 It explained that, based on his answers during the clarificatory conference, petitioner could offer no valid
justification for his negligence in signing in the Roll of Attorneys.

After a judicious review of the records, we grant Medado’s prayer in the instant petition, subject to the payment of a fine
and the imposition of a penalty equivalent to suspension from the practice of law. At the outset, we note that not allowing
Medado to sign in the Roll of Attorneys would be akin to imposing upon him the ultimate penalty of disbarment, a penalty
that we have reserved for the most serious ethical transgressions of members of the Bar. In this case, the records do not
show that this action is warranted. For one, petitioner demonstrated good faith and good moral character when he finally
filed the instant Petition to Sign in the Roll of Attorneys. We note that it was not a third party who called this Court’s
attention to petitioner’s omission; rather, it was Medado himself who acknowledged his own lapse, albeit after the passage
of more than 30 years. When asked by the Bar Confidant why it took him this long to file the instant petition, Medado very
candidly replied: Mahirap hong i-explain yan pero, yun bang at the time, what can you say? Takot ka kung anong
mangyayari sa ‘yo, you don’t know what’s gonna happen. At the same time, it’s a combination of apprehension and
anxiety of what’s gonna happen. And, finally it’s the right thing to do. I have to come here … sign the roll and take the oath
as necessary.16 For another, petitioner has not been subject to any action for disqualification from the practice of law,17
which is more than what we can say of other individuals who were successfully admitted as members of the Philippine
Bar. For this Court, this fact demonstrates that petitioner strove to adhere to the strict requirements of the ethics of the
profession, and that he has prima facie shown that he possesses the character required to be a member of the Philippine
Bar. Finally, Medado appears to have been a competent and able legal practitioner, having held various positions at the
Laurel Law Office,18 Petron, Petrophil Corporation, the Philippine National Oil Company, and the Energy Development
Corporation.19 All these demonstrate Medado’s worth to become a full-fledged member of the Philippine Bar. While the
practice of law is not a right but a privilege,20 this Court will not unwarrantedly withhold this privilege from individuals who
have shown mental fitness and moral fiber to withstand the rigors of the profession.

That said, however, we cannot fully exculpate petitioner Medado from all liability for his years of inaction. Petitioner has
been engaged in the practice of law since 1980, a period spanning more than 30 years, without having signed in the Roll
of Attorneys.21 He justifies this behavior by characterizing his acts as “neither willful nor intentional but based on a
mistaken belief and an honest error of judgment.”22 We disagree. While an honest mistake of fact could be used to
excuse a person from the legal consequences of his acts23 as it negates malice or evil motive,24 a mistake of law cannot
be utilized as a lawful justification, because everyone is presumed to know the law and its consequences.25 Ignorantia
facti excusat; ignorantia legis neminem excusat. Applying these principles to the case at bar, Medado may have at first
operated under an honest mistake of fact when he thought that what he had signed at the PICC entrance before the oath-
taking was already the Roll of Attorneys. However, the moment he realized that what he had signed was merely an
attendance record, he could no longer claim an honest mistake of fact as a valid justification. At that point, Medado should
have known that he was not a full-fledged member of the Philippine Bar because of his failure to sign in the Roll of
Attorneys, as it was the act of signing therein that would have made him so.26 When, in spite of this knowledge, he chose
to continue practicing law without taking the necessary steps to complete all the requirements for admission to the Bar, he
willfully engaged in the unauthorized practice of law. Under the Rules of Court, the unauthorized practice of law by one’s
assuming to be an attorney or officer of the court, and acting as such without authority, may constitute indirect contempt of
court,27 which is punishable by fine or imprisonment or both.28 Such a finding, however, is in the nature of criminal
contempt29 and must be reached after the filing of charges and the conduct of hearings.30 In this case, while it appears
quite clearly that petitioner committed indirect contempt of court by knowingly engaging in unauthorized practice of law,
we refrain from making any finding of liability for indirect contempt, as no formal charge pertaining thereto has been filed
against him.

Knowingly engaging in unauthorized practice of law likewise transgresses Canon 9 of 'the Code of Professional
Responsibility, which provides: CANON 9 - A lawyer shall not, directly or indirectly, assist in the unauthorized practice of
law. While a reading of Canon 9 appears to merely prohibit lawyers from assisting in the unauthorized practice of law, the
unauthorized practice of law by the lawyer himself is subsumed under this provision, because at the heart of Canon 9 is
the lawyer's duty to prevent the unauthorized practice of law. This duty likewise applies to law students and Bar
candidates. As aspiring members of the Bar, they are bound to comport themselves in accordance with the ethical
standards of the legal profession. Turning now to the applicable penalty, previous violations of Canon 9 have warranted
the penalty of suspension from the practice of law. 31 As Medado is not yet a full-fledged lawyer, we cannot suspend him
from the practice of law. However, we see it fit to impose upon him a penalty akin to suspension by allowing him to sign in
the Roll of Attorneys one ( 1) year after receipt of this Resolution. For his transgression of the prohibition against the
unauthorized practice of law, we likewise see it fit to fine him in the amount of P32,000. During the one year period,
petitioner is warned that he is not allowed to engage in the practice of law, and is sternly warned that doing any act that
constitutes practice of law before he has signed in the Roll of Attorneys will be dealt with severely by this Court.
WHEREFORE, the instant Petition to Sign in the Roll of Attorneys is hereby GRANTED. Petitioner Michael A. Medado is
ALLOWED to sign in the Roll of Attorneys ONE (1) YEAR after receipt of this Resolution. Petitioner is likewise ORDERED
to pay a FINE of P32,000 for his unauthorized practice of law. During the one year period, petitioner is NOT ALLOWED to
practice law, and is STERNLY WARNED that doing any act that constitutes practice of law before he has signed in the
Roll of Attorneys will be dealt witp severely by this Court. Let a copy of this Resolution be furnished the Office of the Bar
Confidant, the Integrated Bar of the Philippines, and the Office of the Court Administrator for circulation to all courts in the
country. SO ORDERED.
21. TAPAY VS. BANCOLO – AC NO. 9604, MARCH 20, 2013

A.C. No. 9604 March 20, 2013

RODRIGO E. TAPAY and ANTHONY J. RUSTIA, Complainants,

vs.
ATTY. CHARLIE L. BANCOLO and ATTY. JANUS T. JARDER, Respondents.

DECISION

CARPIO, J.:

The Case

This administrative case arose from a Complaint tiled by Rodrigo E. Tapay (Tapay) and Anthony J. Rustia (Rustia), both
employees of the Sugar Regulatory Administration, against Atty. Charlie L. Bancolo (Atty. Bancolo) and Atty. Janus T.
larder (Atty. Jarder) for violation of the Canons of Ethics and Professionalism, Falsification of Public Document, Gross
Dishonesty, and Harassment.

The Facts

Sometime in October 2004, Tapay and Rustia received an Order dated 14 October 2004 from the Office of the
Ombudsman-Visayas requiring them to file a counter-affidavit to a complaint for usurpation of authority, falsification of
public document, and graft and corrupt practices filed against them by Nehimias Divinagracia, Jr. (Divinagracia), a co-
employee in the Sugar Regulatory Administration. The Complaint1 dated 31 August 2004 was allegedly signed on behalf
of Divinagracia by one Atty. Charlie L. Bancolo of the Jarder Bancolo Law Office based in Bacolod City, Negros
Occidental.

When Atty. Bancolo and Rustia accidentally chanced upon each other, the latter informed Atty. Bancolo of the case filed
against them before the Office of the Ombudsman. Atty. Bancolo denied that he represented Divinagracia since he had
yet to meet Divinagracia in person. When Rustia showed him the Complaint, Atty. Bancolo declared that the signature
appearing above his name as counsel for Divinagracia was not his. Thus, Rustia convinced Atty. Bancolo to sign an
affidavit to attest to such fact. On 9 December 2004, Atty. Bancolo signed an affidavit denying his supposed signature
appearing on the Complaint filed with the Office of the Ombudsman and submitted six specimen signatures for
comparison. Using Atty. Bancolo’s affidavit and other documentary evidence, Tapay and Rustia filed a counter-affidavit
accusing Divinagracia of falsifying the signature of his alleged counsel, Atty. Bancolo.

In a Resolution dated 28 March 2005, the Office of the Ombudsman provisionally dismissed the Complaint since the
falsification of the counsel’s signature posed a prejudicial question to the Complaint’s validity. Also, the Office of the
Ombudsman ordered that separate cases for Falsification of Public Document 2 and Dishonesty3 be filed against
Divinagracia, with Rustia and Atty. Bancolo as complainants.
Thereafter, Divinagracia filed his Counter-Affidavit dated 1 August 2005 denying that he falsified the signature of his
former lawyer, Atty. Bancolo. Divinagracia presented as evidence an affidavit dated 1 August 2005 by Richard A. Cordero,
the legal assistant of Atty. Bancolo, that the Jarder Bancolo Law Office accepted Divinagracia’s case and that the
Complaint filed with the Office of the Ombudsman was signed by the office secretary per Atty. Bancolo’s instructions.
Divinagracia asked that the Office of the Ombudsman dismiss the cases for falsification of public document and
dishonesty filed against him by Rustia and Atty. Bancolo and to revive the original Complaint for various offenses that he
filed against Tapay and Rustia.

In a Resolution dated 19 September 2005, the Office of the Ombudsman dismissed the criminal case for falsification of
public document (OMB-V-C-05-0207-E) for insufficiency of evidence. The dispositive portion states:

WHEREFORE, the instant case is hereby DISMISSED for insufficiency of evidence, without prejudice to the re-filing by
Divinagracia, Jr. of a proper complaint for violation of RA 3019 and other offenses against Rustia and Tapay.

SO ORDERED.4

The administrative case for dishonesty (OMB-V-A-05-0219-E) was also dismissed for lack of substantial evidence in a
Decision dated 19 September 2005.

On 29 November 2005, Tapay and Rustia filed with the Integrated Bar of the Philippines (IBP) a complaint 5 to disbar Atty.
Bancolo and Atty. Jarder, Atty. Bancolo’s law partner. The complainants alleged that they were subjected to a harassment
Complaint filed before the Office of the Ombudsman with the forged signature of Atty. Bancolo. Complainants stated
further that the signature of Atty. Bancolo in the Complaint was not the only one that was forged. Complainants attached a
Report6 dated 1 July 2005 by the Philippine National Police Crime Laboratory 6 which examined three other letter-
complaints signed by Atty. Bancolo for other clients, allegedly close friends of Atty. Jarder. The report concluded that the
questioned signatures in the letter-complaints and the submitted standard signatures of Atty. Bancolo were not written by
one and the same person. Thus, complainants maintained that not only were respondents engaging in unprofessional and
unethical practices, they were also involved in falsification of documents used to harass and persecute innocent people.

On 9 January 2006, complainants filed a Supplement to the Disbarment Complaint Due to Additional Information. They
alleged that a certain Mary Jane Gentugao, the secretary of the Jarder Bancolo Law Office, forged the signature of Atty.
Bancolo.

In their Answer dated 26 January 2006 to the disbarment complaint, respondents admitted that the criminal and
administrative cases filed by Divinagracia against complainants before the Office of the Ombudsman were accepted by
the Jarder Bancolo Law Office. The cases were assigned to Atty. Bancolo. Atty. Bancolo alleged that after being informed
of the assignment of the cases, he ordered his staff to prepare and draft all the necessary pleadings and documents.
However, due to some minor lapses, Atty. Bancolo permitted that the pleadings and communications be signed in his
name by the secretary of the law office. Respondents added that complainants filed the disbarment complaint to retaliate
against them since the cases filed before the Office of the Ombudsman were meritorious and strongly supported by
testimonial and documentary evidence. Respondents also denied that Mary Jane Gentugao was employed as secretary of
their law office.
Tapay and Rustia filed a Reply to the Answer dated 2 March 2006. Thereafter, the parties were directed by the
Commission on Bar Discipline to attend a mandatory conference scheduled on 5 May 2006. The conference was reset to
10 August 2006. On the said date, complainants were present but respondents failed to appear. The conference was
reset to 25 September 2006 for the last time. Again, respondents failed to appear despite receiving notice of the
conference. Complainants manifested that they were submitting their disbarment complaint based on the documents
submitted to the IBP. Respondents were also deemed to have waived their right to participate in the mandatory
conference. Further, both parties were directed to submit their respective position papers. On 27 October 2006, the IBP
received complainants’ position paper dated 18 October 2006 and respondents’ position paper dated 23 October 2006.

The IBP’s Report and Recommendation

On 11 April 2007, Atty. Lolita A. Quisumbing, the Investigating Commissioner of the Commission on Bar Discipline of the
IBP, submitted her Report. Atty. Quisumbing found that Atty. Bancolo violated Rule 9.01 of Canon 9 of the Code of
Professional Responsibility while Atty. Jarder violated Rule 1.01 of Canon 1 of the same Code. The Investigating

Commissioner recommended that Atty. Bancolo be suspended for two years from the practice of law and Atty. Jarder be
admonished for his failure to exercise certain responsibilities in their law firm.

In her Report and Recommendation, the Investigating Commissioner opined:

x x x. In his answer, respondent Atty. Charlie L. Bancolo admitted that his signature appearing in the complaint filed
against complainants’ Rodrigo E. Tapay and Anthony J. Rustia with the Ombudsman were signed by the secretary. He did
not refute the findings that his signatures appearing in the various documents released from his office were found not to
be his. Such pattern of malpratice by respondent clearly breached his obligation under Rule 9.01 of Canon 9, for a lawyer
who allows a non-member to represent him is guilty of violating the aforementioned Canon. The fact that respondent was
busy cannot serve as an excuse for him from signing personally. After all respondent is a member of a law firm composed
of not just one (1) lawyer. The Supreme Court has ruled that this practice constitute negligence and undersigned finds the
act a sign of indolence and ineptitude. Moreover, respondents ignored the notices sent by undersigned. That showed
patent lack of respect to the Integrated Bar of the Philippines’ Commission on Bar Discipline and its proceedings. It
betrays lack of courtesy and irresponsibility as lawyers.

On the other hand, Atty. Janus T. Jarder, a senior partner of the law firm Jarder Bancolo and Associates Law Office, failed
to exercise certain responsibilities over matters under the charge of his law firm. As a senior partner[,] he failed to abide to
the principle of "command responsibility". x x x.

xxxx

Respondent Atty. Janus Jarder after all is a seasoned practitioner, having passed the bar in 1995 and practicing law up to
the present. He holds himself out to the public as a law firm designated as Jarder Bancolo and Associates Law Office. It
behooves Atty. Janus T. Jarder to exert ordinary diligence to find out what is going on in his law firm, to ensure that all
lawyers in his firm act in conformity to the Code of Professional Responsibility. As a partner, it is his responsibility to
provide efficacious control of court pleadings and other documents that carry the name of the law firm. Had he done that,
he could have known the unethical practice of his law partner Atty. Charlie L. Bancolo. Respondent Atty. Janus T. Jarder
failed to perform this task and is administratively liable under Canon 1, Rule 1.01 of the Code of Professional
Responsibility.7

On 19 September 2007, in Resolution No. XVIII-2007-97, the Board of Governors of the IBP approved with modification
the Report and Recommendation of the Investigating Commissioner. The Resolution states:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, with modification, the Report and
Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as
Annex "A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules,
and considering Respondent Atty. Bancolo’s violation of Rule 9.01, Canon 9 of the Code of Professional Responsibility,
Atty. Charlie L. Bancolo is hereby SUSPENDED from the practice of law for one (1) year.

However, with regard to the charge against Atty. Janus T. Jarder, the Board of Governors RESOLVED as it is hereby
RESOLVED to AMEND, as it is hereby AMENDED the Recommendation of the Investigating Commissioner, and
APPROVE the DISMISSAL of the case for lack of merit.8

Tapay and Rustia filed a Motion for Reconsideration. Likewise, Atty. Bancolo filed his Motion for Reconsideration dated 22
December 2007. Thereafter, Atty. Jarder filed his separate Consolidated Comment/Reply to Complainants’ Motion for
Reconsideration and Comment Filed by Complainants dated 29 January 2008.

In Resolution No. XX-2012-175 dated 9 June 2012, the IBP Board of Governors denied both complainants’ and Atty.
Bancolo’s motions for reconsideration. The IBP Board found no cogent reason to reverse the findings of the Investigating
Commissioner and affirmed Resolution No. XVIII-2007-97 dated 19 September 2007.

The Court’s Ruling

After a careful review of the records of the case, we agree with the findings and recommendation of the IBP Board and
find reasonable grounds to hold respondent Atty. Bancolo administratively liable.

Atty. Bancolo admitted that the Complaint he filed for a former client before the Office of the Ombudsman was signed in
his name by a secretary of his law office. Clearly, this is a violation of Rule 9.01 of Canon 9 of the Code of Professional
Responsibility, which provides:

CANON 9
A LAWYER SHALL NOT, DIRECTLY OR INDIRECTLY, ASSIST IN THE UNAUTHORIZED PRACTICE OF LAW.

Rule 9.01 - A lawyer shall not delegate to any unqualified person the performance of any task which by law may only be
performed by a member of the Bar in good standing.

This rule was clearly explained in the case of Cambaliza v. Cristal-Tenorio,9 where we held:

The lawyer’s duty to prevent, or at the very least not to assist in, the unauthorized practice of law is founded on public
interest and policy. Public policy requires that the practice of law be limited to those individuals found duly qualified in
education and character. The permissive right conferred on the lawyer is an individual and limited privilege subject to
withdrawal if he fails to maintain proper standards of moral and professional conduct. The purpose is to protect the public,
the court, the client, and the bar from the incompetence or dishonesty of those unlicensed to practice law and not subject
to the disciplinary control of the Court. It devolves upon a lawyer to see that this purpose is attained. Thus, the canons
and ethics of the profession enjoin him not to permit his professional services or his name to be used in aid of, or to make
possible the unauthorized practice of law by, any agency, personal or corporate. And, the law makes it a misbehavior on
his part, subject to disciplinary action, to aid a layman in the unauthorized practice of law.

In Republic v. Kenrick Development Corporation,10 we held that the preparation and signing of a pleading constitute legal
work involving the practice of law which is reserved exclusively for members of the legal profession. Atty. Bancolo’s
authority and duty to sign a pleading are personal to him. Although he may delegate the signing of a pleading to another
lawyer, he may not delegate it to a non-lawyer. Further, under the Rules of Court, counsel’s signature serves as a
certification that (1) he has read the pleading; (2) to the best of his knowledge, information and belief there is good ground
to support it; and (3) it is not interposed for delay. 11 Thus, by affixing one’s signature to a pleading, it is counsel alone who
has the responsibility to certify to these matters and give legal effect to the document.1âwphi1

In his Motion for Reconsideration dated 22 December 2007, Atty. Bancolo wants us to believe that he was a victim of
circumstances or of manipulated events because of his unconditional trust and confidence in his former law partner, Atty.
Jarder. However, Atty. Bancolo did not take any steps to rectify the situation, save for the affidavit he gave to Rustia
denying his signature to the Complaint filed before the Office of the Ombudsman. Atty. Bancolo had an opportunity to
maintain his innocence when he filed with the IBP his Joint Answer (with Atty. Jarder) dated 26 January 2006. Atty.
Bancolo, however, admitted that prior to the preparation of the Joint Answer, Atty. Jarder threatened to file a disbarment
case against him if he did not cooperate. Thus, he was constrained to allow Atty. Jarder to prepare the Joint Answer. Atty.
Bancolo simply signed the verification without seeing the contents of the Joint Answer.

In the Answer, Atty. Bancolo categorically stated that because of some minor lapses, the communications and pleadings
filed against Tapay and Rustia were signed by his secretary, albeit with his tolerance. Undoubtedly, Atty. Bancolo violated
the Code of Professional Responsibility by allowing a non-lawyer to affix his signature to a pleading. This violation Is an
act of falsehood which IS a ground for disciplinary action.

The complainants did not present any evidence that Atty. Jarder was directly involved, had knowledge of, or even
participated in the wrongful practice of Atty. Bancolo in allowing or tolerating his secretary to sign pleadings for him. Thus,
we agree with the finding of the IBP Board that Atty. Jarder is not administratively liable.

In sum, we find that the suspension of Atty. Bancolo from the practice of law for one year is warranted. We also find
proper the dismissal of the case against Atty. larder.

WHEREFORE, we DISMISS the complaint against Atty. Janus T. larder for lack of merit.

We find respondent Atty. Charlie L. Bancolo administratively liable for violating Rule 9.01 of Canon 9 of the Code of
Professional Responsibility. He is hereby SUSPENDED from the practice of law for one year effective upon finality of this
Decision. He is warned that a repetition of the same or similar acts in the future shall be dealt with more severely.
Let a copy of this Decision be attached to respondent Atty. Charlie L. Bancolo's record in this Court as attorney. Further,
let copies of this Decision be furnished to the Integrated Bar of the Philippines and the Office of the Court Administrator,
which is directed to circulate them to all the courts in the country for their information and guidance.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

22. MACARUBBO VS. MACARUBBO – AC NO. 6148, JAN. 22, 2013

Adm. Case No. 6148 January 22, 2013

FLORENCE TEVES MACARUBBO, Complainant, vs. ATTY. EDMUNDO L. MACARUBBO, Respondent.

RE: PETITION (FOR EXTRAORDINARY MERCY) OF EDMUNDO L. MACARUBBO.

RESOLUTION

PERLAS-BERNABE, J.:

For resolution is the Petition (For Extraordinary Mercy) filed by respondent Edmundo L. Macarubbo (respondent) who
seeks to be reinstated in the Roll of Attorneys.

Records show that in the Decision1 dated February 27, 2004, the Court disbarred respondent from the practice of law for
having contracted a bigamous marriage with complainant Florence Teves and a third marriage with one Josephine
Constantino while his first marriage to Helen Esparza was still subsisting, which acts constituted gross immoral conduct in
violation of Canon 1, Rule 1.01 and Canon 7, Rule 7.03 of the Code of Professional Responsibility. The dispositive portion
of the subject Decision reads:

WHEREFORE, respondent Edmundo L. Macarubbo is found guilty of gross immorality and is hereby DISBARRED from
the practice of law. He is likewise ORDERED to show satisfactory evidence to the IBP Commission on Bar Discipline and
to this Court that he is supporting or has made provisions for the regular support of his two children by complainant.

Let respondent’s name be stricken off the Roll of Attorneys.

SO ORDERED.2
Aggrieved, respondent filed a Motion for Reconsideration/Appeal for Compassion and Mercy3 which the Court denied with
finality in the Resolution4 dated June 1, 2004. Eight years after or on June 4, 2012, respondent filed the instant Petition
(For Extraordinary Mercy)5 seeking

judicial clemency and reinstatement in the Roll of Attorneys. The Court initially treated the present suit as a second motion
for reconsideration and accordingly, denied it for lack of merit in the Resolution dated September 4, 2012.6On December
18, 2012, the same petition was endorsed to this Court by the Office of the Vice President 7 for re-evaluation, prompting
the Court to look into the substantive merits of the case.

In Re: Letter of Judge Augustus C. Diaz, Metropolitan Trial Court of Quezon City, Branch 37, Appealing for
Clemency,8 the Court laid down the following guidelines in resolving requests for judicial clemency, to wit:

1. There must be proof of remorse and reformation. These shall include but should not be limited to certifications or
testimonials of the officer(s) or chapter(s) of the Integrated Bar of the Philippines, judges or judges associations and
prominent members of the community with proven integrity and probity. A subsequent finding of guilt in an administrative
case for the same or similar misconduct will give rise to a strong presumption of non-reformation.

2. Sufficient time must have lapsed from the imposition of the penalty to ensure a period of reform.

3. The age of the person asking for clemency must show that he still has productive years ahead of him that can be put to
good use by giving him a chance to redeem himself.

4. There must be a showing of promise (such as intellectual aptitude, learning or legal acumen or contribution to legal
scholarship and the development of the legal system or administrative and other relevant skills), as well as potential for
public service.

5. There must be other relevant factors and circumstances that may justify clemency.9 (Citations omitted)

Moreover, to be reinstated to the practice of law, the applicant must, like any other candidate for admission to the bar,
satisfy the Court that he is a person of good moral character.10

Applying the foregoing standards to this case, the Court finds the instant petition meritorious.

Respondent has sufficiently shown his remorse and acknowledged his indiscretion in the legal profession and in his
personal life. He has asked forgiveness from his children by complainant Teves and maintained a cordial relationship with
them as shown by the herein attached pictures.11 Records also show that after his disbarment, respondent returned to his
hometown in Enrile, Cagayan and devoted his time tending an orchard and taking care of his ailing mother until her death
in 2008.12 In 2009, he was appointed as Private Secretary to the Mayor of Enrile, Cagayan and thereafter, assumed the
position of Local Assessment Operations Officer II/ Office-In-Charge in the Assessor’s Office, which office he continues to
serve to date.13 Moreover, he is a part-time instructor at the University of Cagayan Valley and F.L. Vargas College during
the School Year 2011-2012.14 Respondent likewise took an active part in socio-civic activities by helping his neighbors
and friends who are in dire need.
The following documents attest to respondent’s reformed ways: (1) Affidavit of Candida P. Mabborang; 15 (2) Affidavit of
Reymar P. Ramirez;16 (3) Affidavit of Roberto D. Tallud;17 (4) Certification from the Municipal Local Government
Office;18 (5) Certification by the Office of the Municipal Agriculturist/Health Officer, Social Welfare Development
Officer;19 (6) Certification from the Election Officer of Enrile, Cagayan;20 (7) Affidavit of Police Senior Inspector Jacinto T.
Tuddao;21 (8) Certifications from nine (9) Barangay Chairpersons;22 (9) Certification from the Office of the Provincial
Assessor;23 (10) Certification from the Office of the Manager, Magsaka ca Multi-Purpose Cooperative;24and (11)
Certification of the Office of the Federation of Senior Citizens, Enrile Chapter.25 The Office of the Municipal Treasurer also
certified that respondent has no monetary accountabilities in relation to his office26 while the Office of the Human
Resource Management Officer attested that he has no pending administrative case. 27 He is not known to be involved in
any irregularity and/or accused of a crime. Even the National Bureau of Investigation (NBI) attested that he has no record
on file as of May 31, 2011.28

Furthermore, respondent’s plea for reinstatement is duly supported by the Integrated Bar of the Philippines, Cagayan
Chapter29 and by his former and present colleagues.30 His parish priest, Rev. Fr. Camilo Castillejos, Jr., certified that he is
faithful to and puts to actual practice the doctrines of the Catholic Church. 31 He is also observed to be a regular
churchgoer.32 Records further reveal that respondent has already settled his previous marital squabbles, 33 as in fact, no
opposition to the instant suit was tendered by complainant Teves. He sends regular support 34 to his children in
compliance with the Court’s directive in the Decision dated February 27, 2004.

The Court notes the eight (8) long years that had elapsed from the time respondent was disbarred and recognizes his
achievement as the first lawyer product of Lemu National High School,35 and his fourteen (14) years of dedicated
government service from 1986 to July 2000 as Legal Officer of the Department of Education, Culture and Sports;
Supervising Civil Service Attorney of the Civil Service Commission; Ombudsman Graft Investigation Officer; and State
Prosecutor of the Department of Justice.36 From the attestations and certifications presented, the Court finds that
respondent has sufficiently atoned for his transgressions. At 5837 years of age, he still has productive years ahead of him
that could significantly contribute to the upliftment of the law profession and the betterment of society. While the Court is
ever mindful of its duty to discipline and even remove its errant officers, concomitant to it is its duty to show compassion to
those who have reformed their ways,38 as in this case.

Accordingly, respondent is hereby ordered .reinstated to the practice of law.1âwphi1 He is, however, reminded that such
privilege is burdened with conditions whereby adherence. to the rigid standards of intellect, moral uprightness, and strict
compliance with the rules and the law are continuing requirements. 39

WHEREFORE, premises considered, the instant petition is GRANTED. Respondent Edmundo L. Macarubbo is hereby
ordered REINSTATED in the Roll of Attorneys.

SO ORDERED.

ESTELA M. PERLAS-BERNABE
Associate Justice

WE CONCUR:
MARIA LOURDES P.A. SERENO
Chief Justice
23. IN RE: EDILLION, AM NO. 1928 AUG.3,1978

A.M. No. 1928 August 3, 1978

In the Matter of the IBP Membership Dues Delinquency of Atty. MARCIAL A. EDILION (IBP Administrative Case
No. MDD-1)

RESOLUTION

CASTRO, C.J.:

The respondent Marcial A. Edillon is a duly licensed practicing attorney in the Philippines.

On November 29, 1975, the Integrated Bar of the Philippines (IBP for short) Board of Governors unanimously adopted
Resolution No. 75-65 in Administrative Case No. MDD-1 (In the Matter of the Membership Dues Delinquency of Atty.
Marcial A. Edillon) recommending to the Court the removal of the name of the respondent from its Roll of Attorneys for
"stubborn refusal to pay his membership dues" to the IBP since the latter's constitution notwithstanding due notice.

On January 21, 1976, the IBP, through its then President Liliano B. Neri, submitted the said resolution to the Court for
consideration and approval, pursuant to paragraph 2, Section 24, Article III of the By-Laws of the IBP, which reads:

.... Should the delinquency further continue until the following June 29, the Board shall promptly inquire into the cause or
causes of the continued delinquency and take whatever action it shall deem appropriate, including a recommendation to
the Supreme Court for the removal of the delinquent member's name from the Roll of Attorneys. Notice of the action taken
shall be sent by registered mail to the member and to the Secretary of the Chapter concerned.

On January 27, 1976, the Court required the respondent to comment on the resolution and letter adverted to above; he
submitted his comment on February 23, 1976, reiterating his refusal to pay the membership fees due from him.

On March 2, 1976, the Court required the IBP President and the IBP Board of Governors to reply to Edillon's comment: on
March 24, 1976, they submitted a joint reply.

Thereafter, the case was set for hearing on June 3, 1976. After the hearing, the parties were required to submit
memoranda in amplification of their oral arguments. The matter was thenceforth submitted for resolution.

At the threshold, a painstaking scrutiny of the respondent's pleadings would show that the propriety and necessity of the
integration of the Bar of the Philippines are in essence conceded. The respondent, however, objects to particular features
of Rule of Court 139-A (hereinafter referred to as the Court Rule) 1 — in accordance with which the Bar of the Philippines
was integrated — and to the provisions of par. 2, Section 24, Article III, of the IBP By-Laws (hereinabove cited).
The authority of the IBP Board of Governors to recommend to the Supreme Court the removal of a delinquent member's
name from the Roll of Attorneys is found in par. 2 Section 24, Article Ill of the IBP By-Laws (supra), whereas the authority
of the Court to issue the order applied for is found in Section 10 of the Court Rule, which reads:

SEC. 10. Effect of non-payment of dues. — Subject to the provisions of Section 12 of this Rule, default in the payment of
annual dues for six months shall warrant suspension of membership in the Integrated Bar, and default in such payment for
one year shall be a ground for the removal of the name of the delinquent member from the Roll of Attorneys.

The all-encompassing, all-inclusive scope of membership in the IBP is stated in these words of the Court Rule:

SECTION 1. Organization. — There is hereby organized an official national body to be known as the 'Integrated Bar of the
Philippines,' composed of all persons whose names now appear or may hereafter be included in the Roll of Attorneys of
the Supreme Court.

The obligation to pay membership dues is couched in the following words of the Court Rule:

SEC. 9. Membership dues. Every member of the Integrated Bar shall pay such annual dues as the Board of Governors
shall determine with the approval of the Supreme Court. ...

The core of the respondent's arguments is that the above provisions constitute an invasion of his constitutional rights in
the sense that he is being compelled, as a pre-condition to maintaining his status as a lawyer in good standing, to be a
member of the IBP and to pay the corresponding dues, and that as a consequence of this compelled financial support of
the said organization to which he is admittedly personally antagonistic, he is being deprived of the rights to liberty and
property guaranteed to him by the Constitution. Hence, the respondent concludes, the above provisions of the Court Rule
and of the IBP By-Laws are void and of no legal force and effect.

The respondent similarly questions the jurisdiction of the Court to strike his name from the Roll of Attorneys, contending
that the said matter is not among the justiciable cases triable by the Court but is rather of an "administrative nature
pertaining to an administrative body."

The case at bar is not the first one that has reached the Court relating to constitutional issues that inevitably and
inextricably come up to the surface whenever attempts are made to regulate the practice of law, define the conditions of
such practice, or revoke the license granted for the exercise of the legal profession.

The matters here complained of are the very same issues raised in a previous case before the Court, entitled
"Administrative Case No. 526, In the Matter of the Petition for the Integration of the Bar of the Philippines, Roman Ozaeta,
et al., Petitioners." The Court exhaustively considered all these matters in that case in its Resolution ordaining the
integration of the Bar of the Philippines, promulgated on January 9, 1973. The Court there made the unanimous
pronouncement that it was

... fully convinced, after a thoroughgoing conscientious study of all the arguments adduced in Adm. Case No. 526 and the
authoritative materials and the mass of factual data contained in the exhaustive Report of the Commission on Bar
Integration, that the integration of the Philippine Bar is 'perfectly constitutional and legally unobjectionable'. ...
Be that as it may, we now restate briefly the posture of the Court.

An "Integrated Bar" is a State-organized Bar, to which every lawyer must belong, as distinguished from bar associations
organized by individual lawyers themselves, membership in which is voluntary. Integration of the Bar is essentially a
process by which every member of the Bar is afforded an opportunity to do his share in carrying out the objectives of the
Bar as well as obliged to bear his portion of its responsibilities. Organized by or under the direction of the State, an
integrated Bar is an official national body of which all lawyers are required to be members. They are, therefore, subject to
all the rules prescribed for the governance of the Bar, including the requirement of payment of a reasonable annual fee for
the effective discharge of the purposes of the Bar, and adherence to a code of professional ethics or professional
responsibility breach of which constitutes sufficient reason for investigation by the Bar and, upon proper cause appearing,
a recommendation for discipline or disbarment of the offending member. 2

The integration of the Philippine Bar was obviously dictated by overriding considerations of public interest and public
welfare to such an extent as more than constitutionally and legally justifies the restrictions that integration imposes upon
the personal interests and personal convenience of individual lawyers. 3

Apropos to the above, it must be stressed that all legislation directing the integration of the Bar have been uniformly and
universally sustained as a valid exercise of the police power over an important profession. The practice of law is not a
vested right but a privilege, a privilege moreover clothed with public interest because a lawyer owes substantial duties not
only to his client, but also to his brethren in the profession, to the courts, and to the nation, and takes part in one of the
most important functions of the State — the administration of justice — as an officer of the court. 4 The practice of law
being clothed with public interest, the holder of this privilege must submit to a degree of control for the common good, to
the extent of the interest he has created. As the U. S. Supreme Court through Mr. Justice Roberts explained, the
expression "affected with a public interest" is the equivalent of "subject to the exercise of the police power" (Nebbia vs.
New York, 291 U.S. 502).

When, therefore, Congress enacted Republic Act No. 6397 5 authorizing the Supreme Court to "adopt rules of court to
effect the integration of the Philippine Bar under such conditions as it shall see fit," it did so in the exercise of the
paramount police power of the State. The Act's avowal is to "raise the standards of the legal profession, improve the
administration of justice, and enable the Bar to discharge its public responsibility more effectively." Hence, the Congress
in enacting such Act, the Court in ordaining the integration of the Bar through its Resolution promulgated on January 9,
1973, and the President of the Philippines in decreeing the constitution of the IBP into a body corporate through
Presidential Decree No. 181 dated May 4, 1973, were prompted by fundamental considerations of public welfare and
motivated by a desire to meet the demands of pressing public necessity.

The State, in order to promote the general welfare, may interfere with and regulate personal liberty, property and
occupations. Persons and property may be subjected to restraints and burdens in order to secure the general prosperity
and welfare of the State (U.S. vs. Gomez Jesus, 31 Phil 218), for, as the Latin maxim goes, "Salus populi est supreme
lex." The public welfare is the supreme law. To this fundamental principle of government the rights of individuals are
subordinated. Liberty is a blessing without which life is a misery, but liberty should not be made to prevail over authority
because then society win fall into anarchy (Calalang vs. Williams, 70 Phil. 726). It is an undoubted power of the State to
restrain some individuals from all freedom, and all individuals from some freedom.
But the most compelling argument sustaining the constitutionality and validity of Bar integration in the Philippines is the
explicit unequivocal grant of precise power to the Supreme Court by Section 5 (5) of Article X of the 1973 Constitution of
the Philippines, which reads:

Sec. 5. The Supreme Court shall have the following powers:

xxx xxx xxx

(5) Promulgate rules concerning pleading, practice, and pro. procedure in all courts, and the admission to the practice of
law and the integration of the Bar ...,

and Section 1 of Republic Act No. 6397, which reads:

SECTION 1. Within two years from the approval of this Act, the Supreme Court may adopt rules of Court to effect the
integration of the Philippine Bar under such conditions as it shall see fit in order to raise the standards of the legal
profession, improve the administration of justice, and enable the Bar to discharge its public responsibility more effectively.

Quite apart from the above, let it be stated that even without the enabling Act (Republic Act No. 6397), and looking solely
to the language of the provision of the Constitution granting the Supreme Court the power "to promulgate rules concerning
pleading, practice and procedure in all courts, and the admission to the practice of law," it at once becomes indubitable
that this constitutional declaration vests the Supreme Court with plenary power in all cases regarding the admission to and
supervision of the practice of law.

Thus, when the respondent Edillon entered upon the legal profession, his practice of law and his exercise of the said
profession, which affect the society at large, were (and are) subject to the power of the body politic to require him to
conform to such regulations as might be established by the proper authorities for the common good, even to the extent of
interfering with some of his liberties. If he did not wish to submit himself to such reasonable interference and regulation,
he should not have clothed the public with an interest in his concerns.

On this score alone, the case for the respondent must already fall.

The issues being of constitutional dimension, however, we now concisely deal with them seriatim.

1. The first objection posed by the respondent is that the Court is without power to compel him to become a member of
the Integrated Bar of the Philippines, hence, Section 1 of the Court Rule is unconstitutional for it impinges on his
constitutional right of freedom to associate (and not to associate). Our answer is: To compel a lawyer to be a member of
the Integrated Bar is not violative of his constitutional freedom to associate. 6

Integration does not make a lawyer a member of any group of which he is not already a member. He became a member
of the Bar when he passed the Bar examinations. 7 All that integration actually does is to provide an official national
organization for the well-defined but unorganized and incohesive group of which every lawyer is a ready a member. 8

Bar integration does not compel the lawyer to associate with anyone. He is free to attend or not attend the meetings of his
Integrated Bar Chapter or vote or refuse to vote in its elections as he chooses. The only compulsion to which he is
subjected is the payment of annual dues. The Supreme Court, in order to further the State's legitimate interest in elevating
the quality of professional legal services, may require that the cost of improving the profession in this fashion be shared by
the subjects and beneficiaries of the regulatory program — the lawyers.9

Assuming that the questioned provision does in a sense compel a lawyer to be a member of the Integrated Bar, such
compulsion is justified as an exercise of the police power of the State. 10

2. The second issue posed by the respondent is that the provision of the Court Rule requiring payment of a membership
fee is void. We see nothing in the Constitution that prohibits the Court, under its constitutional power and duty to
promulgate rules concerning the admission to the practice of law and the integration of the Philippine Bar (Article X,
Section 5 of the 1973 Constitution) — which power the respondent acknowledges — from requiring members of a
privileged class, such as lawyers are, to pay a reasonable fee toward defraying the expenses of regulation of the
profession to which they belong. It is quite apparent that the fee is indeed imposed as a regulatory measure, designed to
raise funds for carrying out the objectives and purposes of integration. 11

3. The respondent further argues that the enforcement of the penalty provisions would amount to a deprivation of property
without due process and hence infringes on one of his constitutional rights. Whether the practice of law is a property right,
in the sense of its being one that entitles the holder of a license to practice a profession, we do not here pause to consider
at length, as it clear that under the police power of the State, and under the necessary powers granted to the Court to
perpetuate its existence, the respondent's right to practise law before the courts of this country should be and is a matter
subject to regulation and inquiry. And, if the power to impose the fee as a regulatory measure is recognize, then a penalty
designed to enforce its payment, which penalty may be avoided altogether by payment, is not void as unreasonable or
arbitrary. 12

But we must here emphasize that the practice of law is not a property right but a mere privilege, 13 and as such must bow
to the inherent regulatory power of the Court to exact compliance with the lawyer's public responsibilities.

4. Relative to the issue of the power and/or jurisdiction of the Supreme Court to strike the name of a lawyer from its Roll of
Attorneys, it is sufficient to state that the matters of admission, suspension, disbarment and reinstatement of lawyers and
their regulation and supervision have been and are indisputably recognized as inherent judicial functions and
responsibilities, and the authorities holding such are legion. 14

In In Re Sparks (267 Ky. 93, 101 S.W. (2d) 194), in which the report of the Board of Bar Commissioners in a disbarment
proceeding was confirmed and disbarment ordered, the court, sustaining the Bar Integration Act of Kentucky, said: "The
power to regulate the conduct and qualifications of its officers does not depend upon constitutional or statutory grounds. It
is a power which is inherent in this court as a court — appropriate, indeed necessary, to the proper administration of
justice ... the argument that this is an arbitrary power which the court is arrogating to itself or accepting from the legislative
likewise misconceives the nature of the duty. It has limitations no less real because they are inherent. It is an unpleasant
task to sit in judgment upon a brother member of the Bar, particularly where, as here, the facts are disputed. It is a grave
responsibility, to be assumed only with a determination to uphold the Ideals and traditions of an honorable profession and
to protect the public from overreaching and fraud. The very burden of the duty is itself a guaranty that the power will not
be misused or prostituted. ..."
The Court's jurisdiction was greatly reinforced by our 1973 Constitution when it explicitly granted to the Court the power to
"Promulgate rules concerning pleading, practice ... and the admission to the practice of law and the integration of the Bar
... (Article X, Sec. 5(5) the power to pass upon the fitness of the respondent to remain a member of the legal profession is
indeed undoubtedly vested in the Court.

We thus reach the conclusion that the provisions of Rule of Court 139-A and of the By-Laws of the Integrated Bar of the
Philippines complained of are neither unconstitutional nor illegal.

WHEREFORE, premises considered, it is the unanimous sense of the Court that the respondent Marcial A. Edillon should
be as he is hereby disbarred, and his name is hereby ordered stricken from the Roll of Attorneys of the Court.

Fernando, Teehankee, Barredo, Makasiar, Antonio, Muñoz Palma, Aquino, Concepcion, Jr., Santos, Fernandez and
Guerrero, JJ., concur.
24. ELMO S. ABAD, BM 139, MARCH 18, 1983

A. M. No. 139 March 28, 1983

RE: ELMO S. ABAD, 1978 Successful Bar Examinee. ATTY. PROCOPIO S. BELTRAN, JR., President of the
Philippine Trial Lawyers Association, Inc., complainant,
vs.
ELMO S. ABAD, respondent.

ABAD SANTOS, J.:

Charged by Atty. Procopio S. Beltran, Jr., president of the Philippine Trial Lawyers Association, Inc., of practicing law
without having been previously admitted to the Philippine Bar, Mr. Elmo S. Abad could not deny and had to admit the
practice. In exculpation he gives the following lame explanation:

1. On July 23, 1979, respondent conformably with the Resolution of the Honorable Supreme Court En Banc dated July 10,
1979, ... prior to his taking the Oath of Office as a member of the bar, paid his Bar Admission Fee in the amount of
P175.00 as shown by Official Receipt No. 8128792, ... paid his Certification Fee in the amount of P5.00 as shown by
Official Receipt No. 8128793, ... and also paid his Membership Dues for the year 1979-80 to the Integrated Bar of the
Philippines as shown by Official Receipt No. 83740,... .

2. On July 26, 1979, Atty. Romeo Mendoza, the then Clerk of Court of the Honorable Supreme Court, included the
respondent as among those taking the Oath of Office as Member of the Bar as shown by a Letter of Request dated July
23, 1979, ...

3. At around Eleven o' clock in the morning of July 26, 1979, while waiting for my turn to take my Oath as a member of the
Bar, I was made to sign my Lawyer's Oath by one of the Clerk in the Office of the Bar Confidant and while waiting there,
Atty. Romeo Mendoza told me that Chief Justice, the Honorable Enrique M. Fernando wants to talk to me about the Reply
of Mr. Jorge Uy (Deceased) to my Answer to his Complaint. The Honorable Chief Justice told me that I have to answer
the Reply and for which reason the taking of my Lawyer's Oath was further suspended. *

4. On July 31, 1979, I filed my Reply to Mr. Jorge Uy's Answer with a Prayer that the Honorable Supreme Court
determines my fitness to be a member of the Bar;

5. While waiting for the appropriate action which the Honorable Supreme Court may take upon my Prayer to determine my
fitness to be a member of the Bar, I received a letter from the Integrated Bar of the Philippines, Quezon City Chapter
dated May 10, 1980 informing the respondent of an Annual General Meeting together with my Statement of Account for
the year 1980-1981, ... .

6. Believing that with my signing of the Lawyer's Oath on July 26, 1979 and my Reply to Mr. Jorge Uy's (Deceased)
Answer, the Honorable Supreme Court did not ordered for the striking of my name in the Roll of Attorneys with the
Integrated Bar of the Philippines and therefore a Member in Good Standing, I paid my membership due and other
assessments to the Integrated Bar of the Philippines, Quezon City Chapter, as shown by Official Receipt No. 110326 and
Official Receipt No. 0948, ... . Likewise respondent paid his Professional Tax Receipt as shown by Official Receipt No.
058033 and Official Receipt No. 4601685, ... .

7. On February 28, 1981, the Integrated Bar of the Philippines, Quezon City Chapter also included the name of the
respondent as a Qualified Voter for the election of officers and directors for the year 1981-1982, ... .

8. Respondent's belief and good faith was further enhanced by the fact that on January 8, 1981, Complainant Jorge Uy in
SBC607 died and herein respondent submitted a verified Notice and Motion with the Honorable Supreme Court on April
27, 1981; notifying the Court of this fact with a prayer that herein respondent be allowed to take his Oath as Member of
the Bar;

9. Thereafter, respondent was again assessed by the Integrated Bar for his 1981-1982 membership due and other
assessment for which the undersigned paid as shown by Official Receipt No. 132734 and Official Receipt No. 3363, ... .

10. Respondent likewise paid his Professional Tax Receipt for 1981 as shown by Official Receipt No. 3195776, ... .

11. Respondent likewise has a Certificate of Membership in the Integrated Bar of the Philippines as well as a Certificate of
Membership in Good Standing with the Quezon City Chapter of the Integrated Bar of the Philippines, ....

Respondent Abad should know that the circumstances which he has narrated do not constitute his admission to the
Philippine Bar and the right to practise law thereafter. He should know that two essential requisites for becoming a lawyer
still had to be performed, namely: his lawyer's oath to be administered by this Court and his signature in the Roll of
Attorneys. (Rule 138, Secs. 17 and 19, Rules of Court.)

The proven charge against respondent Abad constitutes contempt of court (Rule 71, Sec. 3(e), Rules of Court.)

WHEREFORE, Mr. Elmo S. Abad is hereby fined Five Hundred (P500.00) pesos payable to this Court within ten (10) days
from notice failing which he shall serve twenty-five (25) days imprisonment.

SO ORDERED.

Fernando, C.J., Teehankee, Makasiar, Concepcion Jr., Guerrero, De Castro, Melencio-Herrera, Plana, Escolin Vasquez,
Relova and Gutierrez, Jr., JJ., concur
25. AGUIRRE VS RANA, BM 1036, JUNE 10, 2003

DONNA MARIE S. AGUIRRE, complainant, vs. EDWIN L. RANA, respondent.

DECISION

CARPIO, J.:

The Case

Before one is admitted to the Philippine Bar, he must possess the requisite moral integrity for membership in the
legal profession. Possession of moral integrity is of greater importance than possession of legal learning. The practice of
law is a privilege bestowed only on the morally fit. A bar candidate who is morally unfit cannot practice law even if he
passes the bar examinations.

The Facts

Respondent Edwin L. Rana (respondent) was among those who passed the 2000 Bar Examinations.

On 21 May 2001, one day before the scheduled mass oath-taking of successful bar examinees as members of the
Philippine Bar, complainant Donna Marie Aguirre (complainant) filed against respondent a Petition for Denial of Admission
to the Bar. Complainant charged respondent with unauthorized practice of law, grave misconduct, violation of law, and
grave misrepresentation.

The Court allowed respondent to take his oath as a member of the Bar during the scheduled oath-taking on 22 May
2001 at the Philippine International Convention Center. However, the Court ruled that respondent could not sign the Roll
of Attorneys pending the resolution of the charge against him. Thus, respondent took the lawyers oath on the scheduled
date but has not signed the Roll of Attorneys up to now.

Complainant charges respondent for unauthorized practice of law and grave misconduct. Complainant alleges that
respondent, while not yet a lawyer, appeared as counsel for a candidate in the May 2001 elections before the Municipal
Board of Election Canvassers (MBEC) of Mandaon, Masbate. Complainant further alleges that respondent filed with the
MBEC a pleading dated 19 May 2001 entitled Formal Objection to the Inclusion in the Canvassing of Votes in Some
Precincts for the Office of Vice-Mayor. In this pleading, respondent represented himself as counsel for and in behalf of
Vice Mayoralty Candidate, George Bunan, and signed the pleading as counsel for George Bunan (Bunan).

On the charge of violation of law, complainant claims that respondent is a municipal government employee, being a
secretary of the Sangguniang Bayan of Mandaon, Masbate. As such, respondent is not allowed by law to act as counsel
for a client in any court or administrative body.

On the charge of grave misconduct and misrepresentation, complainant accuses respondent of acting as counsel for
vice mayoralty candidate George Bunan (Bunan) without the latter engaging respondents services. Complainant claims
that respondent filed the pleading as a ploy to prevent the proclamation of the winning vice mayoralty candidate.
 On 22 May 2001, the Court issued a resolution allowing respondent to take the lawyers oath but disallowed him from
signing the Roll of Attorneys until he is cleared of the charges against him. In the same resolution, the Court required
respondent to comment on the complaint against him.

In his Comment, respondent admits that Bunan sought his specific assistance to represent him before the MBEC.
Respondent claims that he decided to assist and advice Bunan, not as a lawyer but as a person who knows the
law. Respondent admits signing the 19 May 2001 pleading that objected to the inclusion of certain votes in the
canvassing. He explains, however, that he did not sign the pleading as a lawyer or represented himself as an attorney in
the pleading.

On his employment as secretary of the Sangguniang Bayan, respondent claims that he submitted his resignation on
11 May 2001 which was allegedly accepted on the same date. He submitted a copy of the Certification of Receipt of
Revocable Resignation dated 28 May 2001 signed by Vice-Mayor Napoleon Relox. Respondent further claims that the
complaint is politically motivated considering that complainant is the daughter of Silvestre Aguirre, the losing candidate for
mayor of Mandaon, Masbate. Respondent prays that the complaint be dismissed for lack of merit and that he be allowed
to sign the Roll of Attorneys.

On 22 June 2001, complainant filed her Reply to respondents Comment and refuted the claim of respondent that his
appearance before the MBEC was only to extend specific assistance to Bunan. Complainant alleges that on 19 May 2001
Emily Estipona-Hao (Estipona-Hao) filed a petition for proclamation as the winning candidate for mayor. Respondent
signed as counsel for Estipona-Hao in this petition. When respondent appeared as counsel before the MBEC,
complainant questioned his appearance on two grounds: (1) respondent had not taken his oath as a lawyer; and (2) he
was an employee of the government.

Respondent filed a Reply (Re: Reply to Respondents Comment) reiterating his claim that the instant administrative
case is motivated mainly by political vendetta.

On 17 July 2001, the Court referred the case to the Office of the Bar Confidant (OBC) for evaluation, report and
recommendation.

OBCs Report and Recommendation

The OBC found that respondent indeed appeared before the MBEC as counsel for Bunan in the May 2001 elections.
The minutes of the MBEC proceedings show that respondent actively participated in the proceedings. The OBC likewise
found that respondent appeared in the MBEC proceedings even before he took the lawyers oath on 22 May 2001. The
OBC believes that respondents misconduct casts a serious doubt on his moral fitness to be a member of the Bar. The
OBC also believes that respondents unauthorized practice of law is a ground to deny his admission to the practice of
law. The OBC therefore recommends that respondent be denied admission to the Philippine Bar.

On the other charges, OBC stated that complainant failed to cite a law which respondent allegedly violated when he
appeared as counsel for Bunan while he was a government employee. Respondent resigned as secretary and his
resignation was accepted. Likewise, respondent was authorized by Bunan to represent him before the MBEC.
 The Courts Ruling

We agree with the findings and conclusions of the OBC that respondent engaged in the unauthorized practice of law
and thus does not deserve admission to the Philippine Bar.

Respondent took his oath as lawyer on 22 May 2001. However, the records show that respondent appeared as
counsel for Bunan prior to 22 May 2001, before respondent took the lawyers oath. In the pleading entitled Formal
Objection to the Inclusion in the Canvassing of Votes in Some Precincts for the Office of Vice-Mayor dated 19 May 2001,
respondent signed as counsel for George Bunan. In the first paragraph of the same pleading respondent stated that he
was the (U)ndersigned Counsel for, and in behalf of Vice Mayoralty Candidate, GEORGE T. BUNAN. Bunan himself
wrote the MBEC on 14 May 2001 that he had authorized Atty. Edwin L. Rana as his counsel to represent him before the
MBEC and similar bodies.

On 14 May 2001, mayoralty candidate Emily Estipona-Hao also retained respondent as her counsel. On the same
date, 14 May 2001, Erly D. Hao informed the MBEC that Atty. Edwin L. Rana has been authorized by REFORMA LM-PPC
as the legal counsel of the party and the candidate of the said party. Respondent himself wrote the MBEC on 14 May
2001 that he was entering his appearance as counsel for Mayoralty Candidate Emily Estipona-Hao and for the
REFORMA LM-PPC. On 19 May 2001, respondent signed as counsel for Estipona-Hao in the petition filed before the
MBEC praying for the proclamation of Estipona-Hao as the winning candidate for mayor of Mandaon, Masbate.

All these happened even before respondent took the lawyers oath. Clearly, respondent engaged in the practice of
law without being a member of the Philippine Bar.

In Philippine Lawyers Association v. Agrava,[1] the Court elucidated that:

The practice of law is not limited to the conduct of cases or litigation in court; it embraces the preparation of pleadings and
other papers incident to actions and special proceedings, the management of such actions and proceedings on behalf of
clients before judges and courts, and in addition, conveyancing. In general, all advice to clients, and all action taken for
them in matters connected with the law,incorporation services, assessment and condemnation services contemplating an
appearance before a judicial body, the foreclosure of a mortgage, enforcement of a creditor's claim in bankruptcy and
insolvency proceedings, and conducting proceedings in attachment, and in matters of estate and guardianship have been
held to constitute law practice, as do the preparation and drafting of legal instruments, where the work done involves the
determination by the trained legal mind of the legal effect of facts and conditions. (5 Am. Jur. p. 262, 263). (Italics
supplied) x x x

In Cayetano v. Monsod,[2] the Court held that practice of law means any activity, in or out of court, which requires
the application of law, legal procedure, knowledge, training and experience. To engage in the practice of law is to perform
acts which are usually performed by members of the legal profession. Generally, to practice law is to render any kind of
service which requires the use of legal knowledge or skill.

Verily, respondent was engaged in the practice of law when he appeared in the proceedings before the MBEC and
filed various pleadings, without license to do so. Evidence clearly supports the charge of unauthorized practice of law.
Respondent called himself counsel knowing fully well that he was not a member of the Bar. Having held himself out as
counsel knowing that he had no authority to practice law, respondent has shown moral unfitness to be a member of the
Philippine Bar.[3]
 The right to practice law is not a natural or constitutional right but is a privilege. It is limited to persons of good moral
character with special qualifications duly ascertained and certified.The exercise of this privilege presupposes possession
of integrity, legal knowledge, educational attainment, and even public trust [4] since a lawyer is an officer of the court. A bar
candidate does not acquire the right to practice law simply by passing the bar examinations. The practice of law is a
privilege that can be withheld even from one who has passed the bar examinations, if the person seeking admission had
practiced law without a license.[5]

The regulation of the practice of law is unquestionably strict. In Beltran, Jr. v. Abad,[6] a candidate passed the bar
examinations but had not taken his oath and signed the Roll of Attorneys. He was held in contempt of court for practicing
law even before his admission to the Bar. Under Section 3 (e) of Rule 71 of the Rules of Court, a person who engages in
the unauthorized practice of law is liable for indirect contempt of court.[7]

True, respondent here passed the 2000 Bar Examinations and took the lawyers oath. However, it is the signing in the
Roll of Attorneys that finally makes one a full-fledged lawyer. The fact that respondent passed the bar examinations is
immaterial. Passing the bar is not the only qualification to become an attorney-at-law.[8] Respondent should know that two
essential requisites for becoming a lawyer still had to be performed, namely: his lawyers oath to be administered by this
Court and his signature in the Roll of Attorneys.[9]

On the charge of violation of law, complainant contends that the law does not allow respondent to act as counsel for
a private client in any court or administrative body since respondent is the secretary of the Sangguniang Bayan.

Respondent tendered his resignation as secretary of the Sangguniang Bayan prior to the acts complained of as
constituting unauthorized practice of law. In his letter dated 11 May 2001 addressed to Napoleon Relox, vice- mayor and
presiding officer of the Sangguniang Bayan, respondent stated that he was resigning effective upon your
acceptance.[10] Vice-Mayor Relox accepted respondents resignation effective 11 May 2001.[11] Thus, the evidence does
not support the charge that respondent acted as counsel for a client while serving as secretary of the Sangguniang
Bayan.

On the charge of grave misconduct and misrepresentation, evidence shows that Bunan indeed authorized
respondent to represent him as his counsel before the MBEC and similar bodies. While there was no misrepresentation,
respondent nonetheless had no authority to practice law.

WHEREFORE, respondent Edwin L. Rana is DENIED admission to the Philippine Bar.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-
Martinez, Corona, Carpio-Morales, Callejo, Sr., and Azcuna, JJ., concur.
26. IN RE: BENJAMIN DACANAY, 540 SCRA 424 (2007)

B.M. No. 1678 December 17, 2007

PETITION FOR LEAVE TO RESUME PRACTICE OF LAW,

BENJAMIN M. DACANAY, petitioner.

RESOLUTION

CORONA, J.:

This bar matter concerns the petition of petitioner Benjamin M. Dacanay for leave to resume the practice of law.

Petitioner was admitted to the Philippine bar in March 1960. He practiced law until he migrated to Canada in December
1998 to seek medical attention for his ailments. He subsequently applied for Canadian citizenship to avail of Canada’s
free medical aid program. His application was approved and he became a Canadian citizen in May 2004.

On July 14, 2006, pursuant to Republic Act (RA) 9225 (Citizenship Retention and Re-Acquisition Act of 2003), petitioner
reacquired his Philippine citizenship.1 On that day, he took his oath of allegiance as a Filipino citizen before the Philippine
Consulate General in Toronto, Canada. Thereafter, he returned to the Philippines and now intends to resume his law
practice. There is a question, however, whether petitioner Benjamin M. Dacanay lost his membership in the Philippine bar
when he gave up his Philippine citizenship in May 2004. Thus, this petition.

In a report dated October 16, 2007, the Office of the Bar Confidant cites Section 2, Rule 138 (Attorneys and Admission to
Bar) of the Rules of Court:

SECTION 2. Requirements for all applicants for admission to the bar. – Every applicant for admission as a
member of the bar must be a citizen of the Philippines, at least twenty-one years of age, of good moral
character, and a resident of the Philippines; and must produce before the Supreme Court satisfactory evidence of
good moral character, and that no charges against him, involving moral turpitude, have been filed or are pending
in any court in the Philippines.

Applying the provision, the Office of the Bar Confidant opines that, by virtue of his reacquisition of Philippine citizenship, in
2006, petitioner has again met all the qualifications and has none of the disqualifications for membership in the bar. It
recommends that he be allowed to resume the practice of law in the Philippines, conditioned on his retaking the lawyer’s
oath to remind him of his duties and responsibilities as a member of the Philippine bar.

We approve the recommendation of the Office of the Bar Confidant with certain modifications.

The practice of law is a privilege burdened with conditions.2 It is so delicately affected with public interest that it is both a
power and a duty of the State (through this Court) to control and regulate it in order to protect and promote the public
welfare.3
Adherence to rigid standards of mental fitness, maintenance of the highest degree of morality, faithful observance of the
rules of the legal profession, compliance with the mandatory continuing legal education requirement and payment of
membership fees to the Integrated Bar of the Philippines (IBP) are the conditions required for membership in good
standing in the bar and for enjoying the privilege to practice law. Any breach by a lawyer of any of these conditions makes
him unworthy of the trust and confidence which the courts and clients repose in him for the continued exercise of his
professional privilege.4

Section 1, Rule 138 of the Rules of Court provides:

SECTION 1. Who may practice law. – Any person heretofore duly admitted as a member of the bar, or thereafter
admitted as such in accordance with the provisions of this Rule, and who is in good and regular standing, is
entitled to practice law.

Pursuant thereto, any person admitted as a member of the Philippine bar in accordance with the statutory requirements
and who is in good and regular standing is entitled to practice law.

Admission to the bar requires certain qualifications. The Rules of Court mandates that an applicant for admission to the
bar be a citizen of the Philippines, at least twenty-one years of age, of good moral character and a resident of the
Philippines.5 He must also produce before this Court satisfactory evidence of good moral character and that no charges
against him, involving moral turpitude, have been filed or are pending in any court in the Philippines. 6

Moreover, admission to the bar involves various phases such as furnishing satisfactory proof of educational, moral and
other qualifications;7 passing the bar examinations;8 taking the lawyer’s oath9 and signing the roll of attorneys and
receiving from the clerk of court of this Court a certificate of the license to practice. 10

The second requisite for the practice of law ― membership in good standing ― is a continuing requirement. This means
continued membership and, concomitantly, payment of annual membership dues in the IBP; 11 payment of the annual
professional tax;12 compliance with the mandatory continuing legal education requirement; 13 faithful observance of the
rules and ethics of the legal profession and being continually subject to judicial disciplinary control. 14

Given the foregoing, may a lawyer who has lost his Filipino citizenship still practice law in the Philippines? No.

The Constitution provides that the practice of all professions in the Philippines shall be limited to Filipino citizens save in
cases prescribed by law.15 Since Filipino citizenship is a requirement for admission to the bar, loss thereof terminates
membership in the Philippine bar and, consequently, the privilege to engage in the practice of law. In other words, the loss
of Filipino citizenship ipso jure terminates the privilege to practice law in the Philippines. The practice of law is a privilege
denied to foreigners.16

The exception is when Filipino citizenship is lost by reason of naturalization as a citizen of another country but
subsequently reacquired pursuant to RA 9225. This is because "all Philippine citizens who become citizens of another
country shall be deemed not to have lost their Philippine citizenship under the conditions of [RA 9225]."17Therefore, a
Filipino lawyer who becomes a citizen of another country is deemed never to have lost his Philippine citizenship if he
reacquires it in accordance with RA 9225. Although he is also deemed never to have terminated his membership in the
Philippine bar, no automatic right to resume law practice accrues.

Under RA 9225, if a person intends to practice the legal profession in the Philippines and he reacquires his Filipino
citizenship pursuant to its provisions "(he) shall apply with the proper authority for a license or permit to engage in such
practice."18 Stated otherwise, before a lawyer who reacquires Filipino citizenship pursuant to RA 9225 can resume his law
practice, he must first secure from this Court the authority to do so, conditioned on:

(a) the updating and payment in full of the annual membership dues in the IBP;

(b) the payment of professional tax;

(c) the completion of at least 36 credit hours of mandatory continuing legal education; this is specially significant
to refresh the applicant/petitioner’s knowledge of Philippine laws and update him of legal developments and

(d) the retaking of the lawyer’s oath which will not only remind him of his duties and responsibilities as a lawyer
and as an officer of the Court, but also renew his pledge to maintain allegiance to the Republic of the Philippines.

Compliance with these conditions will restore his good standing as a member of the Philippine bar.

WHEREFORE, the petition of Attorney Benjamin M. Dacanay is hereby GRANTED, subject to compliance with the
conditions stated above and submission of proof of such compliance to the Bar Confidant, after which he may retake his
oath as a member of the Philippine bar.

SO ORDERED.

Puno, C.J., Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Azcuna, Tinga, Chico-
Nazario, Velasco, Jr., Nachura, Reyes, Leonardo-de Castro, JJ., concur.
Quisumbing, J., on leave.