[G.R. No. 132655.

August 11, 1998] insolvency, not that of [the] defendant, as a good reason for execution
BF CORPORATION, petitioner, vs. EDSA SHANGRI-LA HOTEL and RESORT, pending appeal.
INC., RUFO B. COLAYCO, RUFINO T. SAMANIEGO, CYNTHIADEL Normally, we would expect a losing defendants impending insolvency or
CASTILLO, KUOK KHOON CHEN, and KUOK KHOON dangerous tendency to dispose or dissipate his properties to frustrate
TSEN, respondents. future execution, as the logical, good reason for plaintiff to ask for
DECISION advanced execution.
MENDOZA, J.: In addition, the appellate court found that the order of execution pending appeal
On July 26, 1993, petitioner BF Corporation brought suit to collect from was not in the form of a special order as required by Rule 39, 2 of the Rules of Civil
respondents EDSA Shangri-La Hotel and Resort, Inc. (ESHRI), Rufo B. Colayco, Procedure.
Rufino T. Samaniego, Cynthia del Castillo, Kuok Khoon Chen, and Kuok Khoon Tsen Petitioner moved for reconsideration, but this motion was denied by the Court of
the sum of P31,791,284.72, plus damages. The amount represents the alleged Appeals in its resolution dated February 11, 1998.[4] Hence, this petition for review
liability of respondents to petitioner for the construction of the EDSA Shangri-La Hotel on certiorari.
on St. Francis Street, Mandaluyong City. Petitioner contends:
The case was assigned to Branch 162 of the Regional Trial Court, Pasig City. I
After trial, the said court rendered judgment ordering respondents to pay petitioner THE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT
P24,780,490.00 for unpaid construction work accomplishments under petitioners PETITIONERS SERIOUS FINANCIAL DISTRESS AND URGENT NEED
Progress Billings Nos. 14 to 19; to return to petitioner the retention sum of OF FUNDS WERE NOT GOOD REASON TO JUSTIFY EXECUTION
P5,810,000.00, with legal interest on both amounts; and to pay petitioner the sums of PENDING APPEAL IN UTTER DISREGARD OF WELL-FOUNDED AND
P1,000,000.00 as moral damages, P1,000,000.00 as exemplary damages, ESTABLISHED JURISPRUDENTIAL PRECEPTS.
P1,000,000.00 as attorneys fees, and the costs. II
Private respondents moved for a reconsideration of the decision. However, their THE COURT OF APPEALS ERRED WHEN IT HELD THAT THE LOWER
motion was denied whereupon they appealed. Pending disposition of the appeal, COURTS WRIT OF EXECUTION PENDING APPEAL WAS DEFECTIVE
petitioner filed a motion for the execution of the decision in its favor which the trial FOR NOT HAVING COMPLIED WITH THE PRESCRIBED FORM
court granted in its order dated January 21, 1997. CONSIDERING THAT SECTION 2 OF RULE 39 DOES NOT PRESCRIBE
Private respondents assailed the order of execution pending appeal in a petition FORMAL REQUIREMENTS.
for certiorari which they filed in the Court of Appeals. In due time, petitioner filed a III
Comment with Opposition to Preliminary Injunction. THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO
On March 7, 1997, the Court of Appeals issued a writ of preliminary injunction CONSIDER THAT OTHER GOOD REASONS WARRANTING EXECUTION
enjoining the trial court from carrying out its order of execution, upon the filing by PENDING APPEAL EXISTED IN THE CASE AT BAR, TO WIT:
respondents of a bond in the amount of P1 million.[1] In a supplemental resolution (A) THE APPEAL FROM THE TRIAL COURTS DECISION
issued on the same day, the appellate court issued a writ of preliminary mandatory DATED 23 SEPTEMBER 1996 IS OBVIOUSLY
injunction ordering that: FRIVOLOUS AND UNCONSCIONABLY DILATORY.
A. Respondent Judge and his branch sheriff acting under him LIFT all garnishments (B) THE POSTING OF A BOND BY PRIVATE RESPONDENT
and levy made under the enjoined order of execution pending appeal. IS AN ADDED JUSTIFICATION FOR EXECUTION
B. Said Sheriff desist from delivering to private respondent [herein petitioner] all his PENDING APPEAL.
garnishments on petitioners bank deposits and, instead, immediately return the same IV
to PNB, Shangri-la Plaza Branch. THE COURT OF APPEALS ERRED IN ISSUING THE ASSAILED
C. If the garnished deposits have been delivered to private respondent [herein INJUNCTIONS CONSIDERING THAT BY DOING SO IT RESOLVED THE
petitioner], the latter should forthwith return them to petitioners [herein respondents] MERITS OF THE MAIN CASE WITHOUT AFFORDING THE PETITIONER
deposit accounts.[2] DUE PROCESS OF LAW.
Petitioner moved for a reconsideration of the two resolutions. On June 30, 1997, V
the Court of Appeals rendered a decision [3] setting aside the trial courts order of THE COURT OF APPEALS ERRED IN GRANTING RESPONDENTS
execution pending appeal and denying petitioners motion for reconsideration of its MOTIONS FOR PRELIMINARY INJUNCTIONS WHEN PRIVATE
two resolutions dated March 7, 1997. The appellate court held that the trial courts RESPONDENTS WERE CLEARLY NOT ENTITLED TO SAID RELIEF.
reason for ordering execution pending appeal, that (petitioners) viability as a building VI
contractor is being threatened by (respondents) continued refusal to pay their THE COURT OF APPEALS ERRED IN IMPROVIDENTLY ISSUING A
obligations, did not justify such an order. The appellate court noted that - PRELIMINARY MANDATORY INJUNCTION BASED ON A FORMALLY
Contrary to the ordinary run of things it is the prevailing party in the trial AND SUBSTANTIALLY DEFECTIVE MOTION.
court who admits to be in financial straits and cites his threatened VII

1
 THE COURT OF APPEALS GRAVELY ERRED IN GRANTING THE
PRELIMINARY INJUNCTIONS WITHOUT AFFORDING PETITIONER THE
OPPORTUNITY TO BE HEARD THEREBY DENYING IT DUE PROCESS
OF LAW.
VIII
THE COURT OF APPEALS GRAVELY ERRED IN ISSUING A
MANDATORY INJUNCTION ORDERING THE RETURN OF GARNISHED
FUNDS WHICH IS CLEARLY OUTSIDE THE PROVINCE OF AN
INJUNCTION.
Petitioner filed a supplemental petition to enjoin the trial court from enforcing the
writ of execution it had issued pursuant to the decision of the Court of Appeals.
The issue in this case is whether the Court of Appeals erred in setting aside the
trial courts order granting execution pending appeal. We hold that it did not.
First. Execution pending appeal is not to be granted except for good reason to
be stated in a special order. For the general rule is that only judgments which have
become final and executory may be executed.[5] In this case, the issuance of an order
granting execution pending appeal is sought to be justified on the plea that the
[r]espondents dilatory appeal and refusal to pay petitioner the amount justly due it had
placed petitioner in actual and imminent danger of insolvency.
The contention is without merit. As we recently held in Philippine Bank of
Communications v. Court of Appeals:[6]
It is significant to stress that private respondent Falcon is a juridical entity and not a
natural person. Even assuming that it was indeed in financial distress and on the
verge of facing civil or even criminal suits, the immediate execution of a judgment in
its favor pending appeal cannot be justified as Falcons situation may not be likened to
a case of a natural person who may be ill or may be of advanced age. Even the
danger of extinction of the corporation will not per se justify a discretionary execution
unless there are showings of other good reasons, such as for instance, impending
insolvency of the adverse party or the appeal being patently dilatory. But even as to
the latter reason, it was noted in Aquino vs. Santiago (161 SCRA 570 [1988]), that it is
not for the trial judge to determine the merit of a decision he rendered as this is the
role of the appellate court.Hence, it is not within competence of the trial court, in
resolving a motion for execution pending appeal, to rule that the appeal is patently
dilatory and rely on the same as its basis for finding good reasons to grant the motion.
Only an appellate court can appreciate the dilatory intent of an appeal as an
additional good reason in upholding an order for execution pending appeal which may
have been issued by the trial court for other good reasons, or in cases where the
motion for execution pending appeal is filed with the appellate court in accordance
with Section 2, paragraph (a), Rule 39 of the 1997 Rules of Court.
Nor does the fact that petitioner filed a bond in the amount of P35 million justify
the grant of execution pending appeal. We have held in a number of cases [7] that the
posting of a bond to answer for damages is not alone a sufficient reason for ordering
execution pending appeal. Otherwise, execution pending appeal could be obtained
through the mere filing of such a bond.
Second. The foregoing reason justifies the issuance by the Court of Appeals of
writs of preliminary prohibitory and mandatory injunction against the trial court, the
sheriff, and petitioner.
2
Petitioner assails the issuance of the writs, claiming that the same had been
issued on the basis of motions which had no verification and without affording it due
process.
The motions referred to by petitioner merely sought the expeditious resolution of
respondents application for a writ of preliminary injunction as contained in
their verifiedpetition for certiorari. This petition contained the necessary factual
averments justifying the grant of injunction. Nor was petitioner denied the right to be
heard before the writs were issued. Petitioner filed a comment which controverted the
allegations of the petition, including its prayer for a writ of preliminary injunction.
There is, therefore, no basis for its claim that it was denied due process.
Be that as it may, this question became moot in view of the appellate courts
decision rendered on June 30, 1997, permanently enjoining the trial court from
enforcing its order of execution pending appeal and ordering petitioner to return the
amounts paid to it by virtue of the garnishment of respondents bank deposits.
Petitioner argues that, instead of being required to make restitution, the bond for
P35 million, which it had posted, should have been proceeded against. It cites the
case of Engineering Construction Inc. v. National Power Corp.,[8] where this Court,
instead of ordering the judgment creditor to return funds that had been improperly
garnished pursuant to an order of execution pending appeal, directed the judgment
debtor to proceed against the bond filed by the judgment creditor. We find this
contention correct. Rule 39, 5 of the Rules of Civil Procedure provides that Where the
executed judgment is reversed totally or partially, or annulled, on appeal or otherwise,
the trial court may, on motion, issue such orders of restitution or reparation of
damages as equity and justice may warrant under the circumstances.
As garnishment is a specie of attachment, [9] the procedure provided in Rule 57,
20 of the Rules of Court for the recovery of damages against a bond in case of
irregular attachment should be applied. This means that notice should be given to
petitioners surety and that there should be a hearing before it is held liable on its
bond.[10]
Third. In its supplemental petition, petitioner contends that the propriety of the
issuance of the writ of execution pending appeal is an ancillary issue which should
have been raised by respondents in their appeal from the trial courts decision on the
merits instead of in a separate petition for certiorari.
The contention is also without merit. Certiorari lies against an order granting
execution pending appeal where the same is not founded upon good reasons. Appeal
is not a speedy and adequate remedy that can relieve the losing party from the
immediate effects of an improvident execution pending appeal.[11]
WHEREFORE, the decision of the Court of Appeals dated June 30, 1997 and its
resolutions dated March 7, 1997 are AFFIRMED with the MODIFICATION that
recovery of the garnished deposits delivered to petitioner shall be against the bond of
petitioner BF Corporation.
SO ORDERED
G.R. No. 100626 November 29, 1991
CITY OF MANILA, represented by Mayor Gemiliano C. Lopez, Jr., petitioner,
vs.
HON. COURT OF APPEALS and THE ARMY & NAVY CLUB, INC., respondents.
The Chief Legal Officer for petitioner.
Ramon A. Gonzales for private respondent.
CRUZ, J.:
Respondent Court of Appeals is faulted in this action for certiorari for having set aside
the order of execution dated June 10, 1991, and the writ of execution issued by Judge
Wilfredo Reyes of the Regional Trial Court of Manila in Civil Case No. 9156335.
This was a complaint for unlawful detainer filed by the City of Manila against private
respondent Army and Navy Club for violation of the lease agreement between them
over a parcel of land on Roxas Boulevard in the said city. A summary judgment in
favor of the petitioner was rendered by the Metropolitan Trial Court of Manila 1 and
seasonably elevated to the Regional Trial Court. To stay its execution, ANC filed a
supersedes bond in the amount of P2,700,000.00, which was approved by Judge
Reyes. 2 He subsequently affirmed the appealed judgment on June 7, 1991. 3
On June 10, 1991, the petitioner filed an ex parte motion for execution on the ground that the judgment had already become final and executory
under RA 6031. Judge Reyes granted the motion the same day 4
and at 4:00 o'clock that afternoon the writ of
execution was served on ANC.
ANC moved to quash the writ on June 11, 1991, but hours later, sensing that the
motion could not be acted upon, filed a petition for certiorari and prohibition with the
Court of Appeals.
On July 3, 1991, that court issued the questioned decision, 5 prompting the filing of
the present petition for certiorari.
The petitioner assails the action of the respondent court and contends that decisions
of the regional trial court in cases exclusively cognizable by inferior courts and are
final and executory under RA 6031. Thus:
Sec. 1. . . .
In cases falling under the exclusive original jurisdiction of municipal and city
courts which are appealed to the courts of first instance, the decision of the
latter shall be final: Provided, That the findings of facts contained in said
decision are supported by substantial evidence as basis thereof, and the
conclusions are not clearly against the law and jurisprudence; in cases
falling under the concurrent jurisdictions of the municipal and city courts with
the courts of first instance, the appeal shall be made directly to the Court of
Appeals whose decision shall be final: Provided, however, that the Supreme
Court in its direction may, in any case involving a question of law, upon
petition of the party aggrieved by the decision and under rules and
conditions that it may prescribe, require by certiorari that the case be
certified to it for review and determination, as if the case had been brought
before it on appeal. (Emphasis supplied.)
The respondents argue on the other hand that under BP 129, decisions of the
regional trial court in cases originating from and within the exclusive jurisdiction of the
metropolitan or municipal trial courts are not final but subject to appeal in a petition for
review to the Court of Appeals. Such decisions cannot be executed where the period
of time for the defendant to perfect his appeal has not yet expired. Thus:
Sec. 22. (BP 129) — Appellate jurisdiction. — Regional Trial Courts shall
exercise appellate jurisdiction over all cases decided by Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in their
respective territorial jurisdiction. Such cases shall be decided on the basis of
3
the entire record of the proceedings had in the court of origin and such
memoranda and/or briefs as may be submitted by the parties or required by
the Regional Trial Courts. The decision of the RTC in such cases shall be
appealable by petition for review to the Intermediate Appellate Court which
may give it due course only when the petition shows prima facie that the
lower court has committed an error of fact or law that will warrant a reversal
or modifications of the decision or judgment sought to be
reviewed. (Emphasis supplied.)
It is useful at this point to review the distinction between a "final" judgment and one
which has become "final and executory."
In PLDT Employees Union v. PLDT Free Telephone Workers Union, 6 the Court
observed:
. . . (A)n order or judgment is deemed final when it finally disposes of the
pending action so that nothing more can be done with it in the trial court. In
other words, a final order is that which gives an end to the litigation . . . when
the order or judgment does not dispose of the case completely but leaves
something to be done upon the merits, it is merely interlocutory.
The case of Antonio v. Samonte 7 elaborated on this matter thus:
A final order of judgment finally disposes of, adjudicates, or determines the
rights, or some right or rights of the parties, either on the entire controversy
or on some definite and separate branch thereof, and concludes them until it
is reversed or set aside . . .Where no issue is left for future consideration,
except the fact of compliance or non-compliance with the terms of the
judgment or order, such judgment or order is final and appealable.
By contrast, in Investments, Inc. v. Court of Appeals, 8 we declared:
Now, a "final judgment" in the sense just described becomes final "upon
expiration of the period to appeal therefrom if no appeal has been duly
perfected" or, an appeal therefrom having been taken, the judgment of the
appellate tribunal in turn becomes final and the records of the case are
returned to the Court of origin. The "final" judgment is then correctly
categorized as a "final and executory judgment" in respect to which, as the
law explicitly provides, "execution shall issue as a matter of right." It bears
stressing that only a final judgment or order, i.e., "a judgment or order that
finally dispose of the action of proceeding" can become final and executory.
A judgment becomes "final and executory" by operation of law. Finality of judgment
becomes a fact upon the lapse of the reglementary period to appeal if no appeal is
perfected. In such a situation, the prevailing party is entitled to a writ of execution, and
issuance thereof is a ministerial duty of the court.
Both RA 6031 and BP 129 provide that decisions of the regional trial court in its
appellate capacity may be elevated to the Court of Appeals in a petition for review. In
effect, both laws recognize that such judgments are "final" in the sense that they
finally dispose of, adjudicate, or determine the rights of the parties in the case. But
such judgments are not yet "final and executory" pending the expiration of the
reglementary period for appeal. During that period, execution of the judgment cannot
yet be demanded by the winning party as a matter of right.
In the present case, the private respondent had up to June 25, 1991, to appeal the
decision of the regional trial court. The motion for execution was filed by the petitioner
on June 10, 1991, before the expiration of the said reglementary period. As the
decision had not yet become final and executory on that date, the motion was
 the inadequacy — not the mere absence of all other legal remedies and the danger of failure of justice without merit that usually
premature and should therefore not have been granted. Contrary to the petitioner's
determines the propriety ofcertiorari. 13
contention, what the trial court authorized was an execution pending appeal.
While it is true that execution pending appeal is allowed under Rule 39, Sec. 2, of the
Rules of Court, this provision must be strictly construed, being an exception to the While appeal is normally employed to question an order or writ which varies the terms of the decision being executed, it is nevertheless not the sole

general rule. The reason allowing this kind of execution must be of such urgency as and exclusive remedy. The special civil action of certiorari and prohibition under Rule 65 was available to the private respondent on the allegation

to outweigh the injury or damage of the losing party should it secure a reversal of the that the regional trial court, in issuing the writ of execution, committed grave abuse of discretion and acted beyond its jurisdiction and that the

judgment on appeal. Absent any such justification, the order of execution must be ordinary remedy of appeal was inadequate.

struck down as flawed with grave abuse of discretion. 9 The last question to be resolved is, assuming that the decision of the regional trial court had already become "final and executory," could the said
court order its execution?
We see no such justification in the case before us.

It is worth remarking that as the case was not tried under the Rule on Summary procedure, the writ of execution did not even fall under the following
The rule is that if the judgment of the metropolitan trial court is appealed to the regional trial court and the decision of the latter is itself elevated to
Section 18 thereof :
the Court of Appeals, whose decision thereafter became final, the case should be remanded through the regional trial court to the metropolitan trial
d) Sec. 18. Appeal. — The judgment or final order, including that rendered under Section 5 hereof, shall be appealable to the
court for execution. 14
appropriate regional trial court which shall decide the same on the basis of the records, in accordance with Section 22 of Batas
The only exception is the execution pending appeal, which can be
Pambansa Blg. 129. The decision of the regional trial court in such civil cases shall be immediately executory.
issued by the regional trial court under Sec. 8 of Rule 70 or the Court of Appeals or
the Supreme Court under Sec. 10 of the same Rule.
As previously observed, the petitioner has shown no weighty justification for the
To stay the execution, a supersedes bond is necessary except where one has already been filed in the lower court. This bond continues to be
application of the exception. Hence, the respondent court committed no error in
effective if the judgment of the regional trial court is appealed. But during the pendency of the appeal, the defendant-appellant must continue to
reversing the Regional Trial Court of Manila and annulling the writ of execution issued
depositing with the appellate court the payments required in the appealed judgment. The rentals accruing during the pendency of the appeal must be
by it on June 10, 1991, pending appeal of its decision.
deposited on or before the date stipulated, if there is one, and in the absence thereof, on or before the dates provided for in Sec. 8 of Rule 70.
ACCORDINGLY, the petition is DISMISSED, and the challenged decision of the Court
Failure to make such deposits or payments is ground for execution of the judgment. 10
of Appeals is AFFIRMED intoto. No costs.
Since the private respondent in the case at bar has filed a supersedeas bond and the stipulated rental is yearly, 11
execution may SO ORDERED.
issue only when it fails to make the yearly deposit of the rental, and after notice and
hearing. Such default has not yet been established. Republic of the Philippines
The Court notes with disapproval the arbitrary manner in which Sheriff Dominador SUPREME COURT
Cacpal and Deputy Sheriff Reynaldo Cordero acted in delivering possession of the Manila
leased premises to the petitioner. The evidence shows that they enforced the writ of SECOND DIVISION
execution on the same date they received it, forcibly taking out movables from the G.R. No. 89431 April 25, 1990
said premises, including chandeliers, furniture and furnishings, music organs, stereo ERIBERTO G. VALENCIA, petitioner,
components, lighting fixtures and computers. They turned off the water, cut off the vs.
electricity and disconnected the telephones. They also unreasonably prevented ANC HON. COURT OF APPEALS, HON. CARLOS C. OFILADA, Presiding Judge,
members from entering the premises to get their personal belongings. Regional Trial Court, Bulacan, Branch XL, Third Judicial Region, Deputy Sheriff
Cacpal and Cordero are hereby sternly reprimanded and warned that a repetition of PABLO R. GLORIOSO, MIGUEL BUNYE and RICARDO BAGTAS, respondents.
similar arbitrariness will be dealt with more severely. Their conduct was a clear Gamaliel P. Magsaysay for petitioner.
violation of the requirement that: Benjamin Abalos Law Office for private respondents.
Under the Rules of Court the immediate enforcement of a writ of ejectment
execution is carried out by giving the defendant notice of such writ, and
making a demand that defendants comply therewith within a reasonable
period, normally from three (3) to five (5) days, and it is only after such REGALADO, J.:
period that the sheriff enforces the writ by the bodily removal of the For review is the resolution of the Court of Appeals, 1 promulgated on June 20, 1989
defendant and his personal belonging. 12 in CA-G.R. SP No. 17374, which dismissed the petition for certiorari, prohibition
and mandamus filed by petitioner assailing the order of respondent judge granting a
On the issue of the propriety of a special civil action for certiorari to assail an order of execution pending appeal, this Court has held that —
writ of execution pending appeal, and the resolution of said respondent court, dated
August 9, 1989, denying petitioner's motion for reconsideration of the dismissal.
The record shows that on July 6, 1984, petitioner filed Civil Case No. 7554-M of the
. . . Although Sec. 1, Rule 66 of the Rules of Court provides that the special civil action of certiorari may only be invoked when "there
Regional Trial Court, Branch XL at Malolos, Bulacan, for the rescission of a lease
is no appeal, nor any plain, speedy and adequate remedy in the (ordinary) course of law" this rule is not without exception. The
contract over a 24 hectare fishpond in Paombong, Bulacan, with a prayer for a writ of
availability of the ordinary course of appeal does not constitute sufficient ground to prevent a party from making use of the
preliminary mandatory injunction against private respondents. 2 Private respondents
extraordinary remedy of certiorari where the appeal is not an adequate remedy or equally beneficial, speedy and sufficient. It is
filed an answer with a counterclaim for damages.
4
During the pendency of the case, as found by the trial court, the lease contract
expired and the defendants therein peacefully surrendered the fishpond to therein
plaintiff. Consequently, in its decision dated November 29, 1988, the court a
quo declared that the plaintiff's prayer for rescission of contract had become moot and
academic and the only remaining issue for adjudication was the matter of damages
claimed by the defendants. On that score, the trial court awarded P100,000.00 as
moral damages and P50,000.00 as exemplary damages to each defendant and
further ordered plaintiff to pay P30,000.00 as attorney's fees, aside from the costs of
suit. 3
Petitioner claims that defendant Bagtas acknowledged in writing his receipt of a copy
of said decision on January 3, 1989. On the other hand, petitioner received a copy of
the decision on January 10, 1989, and filed a notice of appeal on January 16,
1989. 4 On the same day, respondent judge issued an order that said notice of appeal
be "given due course" and directing that the records of the case be forwarded to the
Court of Appeals. 5
On January 17, 1989, private respondents filed a motion for execution pending
appeal, alleging that:
2. Under Section 2 of Rule 39 of the Rules of Court a writ of execution may
be issued to enforce a judgment before the expiration of the period to appeal
upon showing good reasons. In the cases of Hacienda Navarro, Inc. vs.
Labrador, et al., 65 Phil. 536; The People's Bank and Trust Company vs.
San Juan, et al., L-7692, April 27, 1955; and Rodriguez vs. Court of Appeals,
May 23, 1953, it has already been held that the filing of the bond by the
successful party is a good reason for ordering execution. (Cited in Moran,
Rules of Court, Volume 2, 1979 edition, Page 256)
3. Pursuant to said Section 2 of Rule 39 and the jurisprudence on the matter,
defendant is now moving that a writ of execution be issued pending appeal
to enforce judgment of this Honorable Court and for this purpose hereby
offers to post a bond in such amount that this Honorable Court may deem
adequate to answer for all damages that the plaintiff may suffer by reason of
the execution prayed for. 6
On March 6, 1989, respondent judge, over the opposition filed by herein petitioner,
issued an order 7 granting the motion for execution pending appeal, the defendants
having filed a bond in the amount of P330,000.00 posted by the Domestic Insurance
Company of the Philippines. It also granted a period up to April 27, 1989 8 within
which the plaintiff may "file a counterbond to stay the implementation of the Writ of
Execution to be issued."
Petitioner's motion for reconsideration thereof was denied by the trial court in its order
dated April 6, 1989, on the ground that "an offer of a bond for immediate execution of
judgment is a good ground for execution pending appeal" and "execution pending
appeal may be granted as long as movant files a good and sufficient surety." 9
On April 10, 1989, a writ of execution pending appeal was issued by the trial
court. 10 Petitioner then filed a petition for certiorari, prohibition and mandamus with
the Court of Appeals on the following grounds reproduced in the decision of said
respondent court, to wit:
THAT THE RESPONDENT JUDGE, UPON THE PERFECTION OF THE
APPEAL FROM THE DECISION RENDERED ON NOVEMBER 29, 1988 IN
CIVIL CASE NO. 7554-M, A COPY THEREOF HAVING BEEN RECEIVED
BY BUNYE AND BAGTAS ON JANUARY 3, 1989, AS INDICATED ON THE
5
RECORDS OF SAID CASE, REGIONAL TRIAL COURT BULACAN
BRANCH XV (15), THIRD JUDICIAL REGION, LOST JURISDICTION OVER
THE CASE (AQUINO V. SANTIAGO, G.R. NO. 56362, 28 MAY 1988) AND
ACCORDINGLY, NO LONGER HAD ANY JURISDICTION TO ENTERTAIN
BUNYE'S AND BAGTAS' MOTION FOR EXECUTION PENDING APPEAL,
LET ALONE TO ISSUE A WRIT OF EXECUTION.
CONSIDERING THE EXPRESS PROVISIONS OF THE RULE
GOVERNING EXECUTION PENDING APPEAL IN RELATION TO THE
SETTLED DECISIONAL LAW DEFINING THE ESSENTIAL REQUISITES,
STATING THAT MERE FILING OF A BOND DOES NOT SUFFICE ABSENT
OF (sic) A SHOWING OF SUPERIOR CIRCUMSTANCES DEMANDING
URGENCY WHICH WILL OUTWEIGH THE INJURY OR DAMAGES
SHOULD THE LOSING PARTY SECURE A REVERSAL OF THE
JUDGMENT, AND RULING THAT A TRIAL COURT EXCEEDS THE LIMITS
OF ITS JURISDICTION WHERE IT ORDERS ADVANCE OF (sic)
EXECUTION OF CONSEQUENTIAL DAMAGES, EXEMPLARY DAMAGES
AND ATTORNEY'S FEES.
INSTEAD, RESPONDENT JUDGMENT (sic) SHOULD HAVE
IMPLEMENTED HIS ORDER GIVING DUE COURSE TO VALENCIA'S
APPEAL AND DIRECTING THE RECORDS OF CIVIL CASE NO. 7554-M
FORWARDED TO THIS COURT. 11
As stated at the outset, respondent Court of Appeals dismissed said petition and
refused to reconsider such dismissal, eventuating in petitioner's appeal to us. In our
resolution of August 28, 1989, we issued a temporary restraining order against
respondents.
We are not persuaded by the first and third grounds invoked by petitioner. Under the
present procedure, an appeal is perfected upon the expiration of the last day to
appeal by any party. 12 It is not perfected on the date the notice of appeal was
filed. 13 In the present case, the defendants had up to January 18, 1989 within which
to appeal and the plaintiff had up to January 25, 1989. The motion for execution was
filed by defendants on January 17, 1989, before the expiration of the last day to
appeal by any of the parties.
The fact that plaintiff filed a notice of appeal on January 16, 1989 did not, as already
stated, result in the perfection of the appeal. Despite plaintiff's having filed his notice
of appeal, defendants, had they been so minded, could still have availed of the right,
up to their last day to appeal which was January 18, 1989, to also file their notice of
appeal or to file a motion for new trial or to move for execution as in fact they did,
since plaintiff s appeal had not yet been perfected. That respondent judge gave "due
course" to plaintiffs notice of appeal, on the same date when it was filed on January
16, 1989, is inconsequential. Both under the former and present procedural
governance on appeals, a notice of appeal does not require the approval of the trial
court, 14 and its act of giving "due course" thereto, or seeming approval thereof, does
not affect the rule as to when an appeal is deemed perfected.
Petitioner's second ground, however, commends itself as a meritorious submission. It
is concordant with our present doctrinal pronouncements and must be sustained.
Conformably with Section 2, Rule 39 of the Rules of Court, in order that there may be
a discretionary issuance of a writ of execution pending appeal the following requisites
must be satisfied: (a) There must be a motion by the prevailing party with notice to the
adverse party; (b) There must be a good reason for issuing the writ of execution; and
(c) The good reason must be stated in a special order. 15
In the case at bar, the ground relied upon by the trial court in allowing the immediate
execution, as stated in its order of March 20, 1989, is the filing of a bond by private
respondents. The rule is now settled that the mere filing of a bond by the successful
party is not a good reason for ordering execution pending appeal, as clarified
in Roxas vs.Court of Appeals, et al., 16 which we are constrained to quote for the
benefit of the parties:
It is not intended obviously that execution pending appeal shall issue as a
matter of course. Good reasons, special, important, pressing reasons must
exist to justify it; otherwise, instead of an instrument of solicitude and justice,
it may well become a tool of oppression and inequity. But to consider the
mere posting of a bond a "good reason" would precisely make immediate
execution of a judgment pending appeal routinary, the rule rather than the
exception. Judgments would be executed immediately, as a matter of
course, once rendered, if all that the prevailing party needed to do was to
post a bond to answer for the damages that might result therefrom. This is a
situation, to repeat, neither contemplated nor intended by law.
The exercise of the power to grant or deny immediate or advance execution is
addressed to the sound discretion of the court. 17 However, the existence of good
reasons is principally what confers such discretionary power. Absent any such good
reason, the special order of execution must be struck down for having been issued
with grave abuse of discretion. The Court has had the occasion to explain the
importance of such requirement for good reasons, thus:
. . . If the judgment is executed and, on appeal, the same is reversed,
although there are provisions for restitution, oftentimes damages may arise
which cannot be fully compensated. Accordingly, execution should be
granted only when these considerations are clearly outweighed by superior
circumstances demanding urgency and the provision contained in Rule 39,
Section 2, requires a statement of these circumstances as a security for their
existence. 18
The courts look with disfavor upon any attempt to execute a judgment which has not
acquired a final character. Section 2 of Rule 39 which authorizes the discretionary
execution of judgments, being an exception to the general rule, must be restrictively
construed. It would not be a sound rule to allow indiscriminately the execution of a
money judgment, even if there is a sufficient bond.
Moreover, we likewise further reproduce what we said in Radio Communications of
the Philippines, Inc. (RCPI) vs.Lantin, et al. 19 that awards for moral and exemplary
damages cannot be the subject of execution pending appeal, under the following
rationale:
. . . The execution of any award for moral and exemplary damages is
dependent on the outcome of the main case. Unlike actual damages for
which the petitioners may clearly be held liable if they breach a specific
contract and the amounts of which are fixed and certain, liabilities with
respect to moral and exemplary damages as well as the exact amounts
remain uncertain and indefinite pending resolution by the Intermediate
Appellate Court and eventually the Supreme Court. The existence of the
factual bases of these types of damages and their causal relation to the
petitioners' act will have to be determined in the light of the assignments of
6
errors on appeal. It is possible that the petitioners, after all, while liable for
actual damages may not be liable for moral and exemplary damages. Or as
in some cases elevated to the Supreme Court, the awards may be reduced.
Anent the issue of the propriety of a special civil action for certiorari to assail an order
for execution pending appeal, we have ruled in Jaca et al. vs. Davao Lumber
Company, et al. 20 that:
. . . Although Section 1, Rule 65 of the Rules of Court provides that the
special civil action of certiorari may only be invoked when "there is no
appeal, nor any plain, speedy and adequate remedy in the (ordinary) course
of law," this rule is not without exception. The availability of the ordinary
course of appeal does not constitute sufficient ground to prevent a party
from making use of the extraordinary remedy of certiorari where appeal is
not an adequate remedy or equally beneficial, speedy and sufficient. It is the
inadequacy — not the mere absence — of all other legal remedies and the
danger of failure of justice without the writ that usually determines the
propriety of certiorari.
Thus, we held therein, and we so reiterate for purposes of the case at bar,
that certiorari lies against an order granting execution pending appeal where the
same is not founded upon good reasons. Also, the fact that the losing party had
appealed from the judgment does not bar the certiorari action filed in respondent
court as the appeal could not be an adequate remedy from such premature
execution.
That petitioner could have resorted to a supersedeas bond to prevent execution
pending appeal, as suggested by the two lower courts, is not to be held against him.
The filing of such bond does not entitle him to the suspension of execution as a
matter of right. 21 It cannot, therefore, be categorically considered as a plain, speedy
and adequate remedy. Hence, no rule requires a losing party so circumstances to
adopt such remedy in lieu or before availment of other remedial options at hand.
Furthermore, a rational interpretation of Section 3, Rule 39 should be that the
requirement for a supersedeas bond presupposes that the case presents a
presumptively valid occasion for discretionary execution. Otherwise, even if no good
reason exists to warrant advance execution, the prevailing party could unjustly
compel the losing party to post a supersedeas bond through the simple expedient of
filing a motion for, and the trial court improvidently granting, a writ of execution
pending appeal although the situation is violative of Section 2, Rule 39. This could not
have been the intendment of the rule, hence we give our imprimatur to the propriety
of petitioner's action for certiorari in respondent court.
WHEREFORE, the petition is granted and the assailed resolutions of respondent
Court of Appeals are hereby REVERSED and SET ASIDE. The writ of execution
issued by the trial court pursuant to its order of March 20, 1989 is hereby ANNULLED.
The temporary restraining order heretofore issued against the said order and writ is
hereby made permanent.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 172149 February 8, 2010 On July 4, 2003, the CA dismissed the petition and affirmed with modification the
SESSION DELIGHTS ICE CREAM AND FAST FOODS, Petitioner, NLRC decision by deleting the awards for a proportionate 13th month pay and for
vs. indemnity.11 The CA decision became final per Entry of Judgment dated July 29,
THE HON. COURT OF APPEALS (Sixth Division), HON. NATIONAL LABOR 2003.12 The dispositive portion of this CA decision states:
RELATIONS COMMISSION (Second Division) and ADONIS ARMENIO M. WHEREFORE, premises considered, the instant petition is hereby DISMISSED. The
FLORA, Respondents. decision of the National Labor Relations Commission is AFFIRMED with modification
DECISION that the award of proportional 13th month pay as well as the award of indemnity of ₱
BRION, J.: 5,000.00 for failure to observe due process are DELETED.
We rule on the petition for review on certiorari assailing the decision1 and In January 2004, and in the course of the execution of the above final judgment
resolution2 of the Court of Appeals3 (CA) in CA-G.R. SP No. 89326. These CA rulings pursuant to Section 3, Rule VIII13 of the then NLRC Rules of Procedure, the Finance
dismissed the petition for certiorari the petitioner – Session Delights Ice Cream and Analyst of the Labor Arbiter’s Office held a pre-execution conference with the
Fast Foods (petitioner) – filed to challenge the resolutions4 of the Second Division of contending parties in attendance. The Finance Analyst submitted an updated
the National Labor Relations Commission5 (NLRC) that in turn affirmed the order6 of computation of the monetary awards due the private respondent in the total amount of
the Labor Arbiter7 granting a re-computation of the monetary awards in favor of the ₱235,986.00.14 This updated computation included additional backwages and
private respondent Adonis Armenio M. Flora (private respondent). separation pay due the private respondent computed from March 1, 2001 to
The Facts September 17, 2003. The computation also included the proportionate amount of the
The private respondent filed against the petitioner a complaint for illegal dismissal, private respondent’s 13th month pay. On March 25, 2004, the labor arbiter approved
entitled "Adonis Armenio M. Flora, Complainant versus Session Delights Ice Cream & the updated computation which ran, as follows:
Fast Foods, et. al, Private respondents," docketed as NLRC Case No. RAB-CAR 09- C O M P UTATI O N
0507-00. Total computation as per NLRC CAR
The labor arbiter decided the complaint on February 8, 2001, finding that the decision dated February 8, 2001 (sic) 41,591.00
petitioner illegally dismissed the private respondent. The decision awarded the private
respondent backwages, separation pay in lieu of reinstatement, indemnity, and 1. Additional backwages: (March 1, 2001-Sept. 17, 2003)
attorney’s fees, under a computation that the decision itself outlined in its dispositive March 1, 2001-April 30, 2002:
portion. The dispositive portion reads:
WHEREFORE, judgment is hereby rendered declaring private respondent guilty of ₱178.00 x 52 days = 9,256.00
illegal dismissal. Accordingly, private respondent SESSION DELIGHTS is ordered to May 1, 2001-June 30, 2002:
pay complainant the following:
Backwages: ₱185.00 x 365 days = 67,525.00
a) July 1, 2002- Sept. 17, 2003:
₱170.00 x 154 days ₱ 26,180.00 ₱190.00 x 382 days = 72,580.00 149,361.00
Proportional 13th month pay Proportional 13th month pay:
₱ 26,180/12 2,181.65 28,361.65 ₱149,361.00/12 = 12,446.75
b) Separation Pay:
₱ 170.00 x 314/12 x 1 4,448.35 161,807.75
c) Indemnity of ₱5,000.00 for failure to observe due process 2. Additional separation pay:
Attorney’s fees which is 10% of the total award in the amount of ₱190.00 x 314/12 x 3 years = 14,915.00
d)
₱3,781.00.
3. Additional attorney’s fee:
SO ORDERED.8
On the petitioner’s appeal, the NLRC affirmed the labor arbiter’s decision in its ₱176,722.75 x 10% = 17,672.25 194,395.00
resolutions dated May 31, 2002 and September 30, 2002.9 The dispositive portion of
the NLRC’s resolution of May 31, 2002 states:
TOTAL 253,986.00
WHEREFORE, premises considered, the decision under review is hereby
AFFIRMED, and the appeal, DISMISSED, for lack of merit.10
The petitioner continued to seek relief, this time by filing a petition for certiorari before
the CA, which petition was docketed as CA-G.R. SP No. 74653.
7
The petitioner objected to the re-computation and appealed the labor arbiter’s order
to the NLRC. The petitioner claimed that the updated computation was inconsistent
with the dispositive portion of the labor arbiter’s February 8, 2001 decision, as
modified by the CA in CA-G.R. SP No. 74653. The NLRC disagreed with the
petitioner and affirmed the labor arbiter’s decision in a resolution dated October 25,
2004. The NLRC also denied the petitioner’s motion for reconsideration in its
resolution dated January 31, 2005.
The petitioner sought recourse with the CA through a petition for certiorari on the
ground that the NLRC acted with grave abuse of discretion amounting to lack or
excess of jurisdiction.
The CA Rulings
The CA partially granted the petition in its decision of December 19, 2005 (now
challenged before us) by deleting the awarded proportionate 13th month pay. The CA
ruled:
WHEREFORE, the petition is PARTIALLY GRANTED. The Labor Arbiter is
DIRECTED to compute only the following (a) private respondent’s backwages from
the time his salary was withheld up to July 29, 2003, the finality of the Decision in CA-
G.R. SP No. 74653; (b) private respondent’s separation pay from July 31, 2000 up to
July 29, 2003; and (c) attorney’s fees equivalent to 10% of the total monetary claims
from (a) and (b). The total monetary award shall earn legal interest from July 29, 2003
until fully paid. No pronouncement as to cost.
SO ORDERED.15
The CA explained in this ruling that employees illegally dismissed are entitled to
reinstatement, full backwages, inclusive of allowances and other benefits or their
monetary equivalent, computed from the time actual compensation was withheld from
them, up to the time of actual reinstatement. If reinstatement is no longer feasible, the
backwages shall be computed from the time of their illegal dismissal up to the finality
of the decision. The CA reasoned that a re-computation of the monetary awards was
necessary to determine the correct amount due the private respondent from the time
his salary was withheld from him until July 29, 2003 (the date of finality of the July 4,
2003 decision in CA-G.R. SP No. 74653) since the separation pay, which was
awarded in lieu of reinstatement, had not been paid by the petitioner. The attorney’s
fees likewise have to be re-computed in light of the deletion of the proportionate 13th
month pay and indemnity awards.
The petitioner timely filed a motion for reconsideration which the CA denied in its
resolution of March 30, 2006, now similarly assailed before us.
The Issue
The lone issue the petitioner raised is whether a final and executory decision (the
labor arbiter’s decision of February 8, 2001, as affirmed with modification by the CA
decision in CA-G.R. SP No. 74653) may be enforced beyond the terms decreed in its
dispositive portion.
In the pleadings submitted to the Court, the petitioner insists on a literal reading and
application of the labor arbiter’s February 8, 2001 decision, as modified by the CA in
CA-G.R. SP No. 74653. The petitioner argues that since the modified labor arbiter’s
February 8, 2001 decision did not provide in its dispositive portion for a computation
of the monetary award up to the finality of the judgment in the case, the CA should
have enforced the decision according to its express and literal terms. In other words,
the CA cannot now allow the execution of the labor arbiter’s original decision (which
the CA affirmed with finality but with modification) beyond the express terms of its
8
dispositive portion; thus, the amounts that accrued during the pendency of the
petitioner’s recourses with the NLRC and the CA cannot be read into and
implemented as part of the final and executory judgment.
The petitioner, as an alternative argument, argues that even assuming that the body
of the CA decision in CA-G.R. SP No. 74653 intended a computation of the monetary
award up to the finality of the decision, the dispositive portion remains to be the
directive that should be enforced, as it is the part of the decision that governs, settles,
and declares the rights and obligations of the parties.
The private respondent, for his part, counters that the computation of the monetary
award until the finality of the CA decision in CA-G.R. SP No. 74653 is in accord with
Article 279 of the Labor Code, as amended.
The Court’s Ruling
We resolve to dismiss the petition and, accordingly, affirm the CA decision.
We state at the outset that, as a rule, we frown upon any delay in the execution of
final and executory decisions, as the immediate enforcement of the parties’ rights,
confirmed by a final decision, is a major component of the ideal administration of
justice. We admit, however, that circumstances may transpire rendering delay
unavoidable. One such occasion is when the execution of the final judgment is not in
accord with what the final judgment decrees in its dispositive portion. Just as the
execution of a final judgment is a matter of right for the winning litigant who should not
be denied the fruits of his or her victory, the right of the losing party to give, perform,
pay, and deliver only what has been decreed in the final judgment should also be
respected.
That a judgment should be implemented according to the terms of its dispositive
portion is a long and well-established rule.16 Otherwise stated, it is the dispositive
portion that categorically states the rights and obligations of the parties to the dispute
as against each other.17 Thus, it is the dispositive portion which the entities charged
with the execution of a final judgment that must be enforced to ensure the validity of
the execution.18
A companion to the above rule on the execution of a final judgment is the principle of
its immutability. Save for recognized exceptions,19 a final judgment may no longer be
altered, amended or modified, even if the alteration, amendment or modification is
meant to correct what is perceived to be an erroneous conclusion of fact or law and
regardless of what court, be it the highest Court of the land, renders it.20 Any attempt
on the part of the responsible entities charged with the execution of a final judgment
to insert, change or add matters not clearly contemplated in the dispositive portion
violates the rule on immutability of judgments.
In the present case, with the CA’s deletion of the proportionate 13th month pay and
indemnity awards in the labor arbiter’s February 8, 2001 decision, only the awards of
backwages, separation pay, and attorney’s fees remain. These are the awards
subject to execution.
Award of backwages and separation pay
A distinct feature of the judgment under execution is that the February 8, 2001 labor
arbiter decision already provided for the computation of the payable separation pay
and backwages due, and did not literally order the computation of the monetary
awards up to the time of the finality of the judgment. The private respondent, too, did
not contest the decision through an appeal. The petitioner’s argument to confine the
awards to what the labor arbiter stated in the dispositive part of his decision is largely
based on these established features of the judgment.
We reject the petitioner’s view as a narrow and misplaced interpretation of an illegal
dismissal decision, particularly of the terms of the labor arbiter’s decision.
While the private respondent failed to appeal the February 8, 2001 decision of the
labor arbiter, the failure, at the most, had the effect of making the awards granted to
him final so that he could no longer seek any other affirmative relief, or pray for any
award additional to what the labor arbiter had given. Other than these, the illegal
dismissal case remained open for adjudication based on the appeal made for the
higher tribunals’ consideration. In other words, the higher tribunals, on appropriate
recourses made, may reverse the judgment and declare that no illegal dismissal took
place, or affirm the illegal dismissal already decreed with or without modifying the
monetary consequences flowing from the dismissal.
As the case developed and is presented to us, the issue before us is not the
correctness of the awards, nor the finality of the CA’s judgment, nor the petitioner’s
failure to appeal. The issue before us is the propriety of the computation of the
awards made, and, whether this violated the principle of immutability of final
judgments.
In concrete terms, the question is whether a re-computation in the course of
execution of the labor arbiter’s original computation of the awards made, pegged as
of the time the decision was rendered and confirmed with modification by a final CA
decision, is legally proper. The question is posed, given that the petitioner did not
immediately pay the awards stated in the original labor arbiter’s decision; it delayed
payment because it continued with the litigation until final judgment at the CA level.
A source of misunderstanding in implementing the final decision in this case proceeds
from the way the original labor arbiter framed his decision. The decision consists
essentially of two parts.
The first is that part of the decision that cannot now be disputed because it has been
confirmed with finality. This is the finding of the illegality of the dismissal and the
awards of separation pay in lieu of reinstatement, backwages, attorney’s fees, and
legal interests.
The second part is the computation of the awards made. On its face, the computation
the labor arbiter made shows that it was time-bound as can be seen from the figures
used in the computation. This part, being merely a computation of what the first part
of the decision established and declared, can, by its nature, be re-computed. This is
the part, too, that the petitioner now posits should no longer be re-computed because
the computation is already in the labor arbiter’s decision that the CA had affirmed.
The public and private respondents, on the other hand, posit that a re-computation is
necessary because the relief in an illegal dismissal decision goes all the way up to
reinstatement if reinstatement is to be made, or up to the finality of the decision, if
separation pay is to be given in lieu reinstatement.
That the labor arbiter’s decision, at the same time that it found that an illegal dismissal
had taken place, also made a computation of the award, is understandable in light of
Section 3, Rule VIII of the then NLRC Rules of Procedure which requires that a
computation be made. This Section in part states:
[T]he Labor Arbiter of origin, in cases involving monetary awards and at all events, as
far as practicable, shall embody in any such decision or order the detailed and full
amount awarded.
Clearly implied from this original computation is its currency up to the finality of the
labor arbiter’s decision. As we noted above, this implication is apparent from the
9
terms of the computation itself, and no question would have arisen had the parties
terminated the case and implemented the decision at that point.
However, the petitioner disagreed with the labor arbiter’s findings on all counts – i.e.,
on the finding of illegality as well as on all the consequent awards made. Hence, the
petitioner appealed the case to the NLRC which, in turn, affirmed the labor arbiter’s
decision. By law,21 the NLRC decision is final, reviewable only by the CA on
jurisdictional grounds.
The petitioner appropriately sought to nullify the NLRC decision on jurisdictional
grounds through a timely filed Rule 65 petition for certiorari. The CA decision, finding
that NLRC exceeded its authority in affirming the payment of 13th month pay and
indemnity, lapsed to finality and was subsequently returned to the labor arbiter of
origin for execution.
It was at this point that the present case arose. Focusing on the core illegal dismissal
portion of the original labor arbiter’s decision, the implementing labor arbiter ordered
the award re-computed; he apparently read the figures originally ordered to be paid to
be the computation due had the case been terminated and implemented at the labor
arbiter’s level. Thus, the labor arbiter re-computed the award to include the separation
pay and the backwages due up to the finality of the CA decision that fully terminated
the case on the merits. Unfortunately, the labor arbiter’s approved computation went
beyond the finality of the CA decision (July 29, 2003) and included as well the
payment for awards the final CA decision had deleted – specifically, the proportionate
13th month pay and the indemnity awards. Hence, the CA issued the decision now
questioned in the present petition.
We see no error in the CA decision confirming that a re-computation is necessary as
it essentially considered the labor arbiter’s original decision in accordance with its
basic component parts as we discussed above. To reiterate, the first part contains the
finding of illegality and its monetary consequences; the second part is the
computation of the awards or monetary consequences of the illegal dismissal,
computed as of the time of the labor arbiter’s original decision.
To illustrate these points, had the case involved a pure money claim for a specific
sum (e.g. salary for a specific period) or a specific benefit (e.g. 13th month pay for a
specific year) made by a former employee, the labor arbiter’s computation would
admittedly have continuing currency because the sum is specific and any variation
may only be on the interests that may run from the finality of the decision ordering the
payment of the specific sum.
In contrast with a ruling on a specific pure money claim, is a claim that relates to
status (as in this case, where the claim is the legality of the termination of the
employment relationship). In this type of cases, the decision or ruling is essentially
declaratory of the status and of the rights, obligations and monetary consequences
that flow from the declared status (in this case, the payment of separation pay and
backwages and attorney’s fees when illegal dismissal is found). When this type of
decision is executed, what is primarily implemented is the declaratory finding on the
status and the rights and obligations of the parties therein; the arising monetary
consequences from the declaration only follow as component of the parties’ rights and
obligations.
In the present case, the CA confirmed that indeed an illegal dismissal had taken
place, so that separation pay in lieu of reinstatement and backwages should be paid.
How much that separation pay would be, would ideally be stated in the final CA
decision; if not, the matter is for handling and computation by the labor arbiter of
origin as the labor official charged with the implementation of decisions before the
NLRC.22
As the CA correctly pointed out, the basis for the computation of separation pay and
backwages is Article 279 of the Labor Code, as amended, which reads:
x x x An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement.
By jurisprudence derived from this provision, separation pay may be awarded to an
illegally dismissed employee in lieu of reinstatement.23 Recourse to the payment of
separation pay is made when continued employment is no longer possible, in cases
where the dismissed employee’s position is no longer available, or the continued
relationship between the employer and the employee is no longer viable due to the
strained relations between them, or when the dismissed employee opted not to be
reinstated, or payment of separation benefits will be for the best interest of the parties
involved.24
This reading of Article 279, of course, does not appear to be disputed in the present
case as the petitioner admits that separation pay in lieu of reinstatement shall be
paid, computed up to the finality of the judgment finding that illegal dismissal had
taken place. What the petitioner simply disputes is the re-computation of the award
when the final CA decision did not order any re-computation while the NLRC decision
that the CA affirmed and the labor arbiter decision the NLRC in turn affirmed, already
made a computation that – on the basis of immutability of judgment and the rule on
execution of the dispositive portion of the decision – should not now be disturbed.
Consistent with what we discussed above, we hold that under the terms of the
decision under execution, no essential change is made by a re-computation as this
step is a necessary consequence that flows from the nature of the illegality of
dismissal declared in that decision. A re-computation (or an original computation, if no
previous computation has been made) is a part of the law – specifically, Article 279 of
the Labor Code and the established jurisprudence on this provision – that is read into
the decision. By the nature of an illegal dismissal case, the reliefs continue to add on
until full satisfaction, as expressed under Article 279 of the Labor Code. The re-
computation of the consequences of illegal dismissal upon execution of the decision
does not constitute an alteration or amendment of the final decision being
implemented. The illegal dismissal ruling stands; only the computation of monetary
consequences of this dismissal is affected and this is not a violation of the principle of
immutability of final judgments.1avvphi1
We fully appreciate the petitioner’s efforts in trying to clarify how the standing
jurisprudence on the payment of separation pay in lieu of reinstatement and the
accompanying payment of backwages ought to be read and reconciled. Its attempt,
however, is out of place and, rather than clarify, may only confuse the implementation
of Article 279; the core issue in this case is not the payment of separation pay and
backwages but their re-computation in light of an original labor arbiter ruling that
already contained a dated computation of the monetary consequences of illegal
dismissal.
That the amount the petitioner shall now pay has greatly increased is a consequence
that it cannot avoid as it is the risk that it ran when it continued to seek recourses
against the labor arbiter’s decision. Article 279 provides for the consequences of
10
illegal dismissal in no uncertain terms, qualified only by jurisprudence in its
interpretation of when separation pay in lieu of reinstatement is allowed. When that
happens, the finality of the illegal dismissal decision becomes the reckoning point
instead of the reinstatement that the law decrees. In allowing separation pay, the final
decision effectively declares that the employment relationship ended so that
separation pay and backwages are to be computed up to that point. The decision also
becomes a judgment for money from which another consequence flows – the
payment of interest in case of delay. This was what the CA correctly decreed when it
provided for the payment of the legal interest of 12% from the finality of the judgment,
in accordance with our ruling in Eastern Shipping Lines, Inc. v. Court of Appeals.25
WHEREFORE, premises considered, we hereby AFFIRM the decision of the Court of
Appeals dated December 19, 2005 and its resolution dated March 30, 2006 in CA-
G.R. SP No. 89326.
For greater certainty, the petitioner is ORDERED to PAY the private respondent:
(a) backwages computed from August 28, 2000 (the date the employer
illegally dismissed the private respondent) up to July 29, 2003, the date of
finality of the decision of the Court of Appeals in CA-G.R. SP No. 74653;
(b) separation pay computed from July 31, 2000 (the private respondent’s
first day of employment) up to July 29, 2003 at the rate of one month pay per
year of service;
(c) ten percent (10%) attorney’s fees based on the total amount of the
awards under (a) and (b) above; and
(d) legal interest of twelve percent (12%) per annum of the total monetary
awards computed from July 29, 2003, until their full satisfaction.
The labor arbiter is hereby ORDERED to make another re-computation according to
the above directives.
Costs against the petitioner.
SO ORDERED.
G.R. No. 125607 March 18, 2004
RUFINA C. CAYANA, JOSEFINA C. RABINA, MERCEDES C. DE GUZMAN, and
SUSANA C. SAMBALE,petitioners,
vs.
COURT OF APPEALS, SPS. PASTOR & ROSITA CAYABYAB, SPS. MARCELIANO
& ROSALIA CAYABYAB, SPS. RAFAEL & ROSEMARIE CAYABYAB and
INSURANCE CORP. OF THE PHILIPPINES, respondents.
DECISION
TINGA, J.:
The instant case involves an unfortunate, albeit all too common, property dispute
among siblings.
The petitioners, Rufina Cayana, Josefina Rabina, Mercedes de Guzman and Susana
Sambale, and respondents Pastor and Marceliano Cayabyab are children of the
spouses Raymundo and Eulalia Cayabyab. The other respondents, Rosita and
Rosalia Cayabyab are the wives of Pastor and Marceliano Cayabyab, respectively.
Respondent Rosemarie Cayabyab-Ramos is the daughter of Marceliano Cayabyab,
while respondent Rafael Ramos is the former’s husband. Their dispute involves two
parcels of land1 specifically described thus:
First Parcel ¾ A parcel of land Lot A, (LRC), Psd-231284, being a portion of Plan Psu-
136181, LRC Rec. No. N—8805, situated in Rosario, Lingayen, Pangasinan.
Bounded on the E by Mactec River; SE by Agapito Cabrera; SW by Anselmo Cabrera;
NW by Lot B of the subdivision plan, containing an area of 11,735 square meters,
more or less. Covered by TCT No. 29332 and assessed at ₱1,730.00; and
Second Parcel ¾ A parcel of land Lot 2-A of the subdivision plan Psd-36621, being a
portion of Lot 2 described on Plan Psu-70452, GLRO Rec. No. 41762, situated in
Rosario, Lingayen, Pangasinan. Bounded on the N by Ludovico Cayabyab & Agapito
Cabrera; E by Eduvejas Cabrera and Lot 2-B of subdivision plan; S by Lot 2-B and W
by Clemente Cruz, containing an area of 20,000 square meters more or less.
Covered by TCT No. 117094, declared under Tax Decl. No. 29333 and assessed at
₱2,600.00.
It appears that Raymundo Cayabyab, with the marital consent of Eulalia Cayabyab,
sold the First and Second Parcels to Pastor Cayabyab by virtue of two Deeds of
Absolute Sale2 respectively dated March 3, 1976 and May 13, 1965. Thereupon,
Transfer Certificates of Title (TCTs) No. 117134 and 117094 covering the First and
Second Parcels, respectively, were issued in the name of Pastor Cayabyab.
After the death of Raymundo Cayabyab on March 20, 1976, his wife Eulalia
Cayabyab executed an Affidavit of Adverse Claim,3 dated June 4, 1976, on the
subject parcels of land, alleging that the Deeds of Absolute Sale in favor of Pastor
Cayabyab were forgeries. However, on June 17, 1976, she executed
another Affidavit4 recognizing Pastor Cayabyab’s title and requesting the cancellation
of the adverse claims earlier annotated on the titles of the subject properties.
On February 9, 1977, Eulalia Cayabyab, together with her children, Marceliano,
Mercedes, Rufina, Josefina, Susana and Alfredo, filed a Complaint5 against Pastor
and Rosita Cayabyab for the annulment of the Deeds of Absolute Sale dated March
3, 1976 and May 13, 1965 and the corresponding TCT Nos. 117134 and 117094, and
reconveyance of the First and Second Parcels. They alleged that both parcels were
fraudulently registered in the name of Pastor Cayabyab by means of the
forged Deeds of Absolute Sale. The case was docketed as Civil Case No. 15298.
On February 28, 1977, Pastor and Rosita Cayabyab entered into an agreement of
counter guaranty with the Insurance Corporation of the Philippines (ICP) with respect
to the Second Parcel.
On June 12, 1977, Pastor Cayabyab mortgaged6 the First Parcel to the Rural Bank of
Urbiztondo.
On October 10, 1977, Pastor Cayabyab sold the First Parcel to Rosafina Reginaldo
for ₱15,000.00 by virtue of a Deed of Absolute Sale.7 Subsequently, TCT No. 117134
was cancelled and TCT No. 1243048 was issued in the name of Rosafina Reginaldo
on October 11, 1977. On the same day, the mortgage over the First Parcel was
cancelled.9
On December 23, 1977, Rosafina Reginaldo mortgaged10 the First Parcel to the Rural
Bank of Urbiztondo to secure a loan in the amount of ₱5,000.00.
Meanwhile, the proceedings in Civil Case No. 15298 proceeded. Pastor and Rosita
Cayabyab filed an Answer asserting the validity of the Deeds of Absolute Sale but
were subsequently declared in default after failing to appear at the pre-trial
conference. Thus, the plaintiffs were allowed to present evidence ex-parte.
In a decision11 dated June 17, 1978, the then Court of First Instance of Pangasinan
declared the Deeds of Absolute Sale dated May 13, 1965 and March 3, 1976, and the
corresponding TCT Nos. 117094 and 117134 covering the Second and First Parcels,
11
respectively, null and void. The court, however, denied the prayer for reconveyance in
view of the plaintiffs’ evidence attesting to the fact that Eulalia Cayabyab is still the
owner and possessor of the subject properties. No appeal was taken and the
decision consequently became final.
On April 21, 1981, the mortgage over the First Parcel was foreclosed and the Rural
Bank of Urbiztondo, as the highest bidder, bought the property.12 The bank
consolidated its title on August 2, 198213 and TCT No. 14247914cancelling TCT No.
124304 was issued in its name on August 19, 1982.
In a Deed of Absolute Sale15 dated September 3, 1982, the Rural Bank of Urbiztondo
sold the First Parcel to Marceliano and Rosalia Cayabyab for the amount of
₱7,221.95. Two days later, the latter were issued TCT No. 14288716 cancelling TCT
No. 142479.
For the amount of ₱10,000.00, Marceliano and Rosalia Cayabyab sold the First
Parcel to Rafael and Rosemarie Ramos by virtue of a Deed of Absolute Sale of Real
Estate Property17 dated January 14, 1983. On January 25, 1983, TCT No.
14385918 cancelling TCT No. 142887 was issued in the name of the Ramos spouses.
On June 8, 1983, the petitioners herein as plaintiffs, filed with the Regional Trial Court
of Lingayen, Pangasinan, Branch 37, a Verified Complaint19 docketed as Civil Case
No. 15937 against Pastor and Rosita Cayabyab, Marceliano and Rosalia Cayabyab,
Rafael and Rosemarie Ramos and ICP. They prayed for the annulment of the deeds
of sale in favor of Rosafina Reginaldo, Marceliano and Rosalia Cayabyab, and Rafael
Ramos and Rosemarie Cayabyab; cancellation of TCT Nos. 124304, 142479,
142887, and 143859 issued in favor of Rosafina Reginaldo, the Rural Bank of
Urbiztondo, Marceliano and Rosalia Cayabyab and Rafael and Rosemarie Ramos,
respectively; and recovery of possession of the First and Second Parcels by virtue of
an alleged deed of donation inter vivospurportedly executed by Eulalia Cayabyab in
favor of the petitioners herein.
As regards the Second Parcel, the plaintiffs prayed that ICP or Pastor Cayabyab, in
whose name TCT No. 117094 remained, be ordered to surrender the title. It appears
that ICP was not served with summons because it had already ceased to exist due to
bankruptcy.20
The plaintiffs theorized that the documents sought to be annulled are fictitious,
simulated and entered into in bad faith as the defendants had full knowledge of the
pendency of, as well as the consequent decision in, Civil Case No. 15298.
On the other hand, the defendants claimed that all the transactions over the First
Parcel were entered into free from all liens and encumbrances not inscribed in the
title.
Recognizing the final decision in Civil Case No. 15298 on the nullity of the Deeds of
Absolute Sale and the corresponding TCTs issued in favor of Pastor Cayabyab, the
trial court rendered on August 22, 1989, a Decision in Civil Case No. 15937 in favor of
the plaintiffs, the dispositive portion of which provides:
WHEREFORE, judgment is hereby rendered ordering:
1. The plaintiffs to be the true and lawful owners over the landholdings in
question;
2. The annulment of all documents pertaining thereto; namely, Exhs. C,D, &
E;
3. The cancellation of TCT No. 124304, TCT No. 142479; TCT No. 142887 &
TCT No. 143859;
 4. The defendants restore possession of the landholdings in question to
plaintiffs;
5. The defendants to pay the plaintiffs jointly and severally the amount of
₱20,000.00 as moral damages;
6. The defendants to pay the plaintiffs jointly and severally the amount of
₱5,000.00 as/for attorney’s fees;
7. The defendant Pastor Cayabyab and/or Insurance Corporation of the
Philippines to surrender TCT No. 117094 free from all liens and
encumbrances;
8. The defendants to pay the plaintiffs jointly and severally the amount of
₱5,000.00 as exemplary damages;
9. The dismissal of defendants’ counterclaim; and
10. The defendants to pay the costs of this suit.21
The respondents herein as appellants appealed to the Court of Appeals, contending
that the trial court erred in applying the principle of res judicata to the judgment in Civil
Case No. 15298. According to them, the institution of Civil Case No. 15937 resulted in
the joinder of issues and allowed them to adduce evidence to prove ownership and
possession of the subject parcels of land.
Agreeing with the appellants, the appellate court in its Decision22 dated August 21,
1995, held that the principle of res judicata is inapplicable, there being no identity of
the causes of action in Civil Case No. 15298 and Civil Case No. 15937. While both
cases were for the annulment of public documents, the former covered only
the Deeds of Absolute Sale dated March 3, 1976 and May 13, 1965 and the
corresponding TCTs for the First and Second Parcels. On the other hand, the latter
case covered not only the annulment of the subsequent transactions over the subject
parcels of land but also the recovery of possession on the basis of the alleged deed
of donation inter vivos executed by Eulalia Cayabyab.
The Court of Appeals also upheld the validity of the deeds of sale and the
corresponding TCTs in favor of the appellants, declaring that the affidavit cancelling
the adverse claim annotated in TCT No. 117134 was duly admitted; that the
subsequent sales transactions have not been proven to be simulated or fictitious; that
no notice of lis pendens was recorded in the title; and that the appellees were not
able to prove their claim of title having failed to present the original or certified true
copy of the alleged deed of donation inter vivos or to prove the existence and due
execution of the original deed.
Hence, the appellate court reversed the Decision of the trial court, accordingly
declaring that the deeds of sale as well as the TCTs which emanated from them valid
and enforceable, and the appellants the true and lawful owners and possessors of the
properties in question. The Court of Appeals denied the appellees’ Motion for
Reconsideration in its Resolution23 dated July 11, 1996.
In the instant Verified Petition24 dated July 30, 1996, the petitioners reiterate their
argument that the Deeds of Absolute Sale dated March 3, 1976 and May 13, 1965,
the corresponding TCTs covering the First and Second Parcels, and the subsequent
transfers of the subject properties are all null and void by virtue of the final judgment
in Civil Case No. 15298 declaring them to be so. They allege that a notice of lis
pendens and an affidavit of adverse claim were duly annotated on the TCTs covering
the two parcels of land. Hence, Rosafina Reginaldo, Marceliano and Rosalia
Cayabyab, and Rafael and Rosemarie Ramos should be considered purchasers in
bad faith. The petitioners further claim that the considerations for the subsequent
12
transfers were grossly inadequate leading to the conclusion that the respondents
were motivated by a desire to execute fictitious deeds of conveyance. The petitioners
also insist that the First and Second Parcels were donated to the petitioners by their
mother, Eulalia Cayabyab, through an alleged Donation Inter Vivos attached to the
petition as Annex "F". Finally, they reiterate that Pastor Cayabyab and ICP entered
into a contract of guaranty over the Second Parcel despite the adverse claim and
notice of lis pendens annotated on the title.
In their Comment25 dated October 8, 1997, the respondents contend that whatever
doubts may have been raised by Eulalia Cayabyab on the validity of Pastor
Cayabyab’s title were removed when she executed the Affidavitrequesting the
cancellation of the adverse claims inscribed in the titles. Hence, the Deeds of
Absolute Sale dated March 3, 1976 and May 13, 1965 in favor of Pastor Cayabyab
are legal and valid. The deed of donation inter vivos allegedly executed by Eulalia
Cayabyab did not vest ownership and possession over the subject properties in favor
of the petitioners because of the prior sale to Pastor Cayabyab. Besides, Eulalia
Cayabyab did not have the right to donate the subject properties to the petitioners
because there was no previous partition of the intestate estate of Raymundo
Cayabyab.
In a Resolution dated July 27, 1998, the Court denied the instant petition for non-
compliance with the Resolution of February 25, 1998, requiring the petitioners to file a
reply to the respondents’ Comment. The petitioners filed a Motion for
Reconsideration with Reply26 dated September 21, 1998. In our Resolution of
November 16, 1998, we granted the motion, reinstated and gave due course to the
petition and required the parties to submit their respective Memoranda.27
The pivotal issue is whether the decision in Civil Case No. 15298 operates to bar the
respondents’ defenses and counterclaims in Civil Case No. 15937.
The petitioners insist that the decision of the trial court in Civil Case No. 15298 has
settled with finality the nullity of Pastor Cayabyab’s title. Following the principle of res
judicata, the respondents, as transferees of Pastor Cayabyab, should not have been
allowed to adduce evidence to prove their ownership of the subject parcels of land.
The appellate court, however, ruled that the principle of res judicata does not apply
there being no identity of causes of action in the two cases.
The trial court and the appellate court both erred in the manner by which they treated
and applied the final decision in Civil Case No. 15298 to the instant case. This error
apparently stems from a misreading of the provisions in the 1997 Rules of Civil
Procedure on the effect of judgments. Section 47, Rule 39 thereof provides:
SEC. 47. Effect of judgments or final orders.—The effect of a judgment or final order
rendered by a court of the Philippines, having jurisdiction to pronounce the judgment
or final order, may be as follows:
(a) In case of a judgment or final order against a specific thing, or in respect
to the probate of a will, or the administration of the estate of a deceased
person, or in respect to the personal, political, or legal condition or status of
a particular person or his relationship to another, the judgment or final order
is conclusive upon the title to the thing, the will or administration, or the
condition, status or relationship of the person; however, the probate of a will
or granting of letters of administration shall only be prima facie evidence of
the death of the testator or intestate;
(b) In other cases, the judgment or final order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in
 relation thereto, conclusive between the parties and their successors in
interest by title subsequent to the commencement to the action or special
proceeding, litigating for the same thing and under the same title and in the
same capacity;
(c) In any other litigation between the same parties or their successors in
interest, that only is deemed to have been adjudged in a former judgment or
final order which appears upon its face to have been so adjudged, or which
was actually and necessarily included therein or necessarily thereto.
The distinction between the doctrine of res judicata, or bar by prior judgment, under
paragraph (b) above and conclusiveness of judgment under paragraph (c) is well-laid.
In Gamboa v. Court of Appeals,28 we held:
There is ‘bar by prior judgment’ when, between the first case where the judgment was
rendered and the second case which is sought to be barred, there is identity of
parties, subject matter and cause of action. The judgment in the first case constitutes
an absolute bar to the subsequent action. It is final as to the claim or demand in
controversy, including the parties and those in privity with them, not only as to every
matter which was offered and received to sustain or defeat the claim or demand, but
as to any other admissible matter which might have been offered for that purpose and
of all matters that could have been adjudged in that case. But where between the first
and second cases, there is identity of parties but no identity of cause of action, the
first judgment is conclusive in the second case, only as to those matters actually and
directly controverted and determined and not as to matters merely involved therein.29
For res judicata to apply, there must be (1) a former final judgment rendered on the
merits; (2) the court must have had jurisdiction over the subject matter and the
parties; and, (3) identity of parties, subject matter and cause of action between the
first and second actions. According to the appellate court, the third requisite for the
application of res judicata is not present in this case.
In order to determine the identity of the causes of action in Civil Case Nos. 15298 and
15937, and consequently, the application of the doctrine of res judicata, it is essential
to consider the identity of facts essential to their maintenance, or whether the same
evidence would sustain both causes of action. If the same facts or evidence would
sustain both, the two actions are considered the same and covered by the rule that
the judgment in the former is a bar to the subsequent action. If, however, the two
actions rest upon different states of fact, or if different proofs would be required to
sustain the two actions, a judgment in one is no bar to the maintenance of the other.30
We find that the evidence required to prove the allegations in Civil Case No. 15937,
which involves the annulment of the subsequent transactions and TCTs covering the
subject parcels of land and the recovery of possession thereof on the basis of the
alleged deed of donation inter vivos, is necessarily more than that required in Civil
Case No. 15298, which involves only the annulment of the Deeds of Absolute Sale in
favor of Pastor Cayabyab and the corresponding TCTs covering the First and Second
Parcels. Furthermore, the decision in Civil Case No. 15298 necessarily turned only
upon whether the Deeds of Absolute Sale were fictitious or simulated, while that in
Civil Case No. 15937 will also have to include a determination of the good or bad faith
of the subsequent purchasers. Res judicata, therefore, does not apply.
Nonetheless, the trial court and the Court of Appeals should have applied the doctrine
of conclusiveness of judgment. In Calalang v. Register of Deeds of Quezon City,31 the
concept of conclusiveness of judgment was explained, thus:
13
xxx conclusiveness of judgment—states that a fact or question which was in issue in
a former suit and there was judicially passed upon and determined by a court of
competent jurisdiction, is conclusively settled by the judgment therein as far as the
parties to that action and persons in privity with them are concerned and cannot be
again litigated in any future action between such parties or their privies, in the same
court or any other court of concurrent jurisdiction on either the same or different
cause of action, while the judgment remains unreversed by proper authority. It has
been held that in order that a judgment in one action can be conclusive as to a
particular matter in another action between the same parties or their privies, it is
essential that the issue be identical. If a particular point or question is in issue in the
second action, and the judgment will depend on the determination of that particular
point or question, a former judgment between the same parties or their privies will be
final and conclusive in the second if that same point or question was in issue and
adjudicated in the first suit. Identity of cause of action is not required but merely
identity of issues.32
Under the doctrine of conclusiveness of judgment, the final decision in Civil Case No.
15298 declaring null and void the Deeds of Absolute Sale in favor of Pastor Cayabyab
and the corresponding TCTs covering the subject parcels of land precluded the Court
of Appeals from further adjudicating on the validity of the said deeds and titles.
The appellate court’s pronouncement that "the decision in Civil Case No. 15298 which
declares null and void the deeds of absolute sale dated May 13, 1965 and March 20,
1976 and the corresponding TCT is not conclusive upon the action in Civil Case No.
15937"33 is, therefore, flawed.
It is likewise utterly erroneous for the appellate court to have disregarded the final
judgment in Civil Case No. 15298 declaring null and void the Deeds of Absolute
Sale in favor of Pastor Cayabyab and the corresponding TCTs covering the two
parcels of land. It is axiomatic that decisions which have long become final and
executory cannot be annulled by courts and the appellate court is deprived of
jurisdiction to alter the trial court’s final judgment.34
The issue concerning the validity of the Deeds of Absolute Sale dated May 13, 1965
and March 3, 1976 and the corresponding TCTs covering the subject properties must
be laid to rest. These documents cannot be relied upon by Pastor Cayabyab and his
successors-in-interest as the basis of their claim of ownership over the First Parcel.
Having said that, we find it necessary still to determine whether the respondents who
take title over the First Parcel from Pastor Cayabyab were purchasers in good
faith, i.e., whether they bought the property without notice that some other person has
a right to or interest in such property, and paid a full and fair price for the same at the
time of such purchase or before they had notice of the claim or interest of some other
person in the property.35 If so, their rights will be protected and the nullity of the Deeds
of Absolute Sale and the corresponding TCTs covering the subject properties cannot
be successfully invoked to invalidate the titles subsequently issued, for it has been
consistently ruled that a forged deed can legally be the root of a valid title when an
innocent purchaser for value intervenes.36
As a general rule, 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.37 However,
this principle admits of an unchallenged exception:
…a person dealing with registered land has a right to rely on the Torrens certificate of
title and to dispense with the need of inquiring further except when the party has
actual knowledge of facts and circumstances that would impel a reasonably cautious
man to make such inquiry or when the purchaser has knowledge of a defect or the
lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to
inquire into the status of the title of the property in litigation. The presence of anything
which excites or arouses suspicion should then prompt the vendee to look beyond the
certificate and investigate the title of the vendor appearing on the face of said
certificate. One who falls within the exception can neither be denominated an
innocent purchaser for value nor a purchaser in good faith; and hence does not merit
the protection of the law.38 [Emphasis supplied]
A judicious evaluation of the records and the applicable legal principles leads us to
the conclusion that the subsequent purchasers of the First Parcel were not
purchasers in good faith.
First. The Court notes—and it is not disputed—that Rosafina Reginaldo, the Rural
Bank of Urbiztondo, Marceliano and Rosalia Cayabyab, and Rafael and Rosemarie
Ramos are successors-in-interest of Pastor Cayabyab, having purchased the First
Parcel after the filing of the Complaint in Civil Case No. 15298. In the case of the
Rural Bank of Urbiztondo and Rafael and Rosemarie Ramos, they even purchased
the property after the decision in Civil Case No. 15298 had been rendered.
The records reveal that a Petition for Certiorari and Prohibition,39 dated November 18,
1985, was filed by Pastor and Rosita Cayabyab, Marceliano and Rosalia Cayabyab
and Rafael and Rosemarie Cayabyab assailing the order and resolutions of the trial
court in Civil Case No. 15937, delegating the reception of the plaintiffs’ evidence ex-
parte to the Branch Clerk of Court and denying the defendants’ motions for
reconsideration. The Court of Appeals40 set aside the questioned order and
resolutions and directed the respondent Judge to allow the defendants to adduce
their evidence. The decision was anchored, among others, on the defendants’
representation that the plaintiffs were neither parties nor intervenors in Civil Case No.
15298 but have only laid claim on the subject properties as donees.41 This allegation
is patently false since, as previously mentioned, Eulalia Cayabyab and her children,
Marceliano, Mercedes, Rufina, Josefina, Susana and Alfredo Cayabyab, were the
plaintiffs in Civil Case No. 15298. Even so, the decision apparently became one of the
bases for the respondents’ claim that the institution of Civil Case No. 15937 resulted
in the joinder of issues thereby allowing them to adduce evidence in support of their
claim of ownership and possession of the subject properties, a stand sanctioned by
the appellate court in the instant case.
Second. It is important to emphasize that Marceliano Cayabyab was among the
plaintiffs in Civil Case No. 15298, contrary to the vehement denial in
his Answer,42 dated July 21, 1983, in which he claimed that "answering defendants
(Marceliano and Rosalia Cayabyab) are not parties to the said case and are totally
strangers as regards the same."43
Third. During the pendency of Civil Case No. 15298, Eulalia Cayabyab and her
children Alfredo, Ludovico, Marceliano, Mercedes, Susana, Rufina, Buenaventura and
Josefina, filed a new case44 for the annulment of certain documents affecting several
parcels of land, including the two parcels subject of the instant petition, against Pastor
and Rosita Cayabyab and Rosafina Reginaldo. This was revealed by the respondents
themselves in their Comment45 dated October 8, 1997 and Memorandum46 dated
January 20, 1999.
Parenthetically, in order to bolster their claim of valid title, the respondents constantly
underscore the fact that Eulalia Cayabyab executed an Affidavit47 dated June 17,
14
1976, affirming the genuineness of the Deeds of Absolute Sale in favor of Pastor
Cayabyab and requesting the cancellation of the adverse claims annotated on the
TCTs covering the First and Second Parcels. It should be noted, however, that after
executing the Affidavit on June 17, 1976, Eulalia Cayabyab herself filed
a Complaint (Civil Case No. 15298) for the annulment of the Deeds of Absolute
Sale and the reconveyance of the subject properties on February 9, 1977. It is
beyond this Court’s power to hypothesize on the reasons for Eulalia Cayabyab’s
change of mind. What is clear is that the trial court rendered a decision in Civil Case
No. 15298 which subsequently became final. Eulalia Cayabyab’s Affidavit which was
executed before the institution of Civil Case No. 15298 cannot, by any means, be
construed as a bar to the final decision declaring Pastor Cayabyab’s titles null and
void.
Curiously, the respondents never questioned the petitioners’ assertion that a notice
of lis pendens was annotated at the back of the TCT covering the First Parcel. The
trial court did not rule on this point but the Court of Appeals declared that there was
no such notice annotated on TCT No. 117134. Whether there was an annotation
inscribed in TCT No. 117134 will not, however, affect the Court’s finding that the
respondents are not purchasers in good faith.
To summarize, the records disclose circumstances indicating that Rosafina
Reginaldo, the Rural Bank of Urbiztondo and the respondents Marceliano and
Rosalia Cayabyab and Rafael and Rosemarie Ramos were not purchasers in good
faith.
Rosafina Reginaldo purchased the First Parcel during the pendency of Civil Case No.
15298. Moreover, she was one of the defendants, together with Pastor and Rosita
Cayabyab, in Civil Case No. SCC-552 filed by Eulalia Cayabyab and her children
Alfredo, Ludovico, Marceliano, Mercedes, Susana, Rufina, Buenaventura and
Josefina for the annulment of certain documents concerning several parcels of land,
among which was the First Parcel.
As for the Rural Bank of Urbiztondo, it became a mortgagee of the First Parcel initially
on June 12, 1977 and later, on December 23, 1977, after the filing of the Complaint in
Civil Case No. 15298 on February 9, 1977. After the decision in the case became
final, the bank purchased the property during foreclosure proceedings. It later sold the
property to Marceliano Cayabyab, one of the plaintiffs in Civil Case No. 15298.
As regards Marceliano, his participation in Civil Case Nos. 15298 and SCC-552 seals
his knowledge of the petitioners’ claim over the subject properties.
Likewise, Rafael and Rosemarie Ramos cannot feign ignorance of the proceedings in
Civil Case No. 15298 and the final decision therein declaring null and void the Deeds
of Absolute Sale and the corresponding TCTs issued in the name of Pastor
Cayabyab. The fact that the parties are family members also convinces the Court that
the respondents’ assertion of lack of knowledge of Civil Case No. 15298 and the
petitioners’ claim over the subject properties is a mere pretext.
As regards the Second Parcel, it is not disputed that TCT No. 117094 is in Pastor
Cayabyab’s name and possession. Emanating, as it did, from the final decision in
Civil Case No. 15298, Pastor Cayabyab’s title is null and void.
The final issue pertains to the deed of donation inter vivos allegedly executed by
Eulalia Cayabyab in favor of the petitioners. The trial court sustained the existence
and validity of the deed and declared the plaintiffs, the petitioners herein, to be the
true and lawful owners of the subject properties.
Interestingly, petitioner Rufina Cayana verified the existence of the deed of This leaves us with the question of who the rightful owners of the subject properties
donation inter vivos on direct examination. She declared: are. The Court holds that the First and Second Parcels properly belong to the estate
Q: You said, you know the two parcels of land, subject of this litigation, why of Raymundo and Eulalia Cayabyab, the same to be partitioned in accordance with
do you know them? the law on succession.
A: I know them, sir, because I am one of the owners of said parcels of land. WHEREFORE, the Decision and Resolution of the Court of Appeals are hereby
Q: Who are your co-owners? REVERSED and the Decision of the trial court is accordingly REINSTATED but with
A: Mercedes C. de Guzman, Josefina C. Rabina and Susana C. Sambale, the modification that the First and Second Parcels should be included in the estate of
sir. Raymundo and Eulalia Cayabyab and partitioned in accordance with the law on
Q: How did you and your co-owners acquire these two parcels of land? succession.
A: By way of donation intervivos executed by our mother, Eulalia Aquino SO ORDERED.
Vda. De Cayabyab, sometime on January 5, 1980, sir.
Q: Do you have a copy of that donation intervivos?
A: Yes, sir.
G.R. No. 148090 November 28, 2006
Q: Showing to you this document, entitled ‘Donation Inter-Vivos", will you go
STRONGHOLD INSURANCE COMPANY, INC., Petitioner,
over this if this is the same document you are referring to?
vs.
A: Yes, sir, that is the one.
HONORABLE NEMESIO S. FELIX, in his capacity as Presiding Judge of Branch
ATTY. PALMA:
56, Regional Trial Court, Makati City, RICHARD C. JAMORA, Branch Clerk of
May we pray that this document be marked as Exh. A.48 [Emphasis
Court, and EMERITA GARON, Respondents.
supplied.]
DECISION
Petitioner Josefina Rabina also confirmed the existence of the deed. She testified:
CARPIO, J.:
Q: Is there any document regarding the donation?
The Case
A: Yes, sir.
Before the Court is a petition for review1 assailing the 4 May 2001 Decision2 of the
Q: Showing to you this deed of donation, is this the deed of donation you are
Court of Appeals in CA-G.R. SP No. 63334.
referring to?
The Antecedent Facts
A: Yes, sir.
Emerita Garon ("Garon") filed an action for sum of money docketed as Civil Case No.
Q: There is a signature above the typewritten name ‘Eulalia Aquino Vda. De
99-1051 against Project Movers Realty and Development Corporation ("Project
Cayabyab,’ do you know those (sic) signature is that?
Movers") and Stronghold Insurance Company, Inc. ("Stronghold Insurance"). In an
A: Yes, sir, this is the signature of my mother.49 [Emphasis supplied.]
Order3 dated 19 September 2000, the Regional Trial Court of Makati City, Branch
The appellate court, however, pronounced that the petitioners were not able to prove
564 ("trial court") granted Garon’s motion for summary judgment. The trial court
their claim of ownership of the subject properties as they failed to present the original
rendered judgment in favor of Garon, as follows:
or certified true copy of the deed of donation inter vivos. The Court of Appeals, in fact,
1. Defendant Project Movers Realty and Development Corporation is hereby
held that the purported Exhibit "A" is actually the allegation on the existence of the
directed to pay plaintiff as follows:
alleged deed contained in the complaint itself.50
On Promissory Note No. PMRDC 97-12-332:
Due to the conflicting findings of the trial court and the appellate court, we
(A) The sum of PESOS: Six Million Eighty Eight Thousand Seven
requested51 the transmittal to this Court of, among others, the deed of donation inter
Hundred Eighty Three and 68/100 (₱6,088,783.68) under PMRDC-
vivos marked as Exhibit "A" for the plaintiffs during the direct examination of Rufina
97-12-332;
Cayana. In her reply dated September 2, 2002, the clerk of court informed the Court
(B) Interest thereon at 36% per annum computed from 19
that the entire original records of Civil Case No. 15937, including Exhibit "A," were
December 1997 until fully paid;
listed in the trial court’s records as among the exhibits forwarded to the Court of
(C) A penalty of 3% per month computed from 03 November 1998
Appeals.
until full payment on all unpaid amounts consisting of the principal
However, except for the Index of Exhibits for the Plaintiffs-Appellees52 which lists
and interest.
Exhibit "A," the records of this case are bereft of any showing that the plaintiffs
On Promissory Note No. PMRDC No. 97-12-333:
formally offered in evidence the original or certified true copy of the deed of
(A) The peso equivalent of the sum of DOLLARS: One Hundred
donation inter vivos purportedly executed by Eulalia Cayabyab. The fact that it was
Eighty Nine Thousand Four Hundred Eighteen and 75/100
only when they filed the instant petition that the petitioners actually attached as Annex
(US$189,418.75) under PMRDC-97-12-333;
"F"53 a copy of the said deed is further proof of the petitioners’ lapse. As a rule, the
(B) Interest thereon at the stipulated rate of 17% per annum
court shall not consider evidence which has not been formally offered.54 This being
computed from 31 December 1997;
so, the donation in favor of the petitioners cannot be upheld.
(C) A penalty of 3% per month computed from 03 November 1998 until full
payment on all unpaid amounts consisting of the principal and interest.
15
 2. Defendant Stronghold Insurance Company, Inc. is hereby held jointly and
solidarily liable to plaintiff Mrs. Garon in the amount of PESOS: TWELVE
MILLION SEVEN HUNDRED FIFTY FIVE THOUSAND ONE HUNDRED
THIRTY NINE AND EIGHTY FIVE CENTAVOS (₱12,755,139.85).
3. Defendants Project Movers Realty and Development Corporation and
Stronghold Insurance Company, Inc. are also ordered to pay plaintiff Mrs.
Garon jointly and severally the sum of PESOS: TWO HUNDRED
THOUSAND as attorney’s fees plus costs of suit.
All other claims and counter-claims of the parties are hereby ordered dismissed.
SO ORDERED.5
On 6 October 2000, Garon filed a motion for execution pending appeal. On 10
October 2000, Stronghold Insurance moved for the reconsideration of the 19
September 2000 Order of the trial court.
In an Order6 dated 23 January 2001, the trial court denied Stronghold Insurance’s
motion for reconsideration for lack of merit.
In an Order7 dated 8 February 2001, the trial court granted Garon’s motion for
execution pending appeal. The trial court ordered Garon to post a bond of ₱20 million
to answer for any damage that Project Movers and Stronghold Insurance may sustain
by reason of the execution pending appeal. On 14 February 2001, Branch Clerk of
Court Richard C. Jamora ("Jamora") issued a writ of execution pending appeal.
On 16 February 2001, Stronghold Insurance filed a notice of appeal.
Stronghold Insurance also filed a petition for certiorari before the Court of Appeals to
assail the trial court’s 8 February 2001 Order and the writ of execution pending
appeal. In its Resolution8 of 23 February 2001, the Court of Appeals enjoined the trial
court, Jamora and Garon from enforcing the 8 February 2001 Order. However, it
turned out that notices of garnishment had been served before the Court of Appeals
issued the temporary restraining order (TRO). In its Order9 dated 7 March 2001, the
trial court denied Stronghold Insurance’s Urgent Motion for the recall of the notices of
garnishment.
The Ruling of the Court of Appeals
In its 4 May 2001 Decision, the Court of Appeals dismissed the petition of Stronghold
Insurance and lifted the TRO it issued.
The Court of Appeals sustained the trial court in issuing the writ of execution pending
appeal on the ground of illness of Garon’s husband. Citing Articles 6810 and 19511 of
the Family Code, the Court of Appeals held that while it was not Garon who was ill,
Garon needed the money to support her husband’s medical expenses and to support
her family.
Stronghold Insurance alleged that its liability is limited only to ₱12,755,139.85 in
accordance with its surety bond with Project Movers, plus attorney’s fees of ₱200,000
as awarded by the trial court. However, the amount in the writ of execution pending
appeal and notices of garnishment is ₱56 million. Nevertheless, the Court of Appeals
ruled that Stronghold Insurance failed to show that more than ₱12,755,139.85 had
been garnished.
Hence, the petition before this Court.
In its Resolution12 dated 8 August 2001, this Court issued a TRO to restrain and
enjoin the enforcement of the 8 February 2001 Order and the writ of execution
pending appeal until further orders from this Court.
The Issue
The sole issue is whether there are good reasons to justify execution pending appeal.
16
The Ruling of This Court
The petition has merit.
Requisites of Execution Pending Appeal
Execution pending appeal is governed by paragraph (a), Section 2, Rule 39 of the
1997 Rules of Civil Procedure ("Rules") which provides:
SEC. 2. Discretionary execution. -
(a) Execution of a judgment or final order pending appeal. - On motion of the
prevailing party with notice to the adverse party filed in the trial court while it has
jurisdiction over the case and is in possession of either the original record or the
record on appeal, as the case may be, at the time of the filing of such motion, said
court may, in its discretion, order execution of a judgment or final order even before
the expiration of the period to appeal.
After the trial court has lost jurisdiction, the motion for execution pending appeal may
be filed in the appellate court.
Discretionary execution may only issue upon good reasons to be stated in a special
order after due hearing.
xxxx
Execution pending appeal is an exception to the general rule. The Court explained
the nature of execution pending appeal as follows:
Execution pending appeal is an extraordinary remedy, being more of the exception
rather than the rule. This rule is strictly construed against the movant because courts
look with disfavor upon any attempt to execute a judgment which has not acquired
finality. Such execution affects the rights of the parties which are yet to be ascertained
on appeal.13
The requisites for the grant of an execution of a judgment pending appeal are the
following:
(a) there must be a motion by the prevailing party with notice to the adverse
party;
(b) there must be good reasons for execution pending appeal;
(c) the good reasons must be stated in the special order.14
As a discretionary execution, execution pending appeal is permissible only when
good reasons exist for immediately executing the judgment before finality or pending
appeal or even before the expiration of the period to appeal.15Good reasons, special,
important, pressing reasons must exist to justify execution pending appeal; otherwise,
instead of an instrument of solicitude and justice, it may well become a tool of
oppression and inequality.16 Good reasons consist of exceptional circumstances of
such urgency as to outweigh the injury or damage that the losing party may suffer
should the appealed judgment be reversed later.17
Existence of Good Grounds to Justify Execution Pending Appeal
In this case, Garon anchors the motion for execution pending appeal on the following
grounds:
(a) any appeal which Project Movers and Stronghold Insurance may take
from the summary judgment would be patently dilatory;
(b) the ill health of Garon’s spouse and the spouses’ urgent need for the
funds owed to them by Project Movers and Stronghold Insurance constitute
good reasons for execution pending appeal; and
(c) Garon is ready and willing to post a bond to answer for any damage
Project Movers and Stronghold Insurance may suffer should the trial court’s
decision be reversed on appeal.18
In granting the motion for execution pending appeal, the trial court ruled:
A perusal of [t]he records of the instant case will sustain plaintiff’s claim that
defendants raised no valid or meritorious defenses against the claims of plaintiff. The
Court notes with interest the fact that defendants admitted the genuineness and due
execution of the Promissory Notes and Surety Agreement sued upon in this case.
The instant case simply turns on the issues of (i) whether or not there was a valid,
due and demandable obligation and (ii) whether or not the obligation had been
extinguished in the manner provided for under our laws. The Answers of defendants
contained admissions that the obligation was valid and subsisting and that the same
was due and unpaid. Founded as it is on Promissory Notes and Surety Agreements,
the authenticity and due execution of which had been admitted, the Court is
convinced that plaintiff is entitled to a judgment in her favor and that any appeal
therefrom will obviously be a ploy to delay the proceedings (See Home Insurance
Company vs. Court of Appeals, 184 SCRA 318).
The second ground relied upon by plaintiff is also impressed with merit. In Ma-ao
Sugar Central vs. Canete, 19 SCRA 646, the Supreme Court held that the movant
was entitled to execution pending appeal of an award of compensation, ruling that his
ill health and urgent need for the funds so awarded were considered "good reasons"
to justify execution pending appeal (See also De Leon vs. Soriano, 95 Phil. 806).
It is established that plaintiff’s spouse, Mr. Robert Garon, suffers from coronary artery
disease, benign Prostatic Hyperplasia and hyperlipidemia. He is undergoing
continuous treatment for the foregoing ailments and has been constrained to make
serious lifestyle changes, that he can no longer actively earn a living. As shown in
plaintiff’s verified motion, she has urgent need of the funds owed to her by defendants
in order to answer for her husband’s medical expenses and for the day-to-day support
of the family considering her husband’s ill health. The Court therefore finds and holds
that there exists good reasons warranting an execution pending appeal.19
The trial court ruled that an appeal from its 19 September 2000 Order is only a ploy to
delay the proceedings of the case. However, the authority to determine whether an
appeal is dilatory lies with the appellate court.20 The trial court’s assumption that the
appeal is dilatory prematurely judges the merits of the main case on appeal.21 Thus:
Well-settled is the rule that it is not for the trial court to determine the merit of a
decision it rendered as this is the role of the appellate Court. Hence, it is not within
the competence of the trial court, in resolving the motion for execution pending
appeal, to rule that the appeal is patently dilatory and to rely on the same as the basis
for finding good reason to grant the motion.22
In a Decision23 promulgated on 7 May 2004 in CA-G.R. CV No. 69962 entitled
"Emerita Garon v. Project Movers Realty and Development Corporation, et al.," the
Court of Appeals sustained the trial court in rendering the summary judgment in Civil
Case No. 99-1051. However, the Court of Appeals ruled that Stronghold Insurance
could not be held solidarily liable with Project Movers. The Court of Appeals ruled that
the surety bond between Project Movers and Stronghold Insurance expired on 7
November 1998 before the maturity of Project Movers’ loans on 17 December 1998
and 31 December 1998, respectively. Hence, when the loans matured, the liability of
Stronghold Insurance had long ceased. The Court of Appeals affirmed the trial court’s
19 September 2000 Order with modification by ruling that Stronghold Insurance is not
liable to Garon.
The 7 May 2004 Decision of the Court of Appeals is not yet final. It is the subject of a
petition for review filed by Garon before this Court. The case, docketed as G.R. No.
17
166058, is still pending with this Court. While this Court may either affirm or reverse
the 7 May 2004 Decision of the Court of Appeals, the fact that the Court of Appeals
absolved Stronghold Insurance from liability to Garon shows that the appeal from the
19 September 2000 Order is not dilatory on the part of Stronghold Insurance.
We agree with Stronghold Insurance that Garon failed to present good reasons to
justify execution pending appeal. The situations in the cases cited by the trial court
are not similar to this case. In Ma-Ao Sugar Central Co., Inc. v. Cañete,24 Cañete filed
an action for compensation for his illness. The Workmen’s Compensation
Commission found the illness compensable. Considering Cañete’s physical condition
and the Court’s finding that he was in constant danger of death, the Court allowed
execution pending appeal. In De Leon, et al. v. Soriano, et al.,25 De Leon, et al.
defaulted on an agreement that was peculiarly personal to Asuncion. The agreement
was valid only during Asuncion’s lifetime. The Court considered that Soriano’s health
was delicate and she was 75 years old at that time. Hence, execution pending appeal
was justified. In this case, it was not Garon, but her husband, who was ill.
The posting of a bond, standing alone and absent the good reasons required under
Section 2, Rule 39 of the Rules, is not enough to allow execution pending appeal. The
mere filing of a bond by a successful party is not a good reason to justify execution
pending appeal as a combination of circumstances is the dominant consideration
which impels the grant of immediate execution.26 The bond is only an additional factor
for the protection of the defendant’s creditor.27
The exercise of the power to grant or deny a motion for execution pending appeal is
addressed to the sound discretion of the trial court.28 However, the existence of good
reasons is indispensable to the grant of execution pending appeal.29 Here, Garon
failed to advance good reasons that would justify the execution pending appeal.
Execution Pending Appeal against Stronghold Insurance
Exceeds its Liability under the Trial Court’s Order
The dispositive portion of the trial court’s 19 September 2000 Order states:
WHEREFORE, premises considered[,] this Court hereby renders judgment in favor of
the plaintiff Mrs. Emerita I. Garon as follows:
xxxx
2. Defendant Stronghold Insurance Company, Inc. is hereby held jointly and
solidarily liable to plaintiff Mrs. Garon in the amount of PESOS: TWELVE
MILLION SEVEN HUNDRED FIFTY FIVE THOUSAND ONE HUNDRED
THIRTY NINE AND EIGHTY FIVE CENTAVOS (₱12,755,139.85).
3. Defendants Project Movers Realty and Development Corporation and
Stronghold Insurance Company, Inc. are also ordered to pay plaintiff Mrs.
Garon jointly and severally the sum of PESOS: TWO HUNDRED
THOUSAND as attorney’s fees plus costs of suit.
x x x x30
The writ of execution pending appeal issued against Project Movers and Stronghold
Insurance is for ₱56 million.31However, the Court of Appeals ruled that Stronghold
Insurance failed to show that more than ₱12,755,139.85 had been garnished. The
ruling of the Court of Appeals unduly burdens Stronghold Insurance because the
amount garnished could exceed its liability. It gives the sheriff the discretion to garnish
more than ₱12,755,139.85 from the accounts of Stronghold Insurance. The amount
for garnishment is no longer ministerial on the part of the sheriff. This is not allowed.
Thus:
Leaving to the Sheriff, as held by the Court of Appeals, the determination of the exact Hence, the complaint for illegal dismissal and non-payment of monetary benefits filed
amount due under the Writ would be tantamount to vesting such officer with judicial by petitioners and other LMCEC employees who were similarly situated, namely:
powers. He would have to receive evidence to determine the exact amount owing. In Guillermo S. Lucas (Lucas), Alvin Bontugay, Rector Palajos, and Hermes B. Pacatang
his hands would be placed a broad discretion that can only lead to delay and open (Pacatang), against respondents before the National Labor Relations Commission
the door to possible abuse. The orderly administration of justice requires that the (NLRC). The employees alleged that they were illegally dismissed from employment
amount on execution be determined judicially and the duties of the Sheriff confined to and that their employer failed to pay them their holiday pay, premium pay for holiday,
purely ministerial ones.32 rest day, service incentive leave pay, and 13th month pay during the existence and
WHEREFORE, we SET ASIDE the 4 May 2001 Decision of the Court of Appeals in duration of their employment. They also averred that they were not provided with sick
CA-G.R. SP No. 63334. We also SET ASIDE the 8 February 2001 Order of the and vacation leaves.10
Regional Trial Court of Makati City, Branch 56 and the writ of execution pending Respondents denied that petitioners were illegally dismissed from employment. They
appeal issued on 14 February 2001. We make permanent the temporary restraining claimed that petitioners were project employees and, upon the completion of each
order we issued on 8 August 2001. project, they were served notices of project completion.11 They clarified that the
SO ORDERED. termination of petitioners’ employment was due to the completion of the projects for
which they were hired.12
Petitioners, however, countered that they were regular employees as they had been
engaged to perform activities which are usually necessary or desirable in the usual
G.R. No. 176748 September 1, 2010
business or trade of LMCEC. They denied that they were project or contractual
JUDY O. DACUITAL,1 EUGENIO L. MONDANO, JR., JOSEPH GALER,2 MARIANO
employees because their employment was continuous and uninterrupted for more
MORALES, ROBERTO RUANCE, JOSEPH PORCADILLA, RAULITO PALAD,
than one (1) year. Finally, they maintained that they were part of a work pool from
RICARDO DIGAMON, NONITO PRISCO , EULOGIO M. TUTOR, MELVIN PEPITO,
which LMCEC drew its workers for its various projects.13
HELYTO N. REYES,3 RANDOLF C. BALUDO, ALBERTO EPONDOL, RODELO A.
On July 24, 2002, Labor Arbiter (LA) Lilia S. Savari rendered a decision,14 the
SUSPER,4 EVARISTO VIGORI, 5 JONATHAN P. AYAAY, FELIPE ERILLA, ARIS A.
dispositive portion of which reads:
GARCIA, ROY A. GARCIA, and RESTITUTO TAPANAN, Petitioners,
WHEREFORE, a Decision is hereby rendered declaring the dismissal of the
vs.
complainants illegal. Corollarily, except for complainant Helyto N. Reyes, who has
L.M. CAMUS ENGINEERING CORPORATION and/or LUIS M.
voluntarily withdrawn his case against the respondents, all the other complainants are
CAMUS, Respondents.
hereby ordered to report to respondents for reinstatement but without backwages.
DECISION
All other claims are dismissed for lack of merit.
NACHURA, J.:
SO ORDERED.15
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
The LA did not give credence to respondents’ claim that petitioners were project
assailing the Court of Appeals (CA) Decision6 dated September 25, 2006 and
employees because of the former’s failure to present evidence showing that
Resolution7 dated February 14, 2007 in CA-G.R. SP No. 90377.
petitioners’ contracts of employment reflected the duration of each project for which
The case stemmed from the following factual and procedural antecedents:
they were employed and that respondents duly reported to the Department of Labor
Respondent L.M. Camus Engineering Corporation (LMCEC) is a domestic
and Employment every termination of employment and project. As petitioners’
corporation duly organized and existing under and by virtue of Philippine laws,
dismissal was without just and valid cause, the LA ruled that their termination from
engaged in construction, engineering, and air-conditioning business; while
employment was illegal. However, the LA refused to award backwages and other
respondent Luis M. Camus (Camus) is the company president.
monetary claims on the ground that petitioners’ employment was not continuous as
Petitioners Judy O. Dacuital (Dacuital), Eugenio L. Mondano, Jr., Joseph Galer
they belonged to the regular work pool of LMCEC.16
(Galer), Mariano Morales, Roberto Ruance (Ruance), Joseph Porcadilla, Raulito
The employees jointly filed a partial appeal to the NLRC, except Pacatang and Lucas
Palad (Palad), Ricardo Digamon (Digamon), Nonito Prisco, Eulogio M. Tutor, Melvin
who filed their separate appeal. On the other hand, the Administrative Officer of
Pepito, Helyto N. Reyes (Reyes), Randolf C. Baludo (Baludo), Alberto Epondol,
LMCEC issued individual communications to petitioners directing their reinstatement
Rodelo A. Susper, Evaristo Vigori, Jonathan P. Ayaay, Felipe Erilla, Aris A. Garcia
pursuant to the LA decision.17
(Aris), Roy A. Garcia (Roy), and Restituto Tapanan (Tapanan) were hired by LMCEC
On June 9, 2004, the NLRC modified18 the LA decision, the dispositive portion of
as welder, tinsmith, pipefitter, and mechanical employees.8
which reads:
During the months of January, February and March 2001, petitioners were required
WHEREFORE, the employees enumerated above are hereby ordered reinstated with
by LMCEC to surrender their identification cards and ATM cards and were ordered to
limited backwages, without loss of seniority rights and other privileges.
execute contracts of employment. Most of the petitioners did not comply with the
The computation division of the RAB-NCR is hereby ordered to compute the award as
directive as they believed that it was only respondents’ strategy to get rid of
herein established.
petitioners’ regular status since they would become new employees disregarding their
SO ORDERED.19
length of service. Petitioners were later dismissed from employment.9

18
The NLRC agreed with the LA that petitioners were illegally dismissed from
employment. As a consequence of this pronouncement, the tribunal deemed it proper
not only to reinstate them to their original position but also to give them their
backwages. However, in view of the delayed resolution of the case that could not be
attributed to respondents, the NLRC limited the award of backwages from the date of
dismissal up to six (6) months after the case was elevated on appeal on September
23, 2002.20 The appeal filed by Pacatang and Lucas was dismissed for having been
filed out of time.
Respondents and complainants Pacatang and Lucas moved for the reconsideration
of the NLRC decision. In a Resolution21 dated April 11, 2005, the NLRC denied the
motion for reconsideration filed by respondents, but granted that of Pacatang and
Lucas, thereby entitling the latter to receive backwages.
Petitioners subsequently moved for the execution of the NLRC decision.
Respondents, however, filed a Clarificatory Motion and Opposition to the Motion for
Issuance of Entry of Judgment and Writ of Execution and for Recomputation of the
Monetary Award22 in view of respondents’ petition before the CA and the
reinstatement of some of the employees.
In an Order23 dated August 23, 2005, the NLRC granted the motion. The NLRC took
into consideration the fact that some of the employees who were earlier dismissed
from employment had actually been reinstated. Hence, it limited the award of
backwages from illegal dismissal up to the date of actual reinstatement. These
employees who were actually reinstated were Galer, Ruance, Palad, Digamon, Aris,
Roy, and Baludo.24
In the meantime, in their petition before the CA, respondents obtained a favorable
decision when the appellate court declared petitioners’ termination from employment
valid and legal and consequently set aside the award of backwages.25 The pertinent
portion of the decision reads:
IN VIEW WHEREOF, the Petition is GRANTED. The assailed Decision (dated June 9,
2004) of the National Labor Relations Commission is hereby MODIFIED. The
termination from employment of the public respondents herein are declared valid and
legal. Their award of backwages computed from the date of their termination are (sic)
SET ASIDE.
SO ORDERED.26
Contrary to the conclusions of the LA and the NLRC, the CA held that petitioners were
project employees as their employment contracts provided that their respective
tenures of employment were dependent on the duration of the construction projects.
As such employees, their employment could lawfully be terminated upon the
completion of the project for which they were hired. Consequently, there was no
illegal dismissal.27 Petitioners’ motion for reconsideration was denied on February 14,
2007.28
Aggrieved, petitioners come to us seeking a review of the CA Decision, anchored on
the following issues:
I. Whether or not the Findings of the Honorable Labor Arbiter as affirmed by
the Honorable National Labor Relations Commission should be accorded
high respect and finality.
II. Whether or not Petitioners were regular employees of respondent
Corporation.
III. Whether or not Complainants were illegally dismissed from their
employment.29
19
Petitioners aver that the CA erred in completely disregarding the findings of the LA, as
affirmed by the NLRC, in view of the settled rule that findings of fact and conclusions
of law of quasi-judicial agencies like the NLRC are generally entitled to great respect
and even finality. They also insist that they were regular employees, considering that
the services they rendered were not only necessary but also indispensable to
LMCEC’s business. They likewise claim that they had been in the service for a
continuous period and a considerable length of time, and are in fact members of a
work pool from which LMCEC draws its workers for its projects. Hence, even if they
were initially hired as project employees, they eventually attained the status of regular
employees. Petitioners also insist that they were illegally dismissed as their
employment was terminated without just and valid cause, and without affording them
due process of law. Lastly, petitioners claim that the NLRC had previously rendered
decisions in favor of LMCEC employees who were similarly situated, hence, their
case should also be decided in favor of labor.30
The petition is meritorious.
We discuss first the procedural issues.
Respondents point out that the decision of the LA had attained finality, except as to
Palad, because of their failure to appeal. They explain that the Memorandum on
Appeal filed with the NLRC was verified only by Palad without stating therein that he
did it in representation of the other petitioners. In view of the finality of the NLRC
decision, the instant petition should not prosper.
We do not agree.
Our pronouncement in Pacquing v. Coca-Cola Philippines, Inc.31 is instructive.
As to the defective verification in the appeal memorandum before the NLRC, the
same liberality applies. After all, the requirement regarding verification of a pleading is
formal, not jurisdictional. Such requirement is simply a condition affecting the form of
pleading, the non-compliance of which does not necessarily render the pleading
fatally defective. Verification is simply intended to secure an assurance that the
allegations in the pleading are true and correct and not the product of the imagination
or a matter of speculation, and that the pleading is filed in good faith. The court or
tribunal may order the correction of the pleading if verification is lacking or act on the
pleading although it is not verified, if the attending circumstances are such that strict
compliance with the rules may be dispensed with in order that the ends of justice may
thereby be served.
Moreover, no less than the Labor Code directs labor officials to use reasonable
means to ascertain the facts speedily and objectively, with little regard to technicalities
or formalities; while Section 10, Rule VII of the New Rules of Procedure of the NLRC
provides that technical rules are not binding. Indeed, the application of technical rules
of procedure may be relaxed in labor cases to serve the demand of substantial
justice. Thus, the execution of the verification in the appeal memorandum by only two
complainants in behalf of the other complainants also constitute substantial
compliance.32
Clearly, the NLRC properly took cognizance of the appeal of all the named
complainants even though it was signed by only one of them. While the right to
appeal is a statutory and not a natural right, it is nonetheless an essential part of our
judicial system. Courts are, therefore, advised to proceed with caution, so as not to
deprive a party of the right to appeal. Litigants should have the amplest opportunity
for the proper and just disposition of their cause – free, as much as possible, from the
constraints of procedural technicalities.33 Thus, contrary to respondents’ claim, the
decision had not attained finality even as to those who did not sign the appeal
memorandum.
Now on the substantive aspect.
The issues boil down to whether the CA was correct in concluding that petitioners
were project employees and that their dismissal from employment was legal.
We answer in the negative.
Even if the questions that need to be settled are factual in nature, this Court
nevertheless feels obliged to resolve them due to the incongruent findings of the
NLRC and the LA and those of the CA.34
Article 280 of the Labor Code distinguishes a "project employee" from a "regular
employee" in this wise:
Article 280. Regular and casual employment.—The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.35
A project employee is assigned to a project which begins and ends at determined or
determinable times.36Employees who work under different project employment
contracts for several years do not automatically become regular employees; they can
remain as project employees regardless of the number of years they work. Length of
service is not a controlling factor in determining the nature of one’s
employment.37 Their rehiring is only a natural consequence of the fact that
experienced construction workers are preferred.38 In fact, employees who are
members of a "work pool" from which a company draws workers for deployment to its
different projects do not become regular employees by reason of that fact alone. The
Court has consistently held that members of a "work pool" can either be project
employees or regular employees.39
The principal test used to determine whether employees are project employees is
whether or not the employees were assigned to carry out a specific project or
undertaking, the duration or scope of which was specified at the time the employees
were engaged for that project.40
Admittedly, respondents did not present the employment contracts of petitioners
except that of Dacuital. They explained that it was no longer necessary to present the
other contracts since petitioners were similarly situated. Having presented one
contract, respondents believed that they sufficiently established petitioners’ status as
project employees.
Even though the absence of a written contract does not by itself grant regular status
to petitioners, such a contract is evidence that petitioners were informed of the
duration and scope of their work and their status as project employees.41 In this case,
where no other evidence was offered, the absence of the employment contracts
20
raises a serious question of whether the employees were properly informed at the
onset of their employment of their status as project employees.42
While it is true that respondents presented the employment contract of Dacuital, the
contract does not show that he was informed of the nature, as well as the duration of
his employment. In fact, the duration of the project for which he was allegedly hired
was not specified in the contract. The pertinent provision thereof is quoted hereunder
for easy reference:
3. In accordance with Policy No. 20 of the Labor Code of the Philippines, parties
agree that the effective date of this employment is 4-5-00 up to the duration of the
DUCTWORK/ELECTRICAL/MECHANICAL phase of the project estimated to be
finished in the month of _______, 19______ or earlier.43
Even if we assume that under the above provision of the contract, Dacuital was
informed of the nature of his employment and the duration of the project, that same
contract is not sufficient evidence to show that the other employees were so informed.
It is undisputed that petitioners had individual employment contracts, yet respondents
opted not to present them on the lame excuse that they were similarly situated as
Dacuital. The non-presentation of these contracts gives rise to the presumption that
the employees were not informed of the nature and duration of their employment. It is
doctrinally entrenched that in illegal dismissal cases, the employer has the burden of
proving with clear, accurate, consistent, and convincing evidence that the dismissal
was valid. Absent any other proof that the project employees were informed of their
status as such, it will be presumed that they are regular employees.44
Moreover, Department Order No. 19 (as well as the old Policy Instructions No. 20)
requires employers to submit a report of an employee’s termination to the nearest
public employment office everytime the employment is terminated due to the
completion of a project.45 In this case, there was no evidence that there was indeed
such a report. LMCEC’s failure to file termination reports upon the cessation of
petitioners’ employment was an indication that petitioners were not project but regular
employees.
Well-established is the rule that regular employees enjoy security of tenure and they
can only be dismissed for just or valid cause and upon compliance with due process,
i.e., after notice and hearing. In cases involving an employee’s dismissal, the burden
is on the employer to prove that the dismissal was legal.46 This burden was not amply
discharged by LMCEC in this case. Being regular employees, petitioners were
entitled to security of tenure, and their services may not be terminated except for
causes provided by law.47
Finally, records failed to show that LMCEC afforded petitioners, as regular
employees, due process prior to their dismissal, through the twin requirements of
notice and hearing. Petitioners were not served notices informing them of the
particular acts for which their dismissal was sought. Nor were they required to give
their side regarding the charges made against them, if any. Certainly, petitioners’
dismissal was not carried out in accordance with law and was, therefore, illegal.48
Article 279 of the Labor Code, as amended, provides that an illegally dismissed
employee shall be entitled to reinstatement, full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent from the time his compensation
was withheld from him up to the time of his actual reinstatement.49
Contrary to the conclusion of the NLRC, the backwages due petitioners must be
computed from the time they were unjustly dismissed until actual reinstatement to
their former positions. Thus, until LMCEC implements the reinstatement aspect, its
obligation to petitioners, insofar as accrued backwages and other benefits are
concerned, continues to accumulate.50
The fact that petitioners did not appeal the NLRC decision on this matter does not bar
this Court from ordering its modification. As held in Cocomangas Hotel Beach Resort
v. Visca51¾
While as a general rule, a party who has not appealed is not entitled to affirmative
relief other than the ones granted in the decision of the court below, this Court is
imbued with sufficient authority and discretion to review matters, not otherwise
assigned as errors on appeal, if it finds that their consideration is necessary in arriving
at a complete and just resolution of the case or to serve the interests of justice or to
avoid dispensing piecemeal justice.
Besides, substantive rights like the award of backwages resulting from illegal
dismissal must not be prejudiced by a rigid and technical application of the rules. The
computation of the award for backwages from the time compensation was withheld up
to the time of actual reinstatement is a mere legal consequence of the finding that
respondents [petitioners] were illegally dismissed by petitioners [respondents].52
As to respondent Camus’ liability as LMCEC president, it is settled that in the absence
of malice, bad faith, or specific provision of law, a director or officer of a corporation
cannot be made personally liable for corporate liabilities.53
As held in Lowe, Inc. v. Court of Appeals,54 citing McLeod v. NLRC:55
Personal liability of corporate directors, trustees or officers attaches only when (1)
they assent to a patently unlawful act of the corporation, or when they are guilty of
bad faith or gross negligence in directing its affairs, or when there is a conflict of
interest resulting in damages to the corporation, its stockholders or other persons; (2)
they consent to the issuance of watered down stocks or when, having knowledge of
such issuance, do not forthwith file with the corporate secretary their written objection;
(3) they agree to hold themselves personally and solidarily liable with the corporation;
or (4) they are made by specific provision of law personally answerable for their
corporate action.56
To be sure, Camus has a personality which is distinct and separate from that of
LMCEC. There was no proof that Camus acted in bad faith in dismissing petitioners
from employment. The mere fact that he is the president of the company does not
make him personally liable for the payment of backwages.
Finally, the Court notes that although Tapanan was named as petitioner, he was never
included as a complainant before the NLRC. As such, he is not a party to this case.
Moreover, as clearly stated in the LA decision, Reyes has voluntarily withdrawn his
case against respondents. Thus, although he is one of the petitioners here, he is not
covered by this Decision. Lastly, some of the petitioners had already been actually
reinstated by LMCEC. We emphasize that the computation of their backwages should
be up to the date of actual reinstatement.
WHEREFORE, premises considered, the petition is GRANTED. The Court of Appeals
Decision dated September 25, 2006 and Resolution dated February 14, 2007 in CA-
G.R. SP No. 90377 are REVERSED and SET ASIDE. Petitioners’ dismissal from
employment is declared illegal and, except Helyto N. Reyes and Restituto Tapanan,
they are entitled to full backwages from the time of illegal dismissal until actual
reinstatement.
SO ORDERED.
21
G.R. No. 189496 February 1, 2012
D.M. FERRER & ASSOCIATES CORPORATION, Petitioner,
vs.
UNIVERSITY OF SANTO TOMAS, Respondent.
DECISION
SERENO, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of
Court. Petitioner assails the Court of Appeals (CA) Resolution1 promulgated on 26
June 2009 dismissing the former’s Petition for Certiorari, and the Resolution2 dated 3
September 2009 denying the subsequent Motion for Reconsideration.
The facts are undisputed:
On 25 November 2005, petitioner and University of Santo Tomas Hospital, Inc.
(USTHI) entered into a Project Management Contract for the renovation of the 4th
and 5th floors of the Clinical Division Building, Nurse Call Room and Medical
Records, Medical Arts Tower, Diagnostic Treatment Building and Pay Division
Building.
On various dates, petitioner demanded from USTHI the payment of the construction
costs amounting to ₱17,558,479.39. However, on 16 April 2008, the University of
Santo Tomas (UST), through its rector, Fr. Rolando V. Dela Rosa, wrote a letter
informing petitioner that its claim for payment had been denied, because the Project
Management Contract was without the required prior approval of the board of
trustees. Thus, on 23 May 2008, petitioner filed a Complaint3 for sum of money,
breach of contract and damages against herein respondent UST and USTHI when
the latter failed to pay petitioner despite repeated demands.
In impleading respondent UST, petitioner alleged that the former took complete
control over the business and operation of USTHI, as well as the completion of the
construction project.
It also pointed out that the Articles of Incorporation of USTHI provided that, upon
dissolution, all of the latter’s assets shall be transferred without any consideration and
shall inure to the benefit of UST. It appears that USTHI passed a Resolution on 10
January 2008 dissolving the corporation by shortening its corporate term of existence
from 16 March 2057 to 31 May 2008.
Finally, petitioner alleged that respondent, through its rector, Fr. Dela Rosa, O.P.,
verbally assured the former of the payment of USTHI’s outstanding obligations.
Thus, petitioner posited in part that UST may be impleaded in the case under the
doctrine of "piercing the corporate veil," wherein respondent UST and USTHI would
be considered to be acting as one corporate entity, and UST may be held liable for
the alleged obligations due to petitioner.
Subsequently, respondent filed its Motion to Dismiss dated 12 June 2008.4 It alleged
that the Complaint failed to state a cause of action, and that the claim was
unenforceable under the provisions of the Statute of Frauds.
On 4 August 2008, Judge Bernelito R. Fernandez of Branch 97 of the Regional Trial
Court (RTC) of Quezon City granted the motion and dismissed the Complaint insofar
as respondent UST was concerned.5
First, basing its findings on the documents submitted in support of the Complaint, the
RTC held that respondent was not a real party-in-interest, and that it was not privy to
the contract executed between USTHI and petitioner. Second, the court pointed out
that the alleged verbal assurances of Fr. Dela Rosa should have been in writing to
make these assurances binding and demandable.
Petitioner sought a reconsideration of the RTC Order and asserted that only
allegations of the Complaint, and not the attached documents, should have been the
basis of the trial court’s ruling, consistent with the rule that the cause of action can be
determined only from the facts alleged in the Complaint. It also insisted that the
Statute of Frauds was inapplicable, since USTHI’s obligation had already been
partially executed.6
On 5 October 2008, petitioner filed an Urgent Motion for Voluntary Inhibition7 on the
ground that Judge Fernandez was an alumnus of respondent UST.
Thereafter, Judge Fernandez issued an Order8 inhibiting himself from the case, which
was consequently re-raffled to Branch 76 presided by Judge Alexander S. Balut.
On 16 April 2009, Judge Balut dismissed the Motion for Reconsideration filed by
petitioner,9 upholding the initial findings of Judge Fernandez declaring that respondent
UST was not a real party-in-interest, and that Fr. Dela Rosa’s alleged assurances of
payment were unenforceable.
Subsequently, petitioner filed a Petition for Certiorari under Rule 65 with the
CA.10 Petitioner alleged that the trial court committed grave abuse of discretion when
it granted respondent’s Motion to Dismiss on the basis of the documents submitted in
support of the Complaint, and not solely on the allegations stated therein. Petitioner
pointed out that the allegations raised questions of fact and law, which should have
been threshed out during trial, when both parties would have been given the chance
to present evidence supporting their respective allegations.
However, on 26 June 2009, the CA issued the assailed Resolution and dismissed the
Petition on the ground that a petition under Rule 65 is the wrong remedy to question
the RTC’s Order that completely disposes of the case. Instead, petitioner should have
availed itself of an appeal under Rule 41 of the Rules of Court.
Petitioner moved for a reconsideration of the Resolution.11 It pointed out that the
present case falls under the enumerated exceptions of Rule 41, in particular, while the
main case is still pending, no appeal may be made from a judgment or final order for
or against one or more of several parties or in separate claims, counterclaims, cross-
claims and third-party complaints.
On 3 September 2009, the CA denied the Motion for Reconsideration through its
second assailed Resolution, holding that the motion raised no new issues or
substantial grounds that would merit the reconsideration of the court.
Hence this Petition.
Petitioner raises two grounds in the present Petition: first, whether the CA erred in
dismissing the Petition for Certiorari by failing to consider the exception in Sec. 1(g) of
Rule 41 of the Rules of Court; second, whether the trial court committed grave abuse
of discretion when it held that the Complaint stated no cause of action.
We rule for petitioner.
Respondent insists that petitioner should have first filed a notice of appeal before the
RTC, and the appeal should have been subsequently denied before recourse to the
CA was made. This contention holds no water.
In Jan-Dec Construction Corp. v. Court of Appeals,12 we held that a petition for
certiorari under Rule 65 is the proper remedy to question the dismissal of an action
against one of the parties while the main case is still pending. This is the general rule
in accordance with Rule 41, Sec. 1(g). In that case, ruled thus:
Evidently, the CA erred in dismissing petitioner's petition for certiorari from the Order
of the RTC dismissing the complaint against respondent. While Section 1, Rule 41 of
the 1997 Rules of Civil Procedure states that an appeal may be taken only from a
22
final order that completely disposes of the case, it also provides several exceptions to
the rule, to wit: (a) an order denying a motion for new trial or reconsideration; (b) an
order denying a petition for relief or any similar motion seeking relief from judgment;
(c) an interlocutory order; (d) an order disallowing or dismissing an appeal; (e) an
order denying a motion to set aside a judgment by consent, confession or
compromise on the ground of fraud, mistake or duress, or any other ground vitiating
consent; (f) an order of execution; (g) a judgment or final order for or against one or
more of several parties or in separate claims, counterclaims, cross-claims and third-
party complaints, while the main case is pending, unless the court allows an appeal
therefrom; and (h) an order dismissing an action without prejudice. In the foregoing
instances, the aggrieved party may file an appropriate special civil action for certiorari
under Rule 65.
In the present case, the Order of the RTC dismissing the complaint against
respondent is a final order because it terminates the proceedings against
respondent but it falls within exception (g) of the Rule since the case involves
two defendants, Intermodal and herein respondent and the complaint against
Intermodal is still pending. Thus, the remedy of a special civil action for
certiorari availed of by petitioner before the CA was proper and the CA erred in
dismissing the petition. (Emphasis supplied)
Clearly, in the case at bar, the CA also erred when it dismissed the Petition filed
before it.
Anent the second issue, we also agree with petitioner that the Complaint states a
cause of action against respondent UST. In Abacan v. Northwestern University,
Inc.,13 we said:
It is settled that the existence of a cause of action is determined by the allegations in
the complaint.1âwphi1 In resolving a motion to dismiss based on the failure to state a
cause of action, only the facts alleged in the complaint must be considered. The test
is whether the court can render a valid judgment on the complaint based on the facts
alleged and the prayer asked for. Indeed, the elementary test for failure to state a
cause of action is whether the complaint alleges facts which if true would justify the
relief demanded. Only ultimate facts and not legal conclusions or evidentiary
facts, which should not be alleged in the complaint in the first place, are
considered for purposes of applying the test. (Emphasis supplied)
While it is admitted that respondent UST was not a party to the contract, petitioner
posits that the former is nevertheless liable for the construction costs. In support of its
position, petitioner alleged that (1) UST and USTHI are one and the same
corporation; (2) UST stands to benefit from the assets of USTHI by virtue of the
latter’s Articles of Incorporation; (3) respondent controls the business of USTHI; and
(4) UST’s officials have performed acts that may be construed as an
acknowledgement of respondent’s liability to petitioner.
Obviously, these issues would have been best resolved during trial. The RTC
therefore committed grave abuse of discretion when it dismissed the case against
respondent for lack of cause of action. The trial court relied on the contract executed
between petitioner and USTHI, when the court should have instead considered
merely the allegations stated in the Complaint.
WHEREFORE, in view of the foregoing, the Petition is GRANTED. Branch 76 of the
Regional Trial Court of Quezon City is hereby ordered to REINSTATE respondent
University of Santo Tomas as a defendant in C.C. No. 0862635.
SO ORDERED.
 Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil
Procedure, petitioners assailed the dismissal of the notice of appeal before the Court
of Appeals.
G.R. No. 141524 September 14, 2005
In the appellate court, petitioners claimed that they had seasonably filed their notice
DOMINGO NEYPES, LUZ FAUSTINO, ROGELIO FAUSTINO, LOLITO
of appeal. They argued that the 15-day reglementary period to appeal started to run
VICTORIANO, JACOB OBANIA AND DOMINGO CABACUNGAN, Petitioners,
only on July 22, 1998 since this was the day they received the final order of the trial
vs.
court denying their motion for reconsideration. When they filed their notice of appeal
HON. COURT OF APPEALS, HEIRS OF BERNARDO DEL MUNDO, namely: FE,
on July 27, 1998, only five days had elapsed and they were well within the
CORAZON, JOSEFA, SALVADOR and CARMEN, all surnamed DEL MUNDO,
reglementary period for appeal.7
LAND BANK OF THE PHILIPPINES AND HON. ANTONIO N. ROSALES, Presiding
On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruled
Judge, Branch 43, Regional Trial Court, Roxas, Oriental Mindoro,Respondent.
that the 15-day period to appeal should have been reckoned from March 3, 1998 or
DECISION
the day they received the February 12, 1998 order dismissing their complaint.
CORONA, J.:
According to the appellate court, the order was the "final order" appealable under the
Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito Victoriano, Jacob
Rules. It held further:
Obania and Domingo Cabacungan filed an action for annulment of judgment and
Perforce the petitioners’ tardy appeal was correctly dismissed for the (P)erfection of
titles of land and/or reconveyance and/or reversion with preliminary injunction before
an appeal within the reglementary period and in the manner prescribed by law is
the Regional Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the Bureau
jurisdictional and non-compliance with such legal requirement is fatal and effectively
of Forest Development, Bureau of Lands, Land Bank of the Philippines and the heirs
renders the judgment final and executory.8
of Bernardo del Mundo, namely, Fe, Corazon, Josefa, Salvador and Carmen.
Petitioners filed a motion for reconsideration of the aforementioned decision. This was
In the course of the proceedings, the parties (both petitioners and respondents) filed
denied by the Court of Appeals on January 6, 2000.
various motions with the trial court. Among these were: (1) the motion filed by
In this present petition for review under Rule 45 of the Rules, petitioners ascribe the
petitioners to declare the respondent heirs, the Bureau of Lands and the Bureau of
following errors allegedly committed by the appellate court:
Forest Development in default and (2) the motions to dismiss filed by the respondent
I
heirs and the Land Bank of the Philippines, respectively.
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE
In an order dated May 16, 1997, the trial court, presided by public respondent Judge
PETITIONERS’ PETITION FOR CERTIORARI AND MANDAMUS AND IN
Antonio N. Rosales, resolved the foregoing motions as follows: (1) the petitioners’
AFFIRMING THE ORDER OF THE HON. JUDGE ANTONIO N. ROSALES WHICH
motion to declare respondents Bureau of Lands and Bureau of Forest Development in
DISMISSED THE PETITIONERS’ APPEAL IN CIVIL CASE NO. C-36 OF THE
default was granted for their failure to file an answer, but denied as against the
REGIONAL TRIAL COURT, BRANCH 43, ROXAS, ORIENTAL MINDORO, EVEN
respondent heirs of del Mundo because the substituted service of summons on them
AFTER THE PETITIONERS HAD PAID THE APPEAL DOCKET FEES.
was improper; (2) the Land Bank’s motion to dismiss for lack of cause of action was
II
denied because there were hypothetical admissions and matters that could be
THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING AND
determined only after trial, and (3) the motion to dismiss filed by respondent heirs of
AFFIRMING THE DECISION OR ORDER OF THE RESPONDENT HON. ANTONIO
del Mundo, based on prescription, was also denied because there were factual
M. ROSALES THAT PETITIONERS’ APPEAL WAS FILED OUT OF TIME WHEN
matters that could be determined only after trial.1
PETITIONERS RECEIVED THE LAST OR FINAL ORDER OF THE COURT ON JULY
The respondent heirs filed a motion for reconsideration of the order denying their
22, 1998 AND FILED THEIR NOTICE OF APPEAL ON JULY 27, 1998 AND PAID
motion to dismiss on the ground that the trial court could very well resolve the issue of
THE APPEAL DOCKET FEE ON AUGUST 3, 1998.
prescription from the bare allegations of the complaint itself without waiting for the trial
III
proper.
THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING THAT THE
In an order2 dated February 12, 1998, the trial court dismissed petitioners’ complaint
WORDS "FINAL ORDER" IN SECTION 3, RULE 41, OF THE 1997 RULES OF CIVIL
on the ground that the action had already prescribed. Petitioners allegedly received a
PROCEDURE WILL REFER TO THE [FIRST] ORDER OF RESPONDENT JUDGE
copy of the order of dismissal on March 3, 1998 and, on the 15th day thereafter or on
HON. ANTONIO M. MORALES DATED FEBRUARY 12, 1998 INSTEAD OF THE
March 18, 1998, filed a motion for reconsideration. On July 1, 1998, the trial court
LAST AND FINAL ORDER DATED JULY 1, 1998 COPY OF WHICH WAS RECEIVED
issued another order dismissing the motion for reconsideration3 which petitioners
BY PETITIONERS THROUGH COUNSEL ON JULY 22, 1998.
received on July 22, 1998. Five days later, on July 27, 1998, petitioners filed a notice
IV.
of appeal4 and paid the appeal fees on August 3, 1998.
THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING THAT THE
On August 4, 1998, the court a quo denied the notice of appeal, holding that it was
DECISION IN THE CASE OF DENSO, INC. V. IAC, 148 SCRA 280, IS APPLICABLE
filed eight days late.5 This was received by petitioners on July 31, 1998. Petitioners
IN THE INSTANT CASE THEREBY IGNORING THE PECULIAR FACTS AND
filed a motion for reconsideration but this too was denied in an order dated
CIRCUMSTANCES OF THIS CASE AND THE FACT THAT THE SAID DECISION
September 3, 1998.6

23
WAS RENDERED PRIOR TO THE ENACTMENT OF THE 1997 RULES OF CIVIL
PROCEDURE.9
The foregoing issues essentially revolve around the period within which petitioners
should have filed their notice of appeal.
First and foremost, the right to appeal is neither a natural right nor a part of due
process. It is merely a statutory privilege and may be exercised only in the manner
and in accordance with the provisions of law. Thus, one who seeks to avail of the right
to appeal must comply with the requirements of the Rules. Failure to do so often
leads to the loss of the right to appeal.10 The period to appeal is fixed by both statute
and procedural rules. BP 129,11 as amended, provides:
Sec. 39. Appeals. – The period for appeal from final orders, resolutions, awards,
judgments, or decisions of any court in all these cases shall be fifteen (15) days
counted from the notice of the final order, resolution, award, judgment, or decision
appealed from. Provided, however, that in habeas corpus cases, the period for appeal
shall be (48) forty-eight hours from the notice of judgment appealed from. x x x
Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:
SEC. 3. Period of ordinary appeal. ― The appeal shall be taken within fifteen (15)
days from the notice of the judgment or final order appealed from. Where a
record on appeal is required, the appellant shall file a notice of appeal and a record
on appeal within thirty (30) days from the notice of judgment or final order.
The period to appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial or
reconsideration shall be allowed. (emphasis supplied)
Based on the foregoing, an appeal should be taken within 15 days from the notice of
judgment or final order appealed from. A final judgment or order is one that finally
disposes of a case, leaving nothing more for the court to do with respect to it. It is an
adjudication on the merits which, considering the evidence presented at the trial,
declares categorically what the rights and obligations of the parties are; or it may be
an order or judgment that dismisses an action.12
As already mentioned, petitioners argue that the order of July 1, 1998 denying their
motion for reconsideration should be construed as the "final order," not the February
12, 1998 order which dismissed their complaint. Since they received their copy of the
denial of their motion for reconsideration only on July 22, 1998, the 15-day
reglementary period to appeal had not yet lapsed when they filed their notice of
appeal on July 27, 1998.
What therefore should be deemed as the "final order," receipt of which triggers the
start of the 15-day reglementary period to appeal ¾ the February 12, 1998 order
dismissing the complaint or the July 1, 1998 order dismissing the MR?
In the recent case of Quelnan v. VHF Philippines, Inc.,13 the trial court declared
petitioner Quelnan non-suited and accordingly dismissed his complaint. Upon receipt
of the order of dismissal, he filed an omnibus motion to set it aside. When the
omnibus motion was filed, 12 days of the 15-day period to appeal the order had
lapsed. He later on received another order, this time dismissing his omnibus motion.
He then filed his notice of appeal. But this was likewise dismissed ― for having been
filed out of time.
The court a quo ruled that petitioner should have appealed within 15 days after the
dismissal of his complaint since this was the final order that was appealable under the
Rules. We reversed the trial court and declared that it was the denial of the motion for
24
reconsideration of an order of dismissal of a complaint which constituted the final
order as it was what ended the issues raised there.
This pronouncement was reiterated in the more recent case of Apuyan v. Haldeman
et al.14 where we again considered the order denying petitioner Apuyan’s motion for
reconsideration as the final order which finally disposed of the issues involved in the
case.
Based on the aforementioned cases, we sustain petitioners’ view that the order dated
July 1, 1998 denying their motion for reconsideration was the final order contemplated
in the Rules.
We now come to the next question: if July 1, 1998 was the start of the 15-day
reglementary period to appeal, did petitioners in fact file their notice of appeal on
time?
Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or final
order to appeal the decision of the trial court. On the 15th day of the original appeal
period (March 18, 1998), petitioners did not file a notice of appeal but instead opted to
file a motion for reconsideration. According to the trial court, the MR only interrupted
the running of the 15-day appeal period.15 It ruled that petitioners, having filed their
MR on the last day of the 15-day reglementary period to appeal, had only one (1) day
left to file the notice of appeal upon receipt of the notice of denial of their MR.
Petitioners, however, argue that they were entitled under the Rules to a fresh period
of 15 days from receipt of the "final order" or the order dismissing their motion for
reconsideration.
In Quelnan and Apuyan, both petitioners filed a motion for reconsideration of the
decision of the trial court. We ruled there that they only had the remaining time of the
15-day appeal period to file the notice of appeal. We consistently applied this rule in
similar cases,16 premised on the long-settled doctrine that the perfection of an appeal
in the manner and within the period permitted by law is not only mandatory but also
jurisdictional.17 The rule is also founded on deep-seated considerations of public
policy and sound practice that, at risk of occasional error, the judgments and awards
of courts must become final at some definite time fixed by law.18
Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised Rules of
Court read:
Sec. 3. How appeal is taken. — Appeal maybe taken by serving upon the adverse
party and filing with the trial court within thirty (30) days from notice of order or
judgment, a notice of appeal, an appeal bond, and a record on appeal. The time
during which a motion to set aside the judgment or order or for new trial has been
pending shall be deducted, unless such motion fails to satisfy the requirements of
Rule 37.
But where such motion has been filed during office hours of the last day of the period
herein provided, the appeal must be perfected within the day following that in which
the party appealing received notice of the denial of said motion.19 (emphasis supplied)
According to the foregoing provision, the appeal period previously consisted of 30
days. BP 129, however, reduced this appeal period to 15 days. In the deliberations of
the Committee on Judicial Reorganization20 that drafted BP 129, the raison d’
etre behind the amendment was to shorten the period of appeal21 and enhance the
efficiency and dispensation of justice. We have since required strict observance of
this reglementary period of appeal. Seldom have we condoned late filing of notices of
appeal,22 and only in very exceptional instances to better serve the ends of justice.
In National Waterworks and Sewerage Authority and Authority v. Municipality of
Libmanan,23 however, we declared that appeal is an essential part of our judicial
system and the rules of procedure should not be applied rigidly. This Court has on
occasion advised the lower courts to be cautious about not depriving a party of the
right to appeal and that every party litigant should be afforded the amplest opportunity
for the proper and just disposition of his cause, free from the constraint of
technicalities.
In de la Rosa v. Court of Appeals,24 we stated that, as a rule, periods which require
litigants to do certain acts must be followed unless, under exceptional circumstances,
a delay in the filing of an appeal may be excused on grounds of substantial justice.
There, we condoned the delay incurred by the appealing party due to strong
considerations of fairness and justice.
In setting aside technical infirmities and thereby giving due course to tardy appeals,
we have not been oblivious to or unmindful of the extraordinary situations that merit
liberal application of the Rules. In those situations where technicalities were
dispensed with, our decisions were not meant to undermine the force and effectivity
of the periods set by law. But we hasten to add that in those rare cases where
procedural rules were not stringently applied, there always existed a clear need to
prevent the commission of a grave injustice. Our judicial system and the courts have
always tried to maintain a healthy balance between the strict enforcement of
procedural laws and the guarantee that every litigant be given the full opportunity for
the just and proper disposition of his cause.25
The Supreme Court may promulgate procedural rules in all courts.26 It has the sole
prerogative to amend, repeal or even establish new rules for a more simplified and
inexpensive process, and the speedy disposition of cases. In the rules governing
appeals to it and to the Court of Appeals, particularly Rules 42,27 4328 and 45,29 the
Court allows extensions of time, based on justifiable and compelling reasons, for
parties to file their appeals. These extensions may consist of 15 days or more.
To standardize the appeal periods provided in the Rules and to afford litigants fair
opportunity to appeal their cases, the Court deems it practical to allow a fresh period
of 15 days within which to file the notice of appeal in the Regional Trial Court, counted
from receipt of the order dismissing a motion for a new trial or motion for
reconsideration. 30
Henceforth, this "fresh period rule" shall also apply to Rule 40 governing appeals from
the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review
from the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from
quasi-judicial agencies31 to the Court of Appeals and Rule 45 governing appeals
by certiorari to the Supreme Court.32 The new rule aims to regiment or make the
appeal period uniform, to be counted from receipt of the order denying the motion for
new trial, motion for reconsideration (whether full or partial) or any final order or
resolution.
We thus hold that petitioners seasonably filed their notice of appeal within the fresh
period of 15 days, counted from July 22, 1998 (the date of receipt of notice denying
their motion for reconsideration). This pronouncement is not inconsistent with Rule
41, Section 3 of the Rules which states that the appeal shall be taken within 15 days
from notice of judgment or final order appealed from. The use of the disjunctive word
"or" signifies disassociation and independence of one thing from another. It should, as
a rule, be construed in the sense in which it ordinarily implies.33 Hence, the use of "or"
in the above provision supposes that the notice of appeal may be filed within 15 days
25
from the notice of judgment or within 15 days from notice of the "final order," which we
already determined to refer to the July 1, 1998 order denying the motion for a new
trial or reconsideration.
Neither does this new rule run counter to the spirit of Section 39 of BP 129 which
shortened the appeal period from 30 days to 15 days to hasten the disposition of
cases. The original period of appeal (in this case March 3-18, 1998) remains and the
requirement for strict compliance still applies. The fresh period of 15 days becomes
significant only when a party opts to file a motion for new trial or motion for
reconsideration. In this manner, the trial court which rendered the assailed decision is
given another opportunity to review the case and, in the process, minimize and/or
rectify any error of judgment. While we aim to resolve cases with dispatch and to
have judgments of courts become final at some definite time, we likewise aspire to
deliver justice fairly.
In this case, the new period of 15 days eradicates the confusion as to when the 15-
day appeal period should be counted – from receipt of notice of judgment (March 3,
1998) or from receipt of notice of "final order" appealed from (July 22, 1998).
To recapitulate, a party litigant may either file his notice of appeal within 15 days from
receipt of the Regional Trial Court’s decision or file it within 15 days from receipt of
the order (the "final order") denying his motion for new trial or motion for
reconsideration. Obviously, the new 15-day period may be availed of only if either
motion is filed; otherwise, the decision becomes final and executory after the lapse of
the original appeal period provided in Rule 41, Section 3.
Petitioners here filed their notice of appeal on July 27, 1998 or five days from receipt
of the order denying their motion for reconsideration on July 22, 1998. Hence, the
notice of appeal was well within the fresh appeal period of 15 days, as already
discussed.34
We deem it unnecessary to discuss the applicability of Denso (Philippines), Inc. v.
IAC35 since the Court of Appeals never even referred to it in its assailed decision.
WHEREFORE, the petition is hereby GRANTED and the assailed decision of the
Court of Appeals REVERSED and SET ASIDE. Accordingly, let the records of this
case be remanded to the Court of Appeals for further proceedings.
No costs.
SO ORDERED.
G.R. No. L-61042 April 15, 1987
HECTOR L. ONG, petitioner,
vs.
MARILYN TATING AND ROBERT TATING, ET AL., respondents.
NARVASA, J.:
The issue in this case concerns the jurisdiction of an inferior Court to take cognizance
of a motion impugning the sheriff's authority to execute a final judgment in an
ejectment case — which commands payment of rentals in arrears — against
personalty claimed as theirs by persons formerly residing in the leased premises
together with the evicted defendant-lessee.
An action of desahucio was instituted in the City Court of Quezon City by petitioner
Ong against his lessee, Evangeline Roces. 1 This in time culminated in a judgment by
the Court of First Instance (Branch XVIII) 2 disposing of the case as follows:
 WHEREFORE, premises considered, the judgment of the City
Court is set aside and in lieu thereof judgment is rendered ordering
defendant Evangeline Roces and all persons claiming under her to
vacate plaintiff's premises located at 169-D, Tolentino St., San
Francisco del Monte, Quezon City; to pay rentals in arrears in the
sum of P10,920.00 as of September 1978 and P260.00 a month
from October 1978 until the premises are vacated with interest at
12% per annum; P1,000.00 as attomey's fees and the costs. 3
The decision became final and executory, no appeal having been taken therefrom;
and in due course, the records of the case were remanded to the City Court.
On Ong's application, the City Court directed execution of the judgment. Accordingly,
the sheriff cleared the premises of its occupants, which included Anacleto Tating
(Evangeline's stepfather and lawyer), Marilyn Tating (Anacleto's wife), and Robert
Tating. 4
The sheriff also levied on certain chattels found in the place: a "Citizen" stereo set; a
"Sanyo" television set; a "Frigidaire" refrigerator; and a "Hitachi" electric desk fan.
Marilyn and Robert Tating sought to retrieve these appliances from the sheriff,
alleging that the articles belonged to them and not to the lessee, Evangeline
Roces. 5 To this end, Robert filed with the sheriff a "Third Party Claim" dated
September 13, 1979 as regards the "Citizen" stereo set; and Marilyn, a similar claim
with respect to the other chattels. 6 When these proved unavailing, they filed with the
City Court Identical applications dated September 17, 1979, entitled "Urgent Motion
for Suspension of Sheriff Sale and for Release of Properties Wrongfully Levied Upon
on Execution," in which they set out their respective titles to the goods and prayed
that the execution sale thereof scheduled on September 19, 1979 be abated and that,
after hearing, said goods be released to them as the true and lawful owners thereof. 7
To neutralize the Tatings' moves, and so that the execution sale might proceed as
scheduled, Ong posted two (2) surety bonds 8 to indemnify the sheriff for any liability
for damages. 9 But by Order dated September 19, 1979 the City Court restrained the
sale and set the Tatings' motions for hearing. 10
What Ong did was to present an "Omnibus Opposition, etc. " dated October 2,
1979, 11 contending that the Tatings' motions should have been filed with the Court of
First Instance since it was the latter's decision which was being executed; and that, in
any event, the Tatings' remedy was "to file an action for damages against the
indemnity bonds after the auction sale. " He also theorized that —
* * Atty. Tating, and the third party claimants having stayed in the
premises and having enjoyed the same should be required to pay
the back rentals, attorney's fees and sheriff's and legal expenses
(and should not) escape by avoiding paying any amount as stated
in the judgment. * * 12
Ong later filed a "Motion to Inhibit" dated January 9, 1980, which the City Court
denied by Order dated January 23, 1980. The Court also directed Ong's counsel to
explain certain apparently contumacious statements in the motion. The Order reads
as follows:
ORDER
Considering the Motion to Inhibit filed by the plaintiff, dated January
9, 1980, and the Manifestation filed by the third party claimants,
Marilyn Tating and Robert Tating, dated January 16, 1980, this
Court finds the motion without merit and hereby resolves to deny it.
26
Furthermore, Atty. Manuel E. Yuzon, counsel for the plaintiff, is
hereby ordered to explain in writing within ten (10) days from notice
hereof why he should not be cited for indirect contempt of court for
stating in his Motion to Inhibit that if this Court 'proceeds to hear
and resolve the third-party claims, it is foregone conclusion that the
third-party claimants will surely win and the plaintiff will lose,'
thereby casting aspersions on the integrity of this Court and
degrading the administration of justice.
In the meantime, let the continuation of the hearing of the motion
for suspension of sheriff's sale etc. be set for February 11, 1980, at
9:00 o'clock in the morning.
SO ORDERED. 13
Ong promptly initiated proceedings to negate this Order. He filed with the Court of
First Instance on February 7, 1980 a petition for certiorari and prohibition, with
application for preliminary injunction. 14 Acting thereon, the Court (Branch IX)
promulgated an Order dated April 2, 1980 directing the maintenance of the status
quo and commanding that the City Court refrain "from hearing and deciding the third
party claims and the urgent motion for suspension of Sheriff's Sale, etc. until the
resolution of the injunction * *. 15 It afterwards rendered a decision, dated December
15, 1981, 16 pertinently reading as follows:
The issue in this petition boils down to this should the third-party
claims be heard and decided by the lower court.
While it is true that the respondents Marilyn and Robert Tating were
not parties in the ejectment case because the lease was between
the petitioner and Evangeline Roces, they stayed with her and the
decision of the appellate court covered them as it ordered
"Evangeline Roces and all persons claiming under her to vacate
plaintiff's premises" ... Besides, the procedure followed by said
private respondents in vindicating their rights over the four (4)
levied appliances is not the one sanctioned by law for they should
have filed a separate and independent action making parties the
deputy sheriff and the petitioner and making them responsible for
the execution (Santos et al., vs. Hon. Mojica, L-19618, Feb. 28,
1964).
WHEREUPON, premises considered, the petitioner Hector L. Ong
is entitled to relief. The decision of Branch XVIII of the CFI Quezon
City which is final and executory, stands.
The preliminary injunction issued on April 2, 1980 is hereby ordered
permanent. 17
The Tatings appealed to the Court of Appeals by "a petition for review filed * * on
March 1, 1982. 18 In its decision, promulgated on June 23, 1982, after due
proceedings, 19 the Court of Appeals expressed puzzlement why the matter of the
execution and related incidents were passed upon by the lower court, when the only
issue was the correctness of the City Judge's refusal to inhibit, himself. 20 It dismissed
the petition, and sent the case back to the City Court for further proceedings." Said
the Court:
It is a puzzle to Us why the hearing went out of bounds. Instead of
determining merely the propriety of the order of denial of the motion
to inhibit, the parties and the Court of First Instance * * went into the
 merits of the propriety of the execution of the decision of the City
Court, the auction sale of the appliances claimed by the Tatings, the
levy,the third party claim,the indemnity bond, and the motion to
suspend the sale and the filling of the sheriffs bond matters which
are properly only to be treated in a separate proceeding.
From the records,We see that if at all the matter of execution of the
decision ** (etc.) were mentioned,it was merely to give a
background to the motion to inhibit Judge Laquio, Jr. from
proceeding to take further participation in the incident of the
execution ** and the incident stemming therefrom.
The propriety of the denial of the motion to inhibit was lost in the
maze of the irrelevant facts and incidents taken during the hearing
of this case in the court below.
A thorough review of the decision of the Court of First Instance * *
Branch IX, in this certiorari case shows that the Presiding Judge * *
erroneously treated the pleadings before it in Civil Case No. 29245.
Thus, We are constrained to set the same aside and remand the
case to the City Court presided over by Judge Laquio, Jr. for further
proceedings. Principally, We rule the denial of the motion for Judge
Laquio, Jr. to inhibit himself from the ejectment case No. 28309,
Quezon City Court, was well taken. The petition assailing the order
of denial which is the main issue in Civil Case No. 29245 is without
merit. * * 21
Ong is now before this Court, praying for the reversal of the decision of the Court of
Appeals, and the perpetual inhibition of the City Judge "from further hearing and
deciding the (Tatings') third-party claims." 22
It will not do to dismiss the petition as the IAC did by declaring that the only issue
involved is the propriety of the City Judge's denial of the motion for his inhibition, and
pronouncing the denial to be correct. Not only is such a limitation of the issues
disputed by Ong, but the resolution of the single point would leave unanswered
several other nagging questions. The opportunity to resolve those questions having
been presented, the Court will do precisely that, to the end that the controversy may
be expeditiously laid to rest,
Three theories are advocated by Ong, namely:
1. From the decision of the Court of First Instance (Branch IX) on his petition for
certiorari and prohibition, the Tatings' remedy was appeal (by writ of error), not a
petition for review, to the Court of Appeals.
2. The City Court lost jurisdiction to hear and determine the Tatings' third-party claims
upon the filing by him (Ong) of the bonds prescribed by Section 17, Rule 39, the
purpose of which is precisely to hold the sheriff free from liability for damages for
proceeding with the execution sale despite said third- party claims.
3. Corollarily, the Tatings' remedy was to file a separate suit to recover against said
bonds posted by Ong, whatever damages might be suffered by them by reason of the
effectuation of the execution sale. 23
Ong is correct in arguing that the mode of appeal to the Court of Appeals available to
the Tatings from the adverse judgment of the CFI in the action of certiorari and
prohibition instituted by him, was not by "petition for review" under Section 22 of B.P.
Blg., 129 24 but an ordinary appeal (by writ of error) under Rule 41, Rules of Court and
Section 39, of B.P. Blg. 129 (also, Section 20 of the Interim Rules) A "petition for
27
review" is the correct mode of appeal from a judgment rendered by a CFI (RTC) in the
exercise of appellate jurisdiction i.e., when it decides a case appealed to it from the
inferior court. In such a case, the appeal is not a matter of right, its acceptance being
discretionary on the Court of Appeals, which "may give it due course only when the
petition shows prima facie that the lower court has committed an error of fact or law
that will warrant a reversal or modification of the decision or judgment sought to be
reviewed." On the other hand, when a CFI (RTC) adjudicates a case in the exercise
of its original jurisdiction, the correct mode of elevating the judgment to the Court of
Appeals is by ordinary appeal, or appeal by writ of error, involving merely the filing of
a notice of appeal except only if the appeal is taken in special proceedings and other
cases wherein multiple appeals are allowed under the law, in which event the filing of
a record on appeal is additionally required. 25 Of course, when the appeal would
involve purely questions of law or any of the other cases (except criminal cases as
stated hereunder) specified in Section 5(2), Article X of the Constitution, 26 it should
be taken to the Supreme Court by petition for review on certiorari in accordance with
Rules 42 and 45 of the Rules of Court. 27 However, in criminal cases in which the
penalty imposed is death or life imprisonment, the appeal to the Supreme Court is by
ordinary appeal on both questions of fact and law. In cases where the death penalty is
imposed, there is an automatic review by the Supreme Court. (Sec. 3 of the 1985
Rules on Criminal Procedure)
The mode by which the Tatings thus brought up to the Court of Appeals the adverse
judgment of the CFI — i.e., by petition for review — was erroneous. This aspect of the
case apparently escaped the Appellate Court's attention; it did not treat of it at all.
This is however of no moment. The need of finally resolve this case makes this defect
inconsequential. In any event, the defect has been waived, no issue concerning it
having been raised in the proceedings before the Court of Appeals. 28
Ong's second contention — that the posting by him of a bond to indemnify the sheriff
for damages for proceeding with an execution sale despite the existence of third-party
claims on the property levied on (pursuant to Section 17, Rule 39) caused the Trial
Court to lose jurisdiction to deal with the third-party claimants' plea for relief against
what they deemed to be an act of trespass by the sheriff is incorrect.
Certain it is that the Trial Court has plenary jurisdiction over the proceedings for the
enforcement of its judgments. It has undeniable competence to act on motions for
execution (whether execution be a matter of right or discretionary upon the Court),
issue and quash writs, determine if property is exempt from execution, or fix the value
of property claimed by third persons so that a bond equal to such value may be
posted by a judgment creditor to indemnify the sheriff against liability for damages,
resolve questions involving redemption, examine the judgment debtor and his
debtors, and otherwise perform such other acts as may be necessary or incidental to
the carrying out of its decisions. It may and should exercise control and supervision
over the sheriff and other court officers and employees taking part in the execution
proceedings, and correct them in the event that they should err in the discharge of
their functions.
Now, it is axiomatic that money judgments are enforceable only against property
unquestionably belonging to the judgment debtor. One man's goods shall not be sold
for another man's debts, as the saying goes. 29 Therefore, the sheriff acts properly
only when he subjects to execution property undeniably belonging to the judgment
debtor. But to the extent that he levies on assets of a third person, in which the
judgment debtor has no interest, to that extent he acts as a trespasser, and to that
extent he is amenable to control and correction by the Court. 30
When the sheriff thus seizes property of a third person in which the judgment debtor
holds no right or interest, and so incurs in error, the supervisory power of the Court
which has authorized execution may be invoked by the third person. Upon due
application by the third person, and after summary hearing, the Court may command
that the property be released from the mistaken levy and restored to the rightful
owner or possessor. What the Court can do in these instances however is limited to a
determination of whether the sheriff has acted rightly or wrongly in the performance of
his duties in the execution of the judgment, more specifically, if he has indeed taken
hold of property not belonging to the judgment debtor. The Court does not and cannot
pass upon the question of title to the property, with any character of finality. It can
treat of that matter only in so far as may be necessary to decide if the Sheriff has
acted correctly or not. 31 The Court can require the sheriff to restore the property to
the claimant's possession if warranted by the evidence. If the claimant's proofs do not
however persuade the Court of his title or right of possession thereof, the claim will of
course be denied.
This remedy is not that of intervention, which is dealt with in Rule 12 of the Rules of
Court, and may be availed of only before or during trial, not thereafter, and certainly
not when judgment is executory. It is rather simply an invocation of the Court's power
of supervision and control over the actuations of its officers and employees to the end
that it be assured that these conform to the law. 32
Independently of the recourse just indicated, and even before or without availment
thereof, the person who claims that his property has been wrongfully seized by resort
to the remedy known as terceria set out in Section 17, Rule 39 of the Rules of Court,
viz:
SEC. 17. Proceedings where property claimed by third person. — If
property levied on be claimed by any other person than the
judgment debtor or his agent, and such person make an affidavit of
his title thereto or right to the possession thereof, stating the
grounds of such right or title, and serve the same upon the officer
making the levy, and a copy thereof upon the judgment creditor, the
officer shag not be bound to keep the property, unless such
judgment creditor or his agent, on demand of the officer, indemnify
the officer against such claim by a bond in a sum not greater than
the value of the property levied on. In case of disagreement as to
such value, the same shall be determined by the court issuing the
writ of execution.
The officer is not liable for damages, for the taking or keeping of the
property, to any third-party claimant unless a claim is made by the
latter and unless an action for damages is brought by him against
the officer within one hundred twenty (120) days from the date of
the filing of the bond. But nothing herein contained shall prevent
such claimant or any third person from vindicating his claim to the
property by any proper action.
xxx xxx xxx
The remedies just mentioned are without prejudice to "any proper action" that a third-
party claimant may deem suitable, to vindicate "his claim to the property." Such a
28
"proper action," in the context of Section 17 of Rule 39, has been held to refer to an
action distinct and separate from that in which the judgment is being enforced.
Such a "proper action" is, quite obviously, entirely distinct from the explicitly described
in Section 17 of Rule 39, i.e., "an action for damages ** brought (by a third-party
claimant) against the officer within one hundred twenty (120) days from the date of
the filing of the bond ** for the taking or keeping of the property" subject of
the terceria. Quite obviously, too, this "proper action" would have for its object the
recovery of the possession of the property seized by the sheriff, as well as damages
resulting from the allegedly wrongful seizure and detention thereof despite the third-
party claim; and it may be brought against the sheriff, of course, and such other
parties as may be alleged to have wrongful with the sheriff in the supposedly wrongful
execution proceedings, such as the judgment creditor himself. And such a "proper
action," as above pointed out, is and should be an entirety separate and distinct
action from that in which execution has issued, if instituted by a stranger to the latter
suit. 33
** (C)onstruing Section 17 of Rule 39 of the Revised Rules of
Court, the rights of third-party claimant over certain properties
levied upon by the sheriff to satisfy the judgment should not be
decided in the action where the third- party claims have been
presented, but in the separate action instituted by the claimants.
This is evident from the very nature of the proceedings. In Herald
Publishing, supra. We intimated that the levy by the sheriff of a
property by virtue of a writ of attachment may be considered as
made under authority of the court only when the property levied
upon unquestionably belongs to the defendant. If he attaches
properties other than those of the defendant, he acts beyond the
acts of his authority. Otherwise stated, the court issuing a writ of
execution is supposed to enforce its authority only over properties
of the judgment debtor, and should a third party appear to claim the
property levied upon by the sheriff, the procedure laid down by the
Rules is that such claim should be the subject of a separate and
independent action.
As we explained in the Quebral case (Quebral v. Garduno, 67 Phil.,
316), since the third-party claimant is not one of the parties to the
action, she could not strictly speaking, appeal from the order
denying her claim, but should file a separate reivindicatory action
against the execution creditor or the purchaser of her property after
the sale at public auction, or a complaint for damages against the
bond filed by the judgment creditor in favor of the sheriff.
We reiterated this in Potenciano v. Dineros, et al. (97 Phil. 196;
Agricultural Credit Administration v. Lasam 28 SCRA 1098) when
We ruled that "such reivindicatory action is reserved to the third-
party claimant by Section 15 of Rule 39 despite disapproval of his
claim by the court itself (Planas v. Madriga 94 Phil. 754, Lara v.
Bayona, G.R. No. L-7920, decided May 10, 1955)." This rule is
dictated by reasons -of convenience, as "intervention is more likely
to inject confusion into the issues between the parties in the case
*** with which the third-party claimant has nothing to do and
thereby retard instead of facilitate the prompt dispatch of the
 controversy which is the underlying objective of the rules of
pleading and practice" ( Herald Publishing, supra, p. 101). Besides,
intervention may not be permitted after trial has been concluded
and a final judgment rendered in the case. 34
In such separate action, the court may issue a writ of preliminary injunction against
the sheriff enjoining him from proceeding with the execution sale. 34-A
Upon the other hand, if the claim of impropriety on the part of the sheriff in the
execution proceedings is made by a party to the action, not a stranger thereto, any
relief therefrom may be applied for with, and obtained from, only the executing court;
and this is true even if a new party has been impleaded in the Suit. 35
In any case, Ong's claim that the filing of the judgment creditor's bond operated to
divest the Court of jurisdiction to control and supervise the conduct of the execution
sale must be rejected. That bond had absolutely no effect on the Court's jurisdiction. It
was merely "equivalent to the personal interference of the indemnitor and his
bondsmen in the course of the proceeding by directing or requesting the sheriff to
hold and sell the goods as if they were the property of the defendants in attachment.
In doing this they (the indemnitor and his bondsmen) assume the direction and
control of the sheriff's future action so far as it constitutes a trespass; and they
become to that extent the principals and he their agent in the transaction. This makes
them responsible for the continuance of the wrongful possession and for the sale and
conversion of the goods; in other words, for all the real damages which plaintiff
sustains (Love Joy vs. Murray, 70 U.S. 129). 36
Ong's third theory — that the Tatings' remedy in the event of the denial of their
application for relief by the Trial Court is a separate action for recovery of possession
of the goods by them claimed plus damages for wrongful detention — is correct and
should be sustained, in line with the doctrine in Bayer, supra, 37 and the other cases
which followed it. 38
As regards the matter of the inhibition of the City Court Judge, the incident has been
correctly determined by the Court of Appeals. No proper ground exists to disqualify
His Honor from continuing to act in Civil Case No. 28309.
One last issue remains, and that is, whether the Tatings, who were living with
Evangeline Roces in the premises lease by the latter from Ong, are hable for the
payment of rentals in arrears jointly or solidarily with said Evangeline Roces. They are
not. They were never impleaded as parties and never served with summons in the
suit for ejectment initiated by Ong against Evangeline Roces. The Court therefore
never acquired jurisdiction over them. And while the judgment against Evangeline
Roces, in so far as it decrees her ouster from the leased premises, may be enforced
not only against her but also against "any person or persons claiming under"
her 39 that judgment, in so far as it directs payment of money by way of arrearages in
rents, is not binding on the Tatings and definitely not enforceable against them.
WHEREFORE, the petition is dismissed for lack of merit. The case shall be remanded
to the Metropolitan Trial Court at Quezon City which shall forthwith resolve the
Tatings' pending motions in Civil Case No. 28309, consistently with the principles
herein set forth. Costs against petitioner.
SO ORDERED.
G.R. No. L-25140 July 15, 1980
29
UNIVERSAL MOTORS CORPORATION, plaintiff-appellant,
vs.
MARIANO D. VELASCO, ET AL., defendants-appellees.
ABAD SANTOS, J.:
This is an appeal on a question of law from a decision of the Court of First Instance of
Manila. Since the appeal was perfected in 1965 before the enactment of R.A. No.
5440 which took effect on September 7, 1968, a record on appeal was submitted. The
plaintiff-appellant filed a brief but defendants-appellees having failed to file their brief
within the reglementary period the case was submitted for decision without their brief.
The uncontroverted facts are:
Mariano T. Velasco bought from Universal Motors C tion a Mercedes-Benz truck on
installment basis. To the balance of the purchase price of P35,243.68 he executed a
promissory note and executed a chattel mortgage over the truck. He defaulted in his
payments and as a consequence the Vendor asked him to surrender the truck in
accordance will the term and conditions of the chattel mortgage contract. lie failed
and refused to surrender the truck whereupon the vendor instituted an action in the
court a quo to recover the truck preparatory to foreclosure of the chattel mortgage. As
an alternative, in case the truck could not be recovered, the plaintiff asked for the
payment, among other things, of its vs in the sum of P23,763.09 plus legal interest.
By virtue of a writ of replevin issued by said court, the seller was able to re-possess
the truck.
Going back to the action which was commenced on December 29, 1964, the
defendants failed to answer the complaint within the reglementary period and were
declare in default. On April 26, 1965, defendant Velasco filed a motion to lift the
default order which was granted. He did not, however, file an answer. In lieu thereof
the parties, on June 15, 1965, submitted the following:
STIPULATION OF FACTS
COME NOW the parties in the above-entitled case, through their
respective counsel and before this Honorable Court respectfully
stipulate:
1. That defendant was, at the time of the filing of the complaint
indebted to plaintiff in the principal sum of P23,763.09, which
amount is covered by a promissory note secured by a Chattel Mo
(Annex 'A' of the complaint) on a motor vehicle described in
paragraph 2 of the complaint
2. That notwithstanding defendant being in default of this aforesaid
mentioned sum and notwithstanding demands made by plain tiff on
December 11, 1964, defendant failed to surrender the chattel
described in paragraph 2 of the complaint thereby preventing
plaintiff from f on the same;
3. That plaintiff is entitled to the possession of the chattel bed in
paragraph 2 of the complaint and was constrained to institute the t
action for recovery of possession as a preliminary stop to forced.
4. That in the se and execution of the writ of seizure issued in this
cage and in g the possession of the vehicle subjected of the
complaint plaintiff the occured the following expenses:
a) Premium on replevin bond P971.47
b) Sheriff's expenses 300.00
c) Costs of suit 132.00
d) Mechanic's lien paid by plaintiff in defendant defendant's behalf
to G. Cruz Truck Body Builder & Welding Shop 3,000.00 P 4,403.47
5. That on May 21, 1965, plaintiff received from the Workmen's
Insurance Company, Inc., the sum of P1,870.99 in full settlement of
the damages sustained by the truck subject matter hereof when it
figured in an accident on December 5, 1964, totally immobile the
motor vehicle
6. That subsequent to said event, defect failed to deliver the truck
m question despite demands made by plaintiff,
7. That the following stipulation is found in paragraph 14 of the
Chattel Mortgage (Annex 'A') of the complaint the genuineness and
due execution of which is hereby admitted by the defendant:
14. That in case of non-compliance or violation; or default by the
mortgagor, and forced or any other legal remedy is undertaken by
the mortgagee to compel pa of compensation in the concept of
attorney's fees and cost payment of his obligation the mortgagee
shall be entitled to a reasonable election in a sum equal to twenty
five percent (25%) of the total amount of the indebtedness then
outstanding and unpaid by the mortgagor, but in no case less than
Fifty Pesos (P50.00) as well as payment of the premium on the rep
bond and was of suit in case of court action, which amounts said
agree to pay and for such payment a first Em is hereby in favor of
the mortgagee upon the property mortgaged.
8. That the following stipulation is also found in paragraph 10 of the
Chattel Mortgage (Annex 'A' of the complaint):
10. The mortgagor further agrees that in cm non-compliance with,
or violation of, any of the of the mortgage, and/or in case of default
in the payment of the principle municipal sum or any part thereof or
interest as and when the mm shad become due and payable, the
mo property shall be delivered on demand to the mortgagee in
Manila of all charges, and should be mortgage fail or refuse to
deliver peacefully the said Property as above stated, the mortgagee
and/or its representative or the S is hereby given full and irevocable
power and authority to take possession of the said property,
wherever it may be found and have the same brought in the City of
Manila the HEREBY RATIFYING AND CONFIRMING all that said
mortgagee and/or its representative and/or the Sheriff shall lawfully
do or cause to be done under and by virtue of these presents and
the expenses of locating and bringing property to the City of Manila
shall the account of the mortgegee and shall form part of the sum
by this mortgage ...
9. That plaintiff waives the attorney's fees herein stipulated, but not
the reasonable amount that may be adjudged by this Honorable
Court, the premium of the replevin bond, sheriff's expenses, costs
of suit and the mechanic's lien mentioned in paragraph 4 herein.
10. That plaintiff admits that it is not entitled to deficiency judgment
on the principal sum of P23,763.09 once it has foreclosed on the
mortgage, but only to a reasonable amount of attorney's fees and
30
those amounts mentioned in paragraph 4 herein, less the amount
of P1,870.99 paid by the insurance company.
Acting on the stipulation, the court a quo rendered a decision part of which reads as
follows:
The only issue is whether the plaintiff is entitled to recover the
expenses mentioned in paragraph 4 and attorney's fees. It
undoubtedly has a right to repayment for the premium on the
replevin bond it filed, the sheriff's fees, costs of this suit, and a
reasonable sum as attorney's fees. These are expenses rendered
necessary by the defendant's refusal to surrender voluntarily
possession of the vehicle, in violation of his agreement with the
plaintiff. But the mechanic's lien the plaintiff satisfied is not
recoverable in this action. Nothing is said about it in the complaint
and it is not one of the reliefs sought therein.
It must be understood, however, that all sums adjudged in the
plaintiff's favor may be enforced only against the proceeds of the
vehicle mortgaged in accordance with the settled rule that in an
proceedings for foreclosure of mortgages executed on chattels
which have been sold on the installment plan, the mortgagee is
limited to the property included in the mortgage. Macondray & Co.
vs. Tan, 38, O.G. 2606; Macondray & Co. vs. Ruiz, 38, O.G. 2168;
and Bachrach Motor Co. vs. Milan, 61 Phil. 409.
WHEREFORE, judgment is hereby rendered declaring that the
plaintiff is entitled to the possession of the vehicle described in the
complaint and ordering the defendant Mariano Velasco to pay the
plaintiff P1,403.47 as well as the additional sum of P1,500.00 as
attorney's fees to be satisfied out of the proceeds of the sale
vehicle.
The plaintiff filed a motion requesting that the Court "reconsider its decision dated
June 28, 1965, by requiring the defendant to pay plaintiff directly the sums of
P1,403.47 and P500.00 instead of o the satisfaction of the same from the p of the
auction sale." When the motion was domed the plaintiff appealed as aforementioned
assuming only one , namely "The lower court erred in that the sums adjudged in favor
of the plaintiff are to be satisfied only vehicle.
In stipulating that the sums adjudged P971.41, premium on replevin bond, P300.00,
sheriff's P132.00, costs of the suit total P1,403.47; and P500.00, attorney's fees —
the lower court relied on the provisions of Article 1484 of the Civil Code which insofar
as relevant reads as follows:
Art 1484. In a contract of sale of property the price of which is
payable in to, the vs may any of the following
xxx xxx xxx
(3) Foreclose the chattel mortgage on the thing sold if one has
been constituted, should the vendee's failure to pay cover two or
more installment In this case, he shag have no further action
against the purchase to recover any unpaid of the balance of the
price Any agreement to the contrary shall be void.
The third paragraph of Art. 1484 is inapplicable to the cam at bar. First, as the plaintiff
has correctly pointed out the action instituted in the court a quo was not foreclosure at
the chattel/mortgage but for the replevin; and second, the amounts adjudged in favor
of the plaintiff were not part of the unpaid balance of the price" or in the concept of a
deficiency judgment but were for expenses of the suit.
WHEREFORE, the judgment appealed from is modified by ordering the defendant-
appellee Mariano D. Velasco to pay the amount adjudged m favor of the plaintiff-
appellant of having the same satisfied out of the proceeds of the auction sale on the
motor vehicle the defendant-appellee.
SO ORDERED.
G.R. No. 74833 January 21, 1991
THOMAS C. CHEESMAN, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and ESTELITA PADILLA, respondents.
Estanislao L. Cesa, Jr. for petitioner.
Benjamin I. Fernandez for private respondent.
NARVASA, J.:
This appeal concerns the attempt by an American citizen (petitioner Thomas
Cheesman) to annul — for lack of consent on his part — the sale by his Filipino wife
(Criselda) of a residential lot and building to Estelita Padilla, also a Filipino.
Thomas Cheesman and Criselda P. Cheesman were married on December 4, 1970
but have been separated since February 15,1981.1
On June 4, 1974, a "Deed of Sale and Transfer of Possessory Rights" was executed
by Armando Altares conveying a parcel of unregistered land and the house thereon
(at No. 7 Neptune Street, Gordon Heights, Olongapo City) in favor of "Criselda P.
Cheesman, of legal age, Filipino citizen, married to Thomas Cheesman, and residing
at Lot No. 1, Blk. 8, Filtration Road, Sta. Rita, Olongapo City . . ."2 Thomas
Cheesman, although aware of the deed, did not object to the transfer being made
only to his wife.3
Thereafter—and again with the knowledge of Thomas Cheesman and also without
any protest by him—tax declarations for the property purchased were issued in the
name only of Criselda Cheesman and Criselda assumed exclusive management and
administration of said property, leasing it to tenants.4
On July 1, 1981, Criselda Cheesman sold the property to Estelita M. Padilla, without
the knowledge or consent of Thomas Cheesman.5 The deed described Criselda as
being" . . . of legal age, married to an American citizen,. . ."6
Thirty days later, or on July 31, 1981, Thomas Cheesman brought suit in the Court of
First Instance at Olongapo City against his wife, Criselda, and Estelita Padilla, praying
for the annulment of the sale on the ground that the transaction had been executed
without his knowledge and consent.7 An answer was filed in the names of both
defendants, alleging that (1) the property sold was paraphernal, having been
purchased by Criselda with funds exclusively belonging to her ("her own separate
money"); (2) Thomas Cheesman, being an American, was disqualified to have any
interest or right of ownership in the land; and (3) Estelita Padilla was a buyer in good
faith.8
During the pre-trial conference, the parties agreed upon certain facts which were
subsequently set out in a pre-trial Order dated October 22, 1981,9 as follows:
31
1. Both parties recognize the existence of the Deed of Sale over the
residential house located at No. 7 Granada St., Gordon Heights, Olongapo
City, which was acquired from Armando Altares on June 4, 1974 and sold by
defendant Criselda Cheesman to Estelita Padilla on July 12, 1981; and
2. That the transaction regarding the transfer of their property took place
during the existence of their marriage as the couple were married on
December 4, 1970 and the questioned property was acquired sometime on
June 4,1974.
The action resulted in a judgment dated June 24, 1982,10 declaring void ab initio the
sale executed by Criselda Cheesman in favor of Estelita M. Padilla, and ordering the
delivery of the property to Thomas Cheesman as administrator of the conjugal
partnership property, and the payment to him of P5,000.00 as attorney's fees and
expenses of litigation.11
The judgment was however set aside as regards Estelita Padilla on a petition for relief
filed by the latter, grounded on "fraud, mistake and/or excusable negligence" which
had seriously impaired her right to present her case adequately.12 "After the petition
for relief from judgment was given due course," according to petitioner, "a new judge
presided over the case."13
Estelita Padilla filed a supplemental pleading on December 20, 1982 as her own
answer to the complaint, and a motion for summary judgment on May 17, 1983.
Although there was initial opposition by Thomas Cheesman to the motion, the parties
ultimately agreed on the rendition by the court of a summary judgment after entering
into a stipulation of facts, at the hearing of the motion on June 21, 1983, the
stipulation being of the following tenor:14
(1) that the property in question was bought during the existence of the
marriage between the plaintiff and the defendant Criselda P. Cheesman;
(2) that the property bought during the marriage was registered in the name
of Criselda Cheesman and that the Deed of Sale and Transfer of Possessory
Rights executed by the former owner-vendor Armando Altares in favor of
Criselda Cheesman made no mention of the plaintiff;
(3) that the property, subject of the proceedings, was sold by defendant
Criselda Cheesman in favor of the other defendant Estelita M. Padilla,
without the written consent of the plaintiff.
Obviously upon the theory that no genuine issue existed any longer and there was
hence no need of a trial, the parties having in fact submitted, as also stipulated, their
respective memoranda each praying for a favorable verdict, the Trial Court15 rendered
a "Summary Judgment" dated August 3, 1982 declaring "the sale executed by . . .
Criselda Cheesman in favor of . . . Estelita Padilla to be valid," dismissing Thomas
Cheesman's complaint and ordering him "to immediately turn over the possession of
the house and lot subject of . . . (the) case to . . . Estelita Padilla . . ."16
The Trial Court found that —
1) the evidence on record satisfactorily overcame the disputable
presumption in Article 160 of the Civil Code—that all property of the
marriage belongs to the conjugal partnership "unless it be proved that it
pertains exclusively to the husband or to the wife"—and that the immovable
in question was in truth Criselda's paraphernal property;
2) that moreover, said legal presumption in Article 160 could not apply
"inasmuch as the husband-plaintiff is an American citizen and therefore
disqualified under the Constitution to acquire and own real properties; and
 3) that the exercise by Criselda of exclusive acts of dominion with the
knowledge of her husband "had led . . . Estelita Padilla to believe that the
properties were the exclusive properties of Criselda Cheesman and on the
faith of such a belief she bought the properties from her and for value," and
therefore, Thomas Cheesman was, under Article 1473 of the Civil Code,
estopped to impugn the transfer to Estelita Padilla.
Thomas Cheesman appealed to the Intermediate Appellate Court. There he assailed
the Trial Court acts (1) of granting Estelita Padilla's petition for relief, and its resolution
of matters not subject of said petition; (2) of declaring valid the sale to Estelita Padilla
despite the lack of consent thereto by him, and the presumption of the conjugal
character of the property in question pursuant to Article 160 of the Civil Code; (3) of
disregarding the judgment of June 24, 1982 which, not having been set aside as
against Criselda Cheesman, continued to be binding on her; and (4) of making
findings of fact not supported by evidence. All of these contentions were found to be
without merit by the Appellate Tribunal which, on January 7, 1986, promulgated a
decision (erroneously denominated, "Report")17affirming the "Summary Judgment
complained of," "having found no reversible error" therein.
Once more, Thomas Cheesman availed of the remedy of appeal, this time to this
Court. Here, he argues that it was reversible error for the Intermediate Appellate
Court —
1) to find that the presumption that the property in question is conjugal in accordance
with Article 160 had been satisfactorily overcome by Estelita Padilla;18
2) to rule that Estelita Padilla was a purchaser of said property in good faith, it
appearing:
a) that the deed by which the property was conveyed to Criselda
Cheesman described her as "married to Thomas C. Cheesman," as
well as the deed by which the property was later conveyed to
Estelita Padilla by Criselda Cheesman also described her as
"married to an American citizen," and both said descriptions had
thus "placed Estelita on knowledge of the conjugal nature of the
property;" and
b) that furthermore, Estelita had admitted to stating in the deed by
which she acquired the property a price much lower than that
actually paid "in order to avoid payment of more obligation to the
government;"19
3) to decline to declare that the evidence did not warrant the grant of Estelita Padilla's
petition for relief on the ground of "fraud, mistake and/or excusable negligence;"20
4) to hold that Thomas Cheesman had waived his objection to Estelita's petition for
relief by failing to appeal from the order granting the same;
5) to accord to Estelita Padilla a relief other than that she had specifically prayed for
in her petition for relief, ie., "the restoration of the purchase price which Estelita
allegedly paid to Criselda;"21 and
6) to fail to declare that Thomas Cheesman's citizenship is not a bar to his action to
recover the lot and house for the conjugal partnership.22
Such conclusions as that (1) fraud, mistake or excusable negligence existed in the
premises justifying relief to Estelita Padilla under Rule 38 of the Rules of Court, or (2)
that Criselda Cheesman had used money she had brought into her marriage to
Thomas Cheesman to purchase the lot and house in question, or (3) that Estelita
Padilla believed in good faith that Criselda Cheesman was the exclusive owner of the
32
property that she (Estelita) intended to and did in fact buy—derived from the evidence
adduced by the parties, the facts set out in the pleadings or otherwise appearing on
record—are conclusions or findings of fact. As distinguished from a question of law—
which exists "when the doubt or difference arises as to what the law is on a certain
state of facts" — "there is a question of fact when the doubt or difference arises as to
the truth or the falsehood of alleged facts;"23 or when the "query necessarily invites
calibration of the whole evidence considering mainly the credibility of witnesses,
existence and relevancy of specific surrounding circumstances, their relation; to each
other and to the whole and the probabilities of the situation."24
Now, it is axiomatic that only questions of law, distinctly set forth, may be raised in a
petition for the review oncertiorari of a decision of the Court of Appeals presented to
this Court.25 As everyone knows or ought to know, the appellate jurisdiction of this
Court is limited to reviewing errors of law, accepting as conclusive the factual findings
of the lower court upon its own assessment of the evidence.26 The creation of the
Court of Appeals was precisely intended to take away from the Supreme Court the
work of examining the evidence, and confine its task to the determination of questions
which do not call for the reading and study of transcripts containing the testimony of
witnesses.27 The rule of conclusiveness of the factual findings or conclusions of the
Court of Appeals is, to be sure, subject to certain exceptions,28 none of which
however obtains in the case at bar.
It is noteworthy that both the Trial Court and the Intermediate Appellate Court reached
the same conclusions on the three (3) factual matters above set forth, after
assessment of the evidence and determination of the probative value thereof. Both
Courts found that the facts on record adequately proved fraud, mistake or excusable
negligence by which Estelita Padilla's rights had been substantially impaired; that the
funds used by Criselda Cheesman was money she had earned and saved prior to her
marriage to Thomas Cheesman, and that Estelita Padilla did believe in good faith that
Criselda Cheesman was the sole owner of the property in question. Consequently,
these determinations of fact will not be here disturbed, this Court having been cited to
no reason for doing so.
These considerations dispose of the first three (3) points that petitioner Cheesman
seeks to make in his appeal.1âwphi1They also make unnecessary an extended
discussion of the other issues raised by him. As to them, it should suffice to restate
certain fundamental propositions.
An order of a Court of First Instance (now Regional Trial Court) granting a petition for
relief under Rule 38 is interlocutory and is not appealable. Hence, the failure of the
party who opposed the petition to appeal from said order, or his participation in the
proceedings subsequently had, cannot be construed as a waiver of his objection to
the petition for relief so as to preclude his raising the same question on appeal from
the judgment on the merits of the main case. Such a party need not repeat his
objections to the petition for relief, or perform any act thereafter (e.g., take formal
exception) in order to preserve his right to question the same eventually, on appeal, it
being sufficient for this purpose that he has made of record "the action which he
desires the court to take or his objection to the action of the court and his grounds
therefor."29
Again, the prayer in a petition for relief from judgment under Rule 38 is not
necessarily the same prayer in the petitioner's complaint, answer or other basic
pleading. This should be obvious. Equally obvious is that once a petition for relief is
granted and the judgment subject thereof set aside, and further proceedings are
thereafter had, the Court in its judgment on the merits may properly grant the relief
sought in the petitioner's basic pleadings, although different from that stated in his
petition for relief.
Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14,
Article XIV of the 1973 Constitution ordains that, "Save in cases of hereditary
succession, no private land shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands of the public
domain."30Petitioner Thomas Cheesman was, of course, charged with knowledge of
this prohibition. Thus, assuming that it was his intention that the lot in question be
purchased by him and his wife, he acquired no right whatever over the property by
virtue of that purchase; and in attempting to acquire a right or interest in land,
vicariously and clandestinely, he knowingly violated the Constitution; the sale as to
him was null and void.31 In any event, he had and has no capacity or personality to
question the subsequent sale of the same property by his wife on the theory that in so
doing he is merely exercising the prerogative of a husband in respect of conjugal
property. To sustain such a theory would permit indirect controversion of the
constitutional prohibition. If the property were to be declared conjugal, this would
accord to the alien husband a not insubstantial interest and right over land, as he
would then have a decisive vote as to its transfer or disposition. This is a right that the
Constitution does not permit him to have.
As already observed, the finding that his wife had used her own money to purchase
the property cannot, and will not, at this stage of the proceedings be reviewed and
overturned. But even if it were a fact that said wife had used conjugal funds to make
the acquisition, the considerations just set out militate, on high constitutional grounds,
against his recovering and holding the property so acquired or any part thereof. And
whether in such an event, he may recover from his wife any share of the money used
for the purchase or charge her with unauthorized disposition or expenditure of
conjugal funds is not now inquired into; that would be, in the premises, a purely
academic exercise. An equally decisive consideration is that Estelita Padilla is a
purchaser in good faith, both the Trial Court and the Appellate Court having found that
Cheesman's own conduct had led her to believe the property to be exclusive property
of the latter's wife, freely disposable by her without his consent or intervention. An
innocent buyer for value, she is entitled to the protection of the law in her purchase,
particularly as against Cheesman, who would assert rights to the property denied him
by both letter and spirit of the Constitution itself.
WHEREFORE, the appealed decision is AFFIRMED, with costs against petitioner.
SO ORDERED.
G.R. No. L-45114 October 26, 1987
APOLONIO SUMBINCO, petitioner,
vs.
COURT OF APPEALS, et al., respondents.
No. L-45192 October 26, 1987
JEPTE DEMERIN et al., petitioners,
vs.
COURT OF APPEALS, et al., respondents.
NARVASA, J.:
33
Jepte Demerin Rogelio Argel, Demetrio Jongco and Alfonso Demerin filed with the
Court of Agrarian Relations a complaint against Apolonio Sumbingco, seeking their
reinstatement as tenants on the latter two (2) haciendas and the payment to them of
damages for their ouster therefrom. According to them, prior to the purchase by
Sumbingco of the haciendas in question from Ricardo Nolan, they were already
tenants of the latter, planting the areas occupied by them 'with rice: that even after
Sumbingco acquired the land they continued as tenants thereon by permission of
Sumbingco's administrator; that Sumibingco caused the planting of their landholdings
to citrus little by little, thus progressively depriving them of possession thereof until the
time came when their landholdings were completely planted to citrus and they were
effectively, divested of any area to cultivate: that in view thereof, they asked
Sumbingco to compensate them for the loss of their tenacy rights but although the
former promised to do so, he never did; that instead, in 1964, Sumbingco told them to
vacate their landholdings.
The court of Agrarian Relations dismissed their complaint. It declined to give
credence to the evidence proferred by them to substantiate their claim of being
Sumbingco's tenants, declaring that evidence to be both implausible and tainted by
material trial inconsistencies.
On appeal, however, the court of Appeals reversed the judgment of the Court of
Agrarian Relation. It ruled that in the light of the admission that Jepte Demerio and his
co-plaintiffs were tenants in at least one of the haciendas prior to the sale to
Sumbingco, it was difficult to believe the latter's protestation that he had never seen
them; at the very least, Sumbingco's overseer should have apprised him of their
presence on the land; hence, it was safe to assume that Demerin and his companions
continued as tenants on the land under the new owner. The Appellate Court
accordingly ordered the payment to Demerin, et al. of damages by Sumbingco but not
their reinstatement on the ground that the landholdings had already been completely
planted to citrus.
Both Sumbingco and the Demerin group have taken an appeal by certiorari to this
Court, the former's being docketed as G.R. No. 45114 and the latter's, G.R. No.
45192.
It is axiomatic that appeals from the Court of Appeals are not a matter of right but of
sound judicial discretion on the part of this Court, and will be granted only when there
are special and important reasons therefor. 1 In other words, appeals from the Court
of Appeals are not entertained as a matter of routine; they may be rejected out of
hand in the exercise of this Court's sound judicial discretion. The prescribed mode of
appeal is by certiorari, 2 limited only to issues or questions of law which must be
distinctly set forth in the petition for review on certiorari. 3 The findings of fact of the
Appellate Court are conclusive even on this Court, subject only to a few well defined
exceptions (none of which is present in the instant case). 4 It is incumbent on the
appellant to make out a sufficiently strong demonstration of serious error on the part
of the Court of Appeals, and adduced special and important reasons to justlfy the
exercise by this Court of its discretionary appellate jurisdiction, 5 failing in which this
Court will decline to wield its invoked power of review and will dismiss the appeal on
the ground that it is without merit, or is prosecuted manifestly for delay or the
questions raised are too unsubstantial to require consideration. 6
A thoroughgoing review of the record discloses that contrary to this Court's first
impression, which initially led it to give due course to both petitions in its case, there is
no special and important reason to justify this Court's exercise of its appellate
jurisdiction. The issues raised are principally factual, and such of those issues as may Administrative Region (DENR-CAR), in pursuance of the Supreme Court
be characterized as legal are not sufficiently weighty or substantial to warrant decision is poised to order the removal or demolition of plaintiffs
consideration and review. improvements and to hand possession of the area to defendants
WHERFFORE, the petitions in G.R. No. 45114 and G.R. No. 45192 are DENIED, and Macawiwili and Omico. Plaintiff, while admitting the possessory rights of
the decision of the Court of Appeals sought to be thereby reviewed is affirmed. This defendant mining companies, stresses that the improvements already
decision is immediately, executory, and no motion for extension of time to file a motion existing thereon are vital to the conduct of its mining operations
for reconsideration will be entertained. particularly, its Nevada claims. Thus, it came to court seeking the
expropriation of this area pursuant to Section 59 of Presidential Decree
No. 463.
The conflict between the plaintiff and defendant mining companies spans
[G.R. No. 115104. October 12, 1998]
a period of almost 23 years until finally, it reached the Supreme Court, the
MACAWIWILI GOLD MINING AND DEVELOPMENT CO., INC. and OMICO MINING
final arbiter of all disputes. The Supreme Court has spoken and it has
AND INDUSTRIAL CORPORATION, petitioners, vs. COURT OF
awarded to defendants Macawiwili and Omico the portion sought to be
APPEALS and PHILEX MINING CORPORATION, respondents.
expropriated by the plaintiff.
DECISION
Can this Court now grant to plaintiff the right to expropriate the very land
MENDOZA, J.:
which has been denied it by the decision of the highest court of the land?
This is a petition for certiorari to set aside the resolution, dated April 12, 1994, of
This Court believes not. To do so would not only be presumptious of this
the Tenth Division of the Court of Appeals in CA-G.R. CV No. 42120, denying
Court but a patent defiance of the decision of the highest tribunal.
petitioners motion to dismiss the appeal of private respondent from a ruling of the trial
The plaintiff states that the expropriation is necessary in order for it to
court.[1]
continue with the operation of its Nevada claims. The improvements now
The antecedent facts are as follows:
existing on the land sought to be expropriated consists of a network of
On October 16, 1992, respondent Philex Mining Corporation filed a complaint for
roads constructed sometime in 1958, a motorpool facility built in 1963, a
expropriation against petitioners Macawiwili Gold Mining and Development Co., Inc.
tailings dam and three (3) two-storey concrete bunkhouses. It is thus clear
and Omico Mining & Industrial Corporation. The complaint, entitled Philex Mining
that these improvements have been existing for quite sometime
Corporation v. Macawiwili Gold Mining and Development Co., Inc., et al., was filed
now. Aware that these improvements are essential to their mining
before the Regional Trial Court of La Trinidad, Benguet, where it was docketed as
operations, plaintiff should have initiated expropriation proceedings long
Civil Case No. 92-CV-0727.
before it even started putting up said improvements. Why exercise the
Based on 53 of P.D. No. 463, Philex Mining sought to expropriate 21.9 hectares
right of eminent domain only now that the land has been adjudged in favor
of petitioners mining areas where the latters Macawiwili claims are located. Philex
of defendant mining companies by no less than the Supreme Court? It
Mining likewise moved for the issuance of a writ of preliminary injunction to enjoin
seems the plaintiff, mindful of the Supreme Court decision, would now
petitioners from ejecting it (Philex Mining) from the mining areas sought to be
look for avenues of escape to evade the repercussions of such a
expropriated.
decision. What it has not achieved through the decision, it tries to gain
Although a temporary restraining order was initially issued by the Regional Trial
through the power of eminent domain. Clearly, this is forum-shopping,
Court of La Trinidad, Branch X, on November 11, 1992, it denied respondents
plain and simple. Stripped of all its legal niceties, this expropriation
application for a preliminary injunction.
proceeding is patently a last ditch effort on the part of the plaintiff to
On February 18, 1993, the trial court, acting on the motion of petitioners,
overcome the adverse effects of the Supreme Court decision.
dismissed the complaint of Philex Mining. In its resolution, the trial court stated:[2]
Can this Court countenance such a procedure under the guise of the legal
To better appreciate the incident submitted for resolution, a review of the
process of expropriation?
antecedent facts which gave rise to this case is in order.
No. To agree to it would be to encourage forum-shopping which is
The decision of the Supreme Court dated October 2, 1991 in Poe Mining
abhorred as there will no longer be any end to any litigation.
Association vs. Garcia, 202 SCRA 222 upheld the decision of the then
Nevertheless, plaintiff asserts that its right to expropriate is distinct and
Minister of Natural Resources which was affirmed by the Office of the
separate from the rights of Macawiwili and Omico under the Supreme
President. This decision recognized the possessory rights of defendants
Court decision, anchoring said right on Section 59 of Presidential Decree
Macawiwili and Omico over their mining claims located at Tuba and
No. 463 which states:
Itogon, Benguet as against Poe Mining Association and plaintiff herein
SEC. 59. Eminent Domain. - When the claim owner or an
Philex Mining Corporation as operator. However, on the surface of 21.9
occupant or owner of private lands refuses to grant to another
hectares of these mining claims awarded to defendants Macawiwili and
claim owner or lessee the right to build, construct or install any of
Omico, we find improvements of the plaintiff consisting of a network of
the facilities mentioned in the next preceding section, the claim
roads, a motorpool facility, a tailings dam and three bunkhouses. The
owner or lessee may prosecute an action for eminent domain
Department of Environment and Natural Resources - Cordillera
34
 under the Rules of Court in the Court of First Instance of the
province where the mining claims involved are situated. In the
determination of the just compensation due the claim owner or
owner or occupant of the land, the court shall appoint at least
one duly qualified mining engineer or geologist to be
recommended by the Director as one of the commissioners.
There are two (2) stages in every action of expropriation. The first is
concerned with the determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety of its exercise in
the context of the facts involved in the suit. It ends either with an order of
dismissal or an order of condemnation. The second phase of the eminent
domain action is concerned with the determination by the court of the just
compensation for the property sought to be taken (Municipality of Bian vs.
Hon. Jose Mar Garcia, et al., 180 SCRA 576 as quoted in National Power
Corporation vs. Jocson, G.R. Nos. 94193-99, February 25, 1992, 206
SCRA 520).
Going to the first stage of the expropriation proceeding in the case at bar,
the question is: Is the right to expropriate granted to mining companies
under Section 59 of P.D. No. 463 an absolute right?
An examination of Presidential Decree No. 463 would readily show that
Section 59 upon which plaintiff asserts its right to expropriate is found
under Chapter XI with the heading Auxiliary Mining Rights. From the title
alone, it would seem that the right to expropriate is not an absolute one
but a mere auxiliary right. The right of eminent domain granted to mining
companies is given in aid of its mining operations and not as a matter of
right. Thus, it should be construed strictly against the mining company
seeking the right. Thus, taking into context the antecedent facts arising
from this case, is it proper for plaintiff to exercise the power of eminent
domain?
Absolutely not. But, granting arguendo that the right of expropriation can
be awarded to plaintiff, a bigger question arises on whether a mining
company can expropriate land belonging to another mining company. It
would be absurd if not ridiculous. In the first place, the land would no
longer be subject to expropriation. Expropriation demands that the land be
private land. When the Supreme Court awarded the possessory rights
over the land subject of this case to defendants Macawiwili and Omico, it
has stripped said land of its private character and gave it its public
character, that is, to be utilized for mining operations. Although property
already devoted to public use is still subject to expropriation, this must be
done directly by the national legislature or under a specific grant of
authority to the delegate (Constitutional Law by Isagani Cruz, 1989
edition, page 64). Section 59 of Presidential Decree No. 463 is not a
specific grant of authority given to plaintiff but a mere general authority
which will not suffice to allow plaintiff to exercise the power of eminent
domain.
The plaintiff also states that it does not question the mining rights of
defendant mining companies over the area as it is only interested in the
surface rights as this is where its improvements are located. But this is an
illusory dream which cannot be given reality by this Court. It is a well-
35
known principle that the owner of a piece of land has rights not only to its
surface but also to everything underneath and the airspace above it to a
reasonable height (Art. 437, Civil Code of the Philippines). The surface
area cannot be segregated from the subjacent minerals. There is no
dividing line between the surface and what is underneath that one can
categorically state that one belongs to the plaintiff while the other forms
part of the property of the defendant mining companies. For that is in
effect what the plaintiff wants, just the surface area where its
improvements are. It would be like dismembering a human body of a lady
and awarding the upper part including her bosom to someone while giving
the lower part to another, making it a useless proposition to either
one. For how can defendant mining companies operate their mining
claims when the surface belongs to somebody else and for that matter,
how will the plaintiff improve the surface area without affecting what is
underneath?
As the Supreme Court stated in the case of Republic vs. Court of Appeals,
No. L-43938, April 15, 1988, 160 SCRA 228: Under the (no- conflict)
theory of the respondent court, the surface owner will be planting on the
land while the mining locator will be boring tunnels underneath. The
farmer cannot dig a well because he may interfere with the mining
operations below and the miner cannot blast a tunnel lest he destroys the
crops above. How deep can the farmer, and how high can the miner, go
without encroaching on each others right? Where is the dividing line
between the surface and sub-surface rights? The Court feels that the
rights over the land are indivisible and that the land itself cannot be half
agricultural and half mineral. The classification must be categorical; the
land must be either completely mineral or completely agricultural.
All told, it is clear that plaintiff has not shown that it has the right to
expropriate the land subject of this case. Moreover, that land has been
placed out of its reach by the Supreme Court decision when it awarded it
to defendants Macawiwili and Omico. Both plaintiff and defendants are
engaged in mining, and the Supreme Court has adjudged defendant
mining companies to be the owner of the land. This Court now, on the
ground of the exercise of the power of eminent domain, cannot and will
not overwhelm said decision by awarding it to plaintiff.
As the other motions have become moot and academic, this Court will no
longer delve into them. However, as to the motion for reduction of deposit,
the Court will make its last point. In the case of National Power
Corporation vs. Jocson, supra, the Supreme Court made this
pronouncement: Presidential Decree No. 42 requires the petitioner, to
deposit with the Philippine National Bank in its main office or any of its
branches or agencies, an amount equivalent to the assessed valued of
the property for purposes of taxation. This assessed value is that
indicated in the tax declaration. P.D. No. 42 repealed the provisions of
Rule 67 of the Rules of Court and any other existing law contrary to or
inconsistent with it. Accordingly, it repealed Section 2 of Rule 67 insofar as
the determination of the provisional value, the form of payment and the
agency with which the deposit shall be made, are concerned. P.D. No. 42,
however effectively removes the discretion of the court in determining the
 provisional value. What is to be deposited is an amount equivalent to the
assessed value for taxation purposes. No hearing is required for that
purpose. All that is needed is notice to the owner of the property sought to
be condemned.
Thus, the plaintiff is right in depositing the assessed value of the property
as appearing on the tax declaration of defendant Macawiwili as the
provisional value of the land sought to be expropriated. While this case
remains pending, the plaintiff may then withdraw the balance of the Two
Million Pesos (P2,000,000.00) from the Philippine National Bank after
deducting the provisional value of the land amounting to Forty Eight
Thousand Six Hundred Pesos (P48,600.00).
WHEREFORE, premises considered, the Motion to Dismiss filed by
defendants Macawiwili Gold Mining and Development Mining Co., Inc.
and Omico Mining and Industrial Corporation is granted. This case is
hereby DISMISSED without pronouncement as to costs.
SO ORDERED.
Philex Mining moved for a reconsideration, but its motion was denied. It then
appealed to the Court of Appeals.
On February 16, 1994, petitioners filed a Motion to Dismiss Appeal on the
ground that only questions of law were involved and, therefore, the appeal should be
to the Supreme Court. However, the appellate court denied petitioners motion in a
resolution, dated April 12, 1994. Without filing a motion for reconsideration, petitioners
filed the instant petition for certiorari.
Respondent Philex Mining seeks the dismissal of the petition on the ground that
petitioner should have filed a motion for reconsideration giving the appellate court an
opportunity to correct itself.
Rule 65, 1 of the 1964 Rules of Court in part provides:
Section 1. Petition for certiorari. - When any tribunal, board or officer
exercising judicial functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion and there is no appeal, nor
any plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court,
alleging the facts with certainty and praying that judgment be rendered
annulling or modifying the proceedings, as the law requires, of such
tribunal, board or officer.
With some modifications, Rule 65, 1 of the 1997 Rules of Civil Procedure
similarly provides:
Section 1. Petition for certiorari. - When any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in
excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no
appeal, nor any plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of such tribunal, board or
officer, and granting such incidental reliefs as law and justice may require.
[3]
It is settled that the writ of certiorari lies only when petitioner has no other plain,
speedy, and adequate remedy in the ordinary course of law. Thus, a motion for
36
reconsideration, as a general rule, must be filed before the tribunal, board, or officer
against whom the writ of certiorari is sought.
Ordinarily, certiorari as a special civil action will not lie unless a motion for
reconsideration is first filed before the respondent tribunal, to allow it an
opportunity to correct its assigned errors.[4]
This rule, however, is not without exceptions. In Pajo v. Ago and Ortiz[5] we held:
Respondent contends that petitioners should have filed a motion for
reconsideration of the order in question, or asked for the dissolution of the
preliminary injunction issued by the trial court, before coming to us.
This is not always so. It is only when the questions are raised for the first
time before this Court in a certiorari proceeding that the writ shall not
issue unless the lower court had first been given the opportunity to pass
upon the same. In fine, when the questions raised before this Court are
the same as those which have been squarely raised in and passed upon
by, the court below, the filing of a motion for reconsideration in said court
before certiorari can be instituted in this Court, is no longer prerequisite.
In Locsin v. Climaco[6] it was stated:
When a definite question has been properly raised, argued, and submitted
to a lower court, and the latter has decided the question, a motion for
reconsideration is no longer necessary as a condition precedent to the
filing of a petition for certiorari in this Court.
And in Central Bank v. Cloribel,[7] it was explained:
It is true that Petitioner herein did not seek a reconsideration of the order
complained of, and that, as a general rule, a petition for certiorari will not
be entertained unless the respondent has had, through a motion for
reconsideration, a chance to correct the error imputed to him. This rule is
subject, however, to exceptions, among which are the following, namely:
1) where the issue raised is one purely of law; 2) where public interest is
involved; and 3) in case of urgency. These circumstances are present in
the case at bar. Moreover, Petitioner herein had raised - in its answer in
the main case and in the rejoinder to the memorandum of the Banco
Filipino in support of the latters application for a writ of preliminary
injunction - the very same questions raised in the Petition herein. In other
words, Judge Cloribel has already had an opportunity to consider and
pass upon those questions, so that a motion for reconsideration of his
contested order would have served no practical purpose. The rule
requiring exhaustion of remedies does not call for an exercise in futility.
The issues raised by petitioners in this petition are substantially the same as
those asserted by them in their Motion to Dismiss Appeal, dated February 14, 1994,
before the Court of Appeals. The argument that respondent has no right to
expropriate petitioners mineral areas under Presidential Decree No. 463 has already
been raised, argued, and submitted by petitioners for resolution by the appellate court
in their Motion to Dismiss Appeal. To further file a motion for reconsideration before
the Court of Appeals would simply be to repeat their arguments. For this reason, we
hold that petitioners failure to file a motion for reconsideration is not fatal to the
allowance of their action.
We therefore come to the main question: Did the Court of Appeals commit grave
abuse of discretion in denying petitioners Motion to Dismiss Appeal? We find that it
did.
 To begin with, the writ of certiorari lies when a court, in denying a motion to
dismiss, acts without or in excess of jurisdiction or with grave abuse of discretion. [8] By
grave abuse of discretion is meant, such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be
grave as where the power is exercised in an arbitrary or despotic manner by reason
of passion or personal hostility and must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act
all in contemplation of law.[9]
Petitioners contend that the Court of Appeals gravely abused its discretion in
denying their motion to dismiss the appeal. According to petitioners, respondents
appeal raises only questions of law and, therefore, it should be brought to the
Supreme Court by means of a petition for review on certiorari and not, as Philex
Mining did, by bringing an ordinary appeal to the Court of Appeals. Petitioners argue
that the question whether respondent has a right to expropriate petitioners mining
areas under 59 of Presidential Decree No. 463 is a question of law.
On the other hand, Philex Mining maintains that the issues raised in its appeal
are factual and, therefore, the appellate court is the proper forum for the ventilation of
such issues.
Supreme Court Circular No. 2-90, which is based on the Resolution of the Court
En Banc in UDK-9748 (Anacleto Murillo v. Rodolfo Consul), March 1, 1990, provides
in 4(c) thereof:
c) Raising issues purely of law in the Court of Appeals, or appeal by
wrong mode. - If an appeal under Rule 41 is taken from the regional trial
court to the Court of Appeals and therein the appellant raises only
questions of law, the appeal shall be dismissed, issues purely of law not
being reviewable by said Court. So, too, if an appeal is attempted from the
judgment rendered by a Regional Trial Court in the exercise of its
appellate jurisdiction by notice of appeal, instead of by petition for review,
the appeal is inefficacious and should be dismissed.
Thus, judgments of the regional trial courts in the exercise of their original
jurisdiction are to be elevated to the Court of Appeals in cases where the appellant
raises questions of fact or mixed questions of fact and law. On the other hand,
appeals from judgments of the regional trial courts in the exercise of their original
jurisdiction must be brought directly to the Supreme Court in cases where the
appellant raises only questions of law.
This procedure is now embodied in Rule 41, 2 of the 1997 Rules of Civil
Procedure which distinguishes the different modes of appeal from judgments of
regional trial courts as follows:
Modes of appeal.-
(a) Ordinary appeal. - The appeal to the Court to Appeals in
cases decided by the Regional Trial Court in the exercise of its
original jurisdiction shall be taken by filing a notice of appeal with
the court which rendered the judgment or final order appealed
from and serving a copy thereof upon the adverse party. No
record on appeal shall be required except in special proceedings
and other cases of multiple or separate appeals where the law or
these Rules so require. In such cases, the record on appeal shall
be filed and served in like manner.
37
(b) Petition for review. - The appeal to the Court of Appeals in
cases decided by the Regional Trial Court in the exercise of its
appellate jurisdiction shall be by petition for review in accordance
with Rule 42.
(c) Appeal by certiorari. - In all cases where only questions of law
are raised or involved, the appeal shall be to the Supreme Court
by petition for review on certiorari in accordance with Rule 45.
On the other hand, Rule 42 provides that appeals from judgments of the
regional trial courts in the exercise of their appellate jurisdiction must be brought to
the Court of Appeals, whether the appellant raises questions of fact, of law, or mixed
questions of fact and law.
The rules on appeals from the judgments of the regional trial courts in civil cases
may thus be summarized as follows:
(1) Original Jurisdiction - In all cases decided by the regional trial courts in the
exercise of their original jurisdiction, appeal may be made to:
(a) Court of Appeals - where the appellant raises questions of fact or
mixed questions of fact and law, by filing a mere notice of appeal.
(b) Supreme Court - where the appellant solely raises questions of
law, by filing a petition for review on certiorari under Rule 45.
(2) Appellate Jurisdiction
All appeals from judgments rendered by the regional trial courts in the exercise
of their appellate jurisdiction, whether the appellant raises questions of fact, of law, or
mixed questions of fact and law, shall be by filing a petition for review under Rule 42.
The question is whether the issues raised in the appeal of respondent Philex
Mining are questions of law or of fact.
[F]or a question to be one of law, the same must not involve an
examination of the probative value of the evidence presented by the
litigants or any of them. And the distinction is well-known: There is a
question of law in a given case when the doubt or difference arises as to
what the law is on a certain state of facts; there is a question of fact when
the doubt or difference arises as to the truth or the falsehood of alleged
facts.[10]
Respondents assignment of errors[11] before the appellate court should therefore
be considered in order to determine the nature of the questions therein
raised. Respondent Philex Mining argued before the Court of Appeals:
A. The trial court erred in finding that Philex has no right to
expropriate; P.D. 463 expressly grants to Philex, as operator
of the Nevada claims, the right of eminent domain.
B. The trial court erred in finding that Philex cannot expropriate land
belonging to a mining company; Section 59 in relation to
Section 58 of P.D. 463 allows an operator of a mining claim to
expropriate mining claims or lands owned, occupied, or
leased by other persons or claim owners.
C. The trial court erred in finding that Philex is attempting to subvert
the Supreme Court decision and is engaged in forum-
shopping. Philex is merely exercising its rights under the law.
D. The trial court erred in finding that the expropriation of the land
will divide the surface from the subsurface.
 E. The trial court erred in dismissing the complaint. Philexs
alternative cause of action was disregarded.
The respondents arguments may thus be summarized as follows:
(1) Section 59, in relation to Section 53 of Presidential Decree No. 463,
expressly grants respondent the right to expropriate mining claims or lands owned,
occupied, or leased by other persons once the conditions justifying expropriation are
present. The power of eminent domain expressly granted under Sections 58 and 59
of P.D. No. 463 is not inferior to the possessory right of other claimowners.[12]
(2) There is nothing absurd in allowing a mining company to expropriate land
belonging to another mining company. Pursuant to the ruling laid down in Benguet
Consolidated, Inc. v. Republic,[13] land covered by mining claims may be the subject of
expropriation. Moreover, a general grant of the power of eminent domain only means
that the court may inquire into the necessity of the expropriation.[14]
(3) Respondent could not be held guilty of forum-shopping or subverting the
Supreme Courts decision in Poe Mining v. Garcia.[15] Forum-shopping, which refers to
filing the same or repetitious suits, is not resorted to in the present case since
respondent seeks to expropriate petitioners mining areas, not as operator of the Poe
mining claims, but as operator of the Nevada mining claims.[16]
(4) Respondents expropriation of the land will not divide the surface from the
subsurface for the reason that respondent seeks to expropriate all rights that
petitioners, as well as the Pigoro heirs, have over the 21.9 hectare area.[17]
(5) The trial court erred in disregarding respondents alternative cause of action,
even on the assumption that respondent does not have the right to expropriate, for
the reason that an alternative statement in a pleading, if sufficient, is not vitiated by
the insufficiency of the other alternative statements.[18]
The first four arguments advanced by respondent Philex Mining raise the sole
issue of whether it has, under Presidential Decree No. 463, the right to expropriate
the 21.9 hectare mining areas where petitioners mining claims are located. On the
other hand, its final argument raises the issue of whether the rules on the allegation of
alternative causes of action in one pleading under Rule 8, 1 of the Rules of Court are
applicable to special civil actions. These are legal questions whose resolution does
not require an examination of the probative weight of the evidence presented by the
parties but a determination of what the law is on the given state of facts. These issues
raise questions of law which should be the subject of a petition for review on certiorari
under Rule 45 filed directly with this Court. The Court of Appeals committed a grave
error in ruling otherwise.
WHEREFORE, the petition is GRANTED, the challenged resolution of the Court
of Appeals is SET ASIDE, and the appeal of respondent Philex Mining is DISMISSED.
SO ORDERED.
FIRST DIVISION
G.R. No. 181664 : November 14, 2012
LAND BANK OF THE PHILIPPINES, Petitioner, v. CRISPIN D. RAMOS and
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, Respondent.
DECISION
VILLARAMA, JR., J.:
This petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, seeks to reverse and set aside the Resolution1ςrνll dated
38
January 31, 2008 of the Court of Appeals (CA) in CA-G. R. CV No. 82916 dismissing
the appeal for lack of jurisdiction.
In January 2000, the Department of Public Works and Highways (DPWH) and
respondent Crispin D. Ramos (respondent) entered into a contract of sale over a
portion of land affected by a bridge construction project. As per the recitals of the
Deed of Absolute Sale,2ςrνll the property sold is co-owned but respondent was the
sole vendee, thus:chanroblesvirtuallawlibrary
WHEREAS, the PARTY OF THE FIRST PART is to construct the New Gayaman
Bridge, Binmaley, Pangasinan and such construction affects and passes through a
portion of the hereunto described property under Tax Declaration No. 573 still in the
name of the late Maximo Diaz who is the predecessor-in-interest of the PARTY OF
THE SECOND PART Crispin D. Ramos;
WHEREAS, the PARTY OF THE SECOND PART and FLORA D. RAMOS-REYES,
GOMERCINDO D. RAMOS and JOSE ADVITO D. RAMOS are the compulsory heirs
of the late Matea D. Ramos, the latter, together with the Late Maximo Diaz, being the
only compulsory heirs of the late Mariano Diaz;
WHEREAS, the heirs of the Late Matea Diaz-Ramos and the heirs of the Late
Maximo Diaz are the co-owners of the parcel of land hereunto described property, but
the latters share was alienated, conveyed and ceded to Eduardo Concepcion by the
heirs of the late Maximo Diaz;
WHEREAS, only the PARTY OF THE SECOND PART voluntarily and spontaneously
agrees and assents to alienate, convey and cede such a portion from their share of
inheritance in the estate of the Late Mariano Diaz as transferred to the Late Matea D.
Ramos which such said portion to be affected by the construction of the New
Concrete Gayaman
Bridge shall be deducted from his inheritance share on the said one-half portion of the
estate of the Late Mariano Diaz as hereunto described;
WHEREAS, the PARTY OF THE SECOND PART, being a co-owner of that property
hereunto described covered and embodied under Tax declaration No. 573 as
declared for taxation purposes consents to cede and convey for consideration a
portion from his share in inheritance in the estate of the Late Matea Diaz Ramos
affected thereby by way of this Deed of Absolute Sale to the herein PARTY OF THE
FIRST PART, such portion being more particularly described and bounded on the
North, by the National Road and the property of Marcelo Senting, on the East, by the
river; on the South, by the river; and on the West, by the property of Isidro Menera
and Inocencio Cerezo, containing an area of One Thousand One Hundred Forty
Square Meters (1,140 sq.m.).3ςrνll (Emphasis supplied)
Accordingly, the agreed consideration of P570,000.00 was paid by DPWH to
respondent by debiting the said amount from the latters account with petitioner Land
Bank of the Philippines (LBP) which credited such fund to the deposit/account of
respondent.4ςrνll
Respondent was able to withdraw from the aforesaid account P100,000.00 on March
26, 2001. In a letter5ςrνll dated April 10, 2001, DPWH requested petitioner to hold in
abeyance the release of payment to respondent while it sought a legal opinion from
the DPWH Central Office in Manila. It appears that earlier, Jose Advito D. Ramos, a
brother of respondent, wrote the DPWH saying that as co-owner of the property
bought by DPWH, he is also entitled to his share in the proceeds of the sale.
Under 1st Indorsement dated June 22, 2001, DPWH Legal Services Director Oscar
D. Abundo opined that:
 xxx
It is worthy to mention that until now the property is still owned in common by the
heirs, therefore, all should participate or share in the proceeds of the payment.
For equity and justice, a Deed of Partition should be submitted/demanded in order to
determine the Degree of Participation for every heir.
In view of the foregoing, no release/payment should be made until such time that the
issue is settled.6ςrνll
On March 4, 2002, respondent filed a Complaint7ςrνll for "Recovery of Bank Deposit
With Damages" in the Regional Trial Court (RTC) of Lingayen, Pangasinan against
petitioner, its Branch Manager Ms. Kathleen Fernandez, and Field Attorney Atty. Jose
L. Lopez, Jr.
Petitioner filed its Answer8ςrνll asserting that it was forced to litigate in a baseless
suit which did not implead DPWH as the real party defendant. With leave of court, it
filed a Third-Party Complaint9ςrνll against DPWH.
In its Answer,10ςrνll DPWH contended that it was well within its right to request that
payment to respondent be held in abeyance. Absent any actual partition, respondent
cannot appropriate as his own, that portion of Lot 7382 sought to be acquired by
DPWH, which is owned pro-indiviso by all the co-owners who are also entitled to
receive their equal share of the payment. Hence, DPWH asserted that it does not
incur any liability for its action, the same being legal and justifiable under the
circumstances.
The parties agreed to submit the case for a judgment on the pleadings.
On November 27, 2003, the trial court rendered its decision11ςrνll , the dispositive
portion of which reads:chanroblesvirtuallawlibrary
WHEREFORE, premises well-considered, judgment is hereby rendered as follows:
1. ordering the Land Bank of the Philippines, Dagupan City Extension Office in
Caranglaan District, through its authorized officer(s) to allow the plaintiff to withdraw
his deposit with interest from Savings Account No. 2641-0235-50 with aforesaid bank;
2. ordering the Land Bank of the Philippines to pay the plaintiff litigation expenses in
the amount of Ten Thousand (P10,000.00) pesos and attorneys fees in the amount of
Thirty Thousand (P30,000.00) pesos;
3. dismissing the third party complaint of Land Bank of the Philippines against the
third party defendant Department of Public Works and Highways.
SO ORDERED.12ςrνll
Petitioner filed a motion for reconsideration but it was denied by the trial court in its
Order dated February 16, 2004.13ςrνll DPWH had separately filed a notice of appeal
but subsequently filed a motion to withdraw appeal which was granted by the CA.
Before the CA, petitioner presented the following assignment of errors:
First Assignment of Error
THE LOWER COURT ERRED WHEN IT ORDERED DEFENDANT/THIRD-PARTY
PLAINTIFF-APPELLANT TO ALLOW PLAINTIFF-APPELLEE TO WITHDRAW HIS
DEPOSIT WITH
INTEREST FROM SAVINGS ACCOUNT NO. 2641-0235-50.
Second Assignment of Error
THE LOWER COURT ERRED IN ORDERING DEFENDANTS/THIRD PARTY
PLAINTIFFS-APPELLANTS TO PAY THE PLAINTIFF-APPELLEE LITIGATION
EXPENSES IN THE AMOUNT OF P10,000.00 AND ATTORNEYS FEES IN THE
AMOUNT OF P3,000.00.
Third Assignment of Error
39
THE LOWER COURT ERRED IN ORDERING THE DISMISSAL OF
DEFENDANTS/THIRD-PARTY PLAINTIFFS-APPELLANTS THIRD-PARTY
COMPLAINT AGAINST THIRD-PARTY DEFENDANT-APPELLEE (DPWH).14ςrνll
However, in its assailed Resolution dated January 31, 2008, the CA dismissed the
appeal after finding that it raised only pure questions of law,
thus:chanroblesvirtuallawlibrary
It is clear from the arguments of the Bank that it is assailing the correctness of the
conclusion of the court a quo that it is not an agent of DPWH with respect to the
amount deposited in the savings account of Crispin and that its act of withholding the
release of said amount to Crispin was not valid. It has been held that when there is no
dispute as to the facts, the question of whether or not the conclusion drawn therefrom
is correct is a question of law. x x x.
Worthy of note that during the pre-trial conference, the parties agreed to have the
case resolved by judgment on the pleadings, there being only legal issues involved.
Thus, the court a quo did not make any findings of fact nor did it evaluate the parties
respective evidence, as none was presented, nor pass upon the truth or falsity of the
parties allegations. What the court a quo did was simply to apply the law as to the
facts borne out by the allegations in the pleadings, and whatever conclusions it
arrived at evidently involved questions of law. Consequently, a review of the propriety
of the judgment on the pleadings rendered by the court a quo would not involve an
evaluation of the probative value of any evidence, as none was presented, but would
be limited to the inquiry of whether the law was properly applied given the facts of the
case. Therefore, what would inevitably arise from such a review are pure questions of
law, and not questions of fact, which are not proper in an ordinary appeal under Rule
41, but should be raised by way of a petition for review on certiorari before the
Supreme Court under Rule 45, of the Rules of Court.15ςrνll
Hence, this petitionassailing mainly the dismissal of petitioners appeal.
In Macawiwili Gold Mining and Development Co., Inc. v. Court of Appeals,16ςrνll we
summarized the rule on appeals as follows17ςrνll :
(1) In all cases decided by the RTC in the exercise of its original jurisdiction, appeal
may be made to the Court of Appeals by mere notice of appeal where the appellant
raises questions of fact or mixed questions of fact and law;
(2) In all cases decided by the RTC in the exercise of its original jurisdiction where the
appellant raises only questions of law, the appeal must be taken to the Supreme
Court on a petition for review on certiorari under Rule 45.
(3) All appeals from judgments rendered by the RTC in the exercise of its appellate
jurisdiction, regardless of whether the appellant raises questions of fact, questions of
law, or mixed questions of fact and law, shall be brought to the Court of Appeals by
filing a petition for review under Rule 42.
A question of law arises when there is doubt as to what the law is on a certain state of
facts, while there is a question of fact when the doubt arises as to the truth or falsity of
the alleged facts. For a question to be one of law, the same must not involve an
examination of the probative value of the evidence presented by the litigants or any of
them. The resolution of the issue must rest solely on what the law provides on the
given set of circumstances. Once it is clear that the issue invites a review of the
evidence presented, the question posed is one of fact. Thus, the test of whether a
question is one of law or of fact is not the appellation given to such question by the
party raising the same; rather, it is whether the appellate court can determine the
issue raised without reviewing or evaluating the evidence, in which case, it is a
question of law; otherwise it is a question of fact.18ςrνll
In this case, petitioners appeal did not raise only questions of law but also questions
of fact. Petitioner assailed not just the trial courts alleged error in applying the law on
the nature of relation of the parties, particularly on the rights of DPWH to request
withholding of release of payment and of petitioner as depositary bank to comply with
such request, but also on the factual basis for the grant of damages (litigation and
attorneys fees) in favor of respondent. The discretion of the court to award attorney's
fees under Article 2208 of the Civil Code demands factual, legal, and equitable
justification, without which the award is a conclusion without a premise, its basis
being improperly left to speculation and conjecture.19ςrνll
Since the appeal raised mixed questions of law and fact, the CA clearly erred in
dismissing the case on the ground of lack of jurisdiction.ςηαοblενιrυαllαÏ
‰lιbrαr
WHEREFORE, the petition for review on certiorari is GRANTED. The Resolution
dated January 31, 2008 of the Court of Appeals in CA-G.R. CV No. 82916 is SET
ASIDE.
The case is hereby REMANDED to the Court of Appeals which shall decide CA-G.R.
CV No. 82916 on the merits with deliberate dispatch.
No pronouncement as to costs.ςrαlαωlιbrαr
SO ORDERED.
G.R. No. 111837 October 24, 1995
NEW YORK MARINE MANAGERS, INC., petitioner,
vs.
COURT OF APPEALS and VLASONS SHIPPPING INC., respondents.
BELLOSILLO, J.:
NEW YORK MARINE MANAGERS, INC., a foreign corporation organized under the
laws of the United States, seeks in this special civil action for certiorari under Rule 65
of the Rules of Court1 the annulment of the decision of the Court of Appeals which
reversed the ruling of the trial court denying the motion to dismiss of private
respondent Vlasons Shipping Company, Inc.
On 25 July 1990 American Natural Soda Ash Corporation (ANSAC) loaded in
Portland, U.S.A., a shipment of soda ash on board the vessel "MS Abu Hanna" for
delivery to Manila. The supplier/shipper insured the shipment with petitioner. Upon
arrival in Manila the shipment was unloaded and transferred to the vessel "MV
Biyayang Ginto" owned by private respondent. Since the shipment allegedly
sustained wettage, hardening and contamination, it was rejected as total loss by the
consignees. When the supplier sought to recover the value of the cargo loss from
petitioner the latter paid the claim in the amount of US$58,323.96.
On 20 November 1991 petitioner as subrogee filed with the Regional Trial Court of
Manila a complaint for damages against private respondent alleging among others
that —
. . . 1.01. Plaintiff is a non-life foreign insurance corporation
organized under the laws of the State of New York with offices at
123 William Street, New York, N.Y. 10038 and engaged in an
isolated transaction in this case; defendant is a local domestic
40
corporation organized under Philippine law with offices at Zobel
Street, Isla de Provisor, Paco, Metro Manila where it may be served
with summons and other court processes . . . . 2
On 24 January 1992 private respondent filed a motion to dismiss the complaint
alleging that: (a) The complaint was filed by counsel who had no authority to sue for
plaintiff; (b) The complaint stated no cause of action or without a cause of action as
(a) there was no privity of contract between plaintiff and defendant; (b) the risks which
allegedly caused damages on the goods were not covered by the insurance issued by
plaintiff, and (c) the charter agreement between the consignee, ALCHEMCO
PHILIPPINES, INC., and private respondent absolved the latter from all kinds of claim
whatsoever; (3) The claim of plaintiff was already extinguished, waived, abandoned
and/or had prescribed; and, (4) Plaintiff had no legal capacity to sue.
On 5 February 1992 petitioner opposed the motion to dismiss. On 10 April 1992 the
trial court denied the motion. On 18 August 1992 the motion to reconsider the denial
was also denied. The trial court ruled that since petitioner alleged in its complaint that
it was suing on an isolated transaction the qualifying circumstance of plaintiff's
capacity to sue as an essential element has been properly pleaded. The trial court
also held that the grounds relied upon by private respondent in its motion to dismiss
were matters of defense.
On 28 September 1992 private respondent filed a petition for certiorari and prohibition
with the Court of Appeals alleging that the trial court gravely abused its discretion in
issuing the orders of 10 April 1992 and 18 August 1992 which amounted to lack or
excess of jurisdiction.
On 29 July 1993 the appellate court granted the petition after finding the assailed
orders to be patently erroneous.3While it found the allegation in the complaint that
plaintiff was a non-life foreign insurance corporation engaged in an isolated
transaction to be a sufficient averment, it nevertheless held the complaint to be fatally
defective for failure to allege the duly authorized representative or resident agent of
petitioner in the Philippines. Thus it enjoined the trial court from further proceeding
except to dismiss the case with prejudice.
This petition alleges that the Court of Appeals acted whimsically, capriciously and
arbitrarily amounting to lack or excess of jurisdiction in deciding that petitioner's
complaint was fatally defective for failing to allege its duly authorized representative
or resident agent in the Philippines. Petitioner argues that there is no law, substantive
or procedural, that requires a foreign corporation engaged only in an isolated
transaction to appoint a duly authorized representative or a resident agent in the
Philippines before it can sue locally.
The proper remedy available to petitioner from a decision of the Court of Appeals is a
petition for review on certiorari under Rule 45 of the Rules of Court, not a petition
for certiorari under Rule 65 of the Rules of Court. Mere errors of judgment cannot be
the proper subject of a special civil action for certiorari. Where the issue or question
involved affects the wisdom or legal soundness of the decision — not the jurisdiction
of the court to render said decision — the same is beyond the province of a special
civil action for certiorari. Erroneous findings and conclusions do not render the
appellate court vulnerable to the corrective writ of certiorari. For where the court has
jurisdiction over the case, even if its findings are not correct, they would, at most,
constitute errors of law and not abuse of discretion correctible by certiorari.4
But even if we treat the instant petition as one for review on certiorari the same must
still fail. The issue on whether a foreign corporation can seek the aid of Philippine
courts for relief recoils to the basic question of whether it is doing business in the
Philippines or has merely entered into an isolated transaction. This Court has held in
a long line of cases that a foreign corporation not engaged in business in the
Philippines may exercise the right to file an action in Philippine courts for an isolated
transaction.5 However, in Commissioner of Customs v. K.M.K. Gani et a1.,6 citing
Atlantic Mutual Insurance Company v. Cebu Stevedoring, Inc., 7 we ruled that to say
merely that a foreign corporation not doing business in the Philippines does not need
a license in order to sue in our courts does not completely resolve the issue. When
the allegations in the complaint have a bearing on the plaintiff's capacity to sue and
merely state that the plaintiff is a foreign corporation existing under the laws of the
United States, such averment conjures two alternative possibilities: either the
corporation is engaged in business in the Philippines, or it is not so engaged. In the
first, the corporation must have been duly licensed in order to maintain the suit; in the
second, and the transaction sued upon is singular and isolated, no such license is
required. In either case, compliance with the requirement of license, or the fact that
the suing corporation is exempt therefrom, as the case may be, cannot be inferred
from the mere fact that the party suing is a foreign corporation. The qualifying
circumstance being an essential part of the plaintiff's capacity to sue must be
affirmatively pleaded. Hence, the ultimate fact that a foreign corporation is not doing
business in the Philippines must first be disclosed for it to be allowed to sue in
Philippine courts under the isolated transaction rule.8 Failing in this requirement, the
complaint filed by petitioner with the trial court, it must be said, fails to show its legal
capacity to sue.
Moreover, petitioner's complaint is fatally defective for failing to allege its duly
authorized representative or resident agent in this jurisdiction. The pleadings filed by
counsel for petitioner do not suffice. True, a lawyer is generally presumed to be
properly authorized to represent any cause in which he appears, and no written
power of attorney is required to authorize him to appear in court for his client. But this
presumption is disputable. Where said authority has been challenged or attacked by
the adverse party the lawyer is required to show proof of such authority or
representation in order to bind his client. The requirement of the production of
authority is essential because the client will be bound by his acquiescence resulting
from his knowledge that he was being represented by said attorney.9 In the instant
case, the extent of authority of counsel for petitioner has been expressly and
continuously assailed but he has failed to show competent proof that he was indeed
duly authorized to represent petitioner.
WHEREFORE, the petition is DENIED. The assailed decision of the Court of Appeals
dated 29 July 1993 is AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. L-68291 March 6, 1991
ARCADIO, MELQUIADES, ABDULA, EUGENIO, APOLONIO, all surnamed
YBAÑEZ, petitioners,
vs.
THE HONORABLE INTERMEDIATE APPELLATE COURT and VALENTIN O.
OUANO, respondents,
Dominador F. Carillo for petitioners.
Pableo B. Baldoza for private respondent.
41
FERNAN, C.J.:
This petition for certiorari, prohibition and mandamus which this court treated as a
petition for review on certiorari in its resolution of August 22, 1984 seeks to nullify the
decision of the Intermediate Appellate Court (now Court of Appeals) dated June 29,
1984, modifying the decision of the Court of First Instance (now Regional Trial Court)
of Davao Oriental, dated June 8, 1981, ordering the herein petitioners to vacate the
property in controversy; to return its possession to private respondent and to pay
P10,000.00 representing proceeds of the land from January 4, 1975, and attorney's
fees.
Records show that private respondent Valentin Ouano, a claimant-occupant of Lot
No. 986, Pls-599-D situated at sitio Bagsac, barrio of Manikling, Governor Generoso
(now San Isidro), Davao del Norte, containing an area of three (3) hectares, 48 ares
and 78 centares which was surveyed on March 13, 1958, as evidenced by the
"Survey Notification Card" issued in his name, filed on February 27, 1959, a
homestead application1 with the Bureau of Lands. The said application, recorded as
Homestead Application No. 20-107001, was approved in an order dated March 3,
1959 issued by the District Land Officer, Land District No. 20, for and by authority of
the Director of Lands.
Three (3) years thereafter, or on September 5, 1962, a "Notice of Intention to Make
Final Proof was made by Valentin Ouano to establish his claim to the lot applied for
and to prove his residence and cultivation before Land Inspector Lorenzo Sazon at
the Bureau of Lands, Davao City at 10:00 o'clock A.M. appending thereto an affidavit
attesting that a copy of his intention to make final proof relative to his Homestead
Application No. 20-10701 was posted at the Municipal building of the Municipality of
Gov. Generoso (now San Isidro), Davao, on the bulletin board of the barrio where the
land applied for is located, and in a conspicuous place on the land itself on the 5th
day of August, 1962 and remained so posted for a period of thirty days, until
September 5, 1962.2
On the said date, or on September 5, 1962, Valentin Ouano made his "Final Proof"
before Land Inspector Lorenzo Sazon pursuant to Section 14, Commonwealth Act
No. 141, as amended.
The following year, or on March 4, 1963, an order for the issuance of patent was
issued by the Bureau of Lands.
On April 15, 1963, an "Original Certificate of Title No. P-15353" was issued to private
respondent Valentin Ouano over Homestead Patent No. 181261 which was
transcribed in the "Registration Book" for the province of Davao on October 28,
1963.3
On January 4, 1975, after 19 years of possession, cultivation and income derived
from coconuts planted on Lot No. 986, private respondent Valentin Ouano was
interrupted in his peaceful occupation thereof when a certain Arcadio Ybanez and his
sons, Melquiades, Abdula, Eugenia Numeriano, Apolonio and Victoriano, forcibly and
unlawfully entered the land armed with spears, canes and bolos.
Because of the unwarranted refusal of Arcadio Ybanez, et al. to vacate the premises
since the time he was dispossessed in 1975, private respondent Valentin Ouano filed
on September 24, 1978 a complaint for recovery of possession, damages and
attorney's fees before the then Court of First Instance (now RTC) of Davao Oriental
against Arcadio Melquiades, Abdula, Eugenia Numeriano, Apolonio, Victoriano and
Servando, all surnamed Ybanez,4 docketed as Civil Case No. 671, seeking to enjoin
the Ybanezes from further the coconuts therefrom and restore to him the peaceful
possession and occupation of the premises. In his complaint, Valentin Ouano, then
plaintiff therein, alleged that he has been in lawful and peaceful possession since
1956 of a parcel of land designated as Lot No. 986, Pls-599-D situated in Bagsac,
Manikling, Governor Generoso (now San Isidro), Davao Oriental, to which an Original
Certificate of Title No. P-(l5353)-P-3932 was issued in his name; that petitioners, then
defendants therein, unlawfully entered his land on January 4, 1975 and started
cultivating and gathering the coconuts, bananas and other fruits therein, thereby
illegally depriving him of the possession and enjoyment of the fruits of the premises.
Petitioners, on the other hand, alleged that plaintiff Valentin Ouano, now private
respondent, has never been in possession of any portion of Lot No. 986 as the same
has been continously occupied and possessed by petitioners since 1930 in the
concept of owner and have introduced valuable improvements thereon such as
coconuts and houses; that Lot No. 986 was the subject matter of administrative
proceedings before the Bureau of Lands in Mati, Davao Oriental which was
consequently decided in their favor by the Director of Lands on the finding that
Valentin Ouano has never resided in the land; that it was declared by the Director of
Lands that the homestead patent issued to private respondent Valentin Ouano was
improperly and erroneously issued, since on the basis of their investigation and
relocation survey, the actual occupation and cultivation was made by petitioner
Arcadio Ybañez and his children, consisting of 9.6 hectares which cover the whole of
Lot No. 986 and portions of Lot Nos. 987, 988 and 989; that based on the ocular
inspection conducted, it was established that Valentin Ouano did not have a house on
the land and cannot locate the boundaries of his titled land for he never resided
therein.5
The trial court, after hearing, rendered on June 8, 1991 its decision6 in favor of private
respondent, the dispositive portion of which reads as follows:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered as
follows:
1 — The defendants are ordered to vacate the premises of Lot 986, PLS-
599-D, situated at Sitio Bagsac, Manikling, San Isidro, Governor Generoso
and to return the possession thereof to the plaintiff Valentin Ouano together
with all the improvements therein;
2 — To pay unto the plaintiff the sum of P12,000.00, the proceeds of the sale
of copra from January 4, 1975 to the present;
3 — To pay attorney's fees of P7,500.00;
4 — To desist from entering the property again after they have turned it over
to plaintiff; and
5 — To pay the costs of this suit.7
Petitioners appealed to the Intermediate Appellate Court.
On June 29, 1984, the Intermediate Appellate Court, First Civil Cases Division
promulgated a decision,8 affirming the decision of the trial court, with the modification
that the award of Pl2,000.00 representing the proceeds of the land from January 24,
1975 was reduced to P10,000.00 and the amount of P7,500.00 as attorney's fees
was fixed at P5,000.00.9
Hence the instant recourse by petitioners.
At the outset, it must be noted that in assailing the appellate court's decision which
affirmed that of the trial court, petitioners relied on the Order dated July 19, 1978
issued by the Director of the Bureau of Lands resolving the protest filed by them on
January 3, 1975, later amended on February 6, 1975, against the Homestead
42
Application No. 20-107001 of Valentin Ouano over Lot No. 986, Pls-599-D, docketed
as B.L. Claim No. 2809, D.L.O. Confect No. (XI-7)102.
Petitioners claimed that the complaint for recovery of possession, damages and
attorneys fees against them should have been dismissed by the trial court for failure
of private respondents, as patentee-respondent in the protest case before the Bureau
of Lands, to exhaust administrative remedies which is tantamount to a lack of cause
of action under Section 1, Rule 16 of the Rules of Court; that the decision or order on
a question of fact by the Bureau of Lands that Patent No. 101201 issued to private
respondent was improperly and erroneously issued should have been respected by
the trial court and the appellate court; that the indefeasibility of a certificate of title
must not be a sword for an offense nor should it be allowed to perpetrate fraud.
We find the contentions unmeritorious.
It was erroneous for petitioners to question the Torrens Original Certificate of Title
issued to private respondent over Lot No. 986 in Civil Case No. 671, an ordinary civil
action for recovery of possession filed by the registered owner of the said lot, by
invoking as affirmative defense in their answer the Order of the Bureau of Lands,
dated July 19, 1978,10 issued pursuant to the investigatory power of the Director of
Lands under Section 91 of Public Land Law (C.A. 141 as amended). Such a defense
partakes of the nature of a collateral attack against a certificate of title brought under
the operation of the Torrens system of registration pursuant to Section 122 of the
Land Registration Act, now Section 103 of P.D. 1259. The case law on the matter
does not allow a collateral attack on the Torrens certificate of title on the ground of
actual fraud.11 The rule now finds expression in Section 48 of P.D. 1529 otherwise
known as the Property Registration Decree.
The 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 (1)
year period from the issuance of the decree of registration upon which it is based, it
becomes incontrovertible.12 The settled rule is that a decree of registration and the
certificate of title issued pursuant thereto may be attacked on the ground of actual
fraud within one (1) year from the date of its entry and such an attack must be direct
and not by a collateral proceeding.13 The validity of the certificate of title in this regard
can be threshed out only in an action expressly filed for the purpose.14
It must be emphasized that a certificate of title issued under an administrative
proceeding pursuant to a homestead patent, as in the instant case, is as indefeasible
as a certificate of title issued under a judicial registration proceeding, provided the
land covered by said certificate is a disposable public land within the contemplation of
the Public Land Law.15
There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or
the Land Registration Act (Act 496), now P.D. 1529, fixing the one (1) year period
within which the public land patent is open to review on the ground of actual fraud as
in Section 38 of the Land Registration Act, now Section 32 of P.D. 1529, and clothing
a public land patent certificate of title with indefeasibility. Nevertheless, the pertinent
pronouncements in the aforecited cases clearly reveal that Section 38 of the Land
Registration Act, now Section 32 of P.D. 1529 was applied by implication by this Court
to the patent issued by the Director of Lands duly approved by the Secretary of
Natural Resources, under the signature of the President of the Philippines in
accordance with law. The date of issuance of the patent, therefore, corresponds to
the date of the issuance of the decree in ordinary registration cases because the
decree finally awards the land applied for registration to the party entitled to it, and the
patent issued by the Director of Lands equally and finally grants, awards, and
conveys the land applied for to the applicant.16 This, to our mind, is in consonance
with the intent and spirit of the homestead laws, i.e. conservation of a family home,
and to encourage the settlement, residence and cultivation and improvement of the
lands of the public domain. If the title to the land grant in favor of the homesteader
would be subjected to inquiry, contest and decision after it has been given by the
Government thru the process of proceedings in accordance with the Public Land Law,
there would arise uncertainty, confusion and suspicion on the government's system of
distributing public agricultural lands pursuant to the "Land for the Landless" policy of
the State.
In the instant case, the public land certificate of title issued to private respondent
attained the status of indefeasibility one (1) year after the issuance of patent on April
15, 1963, hence, it is no longer open to review on the ground of actual fraud.
Consequently, the filing of the protest before the Bureau of Lands against the
Homestead Application of private respondent on January 3, 1975, or 12 years after,
can no longer re-open or revise the public land certificate of title on the ground of
actual fraud. No reasonable and plausible excuse has been shown for such an
unusual delay. The law serves those who are vigilant and diligent and not those who
sleep when the law requires them to act.17
In rendering judgment restoring possession of Lot No. 986 to private respondent
Ouano, the duly registered owner thereof, the trial court merely applied the rule and
jurisprudence that a person whose property has been wrongly or erroneously
registered in another's name is not to set aside the decree, but, respecting the decree
as incontrovertible and no longer open to review, to bring an ordinary action in the
ordinary court of justice for reconveyance or, if the property has passed into the
hands of an innocent purchaser for value, for damages.18
Although petitioners may still have the remedy of reconveyance, assuming that they
are the "owners" and actual occupants of Lot No. 986, as claimed by them before the
trial court, this remedy, however, can no longer be availed of by petitioners due to
prescription. The prescriptive period for the reconveyance of fraudulently registered
real property is ten (10) years reckoned from the date of the issuance of the certificate
of title.19
While there is no dispute that the Director of Lands has the authority to conduct an
investigation of any alleged fraud in securing a homestead patent and the
corresponding title to a public land notwithstanding the status of indefeasibility
attached to the certificate of title of private respondent, and such investigation cannot
be enjoined by a writ of prohibition, it must be observed however, that whatever may
be the result of the factual finding in this administrative proceedings under Section 91
of the Public Land Law is not decisive of the issue as to who has a better right of
possession (possession de jure) over Lot No. 986 in Civil Case No. 671. The action
instituted by private respondent before the trial court partakes of the nature of
an accion publiciana which is basically intended for the recovery of possession, and is
a plenary action in an ordinary civil proceeding before a Court of First Instance (now
RTC).20
On the other hand, in the case of the administrative investigation under Section 91 of
the Public Land Law, the sole and only purpose of the Director of Lands is to
determine whether or not fraud had been committed in securing such title in order that
the appropriate action for reversion may be filed by the Government.21 It is not
intended to invalidate the Torrens certificate of title of the registered owner of the land.
43
Unless and until the land is reverted to the State by virtue of a judgment of a court of
law in a direct proceedings for reversion, the Torrens certificate of title thereto remains
valid and binding against the whole world.
In resolving the basic issue of an accion publiciana, the trial court acted within its
sphere of competence and has correctly found that private respondent Ouano has a
better right of possession over Lot No. 986 than petitioners who claimed to own and
possess a total of 12 hectares of land including that of Lot No. 986. Records indicate
that petitioners have not taken any positive step to legitimize before the Bureau of
Lands their self-serving claim of possession and cultivation of a total of 12 hectares of
public agricultural land by either applying for homestead settlement, sale patent,
lease, or confirmation of imperfect or incomplete title by judicial legalization under
Section 48(b) of the Public Land Law, as amended by R.A. No. 1942 and P.D. 1073,
or by administrative legalization (free patent) under Section 11 of Public Land Law, as
amended.1âwphi1 What was clearly shown during the trial of the case was that
petitioners wrested control and possession of Lot No. 986 on January 4, 1975, or one
(1) day after they filed their belated protest on January 3, 1975 before the Bureau of
Lands against the homestead application of private respondent, thus casting serious
doubt on their claim of prior possession and productive cultivation.
What is more, it was only in 1975 that petitioners came to know and realize that they
do not have actual possession of the so-called 12 hectares because, as testified by
Ernesto Domanais, son-in-law of Arcadio Ybanez, three (3) hectares of their land
were found to be in possession of a certain Rodolfo Beneguian; and that petitioners
did not object when said portion of land was removed from their occupation thereby
reducing their purported claim of 12 hectares to only nine (9) hectares.22 It is relatively
easy to declare and claim that one owns and possesses a 12-hectare public
agricultural land, but it is entirely a different matter to affirmatively declare and to
prove before a court of law that one actually possessed and cultivated the entire area
to the exclusion of other claimants who stand on equal footing under the Public Land
Law (CA 141, as amended) as any other pioneering claimants.
WHEREFORE, the petition is DENIED for lack of merit. The decision of the
Intermediate Appellate Court, now Court of Appeals, dated June 29, 1984, is hereby
affirmed. No costs.
SO ORDERED.